Like so many things in life, owning a franchise can be an acquired taste. The best way to determine if owning a franchise is right for you is the weigh the pros against the cons.
Why You Should Give a Franchise a Try
1. The first pro of owning a franchise has to do with the business model: in short, it’s already been established. Of course, this doesn’t mean that you’re guaranteed riches, but it does mean that you’re being thrown into a system that has proven to work.
2. The ease at which you’ll be acclimated. Franchises are owned by all different kinds of people, from all walks of life. In order to be sustainable, the training program must be easy to follow and comprehensive.
3. The tools you’ll be equipped with. Because a franchisor has a budget that is likely to be much larger than yours, you’ll have access to technology, marketing, and advertising that most businesses can’t afford.
4. The innate network of support franchising comes with. From field reps to corporate personnel to other franchisers, this network offers you the attention needed to make sure your business reaches its full potential.
Why You Should Think Twice About Owning a Franchise
On the other side of the coin are the cons that come with franchise ownership:
1. You must pay an upfront fee for the opportunity to use the franchise. These costs can range from tens of thousands to hundreds.
2. In keeping with the financial trend, the next con also involves money – with franchising comes royalties. Each month, you’ll be required to pay a percentage of your profits. How much you pay will be dictated by how much your business earns.
3. You are handcuffed by the company’s rules. Some of these rules include purchasing your inventory and supplies from either the franchisor or a vendor they’ve approved (even if you can find your inventory at a cheaper price somewhere else). The rules will also limit your creativity. Your business is essentially representing the mothership. This means that you must use advertising and marketing materials (including logos) as they are. You’re prohibited from changing them no matter how great your ideas may be.
4. Unlike a business you own outright, a franchise can’t be sold to just anyone. Rather, it must be sold to a buyer that the franchisor approves of.
Deciding to purchase a franchise really comes down to what you want in a business. If you’re looking to capitalize on a plan that has proven to work, a franchise may be for you. If you’re looking for total financial and creative control of your own company, a franchise is more likely to be akin to frustration.