The Good and the Bad of Owning a Franchise

Dec 15, 2020

0

The Good and the Bad of Owning a Franchise

Posted in : Business Advice on by : Josh

For those considering if it would be better to own a franchise or go it alone and start your own business, it is good to consider the positives and negatives of franchising.

Pros

• Operating under a previously established brand can likely lead to success as they already have an established business model, loyal customers, and market trust.
• You would have immediate advice, support and guidance from the franchisor and not have to worry about start-up costs and branding.
• Securing financial support, such as loans is easier. Investors are more likely to look upon franchises more favourably as they have a proven business model.
• Relationships with suppliers, distributors, sales and marketing teams already exist so it is easier to hit the ground running.

Cons

• Business owners who choose to franchise, have much less control over how the business is run. This could make them feel their creativity and independence are stifled.
• You will have to give up some profit, to ‘pay’ for the privilege of operating as a franchise.
• You will be tied to the established franchise supply network, which could possibly eat into profit if those suppliers are not the most cost-effective.
• Relying on the success of the franchisor and other franchisees to ensure the brand is successful could possibly prove problematic if bad decisions are made.