Purchasing A Franchise Is Not The Same As Purchasing a Business

What are your reasons for owning a business?  If you want freedom, a franchise is not for you because the franchisor controls what, when and how you run the business.  If you want to see your dream come to fruition as far as nurturing an idea, a franchise is not recommended.  With lack of control, you would not be able to pursue your ideas in a franchise.  Franchises provide financial opportunities with high success rates of a proven track record in system duplication.  Beware this increases the fees you’ll pay to a franchisor. 

Dr. Timothy Bates, a professor at Wayne State University in Detroit, found that the average capital investment of franchisees was $500,000, compared to $100,000 for independent entrepreneurs.  If you have the capital and lack wisdom of experience, franchises would be an ideal investment.  They would provide the knowledge and systems necessary to run and grow your business.  Franchises prove to be popular with early retirees and downsized business executives who have startup capital, with minimal industry experience.

Both a franchise and an existing business have proven success rates, ready markets, name recognition and management support.  Franchises also provide complete business methodology, continuous management support, greater exposure, shared expenses and minimal risk. 

The bottom line is franchises allow quick entry into business with a proven system and successful track record, with minimal risks.  Freedom and personal control are replaced by system and operational controls, rules and regulations.  A franchisee therefore does not feel like they are their own bosses. 

If you want to be in business for yourself, but not by yourself, consider a franchise.  Pick one that complements your natural skills, talents and work experience.  Franchises offer training, continued support, proven operational systems, advertising and buying efficiencies.

Conversely, business opportunities are not usually given as much support from a parent company, or use of a trademarked name.  They are an independent operation from the parent company. 

There are some turnkey operations similar to franchises that help with training, location, marketing and startup inventory.  The main difference between turnkey and franchises is they don’t offer the trademarked name.