There’s something appealing about a turnkey solution.
If you’re looking to start a business, that’s exactly what opening a franchise offers you. This can be quite alluring for many entrepreneurs because the proof of success is already in the proverbial pudding. While starting your own business from scratch comes with many unknowns and uncertainty, opening a franchise already has a proven successful business model.
That’s not to say that you’ll be guaranteed to be successful, and it certainly doesn’t mean it will come without challenges, but with a franchise, the groundwork has already been laid. Let’s take a look at the pros and cons of franchising.
Pros and Cons of Franchising
There are many franchising benefits, but some drawbacks come with deciding “Should I franchise?” We’ve broken down the key points to think about before you dive in, and you can also check out this guide for further reading.
Pro 1: Less Risk
One of the most attractive perks of franchising is that it already has a proven track record of success. It’s a way that allows you to be your own boss still and have the freedom of an entrepreneur without all the insecurities that come with opening up from scratch.
Pro 2: Forego the Start-up Stage
Many people dread the idea of coming up with a business plan, creating a product, testing a product, and doing all the market research that comes with starting an idea from nothing. Franchising lets you bypass all the steps and offers a streamlined approach to setting up shop and opening your doors.
Pro 3: Brand Recognition
One of the hardest things for a new business is getting its name out to the public. If no one has heard of you, there isn’t going to be trust and loyalty, and that’s something that can take years to develop. If you open up a well-known brand with a franchise, all that trust and loyalty is already built-in and preloaded, making the early days of operation a lot less stressful.
Con 1: Franchises Can Be Expensive to Start
When you piggyback on a proven and successful business, you can expect to pay a pretty penny for all of its brand recognition. There are myriad franchise options out there, but the bigger the name, the bigger the price tag. This can be a barrier of entry for some, whereas if you started your own unique business, the start-up costs could potentially be a lot smaller.
Con 2: You Play by Their Rules
Your freedom of creativity is limited with a franchise because the products and services are uniform and are expected to stay that way. They have built up trust over the years and want their customers to know exactly what to expect each time they purchase their products or services.
Con 3: Public Opinion Can Be Out of Your Control
Things can change on a dime in any marketplace. A brand that might have been successful today could endure a public relations crisis tomorrow. Even though it may have had nothing to do with your store, in particular, it won’t matter as every franchise of the name will be looked at in the same light.
Decide What You Value the Most
When weighing the pros and cons of franchising, you’ll have to decide what you value the most. Are you looking for something with minimal risk and a proven record?
Or do you prefer to throw caution into the wind, make your own rules, and start from scratch? There’s no doubt that there are benefits to each path, and it will all depend on your unique circumstances.
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