Why would you want to franchise with a regional or national brand instead of starting a business on your own? Isn’t it basically the same risk, but one requires you to pay a big company a bunch of money for no reason?
In a word: no.
In a lot of words: there are a vast number of advantages you gain when you partner with a franchise brand – and there’s a reason you have to pay for a franchise business opportunity. That isn’t to say that a franchise is for everyone; there are definitely people who aren’t right for a franchise (and others who aren’t right for entrepreneurship at all). Before examine how to tell who is who, let’s look at what your franchise fee buys.
What Does That Franchise Fee Pay For?
- A Brand Name: The most important (and least tangible) thing you’re paying for is the reputation that comes with having a brand name. Customers know when they walk into a Jack in the Box that they’re going to get the same Sourdough Jack in Atlanta that they got in Seattle, and that means everything.
- A System: OK, maybe this is the most important thing you’re buying — every franchise comes with a manual describing exactly what you need to do in order to succeed. If you’re starting a franchise of literally any brand you’ve already heard of, you know that there are hundreds if not thousands of people who have used that exact formula successfully in the past — compared to starting your own business, the risk you take on when you use one of these systems is dramatically
- Support: Every franchiser offers support for their franchisees, starting with basic training and including regular contacts checking on your marketing, training, operations, and more.
If you’re going into business for yourself, you’re quintessentially on your own when it comes to these assets. You can get some support from the Small Business Administration, and some small amount of reputation by rubbing shoulders at your local Chamber of Commerce, but it doesn’t compare at all to what a franchiser will offer.
What Kind of Person Would Prefer Entrepreneurship to Franchising?
Both franchise business opportunities and entrepreneurship require someone who is willing to take a risk using their time and money to try to create something out of (essentially) nothing. But the attributes of each risk are quite different.
- Reduced Risk vs. Reduced Cost: The franchise model is designed to reduce risk by offering you all of the tools you need to succeed; but it costs money, both upfront and in ongoing fees, to get that reduced risk.
- Predictability vs. Freedom: The franchise model is designed to make sure your experience is predictable; they almost all include documentation of the most common problems in the business and how to handle them, and require you to implement those solutions if and when those problems arise. By comparison, being an entrepreneur gives you the freedom to address problems any way you see fit — but there’s usually no documented past experience to indicate that your particular solution should work.
In short, if what you want is to create and you don’t mind the extra risk involved, entrepreneurship might be your bag. If what you want is to succeed, even if that means giving up some control (and some of your profits), a franchise business opportunity is probably the right path for you.
At Trinity Business Services, we offer free, unlimited franchise consulting with access to nearly 600 of the best franchise business opportunities within the United States and Canada. Through a unique and proven multi-step process, we save you countless hours of research and help you find the right business opportunity to match your skills, passion and budget. And the best part; there is never any additional franchise fee to work with a consultant – you pay the same fee whether you go through us or directly through the company. To get started, contact us at 1-651-202-8636 or by filling out the contact form on the bottom of this page.