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Franchisee vs. Business Owner


For the entrepreneurs in the crowd, I’d like to ask you if you have started your own business or if you have opened a franchise?

Ever since I started my first job out of college I’ve had the desire to own my own business. One of the first questions to answer was whether it was best to open a franchise or start a business from scratch. As a young adult, many of the franchises that I investigated required an extremely high net worth or a much larger capital investment than I was able to handle thus a home-grown business seemed like the best opportunity.

However, as I’ve gotten older, I continue to keep my eyes open for interesting franchise opportunities.

But now that I am in a position where I would qualify for certain franchises, I am left wondering if you can be as successful with a franchise as you can with your own business. Or is it easier to find success with a franchise as opposed to starting your own business from scratch?

Are franchises easier for new entrepreneurs?

When looking to venture into the land of entrepreneurship for the first time, should one look at a franchise opportunity rather than trying to start their own business?

Depending on the nature of the business and your experience a franchise may be a better option as many franchise opportunities provide you with training, establishing a location, equipment, advertising assistance and many other essentials to getting started. Often times a franchise will be more expensive than starting a business from scratch but you do gain the benefit of having a well-known name behind your business.

With a franchisor you will also likely have someone that can support you with any questions that arise and typically you start operation with a complete, proven business model.

Does that mean starting your own business doesn’t make sense? Not necessarily.

While starting your own business means that you do not have a proven business model in place, you do have more freedom to decide how things should be operated. In addition, all of the profits come back to you as the business owner whereas a franchisee is often required to pay a royalty fee and possibly a percentage of the profits back to the franchisor to cover their overhead costs.

Which is the right option?

It will likely depend on what you hope to achieve by entering the arena of entrepreneurship as well as things like your business experience, sales and marketing experience, and financial resources.

To gain a little more insight into the feasibility of a opening a franchise versus starting your own business, it would be great to hear feedback from both franchisees and business owners.


If you have opened a franchise, I would be interested in hearing more about your experience. Some of the questions that immediately come to mind:

  • Did you consider starting your own business before deciding on the franchise? Why?
  • Are you satisfied with the franchisor?
  • Would you open the same franchise again if given the opportunity?
  • What would you have done differently?
  • Has your franchise lived up to your expectations?

Business Owners

Likewise, I would like to hear from people that decided to start their own business:

  • Did you consider opening a franchise before starting your own business? Why?
  • Has your business lived up to your expectations?
  • Would you open the same business again if you were starting today?
  • Did you have any previous experience with owning a business?
  • What has been your biggest challenge as a business owner?

Let the discussion begin!

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    On October 16th, 2007 at 10:35 pm, lornadoone said:

    I’ve never been in a position to really consider opening a franchise, although there is an awesome restaurant “chain” in Montana that my husband and I used to fantasize about. It seems to me that one of the best things about a franchise would be that they probably have some sort of marketing program already set up. “Plugging into” someone else’s marketing plan has got to be so much easier than developing your own.

    I’m not saying that I think franchises are better than starting your own business, just that I can see where there might be some advantages.

    On October 17th, 2007 at 10:04 am, Derek Semmler said:

    Lorna, your restaurant idea is familiar as there is a killer hot dog and beef restaurant near me that I always thought would do huge business down state where I went to college.

    I think the appeal of the franchise is the fact that you have the advantages of the marketing, brand name, proven business model, etc.

    Thanks for sharing your thoughts!

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