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franchisee business

independent business vs franchise business

The decision whether to go for an independent business or a franchise is one of the toughest that a person who wants to venture into entrepreneurship will face. There are and will be various aspects to consider before taking this decision. A lot of checkboxes will have to be ticked so as to decide whether it is better to opt for independent business or a franchise business. One needs to carefully evaluate the factors and then decide which one is better for them.

 

Following are the factors to be considered while making this decision

 

MONEY

Let’s face it, if we are going to start up with any new venture the first thing that comes to our mind is how much money will be required to invest in it. That is how much investment a project would require.

Independent business will require a very high investment cost to buy and operate the business, but they also gain access to more control. A person will have freedom to choose the business decisions with respect to the business needs and priorities that the proprietor deems important

Franchise business buyers will have lower total investment costs, but it is mandatory to fulfil the obligations set by franchisors. For example, the area required by the franchise, the franchisee fees etc.

 

OWNERSHIP

From an ownership perspective, a franchise is very different than a normal day to day small business. Franchise owners don’t enjoy the freedom to change their products and/or services based on their personal sentiments or gut feelings or changing market conditions. To most extent, the franchisor takes decisions with respect to variables prevalent in the market may it be the product line or the mannerism in which the products are displayed etc.

But on the other hand, independent business owners don’t have to go through the tedious process of knowing the product lines, service offerings and other decisions that have already been tested and applied for the marketplace through a lot of trial and error. Click here to read about Real estate brokerage business in India.

 

independent business vs franchise business

 

BRAND POWER AND PULL

In almost all the cases, franchise buyers have an advantage over independent business owners when it comes to brand recognition, brand power, and the customers that come with it. Unless the independent business seller who has rigorously worked upon the brand, it’s highly unlikely that the business will enjoy the brand recognition that comes with proper franchise business opportunities. This is a point where franchise buyers will almost always win.

 

OPERATIONS

Franchise businesses tend to be popular with buyers who lack proper business or industry experience. Obviously, experienced business owners will also buy franchises, but for first-time business owners the success ratio is improved significantly if they opt for franchise

Independent business owners, on the other side, have to do it all alone and don’t have access to the support of the franchisors that is being provided to the franchises in terms of various departments like advertising, marketing, brand building etc.

 

THE FINISH LINE – “SUCCESS”

There is no clear demarcation as to which side of the see-saw here is heavier, here it solely depends on the way it is perceived and taken by an individual.

In the end it all boils down to an individual’s personality as a business owner as to how your approach would be, whether you enjoy control or security and thus you should make your decisions accordingly.

 

 

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  • Rajesh jain

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  • Priyal Jain

    Even though franchise buys have many advantages over independent businesses it does comes with its own list of cons as well. Great post though.

  • Zain Mahdi

    That’s true regarding while setting up a venture these doubts do come into the mind as to what way to go franchise or independent. Nice post though weighing out all the pros and cons of both sides of businesses!