Franchising vs. Starting a Business: Which Option is Right for You?
It seems like you are so determined to achieve something big to succeed, but you’re facing this tough decision.
Should you start your own business from scratch, or would joining a franchise be the smarter choice?
The solution to this problem will be relatively easier as there are more than 8.5 million people working within a franchise meaning that the chances of success are already established (Source: WebFX, 2024).
As the other side of the argument suggests, being your own boss allows you more control, revenue, and better flexibility, which means even a franchise might not always be the right path.
This being said, one shouldn’t worry as this blog will cover everything you need to know in order to help you make informed decisions.
Understanding Franchising
A franchise is a business model where a particular well-known company (the franchisor) allows you or anyone (franchisee) to use its brands and dealing system to run a business in exchange for a fee or a share of profit.
Let’s understand it with an example – Just think of it, you want to have a restaurant of your own, but you are also looking for a way to skip the stiffest parts of establishing it.
That’s where franchising comes in to lighten the weight on your shoulders.
You don’t need to create a brand or worry about building a customer base; instead of starting from the ground up, you could open a franchise with a well-known company such as McDonald’s.
This way you not only be able to run a business of your own but also be able to earn a quiet profit without putting much effort into scratching.
Bear in mind that there would be terms & conditions, you may require to follow, for instance, sharing of profit and decided fees.
Take an insight into the graph below regarding the Global Franchise Market Size which is projected to reach USD billions by 2032.
The Freedom of Starting a Business
You might now have a good idea of what franchising is, as we have discussed in the previous section how it has proven itself to be the ideal business model.
But what if someone, even you, is looking for more freedom, and desiring to establish a brand that is entirely yours?
Well, in that instance, starting your own business becomes the best option for you or anyone looking to make their name known.
You get to make all the decisions including designing how your product and services look, what sources to be included for effecting marketing, and how it will be operated.
Thus, you have this freedom of opportunity to build something unique that makes you stand out in the crowd.
The Right Franchise Option For You
Building an empire or initiating a project from scratch is an intriguing process but what if I told you that there is a way to make it easier without cutting any corners?
The perfect solution for making things easier and not having to work too hard can be answered by searching for an appropriate franchise opportunity.
Popular brands such as Cornwell Tools franchising, make your journey a whole lot easier in terms of setting up a franchise.
They offer an automotive tool franchise that is already well known within the industry and comes with plenty of further bonuses regarding support from Cornwell Tools, which ultimately makes the transition much easier.
You have the potential to excel in this career once you join their company in an established area whilst also being extremely passionate about the work you do.
Evaluating Costs and Financial Commitment
You must weigh the costs associated with any chances you would be making, be it creating a brand or shifting to franchising.
There are primarily two possible scenarios where you would have to go with one of them and ignore the other.
You can focus on spending on structure, marketing, and yourself creating a brand, vs franchising where it would on the other hand cost less to start but would require royalties.
Moreover, when creating a budget, you need to consider factors such as how much budget you have available on the project and how much risk you prefer to take.
Finding the strategy that best works for you will help take time and resources but is worth it, to begin with.
Do You Know? In the U.S., people often say that franchising started in 1851 with Albert Singer and his Singer Sewing Machine Company, which was one of the first to sell business rights to others.
Market Demand and Trends
Knowing what’s trending in the market is another significant factor that can assist you in moving on to the final decision of picking between creating a business from scratch and employing a franchise.
In my research, establishing a brand can be challenging but will provide you with more freedom and creativity.
On the other hand, with a franchise, it is much easier to employ as you will be working with a brand that is already well-known to the consumers.
Make the right decision: Thousands of people are in need of change, and certain sectors will have a larger client base, so be aware of this and choose accordingly.
Personal Interests and Skills
The success of the business is not solely determined by profit factors; it’s also influenced by your personal interests, passions, and skill set.
For example, if you feel you are more comfortable working within the framework of a successful business model that provides clear guidelines and excessively structured practices, then a franchise may be the best option.
On the contrary, if you’re seeking a new adventure, wanting to create from scratch, and hoping to gain complete freedom and decision-making without the burden of someone else’s parameters, then that suggests you would do better starting your own company.
It’s all upon you what you think will be suited best to you – are you willing to seek challenges and build a great empire of your own, or will you go for the support and stability of an established brand?
Assessing Risk Tolerance
Risk exists in both sectors – it comes down to how much risk you think you can tolerate and are willing to take.
There isn’t a great risk when adopting a franchise since you are coming into a business that is already widely recognized and has established procedures to operate it.
On the other hand, starting your own business can be riskier as you are required to create everything from scratch.
Such as introducing yourself to a new customer base, implementing new ideas, and developing a brand.
However, the best part – the payoff can be higher; if your business takes off, you get all the rewards, and no one else takes a share of the profits.
So, what do you prefer – the security and support of an already-established brand or the challenges and greater rewards of your own empire?
