You’ve got the entrepreneurial spirit in your heart and you’re ready to strike it out on your own! But you find yourself stalling at the first big intersection: do you buy into a franchise or try to start up your own company from scratch?
There’s more than one path to financial independence. Whether you choose to pick up a franchise or start up your own business from nothing, there are going to be plenty of hurdles (and plenty of rewards!).
Should I buy a franchise or start my own business?
There’s no one answer to this question. Everyone’s situation is unique, so we can’t make a blanket statement here about which road you should follow. What we can do is lay out the biggest pros and cons of buying a franchise and let you decide what option best suits your life and plans.
Pros of owning a franchise
Franchising is a robust industry (it’s not just for fast food restaurants!) There are over 3,000 franchise brands to choose from. It’s a popular business model and for a good reason. There are many proven benefits to opening a franchise.
• Lower risk
No business venture is completely without risk. However, opening a franchise is considerably lower risk than striking out on your own. You have a lot of the groundwork already laid out for you and a large support network at your disposal.
• Easier to finance
Looking at brass tacks, a franchise is usually an easier sell. Not only are there a plethora of affordable franchises out there, but you’ll likely have an easier time securing financing. Franchises are usually considered more stable investments by financial institutions, so getting that initial capital will be a smoother ride.
• Pre-packaged customer base
With your franchise comes brand recognition. This can provide a boost to your initial sales efforts and can be especially helpful if you’re looking to augment an existing business with a franchise.
• Hit the ground running
A franchise might be the choice for you if you’re looking for a quick start. So much is already taken care of for you, from the services you’ll offer to the marketing packages you’ll use to promote your business. Franchises present an opportunity to get started right away.
Buying supplies and materials are also cheaper as well. This is because the franchises usually have good working relationships with distributors that you can take advantage of.
Cons of owning a franchise
Of course it’s not all perfect (or else everyone and their dog would have purchased a franchise). Depending on your situation, there can be some drawbacks to becoming a franchisee.
• Initial investment costs
The cost of a franchise can be a pro or a con depending on which franchise you get involved with. Some can have very high initial investment costs.
• Lack of privacy
When you start your own business, you have complete control over your company’s information. With a franchise, this isn’t the case. The higher ups in the franchise will have access to most of your data, particularly financial numbers. They’ll be using that information to try and make improvements to the franchise as a whole.
• Limited creative freedom
As a franchise, you are part of a larger company. This will limit your ability to change your business model too much. While there is room to grow and personalize your franchise, you won’t be able to turn a complete 180° or do anything that veers too far from the core of the franchise.
Again, if you’re a very independent person, then a franchise may not be for you. Franchises are, at their heart, a team endeavor. You get a lot of support and camaraderie, but the trade off is a lack of individuality.
Is buying a franchise a good idea?
No one can answer this question for you. Franchising is a great option for people who want to gain financial independence by stepping into a tried-and-true business model, but if you prefer to play by your own rules, then you may want to steer clear.
And of course there will always be money to consider. The pricing on franchises varies wildly by industry, so you will have to do some cost comparisons for your specific area of business. And remember that franchises are not permanent. You are under a contract and both you and the franchisor will have opportunities to choose not to renew.
Is franchising your match made in heaven? The next step is to get more information. If you’re interested in picking up a home improvement franchise, Kitchen Tune-Up may be the place for you. Go to our website to learn more about franchising opportunities and how you can join the Kitchen Tune-Up family!