Five Reasons Why You Should Go For a Franchised Business

Nikita Arya
Nikita Arya Nov 21 2019 - 5 min read
Five Reasons Why You Should Go For a Franchised Business
If you are confused or sceptical about what business model you should operate on, then read on this article as here we present five reasons as to why you should go for a franchised business.

The potential that the concept of franchising holds is tremendous. Think of a successful brand and it turns out to be franchise-operated. With its immense potential, franchising attracts business owners and aspirants towards it but many people are still sceptical about starting a franchise or operating on a franchise model.

The business world is divided among the patrons of both franchising and independent business. However, franchising stands stronger than independent ventures on many parameters. If you are also confused or sceptical about what business model you should operate on, then read on this article as here we present five reasons as to why you should go for a franchised business.

Independent Business Vs Franchise Business


One of the biggest differences between an independent business and a franchise business come up with the difference in ownership. In an independent business, one has the freedom to choose their product line and service offerings while buying a franchise lets you replicate the business idea and the model of an already-existing brand, which doesn’t allow much exploration of products or services.

Related: Advantages of Choosing Retail Franchising as a Mode of Business Operation

Clearly, starting off with a franchise gives you lesser scope to experiment than in an independent business. So, how does it make franchising better than independent business? Here is the reason: there are so many business models that can be replicated by the franchise model of business and one can just conduct a market research and find out something that aligns with your business idea. For instance, if you plan to start a burger QSR, then there are numerous brands that are doing the same thing. By starting an independent business, you will just create an unnecessary competition while if you start a franchise, you can get benefitted from the association with a bigger name.

In a nutshell, starting off with an independent business gives you ownership of your business idea while buying a franchise gives you ownership of the organisation’s assets with a security and stability.

#Startup Cost

Starting up with a business means you have to do start everything from scratch. One has to be prepared about a lot of things like thinking of a business idea, devising a business plan, hiring staff, marketing strategies, funding and the list goes on. So, an overall start-up cost often exceeds the expectation of an amateur business person. Independent startups might need higher investment costs to buy and operate business.

On the other hand, if you start a franchise business, one can save a lot of expenditure. One can buy franchise business at a typically lower cost as all of the other setup is provided by franchisors. The franchisee has to fulfil obligations set by franchisors. For instance, franchisees provide franchisors with franchise fee and time-to-time royalties on an ongoing basis. When it comes to experimenting with the business and other urgent decision making in terms of investments, the franchisor often has the right to remodel and help franchisees in doing so. So this way, franchise business saves a lot of money for a franchisee.

#Brand Recognition

In most cases, franchise buyers have an added advantage over independent business owners when it comes to brand recognition. This is one of the biggest advantages of owning a franchised business. A franchise is always a tried and tested business model. Someone who might have started as an independent business person would have gone through a lot to build his/her brand and finally he would have decided to franchise his/her business. And when franchise worked for him/her, he/she might have gained recognition so that his/her brand could be differentiated from the competition. And this way, a franchisee of the brand gets an advantage of being associated with a franchise business.

So, when you have the choice to reap benefits of an already established brand’s identity, then why not use it to your fullest!

Related: Advantages of Being a Master Franchisee Owner

#Operational Resources

A franchise business supports amateur businessperson in lot many ways. Franchise businesses tend to be popular among aspirants who have lesser business or industry experience. This is because many franchisors offer first-time owners a chance to enter the world of entrepreneurship as they provide operational resources in the form of training and other supportive measures.

A franchisee operates on a blueprint of what his franchisor guides him, so franchisees have an advantage of having a hands-on experience of having worked with an established mentor. Their mentorship and other operational support makes franchising a different deal altogether, which one cannot expect in an independent business.

#Success Rate

Talking about the success rates of both a franchise business and an independent business, there is lesser risk in a franchise business than in an independent venture. As a business buyer, you need to evaluate each potential acquisition on its own merits. Both franchises and independent businesses fail every day, and, at the same time, people clearly have success with both models. However, the success rate of a franchised business is more than that of an independent business. There are several reasons like brand recognition, proven model, foundational support, mentorship and others, which make franchised business a success. While on the other hand, in an independent business, one needs to build the brand on their own, which many entrepreneurs could not manage.

Even as per some reports, it has been revealed that franchises have a success rate of approximately 90% as compared to only about 15% for businesses that are started from the scratch. So, taking up a franchise business gives you another perk in the form of a good success rate.



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