Franchise vs. Start-up: Five Points You Should Know

by Chicago Agent

Franchise vs. Start-up

By Stephanie Sims

If the entrepreneur bug bit you and you’re thinking about branching out on your own in this industry, remember these important points:

  1. With a franchise, you are buying a proven formula. When you buy into a proven franchise concept, you avoid many of the major hurdles new startups face because the franchisor has already worked out any problems and laid a solid foundation. A good franchisor will have everything systemized and ready for you, from marketing and branding to websites and approved vendors.
  2. With your own start-up, there is no bureaucracy. Want to change the rules? Then go ahead! When you own your own start-up, you don’t have to wait for approval from the top of the corporate ladder as you would with a national brand. There’s no red tape stopping you from making any change you think would be beneficial for your business.
  3. With a franchise, you have name recognition and a strong brand. Recruitment and lead generation is easier when you are running an office for a well-recognized and successful brand, and also, consumers tend to do business with brands which they are most familiar and comfortable with. By being attached to a recognized brand, you have built-in security, because consumers want the safety and comfort of a familiar brand with a quality reputation.
  4. With your own start-up, a support system is harder to come by. If you need help negotiating the terms of a lease, if your website is acting up or if you want to offer a special promotion and need advertising and design assistance, a franchise will be there to help. What each franchise offers in terms of tech and marketing support is different, but there will be some sort of support system that comes with a franchise – with a start-up, you are your own support system, along with whoever you might know or can hire to help you fix any problems.
  5. With a franchise, your chances for success are higher. According to Entrepreneur magazine, a franchise is more likely to succeed than an independent startup, and the security of this investment should be proven in ROI. With a franchise, the chances of success are dramatically increased because you have the support of the system, and the franchisor has already taken most of the risk. With a start-up, the only support system is…you.

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