Buying A Franchise: What You Need To Consider
For many the ultimate American dream is attaining financial independence. However, the ‘easiest’ methods of making money, (which entails getting a job), may not offer the type of financial independence people are looking for. In fact, most people who have made it rich have done so by starting their own businesses or buying a franchise. If you would like to be one of these types of people, you will need to decide whether it’s better you start a business from scratch or run an existing franchise. This article will explain the differences between the two. Firstly, you can expect to pay significantly more if you buy a franchise.
For example, you will need at least $500,000 to get a Mcdonald’s. Things may be cheaper if you decide to buy a lesser known franchise, but you will still need to pay in the hundreds of thousands. Compare this to the possibility that you may only need tens of thousands or even less when starting a business from scratch. If you are really ambitious yet poor, it is possible to start a business with absolutely zero dollars. You would have to do everything online and do a lot of marketing work through free advertising venues, but it is certainly possible.
Speaking of advertising much less has to be done when you get a franchise. This is because the name of the franchise pretty much markets itself, especially if it is widespread. Yet, this can offer a potential disadvantage too, one that is not evident with a new business. When you have a franchise name, you gain all of the publicity associated with it. For instance, if your franchise in general has been accused of using child labor in other countries, your business could be affected even though your store or restaurant never did such things. Compare this to a new business, which starts off with a fresh reputation. You determine your own publicity rather than inheriting it. Lastly, when you run a franchise there is not much room for creative expression when it comes to the products you sell and/or the services you provide. This is because you must follow a set of franchise rules. While this may be annoying, without franchise rules the franchise loses the uniqueness that makes it a franchise in the first place.
However, when you own your own business you can pretty much do what you want. In conclusion, the main factors that need to be considered when deciding whether to buy a franchise over owning a new business are: price, advertising concerns and creative expression. All in all it will generally be harder trying to get a franchise over starting a new business, but the monetary reward will be much greater. However, if you are unable to start a franchise right now, you can always start a smaller business and once it builds up then move into franchising. By doing things this way you can go about achieving the American Dream through two financially independent venues.