The first step to buying into a franchise system or existing business is to understand the difference between the two models. Start by doing some research to ensure that you make an educated decision that truly suits what you aim to accomplish and also suits your lifestyle. Check out this insightful list outlining the differences between a franchise and an independent business courtesy of Canada Business Network:
- Proven track record — This is an established business with a proven concept; there is less risk and less initial capital required than with starting something brand new. Similarly, when it comes time to sell, you may have an easier time finding prospective buyers for a known entity.
- Built-in customer base — People know what to expect from your business because they know the brand, and trust the product or service
- Setup, support and training — Having a parent company means having the infrastructure and processes in place, from equipment to uniforms to corporate advertising, rather than having to develop them on your own. Other franchisees can also be a source of support.
- Set of rules and regulations to follow — When you operate a franchise, you have less control over the operations than if you own an independent business; you also have to pay a percentage of your revenues to the parent company, which reduces overall earnings.
- More control and responsibility — You have the autonomy to set your own rules, but the success or failure of the business rests solely on your shoulders.
- No fees or royalties — You keep all of your earnings without sharing any of the profits
- More opportunity and risk — You can sometimes find a business that may not be doing well but has potential. If you are willing to do the work, you may reap the rewards; you must be prepared if things don’t turn out as planned.
When you’re confident and ready, start the search for the business of your dreams by joining the BizON marketplace 🙂
From The Desk of BizON