This article are provided for information purposes only, and are not intended as legal advice.


Why buy a franchise vs an independent store?

September 8th, 2009

Why buy a franchise when you can get your own retail store, not pay monthly fees and can buy from any supplier that you want? 

 

There are many reasons why people prefer franchises:

  • comfort – if a person has never owned a business before, there is always someone there to guide them
  • investors assume that all franchises are equal and all franchises make money.  This is not true but this is many people’s perception
  • training course is involved
  • pricing is set therefore they do not have to determine the price by themselves
  • suppliers are standard therefore you do not have to locate suppliers for the best pricing or quality
  • location is determined by experts in the franchisor’s head office
  • always someone there to answer questions and resolve problems
  • can talk to other franchisees to see what problems that they may have encountered and how they have resolved those issues
  • continual product development
  • continually introduces new items

 

Disadvantages of buying a franchise

  • not all franchises are equal
  • some franchise locations are not profitable
  • must do whatever head office wants including remodelling stores every so many years
  • must buy all supplies through Head office which means that there are commissions going back to franchisor, does this result in higher costs for you?
  • must pay a monthly royalty and advertising, advertising is aimed at entire franchise and is not specifically aimed for your location

 

There are many reasons why investors buy franchises, which franchise is the best one to buy – base it on if you are happy to be there everyday not just because your neighbour has that same franchise.


Filed under: buying a franchise — Gary Landa @ 10:03 am


2 Comments »


  1. There advantages of buying a franchise business are many, especially if it is a popular one. You will be working with a brand name that has already established itself rather than starting from scratch. A disadvantage of owning a franchise is that you will not have the satisfaction of saying, “This business was my idea.” But if the main reason for starting your own business is to make money and gain independence – a franchise is the way to go.

    Comment by Buy a franchise — September 18, 2009 @ 4:23 am

  2. The present job market is characterized by a hire-an-fire policy on the part of the employers. This is prompting a number of employees look for free home business opportunities to secure some extra income for the uncertain future. Many of them find eBay the perfect starting point for their home based ventures for a number of reasons. First of all, eBay offers free home business opportunities with virtually no risks.
    Secondly, you can start an eBay business with little or no investment.
    With eBay you get access to a huge market of 50 millions customers and as such, it is really possible to hit the jackpot at eBay with little innovation.

    Comment by Free Home business opportunities — October 5, 2009 @ 12:28 am


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