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Pros and Cons of Franchising

by Ed Teixeira

Before searching for a franchise, you should know the advantages and disadvantages of purchasing a franchise and understand the implications of buying and operating one.

You should know that although franchising is a proven business model, purchasing a franchise is not a guarantee of success.

Here are some common aspects of franchises that could be either an advantage or disadvantage depending upon your individual needs and preferences:

  • If you are an entrepreneurial or highly creative person, then you may find some aspects of franchising restrictive. This doesnít mean that a franchisee canít be creative. It means that there is a structure to a franchise whereby new ideas and concepts need to remain within certain limits. Following the "program" is the most important aspect of a franchise business. Franchises by their very nature require conformity and consistency in order to be successful. If you are a strong willed individual who doesnít like to deviate from your own feelings or attitudes then you may find franchising difficult to follow.

  • Youíll be operating under a contract or agreement. Your conduct and behavior as a business owner will be governed by an operations manual and a franchise agreement. The overall operation of your franchise must conform to the requirements of these documents. Keep this in mind when performing your due diligence on any franchise you're interested in purchasing... You don't want to part of a franchise program you are not happy with.

  • Franchising offers a number of benefits, not the least of which is being your own boss. Despite the numerous advantages that a franchise can provide, success will be the result of your hard work. Some people buy a franchise with the expectation that they can work 9 to 5. In the majority of cases this is wrong. Be prepared to work long hours especially during the first few years. Although there are exceptions, these are rare.


  • Problems can arise, which can require you to invest additional capital in your business. Since it is your business and youíre not operating a publicly traded company, you wonít have ready access to investment capital from banks or other institutions.

  • Investing in a franchise has financial risk and not all franchise opportunities are created equal. There are flawed franchise systems and even in successful franchise systems not all franchisees are successful. Itís important to identify and avoid the flawed franchise programs.

  • Part of your expectations when you purchase a franchise is that you'll get a certain amount of training and support. In fact, one of the key advantages of buying a franchise over buying or starting an independent business, is the training and support. Since your initial franchise fee and on-going royalty payments are partially to pay for these services, you want to be sure you'll receive what you expect. Ask the franchisor for details of their training and support program. Then contact existing franchisees and ask them to tell you about the training they received. Remember, lack of training or poor training put you at a disadvantage. If the existing franchisees weren't satisfied with the training and support, chances are you won't be, either.

This article is excerpted from The Franchise Buyers Manual. Itís available here.



© 2015 FranchiseKnowHow, LLC

Ed Teixeira is the President of FranchiseKnowHow.com and Chief Operating Officer, FranchiseGrade.com. He is a former franchise executive and franchisee. He can be contacted at 631-246-5782 or at  franchiseknowhow@gmail.com


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