A franchise business is a type of business owned by a businessperson or group that offers merchandise, supplies, and/or services branded by an entity that supports every aspect of the business it franchises for a flat-fee and fees based on sales and/or profits.

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Some of the benefits of buying a franchise include:

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Autonomy: being your own boss

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• Making your own business decisions

• Managing your own staff

• Determine your business needs to promote growth

• Schedule flexibility

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Turnkey operation

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• When buying a franchise, the equipment, supplies, and instruction are included with the purchase

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Business support

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• Experience is not always needed to run a franchise

• All franchises offer an operations manual

  • A detailed guideline with systems, processes, and procedures to successfully run your franchise

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Higher rate of success than start-up businesses

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• Buying a business that is established and successful

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Buying power

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• Opportunity to purchase product in bulk at a lower cost

• Potential savings in insurance services and leasing agreements often negotiated by the franchise

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Financing opportunity

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• Banks and lenders are more willing to take a risk financing a franchise than a traditional type of business

 

When considering a franchise business, it is important to also consider the disadvantages of owning a franchise. One has to conform to the rules and guidelines put in place by the franchisor, which may include business location and its proximity to other similar franchises’ location, hours of operation, and pricing.

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Here is a list of the advantages and disadvantages of buying a franchise business: