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Entrepreneurs – Do It Yourself Or Buy A Franchise?

Written by: Lee Lister

Article Overview: You’ve wanted to go into business for a long time. You know what you want to sell and you know who to. The last big decision you have to make is – do I go it alone or do I buy a franchise?

Entrepreneurs – Do It Yourself Or Buy A Franchise?

You’ve wanted to go into business for a long time. You know what you want to sell and you know who to. The last big decision you have to make is – do I go it alone or do I buy a franchise?

Well there are pros and cons on both sides. Starting your own business means that you have to learn everything as you go along. It can be cheaper and you have more freedom to follow your own choices and decisions. One big drawback is that you will have more problems getting business recognition and establishing your brand. In many different types of business, your unknown and untested brand will be battling for business against several other “household names”. This is tough and can be expensive. The trick here is to find a niche that the cookie cutter franchises are not addressing. So whilst there my be numerous coffee bars for example – yours would be the one that sold home made chocolates or cookies to go with the drinks.

Starting a franchise gives you more instant company recognition and help in setting up your business – from plans to opening days. It also gives you less freedom to do what you want, when you want it. Your franchise agreement will have several constraints built into it. You will also be involved in finding both fixed and variable ongoing costs, payable to the franchisee.

My suggestion is to research the strengths, costs and feedback on the various franchises within your chosen business area. Find one you like, can afford and that actually supports its franchisers.

Then research what it will involve and cost to set up your own franchise using this franchiser. Do the same for your non franchise business. Remember to factor in such matters as designing your own packaging, signs and more importantly products. Expect to have a minimal cash flow while you establish your brand and customer base.

Sit down with pen and paper and compare all the respective costs, of start up and running the business for three years. The list the pros and cons of each type of business and see what kind of conclusion you can get to. If nothing else you have undertaken some detailed planning for your new business.

Last thought. In a highly competitive business area - sometimes product and business recognition is very important. Could you compete in your own business if a franchised opened up close by?

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Article Tags: business area, business recognition, cash flow, chocolates, coffee bars, company recognition, cookie cutter, customer base, drawback, franchise agreement, franchise business, franchisee, franchiser, franchisers, franchises, household names, many different types, pen and paper, pros and cons, starting your own business



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Re: Enticing Franchises - Top 9 List - All Franchise listed above are in millions of dollars. Do you have the list of Franchise in thousands
Re: Info for would be franchisers... - [quote="Sebastien":1d29sdv1]Like Franchise Times, Franchise Update is a very practical magazine. There is no blah blah, just straight facts that anyone in the franchise community can relate to. I just want to mention that all these magazines are NOT franchisee oriented. I mean these magazines are for franchise professionals. If you're looking to buy a franchise, you won't find much information in there. To answer your question, getting published in Franchise Times was fairly easy. I don't want to brag too much but I think I am known in the franchise industry. I was the marketing guy at Franchise.com for a few years before joining my new company, the World Franchising Network. So people know me and I have a very good relationship with Nancy Weingartner, the Managing Editor at Franchise Times. I was talking with her at the last Franchise Expo South in Miami and she mentioned she'd like me to be profiled. I was like "ok, sure!". I like this franchise executive profile thing in Franchise Times as it is rarely BS. People are usually really natural in there.[/quote:1d29sdv1] Thanks for the follow up Sebastien! And I can't say that I'm surprised that networking with the right people and managing your relationships with them properly are the keys to being published. I guess the old adage holds true of "it's not who you know, but who knows you" that's important.
Re: Hello EvanCarmichaelers, and Thanks! - "Carmichaelers" ..nice.. Over at the Young Entrepreneurs I'm going to start calling my readers "DSilvelers" - I like the sound of that! Welcome on board theFranchiseMarket. Do you run a Franchise Business or are involved in Franchising in anyway?
how much for a franchise fee? - Dear Colleague There is no easy answer to this question. Things to consider: [list=] The sizeof the Franchise Clent base Expected Turnover Intellectual Property costs (recoup) Number of Franchises Number of employees Original Set up costs Franchise admin costs An example: A franchise that I was involved in setting was to a simple "lawn mowing/home repair" franchise. The Franchise included national/local advertising - preparation of client lists - general admin - central accounting etc The Franchise involved 300-500 clients - and an annual turnover of about $300,000 . The annual franchise fee was $30,000. Hope that this gives you some idea Take care Ian[/list]
Re: Franchise Surveys - Another good tool to researching a franchise is to speak with their existing franchisees. This contact information is included in most Franchise Disclosure Documents. In order to get a Franchise Disclosure Document or FDD as it is often referred to, you will have to complete a basic franchise application. The franchisor will then usually provide you with the FDD at that time. Included in that book of information is a list of the existing franchisees, the contract, the investment information etc... This information is required by Federal Law to be disclosed to your prior to making a purchase. So be sure to do your research and start with the Franchise Documents to get the initial information.


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