Could Owning a Franchise be Right for You?

Has owning your own business always been a dream? Do you have that entrepreneurial spirit but just can’t decide if you have enough knowledge to open your own business? Are you unhappy or have you been let go from your current corporate employment and feel that you deserve the freedom to open up shop for yourself? If the answer to these is YES then keep reading. Almost everyone has had the idea of having, at least, a small business of their own as some point in time. I have a list of pros and cons to owning a franchise that may help make a decision on whether or not it is the right choice for you. I hope you enjoy Cathy’s Tuesday Tip! ~Cathy

Before you take the leap, consider these pros and cons of buying a franchise.


Buying into a franchise is popular due to the proven success the business has. According to the International Franchise Association, franchise businesses have a history of creating jobs faster than other businesses.


A turnkey business is a business that includes everything you need to immediately start running the business. This franchise will have proven success and generates a profit. Turnkey franchises will cost more initially but if you have little experience in developing a successful business from scratch, this may be a good option.

Marketing and Advertising

Many franchise purchases include marketing and advertising guidance to franchise owners so they can maintain consistency among all franchises. The franchisee gets the support of national marketing which a small business would not normally be able to afford. Franchisees are required, though, to invest a particular amount into local advertising campaigns.

Support Network

Technically you will be in business for yourself, but not really. You are connected with other owners of the same franchise so you can work through problems together. One may have already crossed a hurdle that you are currently bounding toward or have a different outlook on your issues. It includes built in support. The new franchise owner gains many benefits from the association with the main franchise company. The franchisor offers a great deal of business experience that would take years for the average business person to acquire.

Brand Name Recognition

The public is more comfortable doing business with a recognizable brand name. This save you time not having to build brand awareness.

Lower Inventory Cost

A franchise, as a whole, receives a better price on goods since they are negotiated and purchased in such a high volume by the franchise owner.

Most franchises will provide the franchisee with a proven recruitment and training program. This will make it much easier during hiring and training.R


Yes… there can be a down side.

High Start-Up Costs and Royalty Fees

Many franchises require an initial investment fee and also the potential for the  franchisee to have a minimum net worth, liquid cash available as a form of credit; Depending on the kind of business those starting amounts are usually high, credit cards are the typical solution, another option to get a loan online is with ARCCT if your credit isn’t perfect.

A business started by an individual may seem like a better idea due to the upfront financial requirements of a franchise. Each year the franchise will more than likely require a percentage from the previous years profit to be paid. This is a royalty payment. This is for their support in operations and advertising.

Less Freedom

Each franchise is suppose to be ran the same to maintain continuity within the brand. Therefore, all financial information must be open to them and operational procedures must be uniform among all franchisees. With an independent business this is your business.

Possible Lack of Support

Most franchises offer ample support but there are others who do not.  They may have promised to be there when you need them but then leave you to your own devices down the road. This could lead to that particular location being unsuccessful. When you are in control of all aspects of your business, you are the only one you count on.

Make sure you do a lot of research to make sure a franchise is the business model that works for you!

I hope you enjoyed Cathy’s Tuesday Tip this week. To view more of Cathy’s Tuesday Tips, visit our blog.

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