Many entrepreneurs, who are scared by the high failure rate of independent non-franchise
businesses, feel that it is better to open up a franchise than start a new company.
Well, there are merits to both systems. Ultimately the decision depends on what
the entrepreneur feels capable
of handling. To open new business
as well as start a new franchise require the same level of commitment and entail
different kinds of risks.
For entrepreneurs some of the advantages of buying a franchise over starting a new business include
instant brand awareness and credibility, administrative and/or technical support,
franchisor-provided training and quicker return on investment.
Entrepreneurs who take up a franchise need smaller amount of
capital resources. In addition, it is easier for an
entrepreneur to get a business investor
to invest in a brand name franchise.
The advantage of owning a franchise for an
entrepreneur is that he or she will find support every step of the way.
This is especially the case of brand name franchises. Another advantage to owning
a franchise is that entrepreneurs need to spend smaller budgets on
entrepreneur marketing
tactics. Since the brand name is already registered with the individual, entrepreneurs
need to spend less resources of familiarizing clients to the product.
However, for many entrepreneurs, owning a franchise does not have the same sense
of excitement or thrill as starting their own
new business venture. Many entrepreneurs love the thrill of coming up with
new business proposals and they don’t want to give this up to buy a
franchise.
In addition, entrepreneurs need to work within the parameters developed by the main
corporate company when it comes to running a franchise. This means, franchise owners
do not always have flexibility in offering discounts and other brand building measures.
On the other hand, an entrepreneur
of a new business can
use several innovative techniques to build brand recognition.
Finally for some entrepreneurs setting up new businesses is all about the thrill of coming up with new ideas and writing
out new business proposals.
They really do not mind writing one type of business plan for the business investors
and preparing a shorter version of the business plan for employees and clients.