Pros and Cons to Franchise Ownership

Pros and Cons to Franchise Ownership


Purchasing and operating a franchise business comes with many benefits for those who would like to become an entrepreneur without the risk of a start-up company. In return for a turnkey operation with standardized systems, ongoing support, and registered branding elements, franchisees pay an initial fee to purchase the franchise along with ongoing royalties to the franchisor. New franchisees can take advantage of a proven system and a well-known brand name. More independent-minded entrepreneurial types however, may feel boxed in by the franchise guidelines and expectations. There are pros and cons to any business decision, here we’ll consider those for operating a franchise business:

Pros

  • Inherit a proven system of operation in a pre-researched market
  • Receive a clear picture of current market competition with advice on how to differentiate yourself
  • Collective buying power reduces cost of equipment and materials
  • An established trademark provides brand recognition for customers
  • Demonstrated training practices provides instant operational expertise
  • Easier to expand into additional branch locations
  • Consulting readily available regarding sales, marketing and operation standards
  • Standardized scheduling and software systems to manage your business

Cons

  • Lack of control over operational processes
  • Contractual obligations for operating franchise under registered trademark
  • High upfront costs to purchase franchise rights
  • Possible restrictions to geographic market and operations
  • Issues affecting the greater franchisor may also affect you

The decision to get involved and commit to a franchise business depends truly on the type of entrepreneur and business owner you’d like to be. Do you appreciate being provided structure and a proven system that works? Or are you a trailblazer that likes to make up the rules as you go along? Would you like support for your operation or do you like to do things your own way? Answering these questions can lead you to making the right decision.

Consider Associated Costs for Each Option

It’s important to weigh the costs of starting your new business, whether you’re interested in running a start-up, buying a business opportunity from someone selling their current operation, or would like to buy franchise license. Aspects to consider include:

  • Facility or location out of which you will be running your operation
  • Equipment needed to conduct business
  • Signs and marketing materials
  • Advertising fees and costs
  • Paying and training employees
  • Having working capital to begin running your business
  • Opening inventory of materials, having enough to get started

Oftentimes, a franchise will include some of these costs as part of your initial franchise fee. Branding and marketing elements are one of the biggest perks of the franchise option, as a trademark brand is already developed for you. Starting a business will have high start-up costs no matter which option seems most desirable to you, so think about how you would prefer to conduct business and which parts of starting a business seem least desirable to you.

If you’re interested in franchising opportunities and would like to learn more about Bare Metal Standard’s kitchen exhaust cleaning business, contact Jeff Stanley, Franchise Development Director at 844-642-6065 or contact us online.