Which is better: a franchise or a business of your own?
Well, this depends on how we individually view both from their advantages and disadvantages.First, what do we understand by Franchise? This is when an already successful business through a contract allows the franchisee to have the right to use their trade mark. The franchisee will be able to sell their product and services freely without any fear. The brand is the main thing that is being sold which is the valuable asset that must be managed for consumers satisfaction.
Own business or entrepreneurship is when a business is coocked by the owner from the beginning. Every idea needed to make the business succeed is generated by the owner. Now what are the advantages and disadvantages of both.
Starting with Franchising, it's advantages are as follows
1 . Support : The third party which is the person that was given the license has little work to do when it comes to how to run the business. The franchisor are in charge of how to bring up the business to their own standard by providing adequate tools and training needed to run the business professionally. All that is expected of the franchisee is to manage and develop a good relationship with the customers, and make sure the brand is well represented by maintaining their loyalty.
2 . Low risk : The risk involved in franchising is very low. The business or company involved are already rooted in the market doing well, and making their profit with their brand. Their likelihood of folding up is very low. They already have a strong market force driving them to success on daily basis. Their business is popularly known everywhere and they already have customers always waiting to grab their product or services. This is one of the advantage a franchisee dwells on .
Disadvantages
1 . Restriction : The freedom to do some certain things is not there for a franchisee. No matter how intelligent you are,you cannot change the brand line. The settings and structures cannot be changed to your desired taste. There are some rules that must be followed in other to keep the licensing agreement valid.
2 . payments and continuous fee : Before you can become a franchisee, huge amount of money must be paid to seal the agreement. After that is done, there is a monthly renumeration that must be paid to make sure your franchising with them is still intact. As long as you are still bound to the agreement, you will continue to pay as far as the business or company exists within your care.
Advantages of self business
1 . Creativity : owing a business gives one the ability to think and expand. Things to do to make the business become more unique is always the aim and objective of a business owner. If you believe that an action needs to be taken for the betterment of your business, you can come up with an idea and make a change at any time.
2 . Freedom : As a business owner, you are free to do anything you wish to do. You don't have to report to anyone. You only report to yourself. So freedom is something a business owner enjoys.
3 . Expansion : It is possible for an enteprenure to expand his business. If the business succeeds and there is need for expansion, it can easily be done
4. Diversification : A business owner can decide to add some other investments to his business, operating it in the same environment which is a way of minimizing risk in his business.
5 . Not necessarily huge fund needed : starting up a self business does not mandatorily require huge amount. You can start a business with little unlike franchise that you will need huge amount before having the capacity to become a franchisee.
Disadvantages
1. High risk : Most owned businesses fail within short time compared to franchise that is already grounded. Setting up a self business requires a lot of business strategies to keep it running. Why most people fear to start up a business is because of the ability to sustain it. As high as the failure rate is, if own business can be successfully managed to success. It will be a huge achievement.
Looking at the advantages and disadvantages, both are good but the note should be able to give you an insight on which is preferable in your own opinion. You will have to use your capacity in managing a business to determine which one best suites you.
Thank you for the question. Hope the answer helps.
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