Franchise Business vs. Non-Franchise Small Business

If you’re looking to start your own brick and mortar business you have essentially two options…start your own small business, or buy into a franchise. While franchises do have a slightly higher success rate than non-franchise businesses, they are not easy money or guaranteed success by any means. Both options have their own pros and cons… the following article will discuss.

The main difference between franchise and non-franchise business, is that as a franchise owner, you will have a system and proven business model in place for you follow. The system will generally dictate how business is conducted, suppliers, advertising, hours of operation, and so on. Yes this is a great system to have in place, however it’s a common misconception that this is some sort of “turn-key” solution, and an easy ticket to generating income. Whether you’re an independent business owner, or a franchisee, there’s no way around putting some good hard work into your business to make it successful.

As a non-franchise owner, this system will not be in place for you… all is up to you to figure out. This may seem daunting, however it allows for a great deal of personal freedom not seen in franchising. You set the hours of operation, the wages, and you do business how you want, not how someone else tells you how to do it. Additionally, while the system in place in franchising may facilitate the running of your business, it may also result in wasted money. You’re often forced to deal solely with one supplier or advertiser… you can’t shop around for better or cheaper deals.

The cost of franchise business and non-franchise businesses actually tend to be quite similar. As a non-franchise business owner you’ll be responsible for equipment, furniture, legal and consultation fees, licensing fees, and so on… much of which is included in the cost of what a franchisee would pay for their business. However, what a franchisee is also paying for is an established brand name and the business model and system we just discussed… which can get quite pricey with some of the better-known franchise businesses.

Finally as a franchisee, an established brand name may help to bring in business… something which an independent business owner lacks. However, again, this is by no means a determination of success. Market saturation, advertising, location, the state of the economy and so on, will all be factors in determining the success of a franchise business and non-franchise business.