Friday, April 13, 2012

Franchise Vs Start Up's

"Franchise Vs Start Up's"," There are pros and cons of each with several discussions on the Internet that weigh in on the subject of which is ""better"" and the characteristics of each form of ownership. Most franchises succeed but certain franchises will be met with failure and the fact is that more start-up businesses will fail than franchises. The article states that more than three quarters of franchises are still surviving after the first five years. There are some really good franchises out there and one that I feel is always a great one is Chick Fil A. The possibility of failure for starting your own business making chicken sandwiches would experience a greater chance of failure than if you were to buy into the Chick Fil A franchise because of their support system and methodologies. Other BusinessesEvery business will face competition but a franchise has the support of the franchisor, the process, the systems, and the methodologies to be able to successfully compete without taking too much capital from the business. Without this support, it can be tough for an independent business owner to compete against a franchise because those business pockets are ""deeper"" and can spend more money in its efforts to attract new customers via marketing and promotions. Expertise and ExperienceWhen buyers purchase a franchise, they are getting a proven system organized by a knowledgeable and experienced team. If an independent owner has no experience, the business cannot reflect that expertise. As an independent business owner, there is a lot of trial and error but with a franchise, everything is laid out to where it is easy to duplicate and everything is put in place. A start-up business owner must be confident in themselves and their team to bring experience and expertise to their venture to ensure its success and to mitigate mistakes that could cost the company money. FinancesStart-up costs are phenomenal for any business as well as other costs that businesses have to take on (admin costs, worker's wages, maintenance, general business expenses, etc. On the other hand, franchisees have to invest substantial capital in their businesses. Yet a franchise owner is buying into a proven business. For example, having to cut back on one area of your business to promote a marketing campaign could strain your business as you have to conserve capital to operate while focusing on all of the other financial needs of your business. RiskFranchisees mitigate their risks because they have the franchisor behind them. Franchising carries less risk than an individual start-up business. Although franchises do have a lot of advantages, the profitability and how much the franchiser makes is a huge factor in knowing if its right for you. THIS IS WHAT YOU GET TAKE IT OR LEAVE IT  

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