

Should I buy a Franchise or create my own business?
Individuals considering becoming entrepreneurs often ask this question. There isn’t a simple answer. First, it would best to determine your underlying reason for becoming a business owner. Most people respond that they would like to create a dream life. Of course, a dream life means different things to different people. For some, it is financial freedom, having more time and autonomy, for others, it is leaving a legacy for their children/grandchildren or building a business that they can sell to fund their retirement. I would recommend that you spend time self-analyzing to know your ‘WHY’. Why do you want to be a business owner? Knowing your ‘WHY’ and writing it down, helps you to keep going with owning and operating the business when it becomes hard and you want to give up. There will be some moments when you want to give up because you are tired and frustrated. After all, things are not going as well as you expected them to. This will happen no matter if you own a franchise or create your own business from scratch.
Now that you established your ‘WHY’ let’s consider some aspects that you should consider when you are deciding whether to buy a franchise or create your own business from scratch
When you purchase a franchise:
- the franchisor will provide systems, processes, and marketing support.
- you will have access to vendors that have been vetted and offer discounted prices
- you can leverage brand recognition.
- you have a built-in customer base
- you are governed by a franchise agreement.
- you pay an initial investment, monthly royalties, technology, and marketing/advertising fees.
- you have a community of other franchise owners within the brand for support.
Creating your own business provides you with control of all aspects of your business. This sounds great but it is no easy feat to create systems, processes, and marketing activities, and build a customer base from scratch while running your business day-to-day, especially if you have never done it before. Let us not forget you have to negotiate with vendors and you will not receive the discount in pricing that they would offer to a franchisor because you are a one-man operation. There are tax liabilities, insurance, financial planning, and more that as a new business owner you may not be aware of.
Only YOU can determine what option is best for you! Which option would you be most comfortable with and why? Questions to consider asking yourself to help you make a decision would be – Do I have sufficient capital and cash? How much risk do I want to assume? How would I grow my business? How will I know that I have reached my plateau and need help? What is the probability of failing because of a lack of support or knowledge if I create my own business? Should I hire a business coach? If you decide to purchase a franchise, then there is additional research and questions that will need answering to select the right one.
You may have a desire to offer a product/service that no franchisor is offering and then you have no choice but to create that business from scratch and take on the risk. Data shows that 50% of businesses fail within the first 5 years. Therefore, it is critical that you obtain the necessary coaching and mentoring to be successful.