Buying a Franchise Vs Starting a New Business

Buying a Franchise Vs Starting a New Business

There are many people who want to start their own businesses. There are many franchisers too, who are advertising their franchise opportunities. These also promise that you will get into business very fast.

If you are planning to start your own business, do keep in mind, that it will be long and difficult process. There will be a lot of pitfalls and traps especially if you are a novice entrepreneur. There are many examples of businesses which don't reach the break-even stage.

Buying a franchise has many benefits. It helps you shorten the learning time period and also reduces the amount of time, your business needs to actually start making money. It also lets you work under the name of an established brand. It is very obvious that if that business is successful now, it's business processes are mature and they have a sound business concept. So by buying a franchise opportunity, you will also be benefiting from their business processes and from their success.

There are some situations in which, buying a franchise does not seem to be the right option.

One of the reasons is that it is often more costly than starting a new business from scratch. You have to pay certain fees like franchise fee, franchise marketing fees, and you also have to pay for franchise training program. A minimum amount of working capital may also be required. There may be some other restrictions from the franchiser. But seen from an another angle, these high costs and restrictions prove helpful for the business growth.

Some franchises also have the requirement of territory. This also leads to success for a new franchisee. Normally the territory will not have much competition. But owning a franchise territory also needs better franchise management to reach certain milestones.

There are many things that you have to think about, when deciding about buying a franchise or starting a new business. But buying a franchise will be a better choice for many, since they will be getting sound business model and guidance from an established business.

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