Owning a Business or a Franchise; Which way to go?

Rishabh Sharma
Rishabh Sharma Jan 04 2021 - 8 min read
Owning a Business or a Franchise; Which way to go?
By leaving the office regimes behind, you want to be your own boss but don’t know which way to go, a business from scratch, or a franchise? We have created an overview of all the pros and cons through which it will be easy for you to choose the best option available for you according to your situation and personality.

Nowadays, most people are tired of working for someone else and want to start their own business, but most of the time they don’t know if they should start it from scratch or invest in a well-defined business model(franchise). Both ways, you can make a lot of money and work on your own terms. Whichever way you chose to go, both have their pros and cons. So, let’s discuss the advantages and disadvantages of owning your own business or owning a franchise business.

Buying a Franchise

Going for a franchise business means you are entering a system that has already been established and proven to be a success. In a franchise business, all the hard work of building a business from scratch is done for you already by the franchisor. All you have to do is follow the instructions and keep the brand running in order to get the profits.

Below there is a list of some great benefits most franchises will provide you:

1. Ongoing Support - The franchisor will always assist and guide you during all the procedures. You can ask questions and resolve your doubts regarding the franchise and they will be there for you anytime.

2. Operational Assistance -  Everything will be smooth and simple. If you need anything just ask for it and let them do all the crucial work for you.

3. No Experience Needed - You don't necessarily have to have business experience to run a franchise business. You just need to select the right franchise for you and you are good to go.

4. Training Programs - Training programs will be for you and your employees. As the business is already running, most of the brands give training so employees can learn the way things are done, and in every franchise/store, things are done in the exact same way to maintain discipline.

5. Success Rate - It’s the fact that ‘Franchises have a better rate of success than a start-up business’. As the brand(franchise) has made its name and a huge customer base over time, the success rate is quite high.

6. Easier to Secure Finance for a Franchise - It is proven in most cases that ‘it may cost less to buy a franchise than to start from scratch’. Some of the low-cost franchise options are available where you don’t have to put huge investments and you can get huge profits.


The key benefit of buying a franchise is that you have almost all of the business strategy and planning done, some people refer to it as the "hard work" and the strategic thinking is done, and fortunately, all you have to do is get the thing started and once you do, keep going!   

Here are the disadvantages of opting for a franchise:

1. Agreements - Ending up in a formal agreement with a franchisor is not always a great thing, it usually depends on the relationship you have with them. In an agreement, you are bound to a set of rules and regulations applied by the franchisor.

2. Less creativity - As everything is already running smoothly, you can’t be creative about it. As everything is well-settled and running, you can’t make big changes.

3. Royalty - You have to follow the brand in the exact way the franchisor taught you to. Monthly royalty (fee) based on a % of the franchisee's income/sales and must be paid even if the business is not profitable initially.

4. Less Control - Due to the fact that the business is not your idea, there are usually restrictions on where to operate, the products you sell, and the suppliers you use.

5. Reputation - If the brand performs badly or some circumstances occur where the brand is facing any type of negative controversies. That may affect your franchise business.

6. No Renewable - Franchisors do not always have to renew an agreement at the end of the franchise term/agreement.


Starting your own business: 

In starting your own business, you work on it from scratch, putting everything that is in your head to it, then turn it into numbers. When starting your own business you only rely on yourself for absolutely everything. From planning to the design everything is yours. You make a decision about every single aspect of your business.

Benefits of a Business are mentioned below:

1. Fewer Upfront Costs - It’s totally up to you that how much money you want to invest in your business, you go at your own pace, which makes you adaptive and flexible.

2. Greater Costs in the Long Run - Minimum cost of production.

3. Innovation and Creativity - It is totally your idea from the beginning, your time to innovate and shine. It’s all up to you, how you think about every step you take to make your project happen and successful.

4. Professional Freedom and Growth - You are as flexible as you want to be and you explore a lot of new things according to your business. In the beginning, you do not have much income to have a lot of personnel, you are able to learn about every aspect of a business.


Some people say starting a business is much bolder, there is much more risk but much more freedom; everything relies on you, from bottom to the top, you only rely on yourself. 

Disadvantages of a business are as follows:

1. Higher risk of failure - The main problem is that most businesses have a much higher risk of failure. 

2. Low compensation - In the beginning, you invest much more than you have, you put everything you have into your project with a low success rate.

3. Lack of resources - Looking for investors, co-founders, etc, to help with all the resources you need for your business to succeed.

4. Lack of processes - You have to make your own processes according to your business model. 

5. A lot amount of stress - Building the business from scratch can be stressful where you are the soul of your business and you have to make and manage everything on your own. 


Buying a franchise is like having a backup. In this, it’s really hard for you to fail, you expect continued support and assistance in every aspect of your franchise business. You have the security you need, you do things your way. Dependency is the criteria that is always there, you always depend on others in the franchise business.

Conclusion - Main difference between operating a franchise and having an independent business is, you have flexibility/support 24/7. A small independent business has a higher risk of failure and a franchise has a detailed marketing strategy and a bigger buying power which means here you can have high profits with a well-established business.

A startup will give you more innovation and creativity but lack of resources and stress will make it more hard and hard for you. While being a franchise, you don’t have to deal with all these issues. You can go flawlessly on your venture with fewer worries and higher profits.

In the end, the decision is only yours. Whether to go with the business, where you have to deal with a lot of stress and building the business from scratch. Only God knows how much time will the business takes to be a success. Or going for a franchise business where you have everything running up smoothly, you just have to choose the right franchise business for you to invest in. You just need to be very clear about what is exactly that you're looking for and you are good to go.

Subscribe Newsletter
Submit your email address to receive the latest updates on news & host of opportunities
Entrepreneur Magazine

For hassle free instant subscription, just give your number and email id and our customer care agent will get in touch with you

or Click here to Subscribe Online

Newsletter Signup

Share your email address to get latest update from the industry