Is Franchise A Good Option For An Entrepreneur?

For entrepreneurs, franchises are definitely one of the best business options, but as said, the franchise is not for everyone.

Which is better- franchise or business?

Both the franchises and businesses are good for entrepreneurs. But, both of these have their own cons and pros. Let’s, for starters, focus on the cons and pros of the franchises. If you want to start something under someone’s trademark, then the franchise is very good but if you want to create something of your own, then business startups are ideal.

Pros of franchise

• An established brand.
• Franchises are supported by national campaigns.
• Most of the franchises share the suppliers of the franchisor.
• Franchisors provide the necessary support to the businesses in order for them to succeed.
• Franchisors sometimes provide financial aids in the form of loans.
• You are all on your own, even though your business will have someone else’s brand name.

Cons of franchise

• Initially, you have to invest a lot in order to get the license from the franchisor.
• You cannot work beyond what’s mentioned in the franchise agreement.
• In most cases, the franchisor charge franchise fee from the franchisee for marketing purposes.
• The business is completely depending on the success and the market penetration of the franchisor.
• You need to pay a huge amount of money as the royalty fee, as long as you will be a franchisee of the business.

What are general costs associated with a franchise?

For starting a franchise business, one needs to consider a number of business costs like:

• Location cost
• Equipment cost
• Signage cost
• Inventory costs
• Advertising fee
• Investment cost

Conclusion

As the franchise network is quite complex, before investing lakhs of money in any sort of franchise, it’s best to look into the basics of buying such a business.