Which Business Model is Better – Independent or Franchise?
Many people dream about having their own business. But only few are able to make their dream come true. For a young businessmen, it becomes quite confusing to choose between franchise model and independent model as both have their advantages & disadvantages. Here are few differences that separate these two models:
When the independent business model is followed, decision making powers resides with the management. On the other hand, franchisees of a brand have limited freedom in making changes to the basic business model.
Generally, independent business owners have to make a higher investment in order to establish their business. Buying a franchise usually cost quite less as the budget is pre-defined.
In most cases, franchise buyers have an advantage over independent business owners when it comes to brand recognition. However, buyers also need to understand the other side of the story too. If the franchisor or another franchisee does something that results in negative publicity, all of the brand’s franchisees suffer.
Franchisors make it easier for first-time business owners to succeed by providing access to a business system, corporate support, a supplier network and other services. But independent business owners have to go it alone. In return, however, they get complete control.
This is something that’s debatable. There is no conclusive evidence that either approach improves or reduces your likelihood of success. The key is: do your homework and thoroughly research the business before you invest.