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Advantages and Disadvantages of Owning a Franchise

Advantages and Disadvantages of Owning a Franchise

A choice to invest in a desired company model is not one that is made quickly. One of the crucial things to take before entering the corporate world is carefully thought-out research. Franchise models offer a very profitable and low-risk investment choice that allows you to build upon your current brand value and customer base rather than having to start from zero. Due of the enormous array of alternatives offered by various businesses across various franchise structures, this is only one element of the situation; there is also hindsight. Here are some inherent positives and downsides to think about before you are prepared with your research and jump in.

Advantages of Franchise Business

1. Start-up Timetable


Franchises frequently provide tested start-up schedules and specified procedures for every stage up until the end of the process. Finding a venue and making sure it is franchise-specific might be examples of this. Pre- and post-marketing initiatives are another significant component that the timetable covers.

2. Reduced Risk Factor

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Since they have the backing of a bigger, more established company, franchises are a much more solid investment than new companies. These businesses have tried and established business strategies that have already shown to be successful, frequently in many markets across the nation. Obtaining a loan to establish a franchise is simpler than obtaining one to start a standalone firm due to their track record of success.

3. Base of Loyal Customers

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Finding your first clients is one of the most challenging aspects of launching any new business, which is why so many people resort to franchising. When you acquire a franchise, you get to skip a lot of the labour that comes into branding and marketing a new firm. By purchasing a franchise, you have access to a ready-made, devoted client base and a pool of potential employees. By pulling in potential clients and workers from the start, this secures profitability.

4. Purchase Power

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You’ll be able to access resources you couldn’t before thanks to this skill. You will reap the benefits of your franchisor’s long-standing ties with suppliers when you buy a franchise and join the franchise system. As a result of the franchisor’s combined purchasing power, you will be able to obtain materials at a lower price.

5. Franchise Assistance


The assistance provided by the franchise is a very important advantage of franchising. The parent firm helps by offering pre-requisites and marketing techniques that create new chances. The majority of the franchisees also provide advice and assistance with staff training. This will undoubtedly relieve a lot of your burden.

6. Own Your Business


Being your own boss is a wonderful opportunity that comes with owning a franchise. You will be able to establish a more flexible timetable for yourself, have more control over your career, and decide where you want to work, among other things. Â You’ll be a business owner with a network of people you can rely on for help when you need it. There is a proverb in franchising that goes, “You’re in company for oneself, but not for yourself.” This also gives you the freedom to pursue new interests, hobbies, spend quality time with loved ones, etc.




1. Initial expenses

Each franchise takes some investment to set up the new location. The price might change depending on the brand and the franchise owner’s goals. However, there are other costs that must be covered, such as furniture, décor, product purchases, marketing, etc. A royalty charge that must be paid to the parent firm is also included in the costing spectrum; it may take the form of a fixed percentage, a percentage of sales, or both.

2. A Limited Imagination

There are creative restrictions for franchisees that want to explore, modify, or add to their company’s business plan or brand because franchises always have a set brand. Due to the preset business model, there are limitations on how you can function, what you can offer, and the vendors you can work with.

3. Contract-Bounded

Franchise ownership is a big matter with important legal implications. It involves documentation, thus it is also advised to thoroughly review the papers with the help of a lawyer. Franchise owners often gather financial data from their franchisees so that they may audit royalty payments and tweak their business strategy. Franchisees thus have limited privacy regarding the financials of their company.

Conclusion: Having a franchise or making an investment in one might be a dream ambition that will improve your financial situation and personal development. To lessen the risk factors, this also entails making a lot of difficult decisions and thoroughly examining every detail. There are several methods to go about it, but one of the most important is to do extensive research since it ultimately pays off.

An engineer by qualification, Gaurav started his career in sales and marketing due to his affinity towards networking with people. After learning the tips and tricks of the trade, he made a fresh start as an entrepreneur in the franchising industry back in early 2018, with a vision to bring order and transparency to an unorganized sector. He founded and spearheaded Frankart Global Private Limited, where he consulted, developed, and scaled more than 120 domestic and international brands all over India ranging from different industries such as food & beverage, beauty & wellness, and FMCG retail to name a few. Post-Covid, in mid-2021, he developed FranDocX, India’s first ready-to-use franchise documentation service portal, for the MSME entrepreneurs who were severely affected by the pandemic, and wanted to avail an affordable franchise solution service. His aim is to regularize ethical business practices in the franchising sector so that a greater number of investors can participate and avail the benefits of a structured franchise framework.

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