Franchise or Startup: Which One to Go For When Starting a Business?
When we need to choose between Franchise or Startup and we should go for the one that’s best for us. But what’s exactly the definition of “the best for us”? The answer to this will always be subjective. What’s best for you could be not the best for others. It’s how you see things and what particularly are your objectives for that particular time.
Whether you choose Franchise or Startup, there are things you should take into considerations before you make a decision. Let’s help you decide by discussing their features.
A Franchise Could be the Best Choice if You Want an Established Business
Franchise Businesses Have a Higher Success Rate
Franchise businesses have already established themselves. They have been in circulation for quite some time. They have developed product lines, services, and a system to operate to place them where they are now.
One of the good things franchise businesses offer to their licensees is the constant support they give to them like training the employees, which is uniform to all their franchise outlets, and the providing of raw materials for the constant operation of their franchise clients.
Franchise Businesses Have Brand Recognition
If a business will start from scratch, it has to make effort to let people know about the products and servicer and how it would be different from its competitors.
In marketing terms, this is called branding. Branding also includes the name, symbol, design attached to a firm. For example, Coca-cola is known for its tagline “Open Happiness” while M&Ms has “Melts in Your Mouth, Not in Your Hands.” Franchise businesses come with their own name and brand recognition. Franchisees don’t have to work out for it anymore as they already established themselves.
Franchise Businesses Charge Fees for Their Licensees
Think about what you need to do in order to initially set-up your own business. You need to select your business location, construct your physical store, exhaust some lists of suppliers, recruit and train employees, launch and promote your store, and market your own products and services.
With your subscription to the Franchise System, everything is being taken care of. The amounts you pay to a franchise company have two categories – the initial franchise fee and the ongoing franchise fees. The former has got something to do with the initial setup of your franchise business while the latter has got something to do with the operation and maintenance of your company
Franchise Businesses Provide No Freedom
You can’t change the name of the business, the store layout, the uniform of the employees, the product lines and services, the advertisement of the company, or more if you wish to subscribe to the franchise business. This is an advantage for those to wish for convenience and easy establishment of their business, However, it is a drawback for those who want to apply their own creativity in designing their own products and services.
A Startup Could Be the Best Choice if You Prefer Freedom and Creativity
Startup Businesses Promote Creativity and Innovation
Just like franchise businesses, startups also design and create their own product lines and services. However, this is usually done by a creative team. You wouldn’t have a say on this as a franchise licensee unless you’re a part of that creative team.
However, if you start from scratch and employ a startup business, all those creativity and innovation have room. If you’re into a pasta and pizza business, you have the freedom to choose what pasta flavours you want your store to offer. On the other hand, you can invent your own flavor of pizza/ You can even choose what should be the packaging for your products or what should be the layout of your store.
It could be taxing on the part of a startup business but if creativity and innovation are really their game, then, they rather see it as a challenge than problems.
Startup Businesses Promote Growth and Professionalism
Being the owner of your own business, you have professional freedom. You can choose what days of the week you want to operate your business and you can choose as well what are your operating hours. You even can decide how many stores you want to construct and where to do it if you want to branch out as your business grows.
The Call to Make a Decision is up to You
Should you choose a Franchise or Startup? It depends on your objectives. If your objectives are to design and develop your own products and services, then, definitely, startup business suits you best. If your objectives are to build and establish your business in no time without the hassle of building from scratch, a franchise is the right one for you.
Do you need further assistance in choosing between Franchise and Startup? We at 3E Accounting would like to help. We are among the top Business setup specialists in the country. Contact Us for more information.