Exploring the Choice: Franchise vs. Independent Business for
Optimal Profitability
The
choice between investing in either a franchise or an independent business can
be difficult because all of them are business opportunities and offer great opportunities in the form of profits. The main
difference between is that investing in a franchise means inve4sting in an
already established system. A franchise is a system that already has a well-developed
brand, products, marketing, and operations. Investing in a franchise, therefore, involves buying a license
into a business which gives out the rights to sell products that are similar to
other brands within different locations. On the other hand investing in an
independent business means that all the rights associated with the business go to the investor. The owner of the independent
business, therefore, becomes
t\responsible for all decisions associated with
the business (Akalp, 2015).
Another difference between the two forms of
business is the lack of autonomy for a franchise. In this case, franchises make sure that they dictate all aspects of performance, products to
be sold and the type of marketing to be
used by the investor. As a result, this
leaves no room for the investor to make any crucial decision about the
franchise. The lack of autonomy is also seen
where the investor is forced to follow all directions given by the franchise.
Operators are, therefore, left with
minimal aspects of control over the business. However, investing in franchises
is best suited to those investors that have little background in business
development and management. It is very suitable for those people who find it
hard to establish a brand from scratch (Akalp,
2015).
On the other hand, people with the capacity and the patience of establishing an
independent business from scratch can benefit from having control over all
aspects of the business. It is associated with high levels of creativity,
skills in management and leadership. Independent business requires taking full responsibility for every aspect of the business and thus translates to being engaged
with more work (Kroeker, 2013).
Independent
business also requires the complete design and establishment of a brand.
Developing a brand is very difficult because it requires, marketing, product placement
and advertisements which can be very expensive. Small business owners are, therefore, challenged with the task of
having to get their brand noticed and this can be very expensive and consume a
lot of time. They require a well-designed brand that showcases the corporate
image of the business (Kroeker, 2013).
One the other hand branding for a franchise is
very easy. This is because it already
exists and investing in a franchise means that the operator gets rights over
the use of the franchise’s brand. When the franchise has a popular and well-established brand, then it becomes easier
for the operator. However, anything negative about the brand trickles down to the branches and can affect
the business. Another important aspect associated with the brand is that it allows operators to have a
faster return on investment because the business will be recognized in an
instance (Kroeker, 2013).
It
is, therefore, important to note that
independent business and franchises are different from one another. The main difference is that one is already established and the other one has to
be developed from scratch. The choice
between an independent business and a franchise can be very difficult because
they are all business and are profitable. However, a franchise offers more
benefits than an independent business. A franchise is already established and
well recognized. It also takes less time to be in full operation and profitable
as compared to an independent business which has to get recognized first before
it can start making money (Akalp, 2015).
References
Akalp, N. (2015). Franchise or Independent:
What’s Right for You? Retrieved from
http://www.huffingtonpost.com/nellie-akalp/franchise-or-independent-_b_8281324.html
Kroeker, C. (2013). Independent
Business or Franchise? How to Decide. Retrieved from
https://www.inc.com/curtis-kroeker/independent-business-or-franchise-how-to-decide.html
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