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10 Reasons Entrepreneurs Choose Franchises Over Independent Startups

Buying an existing business vs franchise vs starting from scratch? Here are 10 reasons an entrepreneur would choose a franchise over an independent startup. Running a business is not easy. That’s basically the reason why 35 percent of all new businesses fail in their first two years.

Nobody wants to start a business when they know they have a very high chance of packing up in the first two years, that is why entrepreneurs are today leveraging the franchise option. If you dream of owning your own business, but you are still not adept at handling all facets of a business, a franchise can indeed come to the rescue.

This however is not a decision to be taken lightly, as running a franchise unit will require you to invest time, effort and money. Your new business venture will command all of your attention to get it off the ground and you may not see returns for a good few months.

A typical franchise operation will offer you a structure for launching, operating and growing your business. Your franchisor, who himself is successful in his niche, will deliver the entire framework around which his business is built.

Franchisors usually create comprehensive operation manuals and training programs for their franchise owners that cover marketing, operations, accounting, technology and other areas that are specific to the particular business model.

These efficiencies are designed to enable franchise owners earn more and spend less time and effort than otherwise would be required to open and operate a similar business on their own. In addition to the factors mentioned above, we will go ahead to give you reasons why entrepreneurs choose franchises over starting a business on their own.

10 Reasons an Entrepreneur Would Choose a Franchise Over an Independent Startup

1. Your business idea has already been picked and researched on

You’ve got all the drive, determination and skills needed to become an excellent business owner, but you’re missing one crucial thing: a good idea. If you don’t have any obvious talents and haven’t hit upon that million dollar idea, you might think that business ownership is out of your reach. But it doesn’t have to put an end to your business ownership dreams.

According to the BFA’s research, more than 50 percent of franchisees choose to operate through an established business model because they didn’t have an original business idea. That doesn’t mean they’re lazy or lack creativity. Many of these people simply recognise that another brand is dominating a certain market.

Rather than trying to steal some of its customers by launching an independent business that is far too similar, they choose to join the brand instead. The idea of ‘if you can’t beat them, join them’ drives a lot of new franchisees to the biggest brands.

It can make better business sense to join an established franchise. Instead of devoting all your time to product development, brand identity and other incredibly labour-intensive tasks, you can use your skills and experience to build a successful and profitable franchise unit. Not everyone will enjoy the process of building a business from scratch, but that doesn’t mean they don’t have the makings of an excellent business owner.

2. You have mentors showing you the way

Loneliness can be a huge problem for new business owners. You may feel physically isolated, particularly if you go from working in a bustling office full of colleagues to a silent home office. It’s more common, though, that you will feel mentally isolated.

Even if you enjoy the solitude of working alone and find it makes you more productive, it can be very isolating if you don’t have anyone around who understands what you’re going through. Many entrepreneurs find it hard to build a strong business support network, particularly if they’re shy or feel a little bit insecure in the new world they’ve entered.

Luckily, good franchises come with a ready-made support network. Most offer access to a support whenever their franchisees need it.

This could be a 24/7 head office team if you’re joining a huge, international franchise, or it could just mean that your franchisor is always there to answer your calls/emails if you’re part of a small network. You won’t have to wrestle with problems alone and can use the experience of your franchisor and the franchise’s support staff to resolve them.

3. Freedom and Stability

Flexibility has always been a hot button for entrepreneurs who exchange the stability of a “real job” for the freedom that comes with being their own boss. Money, or income, is always a factor but surprisingly it is seldom the most important.

We know many people who have left huge salaries behind because they were miserable, to pursue the American Dream and launch a business. Status is an all-encompassing category that includes not only titles and position, but more important, the feeling of purpose one has and being a part of something significant.

4. Your chances of staying open for longer is doubled

The U.S. Department of Commerce and other authors of statistics concerning franchising have shown that the revenue from franchise establishments accounts for over one-third of all U.S. retail sales.

At its best, franchising provides an opportunity to buy into an existing, successful business model that comes with a proven track record, a successful training program, a solid supply chain, and expert technical support. Some of the best-known franchises have impressive success rates, with the chances of failure hovering in the low single digits. By purchasing a franchise, you get a turnkey business that is ready and waiting for you to take the reins.

If you are detail-oriented, good at following directions, and comfortable with established systems, franchising provides a quick and easy way to become a business owner. Depending on the franchise you select, you may have the choice of either purchasing a fully operational location or starting from the ground up at a new location.

The former option enables you to step right in and take over a business that has an existing customer base, documented cash flows, and a workforce already in place. Franchising also provides a clear exit plan. When you are ready to retire, you can sell an existing, well-known business to another would-be franchise owner.

5. You Qualify for Ongoing Support

One of the top reasons entrepreneurs enjoy the franchise experience is the availability of a support team. The franchisors shared concern for your success means that you are in the business for yourself, but not necessarily by yourself.

Franchisors provide quality training for you and your staff, a corporate team to help you with questions or concerns and even the marketing support you may not be able to afford on your own. Especially for first time business owners, it can be very reassuring knowing there is someone to turn to for help.

While there are always risks in any new business venture, purchasing a franchise limits some of the concerns independent businesses carry. The established brand awareness, franchisor operating procedures, and ongoing support can help you get up to speed and comfortable quickly. And by building on the success of the brand, you can position yourself for growth and the possibility of adding new locations to your franchising portfolio in the future.

6. You don’t need a lot of qualifications

Many of us believe that the only way we can achieve a better life is by achieving costly qualifications, like a degree, or slaving away on a poor wage for years just to complete an apprenticeship. However, franchising can open up a whole world of career possibilities without the need for any new qualifications.

Franchising is also the ideal option if you’re seeking a career change later in life, and you don’t really wish to go back to college or university for added qualification. However, considering that around one in five new franchisees are under 30 years of age, it’s also a great option for younger people who are ready to leave formal education behind.

7. Your brand is recognized from the get go

While launching any business always includes an element of uncertainty, owners purchasing a franchise can mitigate risk by knowing the brand is already well known amongst their target audience. While different franchises certainly have different levels of awareness, owners can at least be confident that the product or service has proven successful elsewhere.

Instead of guessing at projected earnings, buyers should have access to other locations’ average financial benchmarks, providing valuable insights about cash flow and the actual financial performance.

8. Franchise businesses are more likely to generate a profit in the first year

One question franchises usually wonder about is if their chosen franchise will start generating profit in the first year. Well, the good news is that it can. In fact, there is a high chance of that happening. According to the British Franchise Association (BFA) and NatWest Franchise Survey of 2018, around 90 percent of franchisees reported that they were trading profitably after two years in business.

Comparatively, around half of all independent businesses will go bankrupt after just two years, showing that a franchise is a much safer investment than starting your own venture.

In addition, more than 50 percent of franchisees now claim their businesses have an annual turnover of more than $250,000, indicating you can build an impressively large business by going down the franchise route. It’s also easier to enter the world of franchising from a financial perspective. Banks are more likely to approve a business loan if you’re starting a franchise over an independent business, as it has a proven track record of success.

9. Operating systems are already in place

One advantage of buying an existing business, either franchise or independent, is that the business has an established client base, operating history, and a business plan in place. Unfortunately, however, many independent business owners keep those plans in their head and many not have a documented how-to for new owners.

Franchises have gone through those procedures already, giving new owners a well-thought out, already successful operating system. Essentially, the mistakes have already been made and new owners can avoid those common early mishaps. Buyers of existing, operating franchise locations will additionally benefit from an established client base which can be further grown.

10. Collaboration

The franchise organization model offers the franchisee the ability to grow under a common brand and share in the benefits of a larger group of business owners. Though each business is independently owned and managed, all franchisees share in the collaborative benefits of the organization through the support and oversight of the franchisor including:

  • Group advertising resources not typically available to small, independent business owners
  • Owning your own business and making day-to-day decisions yourself, guided by the experience of a successful business enterprise
  • The ability to sell products and services to markets that company-owned outlets have difficulty serving because of higher operational costs and lower motivation of employees in company-owned outlets
  • The benefit of recognized and proven service marks, trademarks, proprietary information, patents and/or designs
  • Training from successful business operators
  • A lower risk of failure and/or loss of investments than if you were to start your own business from scratch
  • Being a part of a uniform operation, which means all franchises will share the same interior and exterior physical appearance, the same product, the same service and product quality and overall customer brand awareness
  • Operational support from the franchisor, both before and after launching your business venture, in areas such as financing, accounting, employee training and operational procedures
  • An opportunity to enhance your management abilities within an established business model that you couldn’t experience in most employment situation


There are loads of reasons why investing in a franchise is worth it. Franchising is a highly accessible route to business ownership for virtually anyone, even if you’ve always felt like it was just a pipe dream for you. If you’re ready to make the transition from employee to business owner, or are looking for a new challenge as a self-employed person, investing in a franchise could be the best decision you ever make.