How to choose between a franchise or starting your own company

Enter a reason for deleting this comment

How to choose between a franchise or starting your own company

Everyone wants to start their own business but they never really know if they should go the franchise route or if they should take a different risk and do their own thing.  Many people think that going the franchise route is playing it safe since doing your own thing takes much more work, but it's still a difficult thing to do because you could be parting with a ton of money to just get started.

Most restaurants and fast food establishments cost $300,000+ just to get started, and if you're looking into a stand-alone McDonald's, you better have at least $1,000,000 on hand to even get considered by them for a location lol.  On the other hand, your own business could get started for as little as $10,000 and you could build it up to that million dollar location over time, but it's still risky because you need all the branding and marketing done right the first time and you can't waste any money doing it.

Franchises are already branded and trusted
One thing people like about franchises is that they are already branded and trusted by the community you'll be getting into.  This is why companies can charge a premium for their franchise locations because they know you'll make money on autopilot, and branding has everything to do with this.

Your own business isn't really branded yet, because no one has heard of "Joe Bobs Burger Hut", but they can if you push all of your time and effort into it.

Franchises need a lot of startup money
Like I mentioned above, you need a ton of money to start a franchise, and the bigger the name is the more you have to put in.  You can definitely get a franchise for $10,000 but you shouldn't think you'll be making millions from those franchises. 

Some businesses even look at what type of assets you have before they decide to work with you.  So if you don't own a house, a few cars, a lakehouse, etc. they might not consider you because you don't have much trust flow or something to fall back on if you can't pay them.  Yes, they will take your house if they need to lol.

Your own company can grow how you want it to
When you have a franchise, you are told what to do and you have no choice in what marketing is to be done.  Now, if you have your own company you can do your own branding and marketing in order to pull people in.  You can boost your company on social media, through the search engines, and any other platform you can think of because you're the boss and no one can tell you no How to choose between a franchise or starting your own company

Your own company doesn't have franchise fees
When you get into a franchise, the startup fee isn't the only thing you'll have to pay, you'll also have to pay between 8% and 15% of your monthly profits to the mother company in order to keep using their name.  This means you are paying exponentially more for a franchise and much less for your own business since you don't have to pay anyone to use your own business name.

Franchises are easier but your business can be more successful
A franchise has been tried and tested in order to know what works and what doesn't, your business, however, has done none of this and you might screw up more than you succeed, but that's not stopping thousands of entrepreneurs each month from going their own route.  You can be much more successful with your own business if you do it right, and you never know, you could actually get a franchise agreement and start letting other people use your business name and charge them a monthly fee How to choose between a franchise or starting your own company

In conclusion
You could go with a franchise or you could go with your own business model, both have their benefits and downfalls, but it's up to you to decide which is better for you at the current time.  Some people prefer to go with a franchise because they're older and don't have the energy to put into a new business, while the younger generations are leaning more towards their own business because they don't want to listen to any sort of boss and they have the time to build up the company.

Remember to follow me!


Tommy Carey


Please login or sign up to leave a comment


Great article btw. just a side note, making our own business is not as easy as it sounds, but once you get used to face the "mistake", you get up and start to baby step again till you can running well. Even me who keep trying to start my own business for the past 10 years still learning and still did a mistake once or two lol

just imho,

Are you sure you want to delete this post?