Choosing Between a Franchise and a Small Business: Which Path Suits You Best?

So, you’ve decided to leave your job and become an entrepreneur. The decisions don’t stop there. You’ll need to figure out what kind of business you want to start—what industry, what products or services to offer, and where it will be located. But there’s one more big decision:

Do you want to buy a franchise or start a business from scratch?

Each option has its pros and cons. Let’s dive in.

Starting a business from scratch is more challenging. Your business concept is untested, so you won’t know if there’s a market for it until you actually launch.

On the flip side, a franchise is a proven model. There are many franchise locations across the country or even around the world. Other franchisees have succeeded, and chances are, you will too.

With a franchise, everything is already set up for you. The processes, marketing, and products are all in place. You just need to follow the established guidelines and start your business. There’s no guesswork involved, which can be appealing to many people.

You’ll also have access to your franchisor for questions and support—something you won’t get with a small business.

However, buying a franchise can be expensive, depending on the brand. You’ll also have to pay a percentage of your sales every month as royalty fees, which go toward marketing and administrative costs.

But if you thrive on challenges and want more control, you might prefer starting a business from scratch. In a small business, you make all the decisions. You choose the products, set the prices, and handle all the marketing. Many find it deeply satisfying to manage every aspect of their business.

You could even develop a unique business model that stands out, potentially achieving more success than any franchise. You might eventually franchise your own business and take pride in seeing new locations open up.

Still, there’s more risk without the safety net a franchise provides. There’s no guarantee of success, and you’ll lack the support network a franchise offers. Failure is a possibility.

But then again, isn’t anything worth doing worth the risk?