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Franchising a Business

A franchise business is a type of business owned by a businessperson or group that offers merchandise, supplies, and/or services branded by an entity that supports every aspect of the business it franchises for a flat-fee and fees based on sales and/or profits.

Some of the benefits of buying a franchise include:

Autonomy: being your own boss
  • Making your own business decisions

  • Managing your own staff

  • Determine your business needs to promote growth

  • Schedule flexibility

Turnkey operation
  • When buying a franchise, the equipment, supplies, and instruction are included with the purchase

Business support
  • Experience is not always needed to run a franchise

  • All franchises offer an operations manual

    • A detailed guideline with systems, processes, and procedures to successfully run your franchise

Higher rate of success than start-up businesses
  • Buying a business that is established and successful

Buying power
  • Opportunity to purchase product in bulk at a lower cost

  • Potential savings in insurance services and leasing agreements often negotiated by the franchise

Financing opportunity
  • Banks and lenders are more willing to take a risk financing a franchise than a traditional type of business


When considering a franchise business, it is important to also consider the disadvantages of owning a franchise. One has to conform to the rules and guidelines put in place by the franchisor, which may include business location and its proximity to other similar franchises’ location, hours of operation, and pricing.

Here is a list of the advantages and disadvantages of buying a franchise business:

Financing opportunity
35% rate of failure after 5 years of operation
Buying power
Often share profits with franchisor
Business support
Business reputation is dependent on other franchises
Turnkey operation
Little to no creative control over business
Being your own boss
Conforming to rules and guidelines by franchisor
More resources for franchising a business

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