The Pros & Cons Of Buying A Franchise

There are many options to finding the right path to becoming self-employed. For those who have the desire, but maybe not the idea, franchises can be the perfect fit. However, how do you know if buying a franchise is the right choice for you? It may seem like a great idea, but if you’re not sure, consider these pros and cons to help you make your decision.


Maybe the best part of buying a franchise is that you are buying into a proven system. Here is how it is supposed to work: Somewhere some business owners created a successful business that they realized could be duplicated; that is, the reasons and methods for their success were things that could be systematized and taught. So the business owners reduced their success to a step-by-step plan. That system, this business model, is the franchise.

The idea is that if you do what they did, you will get the results that they got. A good franchise then is a systematic way of doing business whereby you agree to do things the franchisor’s way and are being allowed to use their business name, logo, system, and so on. So the first benefit of franchising is that you theoretically reduce your risk of failing as you are buying a proven system.

The second good thing about buying a franchise is that you should get plenty of help. Ray Kroc of McDonald’s put it best: As a franchisee, might be in business for yourself, but you are not in business by yourself. Whereas when you start a business from scratch you are on your own, when you start a franchise, the franchisor is there to help you succeed.

They offer expertise in a wide variety of areas. A good franchise system trains you to be a successful businessperson. Furthermore, there will be other franchisees in the system with whom you can learn from and work. That too should be a great resource.

The last benefit of franchising is that you will get assistance with your advertising and marketing, and with the bigger franchise systems, you will get the benefit of their national advertising campaign.


While the benefits of buying a franchise are significant, the downsides must be considered too. The first is that it can be is fairly expensive to buy a franchise. When you are buying a franchise, you are buying the franchisor’s name, logo, goodwill, expertise, system, and training. That can be worth a lot, especially to a well-known franchise. This is not t say that all franchises are expensive, there are many that are quite reasonable, but just know that if you want to buy a name-brand franchise, you will pay for that right.

The second issue is that you will have less independence as a franchisee than you would as a regular entrepreneur. The system is the system, and you will agree in your franchise contract to run your business according to the system. Because the franchisor trusts you with its brand and goodwill, you will need to do things their way.

All in all, if you do your homework and find a good franchisor, you should find that it is a great way to get started in business.

Protect your personal assets and business by forming an LLC for your franchise.

Steve Strauss is a senior small business columnist at USA TODAY and author of 15 books, including The Small Business Bible.

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