This lesson is part of our free Franchise 101 course.
If you’re considering getting into franchising, then it’s worth checking other alternatives first. Franchising is part of a wider group of business opportunities, and one of them might suit you better.
What Do We Mean by “Business Opportunity”?
The phrase “business opportunity” refers to a range of careers where you buy or lease the beginnings of a business from an existing provider. This can include distributorships, product licenses, multi-level marketing schemes, or any other business model where the tools to get started are provided as a package.
The advantage of a business opportunity is that it lets you get a business started quickly while retaining some control over what you do.
Products, services, procedures, and even a brand will be provided, saving you from creating a whole business from scratch. You can pick these up and start earning revenues relatively quickly, skipping some of the research and slow build that your own business would need.
For most, once the business is set up and you’ve paid your initial costs, you’re then in control. You have a lot of space to alter the business and run it your own way.
What Makes Franchises Different?
With franchises, the originating company exerts tighter control than with most business opportunities. There’s a strict vetting process, an ongoing legal relationship, and a strict set of procedures and practices that you have to stick to. There are also ongoing fees, as the franchisor takes a cut of the profits.
In return for more restrictions and more costs, franchises provide more support. There’s extensive training at the start, shared marketing, and a higher authority you can turn to for advice and assistance. The brand may be better known and developed, and have tighter quality control, protecting your business’s reputation.
This is partly because franchises are more tightly regulated. Regulations mean that you know what you’re getting, reducing the risk of getting caught in a scam or investing in a poorly planned business.
How to Choose?
How do you choose between these options?
If you want more freedom and space to reinvent your business, then a franchise isn’t for you. It’s a model where you have to play by someone else’s rules.
On the other hand, if you want more security and support, then a franchise is probably for you. What you lose in individuality you gain in quality control and certainty over what you’re getting into.
Like any business opportunity, a franchise has its risks, but those risks, like your choices of how to run the business, are more under control.