Franchise vs. Start-up: Which One Works for You?
Are you tired of your current job? Looking for a business opportunity? Facing the problem to choose the right business like Franchise vs. startup: which is better?
Don't worry, now you are in the right place. Here we will help you to find a way to start your business.
Here, we are sharing two kinds of business opportunity which is now available in the market
- Franchise
- Startups
Now the question is which one is better? Franchise vs. Start-up model.
Opening a startup or a franchise have numerous advantages and disadvantages. It all depends on the requirements of the people who are willing to get into the business world.
In today’s era opening a new franchise or opening a startup are very good options. The competition is very high and you need to put in lots of effort if you are opening a startup. On the other hand, there is less competition for franchises as you will obviously choose a well-established brand.
Difference Between Franchise and Startup
One of the major differences between a franchise and a startup is the level of control over your business. People with startup businesses have full control over their business but, that is not the same with franchises. Franchisee needs to follow the franchisor’s established business model or the services they are offering.
People opening a startup business have to face huge risks. The risk for these types of businesses is not calculated but, if you are into a franchise business then there is a calculated amount of risk. This is because the products and services in the franchise business have already been tested and used by the upper department of the company.
The challenges faced by a startup are quite more as compared to a franchise business. You need to get your sources right which is quite impossible at the beginning of starting a new business. On the other hand, the challenge faced by franchises is that there is a lack of flexibility. Franchisees need to follow the business model of the selected brand very strictly and need to reach their daily sales target. Franchisees may find the operation schedule challenging to adapt which might not even suit their daily basic routine.
Let's try to understand one by one
Advantages and disadvantages of a franchise
Every business has some advantages and disadvantages. let's try to understand this with the 4 major components
- Success rate
- Brand recognition
- Fee
- Freedom
Success rate:
Franchise business model have a higher success rate in comparison with traditional startup business why because this business has an existing and proven ecosystem. Process and execution of all franchises are operated by a single system and also they have the responsibility of the business.
In this business model, the franchiser trained the franchise about marketing, dealing with the client and also about daily day to day activities.
The most common thing is "due to the ongoing support of from franchise such business get more and more success"
Brand recognition
In the Franchise business model, you don't' need to create brand awareness because the company has already done such stuff. Customer understands the product and services of the brand so you can get sales from day one.
Fee:
Franchise has some fixed amount for the business. it might be a bit higher and apart from this, you need to pay some amount monthly or yearly as the brand fee.
Freedom:
One major problem that occurs with this business is freedom. You cannot changes the product line even the decoration and all stuff related to the franchise ecosystem. when you are working with the franchise, you must have to follow the instruction and guidelines, the rule of the franchise to protect the ecosystem.
Advantages and disadvantages of a Startup /traditional Business
when you are trying to open your own startup, you must have some innovation and creativity regarding the services and product line of business.
If you are the person with great dream and creativity ideas and also you are able to create your dreams into reality, you must go with a startup business.
The major thing which comes in such business is Professional freedom and growth. Unlike the franchise, here, you can implement your though, change the product line and even the complete business to meet the expectation.
The biggest challenges with such business are higher in Failure rate, according to the study, the startup has a higher rate of failure.
The study says, 25 % of businesses failed within the first year, rest 50% of the total get failed within five year and approx 30% of remaining become fails in just the next 10 years.
You must have this in mind while starting a startup and a traditional business model. there is a high rate of failure but if you get success in this business you will have tremendous growth too,
Conclusion: Hope you understand all the stuff about Franchise vs. startup: which one is the better option for you
Disclaimer: The information provided in this post is for general informational purposes only and does not constitute professional advice. Please consult a qualified professional before making any decisions based on this content.
