Date Written: 9/16/2022
Assignment: Write a 250 word essay comparing the franchise model against going independent and “doing your own thing.”
When someone goes to start a business they have to choose from either an independent business or a franchise business. A franchise business would be opening a new location of a preexisting business like McDonald’s. An Independent business would be someone’s own idea like a completely new restaurant. There are advantages and disadvantages to both types which I will go over below.
Franchise Business
The first option running franchise business is perfect for someone who wants less work and risk but probably less reward. The best part of running a franchise business is that you are given the recipe for success. For example, if someone starts a new McDonald’s it will most likely be a success because people already love McDonald’s food. When starting a franchise you don’t have to worry about creating marketing campaigns, new products, employee training, building designs, etc. the franchisor does it all for you. This does come with the drawback that you won’t have the freedom to change any of these things. The franchisor will also train you to be a successful franchise owner. Before you can open a franchise you must complete months of training learning how to run every aspect of the business. The biggest risk with owning a franchise business is that if the franchise goes down your going with it. For example, if you own a McDonald’s restaurant and their food suddenly becomes unpopular, then you will probably go out of business. There is also very little opportunity for growth with a franchise business. Also the franchisor will take a substantial cut of your profits. Overall running a franchise is a great way to run a business with very little risk and less reward.
Independent Business
The second option running an independent business is a lot harder and riskier but the reward and freedom can potentially be much greater. When you start a new business your probability of success is much smaller. This is because you don’t know whether customers will like your new business or not. You also have to come up with every aspect of the business. All of the research and development, the marketing, the logistics, the management, etc. it is all up to you. This added responsibility gives you lots more creative freedom to really make your business your own. If the new business is a success, then there is much more opportunity for growth. For example, you could open a new location or create new products/services or become a franchisor. You also get to keep 100% of your profits. In the end, running an independent business is great if you want more risk and more reward. In my opinion, the added freedom and reward for running an independent business is worth the risk.
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