Comparing Independent Business vs Franchise Business

Business Aspect Independent Business Franchise Business
A. Concept of business. Owner needs to devote substantial amount of time researching the market and developing the product or service. Proven concept that can be adopted immediately.
B. How business is operated. Testing the business requires time and may undergo several rounds of trial and error. Proven procedure in running the business stated in operations manual requires minimal amount of business research.
C. Business owner is the boss. You own everything but business success also relies on your abilities. You own the franchise but you share responsibility with the Franchisor, minimizing instances for error.
D. Availability of instant customers. It may take time and significant amount of investment to retain loyal customers. Previous customers already know the brand. They are familiar with the product o service as Franchisor has already done the promotional legwork.
E. Assistance in running the business. Business owner has to rely on him/herself. Franchisor assists Franchisee on all aspects of the business and acts as business consultant.
F. National advertising. Costly and only a few can afford to do this. All branches contribute to the national advertising program. Contributions are used to promote the business.
G. Availability of supplies. Buying price is high and independent business owner is not the first priority because of low volume purchase. Low price due to bulk purchase. Franchisor maintains steady supply for the network of Franchisees.
H. Certainty of success within 10 years. Only 18% of businesses remain operational. 90 per cent of franchise businesses remain operational.
Comments