The PROs and CONs of Joining a Franchise

business owners leadership richard martinez - business coach small business owners startups May 14, 2021
The PROs and CONs of Joining a Franchise

One of the most popular ways of going into business as an entrepreneur is franchising.  This is because franchising involves active partnership with established brands.  The downside to this is that entrepreneurs who choose franchising have to share their profits with a corporate brand.  The upside though, is that established brands guarantee foot-traffic which generates revenues.


Do Your Homework If You’re Thinking About It

Business Expert Brittney Morgan explains that “Franchising allows bigger businesses to branch out and grow, while giving people the opportunity to run their own business with the help and support of a larger company that has a proven formula for success. Of course, that doesn't mean that opening a franchise is a piece of cake either, but for many aspiring business owners, franchising is a much less risky, yet still rewarding option.”


Here are a few important factors to consider when opting to join a franchise:

 The Pros

1) There’s No Need to Advertise

If a corporation is big enough to actually franchise, that means they have a tremendous customer base.  All the groundwork with respect to marketing has been taken care of.

2) It’s Easier to Borrow for It

If you can draft a viable business plan based on franchising, it’s easier to secure bank loans to finance the business.  This is because it’s much easier to make financial projections when it comes to cookie-cutter franchises.

3) Franchisers Will Train You

There’s no need to do a lot of experimentation with the business-model in a franchise.  Franchisers already have clear rules and procedures and how to set things up and operate.

The Cons

1) You Need A Lot of Up-Front Cash

The capital requirements of opening up a franchise are much steeper than independent startups. Most high-end franchisers ask for seven figures in liquid collateral.

2) Keeping Up with Rules is a Strain

The moment you start doing business as a franchisee, the corporate brand will expect superior quality-control.  There’s no room for deviation from standard procedures.

3) Your Reputation Depends on Other Franchise Locations

Even if you don’t make mistakes as an individual franchisee, other locations within your brand can compromise your business through random accidents.  For example, assuming you joined a restaurant chain, food poisoning in a location halfway across the world can discourage customers from visiting your well-maintained franchise.


Like any major business decision, the key to finding success through franchising is all about one thing.  Weighing out the risks and rewards.  Franchising can only work if you understand just how much sacrifice goes into setting things up initially.  But once you make it past the teething pains, everything can settle into smooth sailing.  If you like what you just read from our blog, you’ll love the various informative courses, workshops and events listed on our websites and social media. Whether you’re interested in personal development, or overall improvement of your business, give us a call at 1 (888) 823-7757 to find out how The RISE Academy can help you break past your daily struggles and start soaring in success. For business development coaching by Richard Martinez, call at 626-202-2291 or follow us on Facebook and Instagram.

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