Keen to run your own busi­ness but not sure if you are ready for an in­de­pen­dent ven­ture or a fran­chise? In­side Fran­chise Busi­ness in­ves­ti­gates the pos­i­tives and neg­a­tives of each op­tion to help you make a more in­formed de­ci­sion.

Inside Franchise Business - - Contents - By Gali Blacher

Should you buy a fran­chise or an in­de­pen­dent busi­ness? Check out these ad­vice tips.

Do you like things done your own way, or do you pre­fer on­go­ing help and guid­ance? The an­swer to that will help de­ter­mine whether you would find fran­chis­ing frus­trat­ing or chal­leng­ing.

From an own­er­ship per­spec­tive, run­ning a typ­i­cal small busi­ness is far dif­fer­ent to run­ning a fran­chise. In­de­pen­dent busi­ness own­ers have the free­dom to change their prod­ucts and ser­vices based on per­sonal pref­er­ences. This is not so for fran­chise own­ers, with fran­chisors gen­er­ally mak­ing de­ci­sions about prod­ucts and other mea­sures.

How­ever, in­de­pen­dent own­ers do not have the se­cu­rity of know­ing that prod­ucts, ser­vices and sys­tems have all been tried and tested. Fran­chisee Bev Tay­lor from courier com­pany InX­press says the beauty of a fran­chise is that there is a model that works. “Fol­low the model – I am the big­gest ad­vo­cate of that,” she says.

While in­de­pen­dent busi­ness own­ers are likely to have higher in­vest­ment costs, they have more con­trol over in­vest­ment de­ci­sions. If cash is tight, they can de­lay plans or choose to down­size projects.

On the other hand, says ad­vi­sory ser­vice BDA di­rec­tor Mark Fer­nan­dez, a fran­chisor and their group col­lec­tively can buy sup­plies and ser­vices cheaper than an in­de­pen­dent busi­ness.

“It is about the num­ber of wid­gets. There is also the group mar­ket­ing fund, and that pool of money is gen­er­ally more than you would have on your own,” he says.

“The fran­chisor usu­ally em­ploys some­one to look af­ter mar­ket­ing, mar­ket trends, in­no­va­tion and mar­ket­ing ini­tia­tives, where a busi­ness owner usu­ally needs to do this them­selves on top of net­work­ing and bring­ing in busi­ness.”


De­spite the many pos­i­tives of own­ing an in­de­pen­dent busi­ness, it comes with a high de­gree of stress and risk. Do­ing things on your own means you need to trial mar­ket­ing or prod­uct ini­tia­tives your­self, and you do not have the ben­e­fit of the con­stant sup­port and help avail­able in a fran­chise network.

An ex­ist­ing brand, tried-and-tested sys­tems, an ex­pe­ri­enced head of­fice and a network of on­go­ing sup­port are just some of the ben­e­fits of a fran­chise.

Brand aware­ness can have a big im­pact on a new busi­ness, so buy­ing an es­tab­lished busi­ness, be it in­de­pen­dent or a fran­chise, means you'll be trad­ing from the get-go. You will not have to spend time and re­sources con­vinc­ing cus­tomers to try some­thing new, which is a sig­nif­i­cant chal­lenge for new busi­ness own­ers.

There will not be sys­tems in place, how­ever, or on­go­ing sup­port for an es­tab­lished in­de­pen­dent busi­ness, which again makes a fran­chise such an ap­peal­ing op­tion.

“It’s all about the brand,” says Fer­nan­dez. “Peo­ple turn to recog­nised brands, and fran­chisees look for the sys­tems and pro­cesses un­der that um­brella.”

Hav­ing an ex­ist­ing brand means there is a head of­fice with ex­pe­ri­enced staff mem­bers ready to of­fer the right busi­ness ad­vice.


Even if not a house­hold name or even es­tab­lished na­tion­ally, a fran­chise will have mul­ti­ple out­lets so there is some brand eq­uity in the com­mu­nity. Buy­ing a fran­chise rather than an in­de­pen­dent busi­ness can also mean a faster re­turn on in­vest­ment be­cause of the sup­port and struc­ture pro­vided. This can of­ten pro­vide a com­pet­i­tive edge.

A 2016 re­port from Griffith Univer­sity says sales turnover for the fran­chise sec­tor was es­ti­mated at $146 bil­lion,

while IbisWorld iden­ti­fies three key suc­cess fac­tors for fran­chis­ing:

• Hav­ing a loyal cus­tomer base

• Hav­ing a clear mar­ket po­si­tion • Hav­ing the com­bined busi­ness ex­per­tise of the group.

A fran­chise makes it pos­si­ble for peo­ple who have never been in busi­ness be­fore to run one suc­cess­fully. A ma­jor ben­e­fit of be­ing part of a fran­chise is the sup­port avail­able, from train­ing to on­go­ing busi­ness de­vel­op­ment and bench­mark­ing.

Op­por­tu­ni­ties for spe­cialised learn­ing or train­ing is another tool in the arse­nal for the de­vel­op­ment and prof­itabil­ity of a fran­chisee.


Tay­lor says it is re­ally im­por­tant that fran­chisees have a group of col­leagues they can visit and learn from.

“Be­fore you con­sider go­ing into fran­chis­ing, visit es­tab­lished fran­chisees. Ask to meet with those who are suc­cess­ful and those who were not,” she says.

“Speak­ing to other fran­chisees is a re­ally great as­pect of own­ing a fran­chise. There is the op­por­tu­nity to dis­cuss and learn from others in the same po­si­tion as you,” says Tay­lor.

To up­hold the re­li­a­bil­ity of their brand, fran­chisors work out nearly ev­ery de­tail for how the busi­ness should be run for peak per­for­mance. Fran­chisees are ex­pected to fol­low the fran­chisor’s di­rec­tion on most as­pects of the prod­uct or ser­vice of­fered, mar­ket­ing di­rec­tion, and quite of­ten which sup­pli­ers are used. How­ever, fran­chisees make man­age­ment de­ci­sions on the kind of cul­ture they want and de­cide who they will hire.

De­pend­ing on your abil­i­ties and goals, this could be ex­actly what you need to start a busi­ness. If you don’t have much ex­pe­ri­ence with busi­ness but would like to own one, then this could be the most ben­e­fi­cial model for you.


So which model is better? There is no clear an­swer or data that pro­poses ei­ther model as more likely to suc­ceed. And, in terms of costs there are too many vari­ables to pro­vide a clear an­swer.

What is clear, how­ever, is that busi­ness suc­cess is highly de­pen­dent on the at­ti­tude and com­mit­ment of the owner. It is the same in fran­chis­ing.

The de­ci­sion to pick a fran­chise above an in­de­pen­dent busi­ness is re­ally per­sonal. It pays to con­sider what is ex­pected of a fran­chisee and whether it is in your na­ture to be com­pli­ant and fol­low tried-and-tested prac­tice, or whether your in­de­pen­dent streak will out and you’ll be rein­vent­ing the wheel at ev­ery op­por­tu­nity – not the best place to be as a fran­chisee.

The only way to re­ally de­cide which model will work best for you is to make sure you have re­searched all an­gles and have spo­ken with both in­de­pen­dent busi­ness own­ers and fran­chisees.

“Learn ev­ery­thing you can about the fran­chises,” says Tay­lor. Do not re­search just the pos­i­tives but also the neg­a­tives.

Tay­lor says her ex­pe­ri­ence as a fran­chisee has been in­cred­i­bly re­ward­ing, but not with­out hur­dles.

“It is im­por­tant to look at your life and pri­or­i­ties and know what it will en­tail to be a fran­chisee or an in­de­pen­dent busi­ness owner. Own­ing a small busi­ness can be a great ex­pe­ri­ence with ei­ther model, and it is im­por­tant you speak with ex­perts and re­search as much as you can be­fore mak­ing a de­ci­sion.”

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