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4 Key Differences Between Running a Franchise and Running a Business

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While there are many similarities between running a franchise and running any other type of business, like the fact that it will take a lot of time and energy to get it up and running successfully, there are also a lot of differences that you should be aware of if you’re considering a franchise.

If you’ve owned other businesses in the past, you’ll find franchises to be unique in their own way.

1. You’re Required to Color in the Lines

When you own your own business, you can do whatever you want. Add new products. Raise your rates. Change the uniforms your staff wears. But with franchises, there are a lot more guidelines and requirements. Primarily this is to provide a consistent experience for customers, whether they visit your Meineke Car Care Center (as an example) or one 10,000 miles away.

For many franchise owners, it’s the fact that most decisions have been made for them that appeal to them. After all, the franchise you invest in has the benefit of millions of dollars in research and they know what works. All you have to do is follow the rulebook and you should succeed.

2. The Bulk of Your Costs are Up Front

Starting a franchise will cost you initially, as much as $500,000 to $1 million (though certainly there are many that are more affordable, depending on the industry you’re interested in). Essentially you buy an out-of-the-box solution that provides you with everything you need — from uniforms to equipment and marketing collateral — so your costs down the road are substantially less. With a small business, your costs are typically lower up front, but they continue to trickle out of your bank account over time.

Also, your costs with a franchise are pretty finite. You know what it will cost you once you talk to the franchisor, and beyond the fluctuating monthly royalty fee you pay, you know exactly your fixed costs. With a small business, there’s no way to know exactly what your costs will be over time.

3. You Benefit from Having Corporate Support

As many small business owners will tell you, it can be frustrating to have no one to tell you what to do or give you advice when you hit a sticky situation. But as a franchisee, you’ve got the benefit of not only the resources your franchisor provides, but also an army of other franchise owners you can learn from.

That corporate support, though, goes beyond just knowledge. You’ll likely have access to health insurance, software, and discounts that you wouldn’t be able to get if you ran an independent business.

4. The Franchisor Does the Heavy Lifting

Independent businesses struggle daily to establish recognition of their brands. but who hasn’t heard of Subway or UFC Gym? That’s because the franchisors have already poured money into branding your business for you (and other franchisees). They buy billboards, commercials, and other forms of advertising, and you benefit.

Running a franchise is a different animal from running an independent business. For many, the ability to own a known brand is what attracts them to a franchise.


Susan Payton is the President of Egg Marketing & Communications, a marketing firm specializing in content writing and social media management. She’s written three business books, including How to Get More Customers With Press Releases, and frequently blogs about small business and marketing on sites including Forbes, AllBusiness, The Marketing Eggspert Blog, and Tweak Your Biz. Follow her on Twitter @eggmarketing.

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