Small Business Franchise
Pros and Cons

There are business franchise pros and cons which should be considered before investing.

The pros to investing in a franchise over starting your own small business or home based business are:

1. There is reduced risk of failure. It is interesting that according to industry statistics, new franchises open daily in the USA every 17 minutes… and according to the US Chamber of Commerce 86% of franchises opened in the last 5 years are under the same ownership, and 97% of them are still open for business.

2. Other franchises may be researched to determine their level of success before a commitment is made.

3. Because a franchise already has a brand, a customer base is more easily set up.

4. The franchiser shares the risk.

5. There is generally great benefit from the advertising and promotions of the franchiser.

6. It is a turn key operation, the business and market planning has been done and the franchisee benefits from the franchiser support and training.

7. The product or service is already pretested and standardized.

8. Normally the franchisee has exclusive territorial rights.

9. Relationships with suppliers are already established.

10. Banks may be more willing to lend money for a franchise than a non-franchised small business.

The cons to investing in a franchise over starting your own small business or home based business are:

1. The initial investment and other costs.

2. Continuing royalties

3. Possibly having to buy products from the franchiser.

4. Restrictions on how the business may be run, and possibly little to no freedom make the changes necessary to please the local market.

5. The franchiser may go out of business.

6. The franchiser may change philosophies on how to run the business.

7. Other franchisees may give the brand a bad name.

8. It may be harder to generate large profits.



There are always pros and cons to weigh out in almost everything in business. If your goal is make money from home, a franchise may be perfect for you.