open a small business or open a franchise?

Question

frachise as in McDonalds, Burger King etc...

Answer 1

Franchises are very expensive to get into and with all the rules you are essentially buying yourself an 80 hour/week job. I suppose they have their benefits but the ones I looked into required you to be there all day every day for different specified times. I decided against it and went with a small business, which still requires a lot of hours and dedication, but I still have the freedom to go away for a week if I so desire and the business won't fall apart without me. I guess you have to decide how valuable your time is to you. Some people don't mind dedicating themselves to being at the store/restaurant all day every day, but that isn't for me.
Also, the income I earn is residual so missing a few days won't hurt at all, in fact the business continues to build itself and the earning potential is even higher than a franchise.
My initial investment was $35 plus a case of product and my business is growing at an incredible rate.
You just have to weigh the pros and cons.

Answer 2

If I remember the startup capita for a McD's is 1.5 or 1.7 million just for the franchising rights, but the average gross income for a McD's owner is 200K/year (depending on whether you're in center city Manhattan or countrytown USA.) So you'll make the initial investment back in 5 to 6 years. And I think out of all the McD's out there...only one or two have failed.

Burger King, haven't a clue. I only know McD's because I use them as a franchising model conceptualization for business presentations.

Have fun!

Answer 3

From the article "Three Roads to Business Ownership" http://www.powerhomebiz.com/vol18/ownership.htm here are the pros and cons of starting a business vis-a-vis opening a franchise

1. Starting Your Own Business.

Starting an independent business of your own offers several advantages. You are free from contractual obligations required from franchisees, and from any precedents established by the previous business owner. You are able to start on a fresh, clean slate with total control on how the business is shaped and managed. You are free to offer a pioneering and proprietary product that could help you dominate your market. You can start with a bang, or at a slower pace, depending on your resources and entrepreneurial goals. There is no required upfront investment that you must raise; except for the level that you think your business requires to be successfully launched. You can choose the location you want, determine the products and service that you market, and decide whether you need employees or not.

The downside of starting a business from scratch could also be numerous. A new business entails greater risk than buying an established business or franchise. You need to determine whether a need exists for your products or service; and if it does, work to create awareness and branding. The start-up process also necessitates you to do the groundwork process by yourself - from business licenses and permits, establishing relations with suppliers, and establishing a customer base to support operations. Many new start-up businesses, particularly home businesses, find it hard to secure financing given the lack of operating histories and inexperience of the people involved.

A new business will require a longer period of time to show profits, if at all. Entrepreneurs who decide on venturing on their own must be willing to dedicate considerable time and energy to establishing and nurturing the business.

2. Franchising.

Franchising incorporates the features of both a start-up and an existing operation. The franchise is the right to sell a product or service. When you purchase a franchise you are basically paying for the right to market an already established product or service owned by somebody else (the franchisor). Under your franchise agreement, you (the franchisee) are expected to market the product/service successfully.

This alternative route to business ownership has some distinct advantages. Risk is minimized, since a well-established franchise has a proven business method with established products or services. Franchises like McDonald's already has well-known name that could easily bring customers to the business and provide a competitive advantage for the franchisee.

Many franchise organizations also provide extensive assistance in terms of marketing, advertising, even managerial support. Oftentimes, management training and follow-up assistance are provided. In many instances, In addition, you can realize cost savings on inventory items, supplies and equipment due to bulk purchase orders made by the franchisor, which in turn is passed on to franchisees. Some franchisors also assist the franchisee in securing financing, while some provide the funding themselves. Franchisees find it easier to convince banks and other lenders to provide loans because franchises are less risky than start-up businesses. Support can also be given in finding the right location, while some provide the layout, display, facilities and business techniques that have already proven successful in previous operations.

Franchising could present problems to the business owner. At the onset, the high franchise fees required to be paid to the franchisor at the start of the franchise agreement may discourage any prospective business owners. Front fees can range from a few thousand dollars to hundreds of thousands of dollars, depending on the franchise. While some franchisors may require high initial fees, the trade-off may be poor support functions once the operations begin.

In addition to the upfront fees, royalty fees are also required on a monthly basis. The royalty fees are monthly payments based on a certain percentage of the franchisee's income or sales, varying between 1 and 20 percent. Note that you still need to pay royalty fees even if the business is not profitable.

Answer 4

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Answer 5

I think that you would have to open a small business first and see if it does well. Then maybe someday you can turn it into a franchise.

Answer 6

depends on financial situation. Franchises are very expensive. A small business can be too depending on what type of business you start.

Answer 7

franchise nickname is "buy a job" where you don't really make big money but it steady an have some support
if you have a small biz you can do whatever you want of course following the goverment's law

Answer 8

if u care to do good business email me or im me at samisalem7
for both small business or franchise

Answer 9

If you open a franchise you have to use their food and follow their rules. Open your own and you can do what you want.

Answer 10

I think you should open a small business.