🖋️Is Franchise Your First Choice?
I have been looking into some business ventures and have come to some what of a realization. I always thought that a franchise is a good and very profitable business venture and please do not get me wrong many people have made their success by owning a franchise however I feel there are lots of negative aspects of owning such a business. Franchise’s are large and a customer base is already a given but it is so expensive to start a franchise. It can cost millions to start a franchise and you may not make your money back. Another thing I do not enjoy about a franchise is the lack of creativity. Owners and managers can not test new ideas on a franchises products that would be considered illegal. Meaning even though you own the business you can never follow you own new ideas to generate a bigger income. You can not source a franchises products locally or just anything similar you are going to have to use very specific suppliers to get you the material and or products to finish the franchises final product. I must say as nice as a franchise sounds and I know many have made it with owning one I know I do not like it all that much. I think just following your own idea with a complete new business what ever the venture may be is the best way to go. What about you is a franchise your first choice or would you rather find and think of your own business venture?
In my country, the easiest way to do business is by franchising.
Franchising is very mushrooming and growing rapidly here.
Yes, if you want really make money easily, You have to do business by franchising.
Shane, in the past I have thought about buying a franchise and yes if you select the right franchise you should be able to make a lot of money but most times the franchise agreement is drafted to the benefit of the franchisor so it is important to exercise a deal of caution when entering into them.
I am not sure what the law around franchises is in South Africa so I am not able to provide you with specific advice. In some cases here in Australia there was a franchisor that did not disclose information adequately and the new franchisee entered into the contract and lost quite a bit of money.
Exercise extreme caution and do your due diligence and seek appropriate legal and accounting advice always.
Thank you so much for the advise. However I was not looking to open one I just was wondering if it was the first go to option as I found more negatives than positives. Like you say above it is well drafted to benefit the franchisor therefor leaving me to question the option further more leading me to conclude that I personally do not like the idea but then again like you say the right franchise can be profitable and the correct legal advise will contribute to the success of a franchise one chooses to open. Furthermore the law revolving a franchise in South Africa is the same as in other countries with little differences that can be found. Once again thank you so much for the advise it sure did help clear up a few of my questions.
As said, I think it’s true that franchises cost a hell of money to start. One has to be already rich to start a franchise. I rather start from my own ideas and creativity than venturing into a franchise.
Jackson I feel the same way I would rather start a new business with my own ideas and choose not to venture into a franchise.