The Benefits of Buying a Franchise Versus Starting a Business From Scratch

The decision to open a business or opt to purchase a franchise is not one to be taken lightly. Many entrepreneurs, after all, start their own businesses because they are full of ideas—and, oftentimes, have grown averse to taking direction from superiors. Franchising, on the other hand, is very much about following a proven system and sticking to brand standards. This, too, has its benefits, as business veterans who have started their own companies and also owned and operated franchises can attest. 

FranNet consultant Kent Craven has owned his own independent businesses as well as franchises. Franchising, he said, is not a good option for people whose main desire is to create their own business concept from scratch.

“You don’t get to make up things as you go along, and some people do want to inject their own creativity into the business that they create,” Craven said. “If that’s the primary motivation for someone going into business—to use your own creativity and be able to say you did it all on your own—then clearly a franchise is not going to meet that definition.” 

The perception among hopeful business owners, Craven said, is that opening a franchise will be a higher investment than opening an independent business, when that is not necessarily the case. 

“What you don’t get with an independent business is a logo. You don’t get any brand recognition. You don’t get a trademark registered,” he said. “You don’t have ready-to-use advertising files. You don’t have your own menus. You don’t have any of the other things that are required to start the business. You have to do it all on your own.” 

Starting a business on one’s own also means a greater risk of failure because, unlike in franchising, systems have not been tested and proved, Craven said.  

“It’s very difficult to put all of those things together and expect them to work the first time,” he said. 

Of course, franchising is not foolproof, either. Prospective franchisees should still research the franchisor and be objective as to whether the concept has a viable future. 

“They still do have to be careful because not every new opportunity is a hot opportunity,” Craven said. 

Two business owners who understand the pros and cons of franchising and of opening one’s own enterprise are husband-and-wife team Ron and Allison Hamilton. The Hamiltons started the commercial photography business Ron Hamilton Photo, which is still in operation, in 2004 in Cincinnati. Their business portfolio is about to expand dramatically, as they recently signed a three-unit franchise deal with the marijuana-themed sandwich shop brand Cheba Hut*. The Hamiltons’ first Cheba Hut location is set to open in the fall of 2020.

“We’re always getting involved with a new project, so we decided to expand our business portfolio,” Allison Hamilton said. “Not only did we decide to try a franchise, but we also started looking online for franchises that would resonate with our lifestyle and vibe. We came across Cheba Hut, which seemed to be a great opportunity to express some individuality. I think getting involved with a franchise that suits your personality is key.” 

As veteran business owners, the Hamiltons understand the pain points that can come with opening a business on one’s own. It took them “a good five to seven years to iron out the kinks” with their photography business and they have always had to adjust to a changing industry. For these reasons, the Hamiltons are glad to have the support of the Cheba Hut leadership team as they prepare to open their franchise. They lauded the team’s “tight-knit family” quality. 

“When you open a business on your own, you will need to do a lot of stuff on your own,” Hamilton said. “You have to put in the work and elbow grease. It can be done, but it takes a lot more energy to do it.” 

By evaluating the reasons why they want to go into any kind of business and doing research, hopeful business owners can determine whether they want to go it alone or partake in the resources a franchise can provide.