How do you choose between a franchise or an independent business? Both have pros and cons.

Here we look at five crucial areas that can impact business success.

1. Branding

Franchisee: Invest in a well-known franchise and you already have brand awareness at your fingertips. Add to this a national marketing campaign and your own local area marketing and the brand is helping you build your own business.

Independent: If you buy into an established local business you’ll have an existing database of customers, as you would with an existing franchise. A strong community presence might help you develop the business but you will be doing all your own marketing, from initiating the ideas to implementing the campaigns.

2. Rules and regulations

Franchisee: One of the elements that makes a franchise successful is compliance – adherence to the rules of the brand mean customers know what to expect, and everyone is maintaining the same high standards. It makes life simple too, because an operations manual lays out all the procedures. 

Independent: As an indie operator you’ll make up your own rules and regulations, and decide when to change them.

3. Franchise fees

Franchisee: Every franchise is built around a fee-paying structure. Typically franchisees pay a regular royalty fee and a marketing levy for the right to operate the brand, and to pay for marketing support. Variants include no marketing levy, a percentage on turnover, a fixed monthly fee. There’s usually an upfront fee, and quite often a cost to renew another term.

Independent: Running your own show means you don’t have to pay out regular fees – except any bank loans or leasing repayments.

4. Training

Franchisee: As part of the back-up franchisees receive in their business, training should be provided both upfront, and ongoing. It’s perfect for anyone switching careers.

Sometimes the costs are included in fees. An experienced trainer will set you up to run your business from the beginning and whether online or in person, further training opportunities keep you competitive.

Independent: You’ll be learning on your feet in your new business, reliant on your own skillset and maybe that of staff.

5. Support

Franchisee: If the pandemic has shown us anything, it’s the value of being a franchisee when times are tough. From financial to business to mental health support, that’s what franchisors can do well to help franchisees survive.

Regular support is just part of the deal.

Independent: You’ll be reliant on support from government initiatives, professional advisors or community organisations, and you’ll need to generate any support yourself. 

• Need to know more? Check out our advice section here.
• This article was published in the latest copy of Inside Franchise Business digital magazine. You can download the magazine for free .