Tips & Lessons

Franchise or Startup: What Is a Smarter Choice For Your Business? | Stella Van Lane

By December 15, 2018 No Comments

With the popularization of franchises around the world and the undeniable benefits they bring, there is a need for every entrepreneurial spirit to answer a life-changing question: should I buy a franchise, or should I pursue my own business ideas and start from scratch? The answer will depend on a myriad of crucial factors you will need to consider carefully before making a move.

Keep in mind that it’s a competitive world out there and that the road to long-term success in the business world will challenge you, and it will take everything you’ve got to reach the proverbial top, no matter which of these paths you choose. Nonetheless, there are distinct differences between the two that you should know about in order to make a rewarding decision that will change your life for the better.

Brand recognition and awareness in Franchise VS Startup

Let’s start by examining the branding side of things. Arguably one of the most important elements of a successful business in the 21st century, building a strong brand identity people know and talk about requires plenty of planning, preparation, investment, and trial and error. Branding has become an art form in the business world, as it requires a company to be able to connect with its customers and clients on a deeper, emotional level while exuding the authority and credibility of a true leader in the industry.

This is not an easy feat to achieve, and it is definitely not cheap. On one hand, launching a startup gives you the freedom to design and create your own brand identity. Whether it will become successful or not, will remain a mystery until you’ve pushed it into the competitive market. On the other hand, becoming a part of a franchise means that you’re joining an established brand that has already built up authority, awareness, and recognition within the industry.

Investment, operating capital, long-term finances

One of the biggest concerns for an aspiring entrepreneur is meeting the financial requirements that come with opening a company. Needless to say, the investment capital needed and the immediate operating capital requirements can deter many an entrepreneur from the idea, but there are numerous ways to secure capital for the first quarter or even the whole year.

On the other hand, some of the best franchises to open already have a comprehensive financial structure in place and offer adequate support that will help you guide your local business and meet its cash flow needs. What’s more, the investment capital needed can sometimes be significantly lower than the investment capital for a brand-new company, depending on the franchise, of course.

This creates a dilemma for wannabee entrepreneurs who want financial stability on one hand and complete financial control on the other. In the end, it will all boil down to your ability to equip and launch your business and ensure long-term solvency.

Business plan and organizational support

A franchise is a structure, a network of departments and semi-autonomous businesses that work towards building solvency and growing the brand in the competitive marketplace. As a structure, a franchise enjoys adequate organizational oversight, control, and support needed to keep the open, run, and grow the network as a whole. Being a part of that whole, you can expect to gain adequate assistance in opening your own franchise, bringing in skillful employees, and running the business in general.

This doesn’t mean that launching a startup is a one-person job, quite the contrary, but it does mean that the majority of the work will fall on your shoulders and that the top organizational structure will be you and your core team. The decisions you make will be your own, and your every action will yield an adequate reaction – so take it slow, do your research, and tread carefully, because there are only so many mistakes you can afford to make.

Marketing expenses and advertising programs

Marketing is, without a doubt, one of the key driving forces behind the success of every business venture in this digital day and age. Without comprehensive online and offline marketing strategies, you cannot hope to spread the word about your brand, or position your business in front of the eyes and ears of your audience. Quite simply, you need a sound marketing plan and a sizable budget to effectuate every marketing campaign.

Between digital marketing and offline media, advertising expenses can rack up pretty quickly, so there is a need to secure finances well before launch day. You can allocate investment resources needed for your startup for this purpose, or you can take out business loans to finance your marketing efforts. When it comes to franchises, on the other hand, your advertising campaigns will be included in your franchising fee. The franchisor should give you the creative freedom you need to devise compelling marketing material, with proper oversight and management to ensure brand consistency across the board.

The entrepreneurial world is evolving rapidly, and nowadays owning your own business doesn’t necessarily mean building it from the ground up. Use the unique traits of these entrepreneurial paths to make the best cost-effective decision that will help you pave the road to a stable and successful future in the business world. 


Stella Van LaneStella van Lane is a Sydney based mom and a passionate writer in love with coffee, chocolate, music, books and good vibes. Her top interests are health, yoga, meditation and interior design.
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