Pros and Cons of Franchise Ownership in 2018

Post Date: March 5, 2018

Are you thinking about buying a franchise? 

There are major upsides to going that route, such as brand recognition, built-in marketing support, and networks of like-minded business owners. There are also some downsides that should be considered, such as franchise fees and corporate requirements, and these should factor into your decision.

In the recent article 4 Top Industries for Entrepreneurs in 2018, we examined the countless possibilities for company types to consider. Among those are several franchise possibilities. To determine whether the model is right for you, here are some pros and cons of franchise ownership in 2018


The benefits of franchise ownership manifest themselves even before you open the doors and continue throughout your ownership. They include:

  • Turnkey. When you buy into a franchise system, you are buying not just the name, but also the business process. Franchise ownership is turnkey, with well-established guidelines, procedures, and rules designed to protect your investment and grow profits for you and the franchisor. 
  • Brand. Some of the world’s best-known brands are also franchise operators. From fast-food restaurants to hair salons to auto repair shops, franchises have long been a way for companies to spread their brand recognition across the country and around the world. 
  • Support. Franchisors provide their franchises with extensive resources for both successful launches and continuing operational proficiency. With a franchise, you will get help with:
    • Site selection
    • Design and construction of locations
    • Training for you and employees
    • Advertising at the local, regional, and national levels
    • Purchasing agreements that allow you to take advantage of discounted pricing and bulk purchases
    • Business operations guidance and support
    • Conferences and recognition programs that allow you to connect with and learn from other franchise owners
    • Access to sales analysis and market research



While there are advantages to franchise ownership, there are a few drawbacks, including:

  • Start-up costs. Investing in a franchise means more up-front costs than with other business ventures. You will pay a franchise fee to the franchisor for the right to a territory. That is in addition to the other costs such as property acquisition or lease, equipment, signage, insurance, and supplies. In many cases, you need to use specific materials, specifications, or vendors to comply with franchise agreements. 
  • Royalty payments. In addition to the franchise fee, you will be paying a royalty to the franchisor, usually on a quarterly basis, on gross sales. Some franchisors also assess other fees, such as for ongoing marketing efforts, that are intractable. 
  • Less flexibility. The roadmap that franchisors provide to their franchise owners can be a real blessing, providing detailed guidance and procedures. It can also serve as a point of frustration for those who want to try something different. Uniform operating procedures often prevent owners from implementing ideas they believe are in their best interests.

At Benetrends, we provide tools and support to help franchise owners assess their businesses and gain necessary funds for start-up and ongoing operational work. To learn more about how Benetrends can help with franchise funding and support functions such as credit card processing, and insurance, schedule a consultation today.

Categories: Blog

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