Starting your own business or buying a franchise?

Growth of a company

Once you make the decision of starting your own business you need to take into consideration a lot of important factors, starting from the kind of business you want to have, what is your main goal, what are the channels that you are going to use and among all, the general business plan.

To do that, you need to take the first decision, is this going to be your own business,  where you are going to take all the important decisions, or if you are buying a franchise, where you just need to comply with the standard disposals. 

To make this decision you need to be clear about what is a franchise and what advantages you have over started your own business from scratch and vice versa. 

In the following article we will get through it for you to make the best decision. 


In the long run, we can’t assure you that a franchise is cheaper than having your own business, or the other way around. Where the main difference relies on its stability. 

When buying a franchise you have some established fees you will need to pay regularly but at the end of the day, you know how much this will be.

With your own business, you will never know, it depends on a lot of factors you do not have control over but mainly you need to think about the Marketing Mix, price, product, promotion and price. 

To make a decision, it is important to compare both models in terms of investment. For example, with a franchise, besides the initial investment, you will need to pay the following:

  • A membership fee: A single payment for the transfer of the brand and the know-how.
  • Royalty fee: This fee depends on the franchise and it is a regular monthly or yearly payment for the services provided by the franchisor.
  • Marketing fee: This is a fee destined to advertising and promotion campaigns of the entire franchise network. 
Business owner doing the inventory

Brand perception

When buying a franchise, the brand is already established in the market. It has its prestige and recognition and it means you do not have to make an effort to position the brand. 

On the other hand, when you start your own business you will have your own brand and you will need to make some efforts to position it. People will need to trust you in order to buy from you, and this is something that will take its time. 


If you buy a franchise there are a lot of things that you won’t need to worry about. For example, you already have a business model designated and you are provided by the products as well as get training for you and your staff for customer service and other provided services. 

In addition to that, you will also receive marketing assistance and general corporate support. While, on the other hand, if you open your own business you will need to start from zero. 

But the advantage you have with your own business is that you can innovate, you can create something new and that comes from your imagination, you can be as creative as you want and you will analyze what suppliers are best for you and how to transform your idea into a reality. 


When buying a franchise you will depend on the franchisor in order to make decisions, this could be an advantage or disadvantage depending on how risky is your personality. 

With your own business, you will have the freedom to do as you please when it comes to making decisions regarding the product or service that you will offer, the equipment you will need, the place where you will be selling and the capacity to test your own ideas.

You just need to make sure to have a business plan where you can rely all your ideas on. 

Coffee shop business owner


The main reason to buy an existing business is the drastic reduction in time, money, energy and efforts. When you buy a franchise you already have pre-existing customers that want to buy from you. Also, you can start to make money immediately thanks to the existing inventory of the franchise. 

When you have your own business you will need to double your efforts in order to make your brand known and gain a place in the market. 

Business expansion

If you want to expand your business you need to know that a franchise can only grow until a certain point. For example, you can’t franchise a franchise.

On the other hand, if you have your own business and it is successful you can franchise it, open other stores or even sell your company shares. 

Keep in mind that there is no answer when it comes to deciding which strategy is better, you can also think about other business models such as an e-commerce business or an affiliate marketing kind of business.

It all depends on the kind of business you want to have, your time and the money that you are willing to invest as well as the objectives you have in mind. 

Also, take into consideration that the company of your dreams may exist already as they are franchises in basically all industries but if it doesn’t you can create it on your own terms.


This post is also available in: Español

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