Should You Buy or Start a Business Franchise Instead?


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Most people know that if you want to secure your finances in the long term, working a nine to five job and saving your earnings isn’t going to be enough to secure your retirement. It’s for this reason that more people are likely to invest their money into safe haven assets and business ventures. However, starting a business from scratch requires a good idea, a lot of time, and some capital, and even that isn’t a guarantee that your startup is going to prosper.

As a result, one option people are turning to is purchasing a business franchise instead. If you’re still undecided on whether to build a startup or buy a business franchise, here are some factors that can help you determine the better option for you:

Initial Cost

You need money to grow money. With business franchises, you’re going to be spending much more money than you would with a startup. Some startups don’t even need much money, as there’s also the possibility of getting investors and grantors to fund your project. However, this doesn’t mean that business franchises are not good purchases. It’s important to take note that securing funds from a grantor or investor is extremely difficult, as you have to convince them that your project is one that has a high profit potential.

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While it’s true that you also have the option to take out a business loan for your franchise, it’s going to be much easier to secure loans for a business franchise than for a startup. The reason behind this is that established businesses have a significantly lower risk factor than startups. Even when startups have massive profit potential, lenders will almost always err on the side of caution. 


Reputation is another factor that will greatly affect the rate of success of your business. Consumers are skeptical of brands, and they tend to buy only from brands that they are familiar with. Business franchises are businesses that already have established reputations, and they are almost always guaranteed to have a loyal customer base, which translates to regular income.

On the other hand, those who start businesses have to dedicate resources to build their brand reputation before they start earning money that can sustain the growth of their business.

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Business franchises come with certain standardizations that all franchisees must adhere to. This isn’t much of a problem for most people considering that buying a franchise is similar to buying a blueprint for success – it only works if you follow the blueprint.

On the other hand, building a business means that you’re going to be your own boss. You have the discretion over how you want to run your business. While this may not always be the best route objectively, this is the best route if you have a passion project.

Even when it’s been mentioned here that buying a business franchise is one of the safest investments you can make, it’s important to consider that not all franchises are made equal. Some franchises are much better than others. This means you’re either going to have to do a lot of due diligence or you can simply have professionals screen entertainment franchises for you instead.