Buying A Franchise Vs Starting Your Own Business, Which Is Best For You?

Starting a new business venture comes with a lot of factors to consider

So, you're looking for your next big business venture. But which avenue should you go down: buying a franchise or starting your own business?

Buying a franchise is one of the most risk-free business ventures possible. That is why it is popular with first-time business owners. Buying a franchise is often more stable than starting your own business because you will work with a tried and tested business model.

Franchises are currently popular in the UK because they are one of the few business models that can keep up with consumer demand. 

So, how do you buy a franchise in the UK? The process is more simple than most people think. You only need a discerning eye to find a business model you can work with. In today's article, we will discuss why buying a franchise might be a good idea.

What is a franchise?

Franchising is a business model that works due to the cooperation between two parties. The first party is the franchisor, the one who owns the brand, and the second party is the franchisee, who owns one of the business locations.

Franchising allows you to bring successful businesses directly into a new location. Pretty much any popular brand has a franchise. It is such a successful business model that the sector is growing every year.

You can run a franchise of anything. It doesn’t have to be a popular product or a recognisable brand. The first key point you must take note of is whether the business is already successful or not. The second important element is the community surrounding the franchise, which can act as a valuable resource for new investors.

Franchise Vs Personal Business

Franchising is quite different from setting up a business from scratch. Both have pros and cons and are viable options for certain people. In theory, starting a business from scratch holds more merit than franchising because the profit ceiling is much higher.

But that’s only in theory. In truth, 80% of startups fail but 75% of franchise businesses succeed. And the startups that succeed aren’t often as profitable as a franchise of similar calibre. So, how does a franchise operate as opposed to startups?

Franchise Pros & Cons

A franchise is a copy of a successful business in a different location. That means that the franchisee can avoid many of the pitfalls that its predecessor faced and even get help related to supply chain and material acquisition.

You’ll get a clear training plan for staff members and receive valuable tips on best hiring practices. You can use blueprints that your predecessors used and dominate an entire geographic region. You can also draw support from your community of franchisees for guidance.

If all you want is to own a business that’ll do fine with minimal input from your end then opening a franchise is probably the right choice for you. You’ll pay a license fee to the franchisor, and in return, you’ll receive support, systems and anything else you need to be successful.

A large enough franchise can also give you autonomy over an entire region. There’s the issue of flexibility too. You can’t run a franchise beyond the scope of its parent company because your handling of the matter directly affects its brand image. However, this is often a non-issue because most brands allow localised business practices.

Starting Your Own Business Pros & Cons

Starting a personal business has all the problems that you’ve probably already heard of. Those include things like attracting investors, risks of the idea failing, supply issues, and distribution issues. 

Personal businesses are lucrative because you get to carve out your name in a niche, create a brand image, and so on. The allure of a successful startup or personal business is almost romantic. It is often accompanied by ambition and a drive to achieve something.

But such lofty ambitions rarely succeed without a proper plan and an absurd amount of dedication toward the goal. Even then, most such endeavours don’t have a good track record.

Going this route is probably not the best idea if you want a safe investment option. Such endeavours require gruelling labour and come with a high risk. Personal businesses are a high-risk high-reward gamble. You could make it big but also fail miserably. 

Startups and personal businesses face many issues related to production and infrastructure. None of the operational processes are fine-tuned. You'll need to navigate uncharted territories. 

Sourcing the raw material for your products is a problem because you won’t have access to networks that franchises have. There’s also local competition to worry about in whatever niche you’re working in.

Things You Should Consider Before Buying A Franchise

There are several things you need to check before buying a franchise. The niche for a franchise business is broad. There are many types of franchises, with various types of licensing deals.

There are many things you can do to validate a franchise. But you’ll need to pick one first. Pick a franchise you understand. Attend a few seminars, and understand the systems and working principles of a brand before joining them.

Research the track record of the franchisor. Try to find out the successful franchisees and reach out to them. You can find valuable input from these people about the potential risks of operating the franchise. Most franchise sectors have their own unique challenges.

Check the initial cost and cost of operating the franchise. Make sure it falls within your budget. Franchises are not like your small business startups. It doesn’t go at your pace. You'll have to keep up with the trend of the brand, so having adequate capital is key.

Check the type of support your franchisor is offering. A franchisor needs to help set you up for the business. To that end, most franchisors offer training programmes, equipment, and even existing clientele to help kick-start a franchise.

How to Buy an ActionCOACH Franchise?

ActionCOACH is a globally recognised coaching franchise for startups and businesses. You can take part in this legacy by starting your very own ActionCOACH Franchise. Granted there’s a slight learning curve for getting into this new profession, but you will get all of the training you need to get started.

Buying an ActionCOACH franchise means you’ll get to run your successful business coaching firm based on a tried and tested method. You can learn the inner workings of the franchise through an extensive list of curated resources, and you can seek help from our extensive list of franchisees. The community is what enables the franchise to succeed.

You can buy a franchise business like ActionCOACH in the UK, or anywhere in the world. The process itself is simple. You just need to finance the initial expenses and working capital. The rest of the kinks will work themselves out. 

You can always find inspiration from people who’ve successfully navigated around the pitfalls. You can find more information by talking to one of our advisors.