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Decision Making: Big Franchise or Small Franchise?

Date : Aug 2, 2018

There are several factors to consider when you buy a business – whether it’s a large or small business for sale, a franchise investment is still one of the best business opportunities in the US. Though a franchise is a proven business that has been popular in the US since just after WWII, you still have to choose as to what kind of franchise you would want to invest in. Should it be a big company or a small company for a start-up business and for a budding entrepreneur like yourself?

We all have to agree that there is no way to prove which kind is better as both have its own pros and cons. However, here are some points to guide you so you may check as to what size of franchise you will most fit into:

Big Franchise System Pros & Cons

1. Offers brand recognition as part of the initial investment
2. Provides continuous promotion of the brand and its company
3. Reliable on proven practices that can overcome any potential damage in the business
4. Agrees to use their intellectual property
5. Requires a big starting capital
6. Promotes advertising campaigns globally
7. Quality training is their top-most priority
8. Provides financial strategy
9. Innumerable employees
10. Has a longer time to evolve

Small Franchise System Pros & Cons

1. Requires only a small start-up capital
2. Offers flexibility in the business operation
3. Marketing efforts can be done locally
4. Needs less initial investment
5. Requires small ongoing marketing costs
6. Ongoing royalties are generally low
7. Customer satisfaction can be greatly achieved
8. Limited territories
9. Lacks financial history
10. Brand reputation can be risky

Apart from everything that was mentioned above, it is mostly important that your franchisor is truly committed to do business with you. He should be able to discuss the resources he can offer you that is needed to open your store. Ask yourself, “is the franchise business model proven?”. If it’s a yes, then you are good to go.

KEVIN BRYANT

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