Being your own boss is a dream come true for many Americans. Whether that means launching a business, buying an established company or investing in a franchise, self-employment offers near-limitless opportunities for success.

Of course, there’s always an element of risk involved with starting a business from scratch. A proven way to reduce this risk is by investing in a franchise. According to the U.S. Department of Consumer Affairs fewer than 5% of franchises fail within the first year, while about 30% of independent companies are shuttered within 12 months or less.

So what makes franchises so much safer, and more successful, than independent start-ups?

Franchisees enjoy all the perks of being a business owner without many of the risks associated with starting up an independent enterprise, making the franchise model an attractive option for many investors.

 

Click To Scroll:

  1. Franchisee vs. Business Owner – What’s the Difference?
  2. Pros of Buying a Franchise
  3. Cons of Buying a Franchise
  4. Franchise opportunities

Franchisee vs. Business Owner – What’s the Difference?

Franchises are systems-based businesses that operate under a franchise agreement with the parent company. Franchisees sell specific products and/or services specified by the franchisor using the branding materials and business model established by the franchisor. In most cases, the franchisee doesn’t need to have previous experience in the industry they invest in, as franchise brands provide extensive hands-on support and training.

By comparison, starting a business from scratch is exactly that — starting from scratch. Entrepreneurs who launch a startup are essentially on their own when it comes to everything from market research to branding, advertising and employee training. Being an independent business owner comes with huge risks, and those risks fall squarely on the shoulders of the entrepreneur and their investors.

Although the risks of being an independent business owner are much higher than being a franchisee, buying into an established business isn’t for everyone. Some entrepreneurs find that operating a franchise is expensive and restrictive, and some investors prefer to take on more risk in exchange for the freedom that comes with running an independent company.

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Pros and Cons of Buying a Franchise

There’s currently an estimated 773,600 franchise systems in the United States, which verifies the popularity of the franchise model among companies and entrepreneurs alike. If you’re an investor who’s considering a franchise, you’ll want to weigh the pros and cons of being a franchisee.

Pros of Buying a Franchise

Buying a franchise is widely considered to be a ‘safe bet’ among entrepreneurs who are looking to maximize their returns without taking on excessive risks. Franchisees are independent business owners who essentially lease the rights to operate a franchise through an established company. For many entrepreneurs, investing in a franchise offers the ideal balance of independence, structure and ongoing support.

Here’s some of the pros of buying a franchise:

  • Franchises are proven, system-based businesses
  • Eliminates much of the guesswork and research involved with starting a business
  • The overall success rate for franchises is higher than the success rate for independent businesses
  • Built-in consumer brand recognition
  • Established supply chains
  • Fixed operating costs
  • Franchisees become part of a community of franchise partners who work collaboratively to build their brand, encourage growth and address pain points
  • Ongoing support and training from a large, established corporation
  • Little to no industry experience needed
  • Some companies provide financing options for franchisees who don’t have the capital needed to cover the start-up costs
  • Most franchise models focus on protected markets, so there’s no risk that another franchisee from the same company could become a direct competitor
  • Offers business ownership without the usual risks

 

Owning a home care franchise with nurse next door

Cons of Buying a Franchise

While there’s a lot of pros that come with buying a franchise, being a franchisee isn’t for everyone. Owning a franchise means complying with established company guidelines that cover everything from hours of operation to brand assets, marketing systems and hiring practices. Here’s some things to consider:

  • The fixed start-up costs to access the franchise opportunity
  • Ongoing royalty payments and advertising costs are usually fixed
  • Support from franchisors varies widely
  • No guarantee that business will be profitable – as with any investment, some risk is involved
  • Fixed operating processes that must be followed

The biggest advantage of buying a franchise vs. starting an independent business is that franchisees don’t have to deal with the typical risks and pain points that come with starting from scratch. Make no mistake, being a franchisee doesn’t automatically guarantee success, but it does dramatically increase the odds of achieving profitability for entrepreneurs.

Franchise Opportunities That Capitalize on Emerging Markets

Franchises have traditionally focused on food service and hospitality, such as fast-food restaurants, hotels and motels. As the franchise model gains traction with savvy entrepreneurs, new opportunities are emerging across a range of industries. Senior Care is one of the fastest-growing industries worldwide, so it makes sense that a number of health and wellness companies have embraced the franchise model.

The U.S. Census Bureau reports that as of 2020, there are about 73 million seniors age 65 and older in the United States, and about 61 million American adults live with a disability. By 2030, one in five Americans will be 65 or older.

Given these stats, it’s easy to see why franchise businesses that focus on home care services for seniors and people with disabilities such as Nurse Next Door are popular among investors. Nurse Next Door was established in 2001, making it one of the best-recognized and most-trusted names in the industry and is the only franchised home care system to offer franchise partners a 24/7 centralized call center, and investors don’t need a medical background.

 

Looking for more information on Home Care Franchise? Click HERE to download a FREE Franchise Report.