Is Bigger Better When Choosing a Franchise?

Bigger may be better in most cases, but is it the same for franchise opportunities? When you go out to buy a franchise, the size of the franchisor, in terms of units, is a major deciding factor. Top franchises in any industry have a large number of franchisees under their wings. So, is it better to start a franchise of such franchisor? Let’s try to find the answers to these questions. Here are some points regarding the advantages and disadvantages of joining a big franchise business:

Advantages of joining a big franchise

• The brand is already established in the market. So, when you start the franchise, you don’t need to promote the business in a big way. All you have to do is announce that you are open for business and people will queue in front of your store/office.
• These top franchises know how to franchise their business. They have perfected the system by their experience and as a result, will provide you with the best possible training and supports. None of your problem will be new or unique to them. They have opened so many units that they must have already helped one of them with the same problem!
• As they are in market for long, they also have franchise business for sale. But be sure that the franchisee is not selling the unit for some internal or market problems; otherwise you will face trouble while starting the business.
• Your operating costs will be much lower, because everything about the system will be perfect owing of its size and experience. You will have excellent support staffs, an operational system that can handle all the problems and an advertising wing that knows what actually sells in the market.
• You can have the best competitive price as your franchisor will get the best deals from the suppliers and manufacturers.
• The returns will be faster and guaranteed, as the product/service has a huge demand in the market. So, even if you spend more on the franchisee fee, it will be worth it.

Disadvantages of joining a big franchise

• First and foremost is the franchise fee, which might be quite high. Also setting up and running the business will require considerable amount of investment.
• Due to its size and demand, there may be very few markets left. The markets can also be saturated with one location eating into the profit of another!
• The franchise agreement will be quite tough, as the franchisor will have to maintain the uniformity of its image. So, you will be dictated at each and every step as a franchisee.
• Getting a franchise will be difficult due to the limited market size. The best franchises will only take the most eligible franchisees that have applied. So, if you don’t have that much experience or financial back up, then it’s not advisable to go for them.
• Since the best franchisors have perfected the system, they don’t need innovators but strict followers of their guidelines.
• Lastly, taking your franchisor to court will mean the battle between David and Goliath!

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