Is a Franchise Always the Best Choice When Starting a Business?

By lexutor Dec 22, 2022

Is a Franchise Always the Best Choice When Starting a Business?

For the most part many franchise companies are an excellent choice, they have done all the work, they know what has been successful and have been able to capitalize on that success. The majority of the decisions will be made for you so you do not have to face endless migraines trying to figure out every detail.

However, keep in mind that they also come attached with royalty fees that usually include an initial charge at the beginning and then monthly percentage fees. Those percentage fees can hurt a new business owner when they have not even earned enough to break-even. Over time if your business is booming you many not even feel a pinch from those fees.

Many also have strict policy and procedure rules the franchisee must follow. For many people this is not an issue, they want to follow the successful path and have no desire to interfere with that. For others who are imaginative and seek to add their personal touch this can give them that “my hands are tied” feeling and leave them frustrated.

With some businesses it simply is not necessary to pay for a franchise. For example some mobile service businesses do not benefit. I will use the example of Mobile Oil Change since that is the business I am experienced in. Many Mobile Lubes are operating from home as a home based business. (Some may rent a storage unit for their supplies) But over-all, there is no building, no contractors to deal with thereby location scouting is also out of the picture.

Name recognition is non-existent when it comes to Mobile Lube, generally you will find most people have never heard of such a business. A Mobile Lubber has to promote his/her business in their area and grow their business before their name will even come close to being recognized. Everyone has heard of “Jiffy Lube” but how many of you have heard of “Melrics Mobile Lube”? No hands went up out there? That is what I thought.

“Ok, but about what about the training?” True they will provide training but consider the fact that whoever you purchase your equipment from will provide some training. Use your head and determine how much you need, is it worth on-going royalty fees? Take your time and do your research, there are Mobile Oil Change franchises that do not charge on-going royalty fees.

So am I saying you should not choose a franchise? Not at all, I am simply saying to weight the benefits. If opening a “Subway” or “Midas” is your dream and you feel that you can follow the rules, go for it, their name alone is going to help you immensely. For a Mobile Lube? Well, do not do it for namesake obviously.

By lexutor

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