Franchising Versus Having Your Own Business

If you will ask me a question if I’m a fan of franchising, well I can say yes. Because franchising can be the easiest way for a starting businessman to have his or her own business. But as much as possible having your own brand and business is more preferable, that is, if you have the patience, passion and some sort of luck to continue the business that you have started.

Well, that is only my opinion and I know that everyone is entitled to his own opinion and it’s up to us what choices we want to take. I have posted this topic because just yesterday, my long time friend and office mate called me up the second time and we were discussing about his problem on what business he has to take.

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Since he was not an entrepreneur type of person, I suggested that having a food cart franchise is a better choice rather than having your own food cart and your own brand name. But the big issue there is not just getting an unpopular franchise because that is definitely wasting your money. Going on our conversation I thought he agrees with my suggestion to him but he insisted that it’s better to have your own business and brand name because the only one who will profit from that system is the franchiser, not the franchisee.

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He mentioned that if I bought the equipment from the franchiser, like for example, a siomai food cart and if I decided to quit the business, then it will be a waste of money. He also mentioned  about the product that a franchisee will sell will be limited and the one who will profit the most is the franchiser.  And about paying for the franchise fee, the franchiser is always in the win win situation because whether the franchisee profits or loose on his venture, the franchiser already got the money that the franchisee paid.

Well he does have a point there. If you will look it on a consumer or a layman point of view. But if you will look at it in another angle, and ask yourself, why will someone pay a large amount of franchise fee for measly food cart business? Anyone can duplicate a food cart and compete. So what is it? it’s the ‘Brand’ and the ‘System’. Those are the things that a franchisee buys from a franchiser. It’s not only the product or the equipment like what most people think. That is why buying a cheap unknown franchise is a big NO. And many people are being scammed by promises of having an autopilot franchise business that will never get off the ground. So how about you? what is your opinion?