Is Franchising or independent business more

[codyheit]

Hi

I would like to know if they is any research which shows if franchising is more profitable then being an independent. I know that the failure rate of independents is much higher then franchises.

[jystrebler]

Originally Posted by codyheit

Hi

I would like to know if they is any research which shows if franchising is more profitable then being an independent. I know that the failure rate of independents is much higher then franchises.

The conventional wisdom is that franchises fail less frequently, but I have yet to find any truly indisputable data that says this is correct.

My personal opinion is that they fail less frequently, but you'll have a hard time finding hard empirical evidence of this.

I think it's just been repeated so often that everybody accepts it as true.

As for profitability, like any other generalization that is this broad, the answer is, "It depends".

It depends on your personality: are you an innovator? You might be unhappy with a franchise and not follow the formula (a very, very dangerous thing to do, I might add.)

Do you have extensive industry experience and knowledge? Maybe you would do well to strike out on your own.

I doubt you'll find any clean-cut guidance on this. I'll just say this: there are franchises where a six figure income is a very realistic possibility. There are franchises that (if you ask me) could never possibly succeed and are nothing more than a money pit.

When it comes to independent business, sometimes you are the founder of Microsoft, and sometimes you're the doofus who forms a "computer consulting company", tries to run it from your home, and never earns a dime.

You can succeed or fail rather spectacularly as either a franchisee or independent businessperson. I know there's no good empirical studies that answer the question you just asked.

Sorry, wish I could be more help.

[richerbrat]

If you do official searches on the web - the data will show that in becoming a franchisee, you will fail far less often than if you set up on your own. How reliable this data is is subject to debate. I recently read an article in the New York Times that stated these figures can be misleading. Many franchisees actually leave the business before going bankrupt - eg. they are pushed out by the franchisor if they are doing badly. You will find this happening a lot - i know many people it has happened to.

[codyheit]

Thanks for the information and advice guys