Franchise vs. Startup – What is Right for Me?
Owning a business is a decision that no one makes lightly. With so many businesses ownership options, narrowing down the type of business you want to open – Franchise vs. Startup – can seem like a daunting task. But it doesn’t have to be!
We know startups look appealing at first glance, and franchises seem like a tried-and-true option, but do you know the ins and outs of both? If not, don’t fret! We’re here to help you learn more about franchises AND startups so you can make the most informed decision for YOU.
Before diving into the pros and cons of a franchise vs. startup, it’s important to first understand what each is.
A franchise is a business model where you pay a franchise fee to the franchise owner. When you do this, you’ll have access to the name and logo, products/services, and systems of that specific franchise. A startup, on the other hand, is a business model where you build the business from the ground up, meaning that you are 100% responsible for all the business decisions.
Now, let’s look at the pros and cons of each…
Franchise vs. Startup
The Pros of Franchising:
Brand recognition
Think about the last time you were on a road trip. You were starving and were looking for somewhere to pull off the highway and get a bite. The place you selected was a brand you know and love. That place is likely a franchise. With a franchise, you don’t need to start from scratch by building a customer base. Instead, when you purchase a franchise, you are not only getting a loyal following, but you are also getting all the other benefits that come with an established brand (like a reputable training program, a longstanding supply chain, and technical support).
Clear exit strategy
When you own a franchise, you are not required to own it forever. If you ever want to retire or want to just sell the business to pursue a different venture, franchises always will have a clear exit strategy in place.
You don’t need to be a business expert
With startups, a lot of the work falls on you. But with franchising, if you have general business knowledge, can follow a plan, you’ll be okay. With this model, there are established systems and processes in place so the learning curve for business ownership isn’t as drastic as it might be with another business model. This gives you less room for error as a franchise owner.
But…
Since franchises come with an established business model, you won’t have the freedom to make your own operational decisions. This is not the time to get creative!
You will be required to pay a franchise fee and ongoing royalties to the franchisor for the length of your contract. These come with many benefits, but it’s something to understand upfront!
The Pros of Startups
Entrepreneurship
The biggest appeal of startups is that it provides you with the ability to be your own boss. If you know business practices, have a business plan or solid idea, and have always wanted to be your own boss, then a startup may be the right fit for you. It’s appealing to be able to make your own decisions, set your schedule, and run a business how you would like to run it.
It doesn’t have to be expensive
If you are starting your own business, you have more control over where you spend your money. You can choose the investment options and can delay an opening or cut back in other areas if you need to. While it may take more time to yield a profit since you don’t have a loyal customer base yet, the startup costs are cheaper than a franchise.
Then again…
You’re completely on your own. What is a pro, can also be a con. With a startup, you are truly on your own. You don’t have the support of an established brand and as a result, you’ll need to work long hours and wear many hats to make your business dream successful.
You also have no existing brand awareness. As much as everyone wants to be an overnight success, that isn’t the reality of entrepreneurship. You’ll need to work hard on promoting your startup and may even need to hire a marketing professional to help drive customers to your business.
And when it boils down to money, it may take some time to see a profit with a startup, which translates into you not being able to quit your day job quite yet. You’ll need to be flexible with your current schedule and put in long hours until your business grows.
While the decision of what business model you should pursue comes down to personal preference, the franchise model has been a longstanding model because it works. If this is your first business ownership venture, franchising is a more stable option to get your business ownership feet wet. You’ll open your business on day one with brand recognition and larger-scale support – two things that will help you be the most successful with your new business.
Icebox Cryotherapy was started in 2012 with its first flagship studio in Atlanta Georgia. In 2019, the company developed and started selling franchise locations that have grown into over 30 studio locations open or under development! Icebox Founder, Alia Alston, developed a franchise model that combines simplified cryotherapy services with a membership-based concept.
If you’re exploring franchise opportunities, look no further than Icebox. Icebox’s franchisees say that it is the most rewarding job or business they’ve ever had!
Join this successful franchise by reaching out to our team today here.