Franchising vs Startups: Which is the best route to entrepreneurship?

Aspiring entrepreneurs often face a crucial decision: to start a business from scratch or invest in a franchise. Both paths offer unique opportunities and challenges, but franchises have gained significant popularity due to their higher success rates. This article will explore the key differences between franchising and start-up businesses and explain why franchises are more likely to succeed.

  1. Defined Business Model and Established Brand

One of the most significant advantages of a franchise is the presence of a well-defined business model and an established brand. Successful entrepreneurs with proven concepts and operations often start franchising to scale their businesses. Franchisors invest substantial time and resources into developing a comprehensive system which includes everything from marketing strategies to training. This blueprint offers franchisees a clear roadmap, eliminating the uncertainties and trial-and-error phase typical of start-up businesses.

  1. Ongoing Support and Training

Franchisees benefit from the continuous support and training provided by the franchisor. Franchisors understand that the success of their franchisees is directly linked to the overall success of the franchise brand. As a result, they offer comprehensive training programmes, operational guidance, and marketing assistance. This ongoing support ensures franchisees have access to a wealth of knowledge and expertise, enabling them to navigate challenges more effectively. In contrast, start-up entrepreneurs must rely solely on their own resources and networks for guidance.

  1. Established Customer Base

One of the biggest hurdles for start-up businesses is establishing a customer base from scratch. Building brand recognition and earning customer trust takes considerable time and effort. On the other hand, franchise businesses leverage the existing customer base of the established brand. When you open a franchise, you can tap into a pool of loyal customers already familiar with the brand, its products or services, and its reputation. The customer following of a well-known franchised brand significantly reduces the time and resources required to attract and retain customers, giving franchisees a head start.

  1. Purchasing Power and Economies of Scale

Franchises often benefit from the purchasing power and economies of scale of being part of a larger network. By leveraging the collective buying power of multiple franchise locations, franchisors negotiate favourable deals with suppliers, resulting in lower costs for franchisees. Additionally, franchises benefit from shared marketing campaigns, reducing individual advertising expenses. On the other hand, start-up businesses lack the same bargaining power. They may face higher procurement costs, putting them at a disadvantage.

  1. Mitigated Risk and Higher Success Rates

Franchises have a proven track record of success, with higher survival rates than start-up businesses. Combining a well-established brand, a proven business model, ongoing support, and customer support mitigates the risks associated with entrepreneurship. According to various studies, the success rate of franchises is significantly higher than that of start-ups. This increased likelihood of success makes franchising appealing to entrepreneurs who want to minimise risks while pursuing their business aspirations.


Although franchising may require a higher initial investment and limited decision-making autonomy compared to start-ups, the reduced risks and increased chances of success make it an attractive option for many aspiring entrepreneurs. Ultimately, deciding between franchising and starting a business from scratch depends on individual circumstances, goals, and preferences. Still, franchises undeniably offer a compelling path to entrepreneurial success.

« || »