What is the difference between franchising versus opening your own business?
Buying the right franchise can be much easier than starting your own business.
If you decide to become a franchisee, get the paperwork (known in the industry as a Franchise Disclosure Document) and see if you are eligible. You pay a fee to the franchisor, if you qualify, to get things started. Starting your own business may take more time and involve risk.
Starting a business from scratch can be extremely satisfying and fulfilling. However, risk is unavoidable and most start-ups are out of business in five years . Utilizing a proven franchise can provide the same satisfying experience of starting your own business but with reduced risk.
You should plan on your initial investment being higher if you choose to buy into a well-established franchise. Franchisors charge an initial fee and often require a 10 year franchising contract.
Buying an established business rather than starting a new business can be a good option for many potential business owners. Established businesses come with an existing customer base. However, you may also inherit problems that the business has. You need to know exactly what you’re signing up for and be clear about your ability to run a business.
Buying a business is a serious investment. You should always seek professional legal and financial advice before signing complex and important legal documents.
Do not hesitate to contact the attorneys at Tishkoff if you have questions regarding franchise law, litigation, business or employment law.