| Area
of Business |
Franchise |
Your
Own Business |
| Risk |
Less
risk as the product is already established and there is an existing
customer base |
High
risk as your product is not know and people will not know what to
expect from your product |
| Financing |
The
Franchisor normally assists with financing |
You
will have to arrange your own finance by borrowing money or providing
it yourself |
| Freedom |
Freedom
is restricted as you are bound to franchisor's requirements |
You
have freedom to be innovative and full control |
| Competition |
Other
stores of the same franchise will be partners to you and assist you. |
Competition
is a serious threat to your business as every other business is against
you. |
| Training |
Franchise
offers training |
Training
is required, and it is the responsibility of business owner |
| Advertising |
Franchisor
will provide sponsored advertising for all outlets including products |
Forced
to advertise
on a small scale due to the cost. |
| Purchasing |
Group
and centralised purchasing which will result in better prices. |
You
will have to purchase in small quantities - might not get lowest prices |
Management
Training |
Franchisor
will normally provide training |
You
have to manage the business whether you have the knowledge or not. |
| Other
Costs |
The
franchise agreement will stipulate royalties and management fees |
Does
Not Apply |
Contractual
Obligations |
Contract
requirements will restrict the franchisee and creativity |
Full
creativity and control over the business |
