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Franchisee VS Going It Alone

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Post Franchisee VS Going It Alone   Sat Aug 13, 2011 9:32 am

Many of you who are desperate to break free from your corporate chains and be your own boss may be wondering whether buying a franchise is a good way to go instead of launching your own business. So what's best?

If you aren't really sure what you want to do, you just know that you want to be the boss then perhaps franchising is for you. For a start, buying into a big brand name franchise does come with the 'promise' of a proven system, pre-designed cookie cutter branding and hopefully a good amount of support. However, for sure it means giving up a lot of control, a lot of profits, definitely limits what you can achieve and won't win you any awards for creativity.

Buying a franchise certainly means a big investment and many thousands do it every year but that doesn't mean guaranteed returns. Franchising also often requires a good credit rating and a substantial net worth depending on which franchise you buy into. Beyond the initial franchise fees and investments in marketing, launch costs and inventory you will also have ongoing royalty payments due to the franchisor. What you may not now is that you can still be held liable for royalty fees even if you end your agreement early or the franchisor does not hold up their end on the services they were supposed to deliver.

Considering that the initial investment for a McDonalds franchise will run you between $1-2 million you could probably achieve a lot more for a lot less with your own enterprise. In fact many of today's most successful businesses and start ups have been launched on several hundred to a few thousand dollars. This includes Facebook, Apple and more.

If you have a ton of cash, great credit, are fine with receiving substandard returns, don't really have a vision and are OK with not doing something original then perhaps franchising is a great choice. Though many are nothing more than glorified jobs which you have to pay to get. Plus absentee ownership is normally not allowed.

If you love systems, that's great but wouldn't you rather rather create your own and end up offering your own franchises so that people paid to make you money, plus have have the freedom to do what you want, when you want?

Want to start small and have your own turnkey business but aren't sure what products or services to offer? You can use affiliate marketing programs to tap into the success of others without having to pay franchise fees.

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