Understanding the Pros and Cons of Franchises
Understanding the Pros and Cons of Franchises
By: Wilmington Trust

Many prospective entrepreneurs are faced with a crucial choice - should they start a company from scratch or invest in a proven method of doing business by opening a franchise?

A franchise is essentially an individually owned business, operated under guidelines provided by another company known as the franchiser. Tapping the resources of an established organization can significantly reduce investment risk, but at a price. Franchisees must give up a great deal of independence and follow set rules and regulations. In addition, purchasing a franchise can often cost more than starting an independent business.

Pros

Cons

Aspiring business owners should consider the many advantages and disadvantages of operating a franchise before making the initial investment. In many respects, a franchise is an appealing option that provides a strong framework for success. However, for others who long to exercise their own business judgment, a franchise might not be the right opportunity.

This article is for informational purposes only and is not intended as an offer or solicitation for the sale of any financial product or service or as a determination that any investment strategy is suitable for a specific investor. Investors should seek financial advice regarding the suitability of any investment strategy based on their objectives, financial situations, and particular needs. This article is not designed or intended to provide financial, tax, legal, accounting, or other professional advice since such advice always requires consideration of individual circumstances. If professional advice is needed, the services of a professional advisor should be sought.


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