Benefits of a franchise business

 

If you are set on working for yourself in business but are not sure whether you should attempt it on your own or buy a franchise in Ireland, you should weigh up all the 'pros and cons'. The table below highlights the main differences which should help you make your mind up.

Proven business

Franchise – the main benefit of buying a franchise is that you are buying into a tried and tested business format. This only applies though if buying into an ethical business where pilot franchises have been run. Please also note that because the business is successful somewhere else, it does not guarantee that it will be successful in your area/region.

Independent business - your business will be totally unproven. You can look at competition to see how well they are doing to get an idea of the market but it is difficult to compare without matching like for like.

Trademark

Franchise – as a franchisee you will have the right to use the franchisor’s established trade name, marks, logo and style. Though the franchise can be national, customers will be aware of local ownership.

Independent business – you will need to establish your own trade name which can take time. The name will not be national throughout Ireland but customers will be aware of local ownership.

Known product or service

Franchise – as you are part of a larger network, your product/service will have wider public acceptance in Ireland. Your reputation however will depend on the network. If the network as a whole has a good reputation then your product will be accepted as being one that is trustworthy. If a franchisee performs badly and gets negative reception, then you may be tainted with the same brush.

Independent business - it can take a long time to establish a product/service and build up public acceptance. It is also more difficult to compete with larger brands such as a franchise.

Training

Franchise - a franchise is a business that has transferable systems and skills. This means that a franchisor will train franchisees in all aspects of running their franchise business. You therefore do not need experience in the particular industry. If your franchise involves managing people you should also be able to train them how to run areas of the business.

Independent business – the business you decide to set up will be limited to your skills. As no one is training or supporting you the success of your business will depend on your own capabilities.

Franchise package

Franchise – you are buying a turnkey business franchise format, i.e. you should be able to start trading successfully from day one.

Independent business - as you will have little external support your business will start small and will require time to develop.

Advertising

Franchise - you will contribute to a monthly advertising fund that allows the franchisor to advertise the brand nationally. As it is a group fund they can negotiate favourable rates, it also means that you are able to undertake professional marketing campaigns.

Independent business – the marketing you do for your business is entirely down to you and your skills. You are responsible for devising and producing your own material and selecting the best media. You therefore need to have some knowledge of marketing. It is also unlikely that you can afford to undertake professional campaigns but you are able to build up local awareness.

Sourcing

Franchise - franchisors will specify suppliers for you to use in order to keep conformity in the network which can allow you to take advantage of group bulk discounts. It does however mean that you are restricted to using their suppliers and not able to look for cheaper supplies elsewhere if they exist.

Independent business - you are free to specify your own materials and to shop around to get the best deals. Initially you will be buying in small quantities and therefore the discounts will be small.

Ongoing help & support

Franchise - you will have the benefit of a trouble shooting service from the franchisor as and when required. Field staff may also visit franchisees and help prevent the build-up of problems; this is especially valuable at the launch of your business.

Independent business – you are on your own with no visits from a support team

Location

Franchise - the franchisor will help to select or advise on location in Ireland that is right for your franchise business. They will have access to demographic reporting tools that will help them to establish these locations. A reputable franchise is also able to negotiate with landlords and sellers to get better locations and rates.

Independent business - you are free to make good or bad choice of location. Expert advice can be obtained but can be expensive.

Ownership

Franchise - there may be limitations on your ability to sell or dispose of your franchise business as the franchisor may have rights to purchase and terminate your contract under terms defined in the franchise agreement. You must remember that you own the Irish franchise business for a fixed period of time with the right to renew.

Independent business – as the outright owner you are totally free to sell or dispose of the business at any time to anyone. No one else has the right to terminate the business whilst it is solvent.

Selling the business

Franchise - the franchisor may have a buyer lined up and can help you to sell the franchise. They will have a say in who you sell to as it is in their interests to get a franchisee that is right for the network as a whole.

Independent business - you have to find your own buyer but are able to sell to anyone.