ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Buy a Business? A Franchising Business vs a Start-up Independent Business.

Updated on December 28, 2013

Dreaming about your financial freedom?

Why do franchises have a business failure rate lower than an independent start-up business?

There are many sources of new business information on the web, some of it good and some not. It is a well known fact that starting a business is extremely difficult and there is a very high failure rate. It is also commonly known that, if you pick the right franchise, a start-up franchise has a better chance of success than starting up an independent business. Although this axiom is statistically correct we need to look beyond the numbers to see why it's true.

What's more important..... what a franchisor makes you do or what they prevent you from doing?

Often a start-up business struggles because the owner doesn't have experience in business or in this specific type of business.

One reason for a lower business failure rate if you open a franchise instead of beginning a start up business is certainly the "systems" a quality franchisor provides their licensees. These often well thought out business systems save the franchisees money and gives them a head start vs just starting the business on a note pad. Basically a good franchise should prevent you from making mistakes you would make if you were not in the franchise system.

One critical reason a start-up franchise is less likely to fail is the discipline a good franchisor puts on accepting you as a franchisee. Here's what a good franchisor WON'T let a new franchisee do:

  • They won't let you become a franchisee if you are under capitalized,
  • They won't let you pick a terrible location even if it is near your home.
  • They won't let you use inferior suppliers
  • They won't have your customers train you, THEY will train you
  • The won't let you put up a cardboard "open for business" sign in your window
  • They won't let you "kind of open", you know part-time
  • They won't let you NOT advertise
  • They won't let you start without a business plan, a real plan, not just an internet "Biz plan in 10 minutes" plan.
  • They won't let you start without a cash flow forecast the sees an acheivable path to positive cash flow for the business and you.
  • They won't let you ignore the power of the internet or Google, a good Google ranking can go a long way to recession-proofing your business. As the saying goes, the economy is always better on the first page of Google.

As you can see from this list, none of the items have anything to do with the franchise product or service. These items could apply to a medical staffing franchise as easily as to a non-franchise sandwich shop.

If you applied the same discipline to starting an independent business start-up your chance for success would also be higher. Keep this in mind, most businesses fail because the owner made a series of decisions that were bad decisions that could have been avoided.

The point is franchises have a lower business failure rate than start-up independent businesses not because the franchise has some great product or service. The lower business failure rate is because the franchisor prevents the franchisee from doing the things that lead to failure. Bascially, the franchisor protects you from yourself. Here's a good resource for evaluating franchises:

Market Research for Better Success

Even If you are convinced you want to start up a non-franchise business I highly recommend that you investigate high quality franchises so you can learn what it takes to reduce your chances for failure....which is always a good thing.

Keep in mind that if you start an independent business you will likely compete with a similar franchise concept. Doesn't it make sense to investigate what a franchise has to offer before they become the enemy?

Finding available franchises for sale is very simple on the internet, however, be careful and understand that when you leave an inquiry/request you will likely hear from a salesperson or maybe even many sales people. Many internet companies sell their leads for franchise buyers, and they will likely deem you to be a lead.

Do your homework and get good advice and good advisers when you explore your new new business information.


This website uses cookies

As a user in the EEA, your approval is needed on a few things. To provide a better website experience, uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at:

Show Details
HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
LoginThis is necessary to sign in to the HubPages Service.
Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
AkismetThis is used to detect comment spam. (Privacy Policy)
HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the or domains, for performance and efficiency reasons. (Privacy Policy)
Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
MavenThis supports the Maven widget and search functionality. (Privacy Policy)
Google AdSenseThis is an ad network. (Privacy Policy)
Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
Index ExchangeThis is an ad network. (Privacy Policy)
SovrnThis is an ad network. (Privacy Policy)
Facebook AdsThis is an ad network. (Privacy Policy)
Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
AppNexusThis is an ad network. (Privacy Policy)
OpenxThis is an ad network. (Privacy Policy)
Rubicon ProjectThis is an ad network. (Privacy Policy)
TripleLiftThis is an ad network. (Privacy Policy)
Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)
ClickscoThis is a data management platform studying reader behavior (Privacy Policy)