Business Online Journal
The Key Differences in Buying a Business vs. Buying a Franchise
By: Bizop Team
Published: February 9, 2017, 3:36 am

The Key Differences in Buying a Business vs. Buying a Franchise


The Support Network

When you’re buying an established business, you’re surrounded by your own support network. Your family supports you on your new endeavor. You might be a part of a mastermind that supports you as you plan new goals and a new direction. You will probably also have a transition team that stands alongside you to support you while the reins get handed over to you.

With a franchise, you have all of this and more.

The roots of the support network with a franchise run deep. In addition to the above, you also have the support and encouragement of those who have had success within the franchise. The key difference between these types of owners and the owner you’d buy a startup from is that they continue to be invested in the success of their franchise. Long after you buy and open a franchise you’ll have access to their brain power to help you strategize and grow.

Ongoing Partnership

Throughout your franchise ownership, you’ll have an ongoing partnership with the corporate office of the franchise you’re buying. That means, you’ll never be left alone to figure out how to do something or create new marketing collateral for your business. Long after you’ve bought the franchise, you’ll still have help, guidance, and proven direction from the people who know your business inside and out.

This ongoing partnership is a fundamental difference in buying a business vs. buying a franchise.

Having a headquarter office guide you keeps your franchise fresh. They’re constantly introducing new ideas and new concepts for your market, giving you creativity in what you offer to your customers. It enables you to expand your business over the coming years in a way that’s smart and healthy, taking the guesswork out of the marketing game.

Disclosure Documents

Before you buy any business – franchise or startup – you need to have a solid understanding of what’s happening in the business, what has happened, and what the future looks like.

The Federal Trade Commision (FTC) requires that franchises provide this information in the Franchise Disclosure Document (FDD). This includes the fees you can expect to incur, any litigation history, any restrictions, financial performance, and any other proprietary information.

Recently, the FTC also put a regulation in place requiring other sellers of business opportunities to provide the Business Opportunity Rule. This is a disclosure document that allows you to review your potential investment before you sign.

Although the Business Opportunity Rule is a step in the right direction, it still lacks the depth of the FDD. Business Opportunity Rule documents can be as short as one page, whereas most FDDs are over 100 pages.

What’s Right for You?

Buying a franchise is a far less risky endeavor. Although you’re still responsible for the growth of your franchise and able to be creative in how you market your new business, you can be certain that you’re entering a world of ownership that’s backed by a strong support network. This type of security is attractive to many people with an entrepreneurial and ownership mindset because it’s stable yet empowering.

Susan Payton is the President of Egg Marketing & Communications, a marketing firm specializing in content writing and social media management. She’s written three business books, including How to Get More Customers With Press Releases, and frequently blogs about small business and marketing on sites including Forbes, AllBusiness, The Marketing Eggspert Blog, and Tweak Your Biz. Follow her on Twitter @eggmarketing.