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Buying a Franchise vs Starting from Scratch: Pros and Cons

If you’re someone who has a passion for business, the first question that strikes your mind is whether to go with a startup or buy a franchise. For you to boldly decide the right option, you need to know the pros and cons of both of these business types. Thus, we’ve curated the most important aspects that need your attention. 

Franchise Vs Starting From Scratch

Buying a franchise means buying an existing, well-established, and successful business model. It provides everything from a business blueprint to account sheet templates to standardized processes to a robust supply chain, and a lot more to make use of readily. In other words, you’re going to take care of a turnkey business from which you can easily fetch returns.    

“Purchasing a franchise could be a safer option!” says Eddie Rodriguez, a Forbes Council member (source:

Alternatively, starting from scratch means you’re developing a business from step 0, i.e., idea generation, to making it an enterprise. Here, you have to take ownership and start developing things from teams, processes, products, etc. Everything is trial and error, learning, and improvement. Nothing comes easily, be it success or failure.   

Buying a Franchise: Pros and Cons  

Franchise Pros

  • The amount of risk is less as you’re buying a proven business with its fan following, brand awareness, customer base, and fully developed products or services. 
  • You can get expert technical support from a company that offers franchise opportunities. This is a big savior in terms of time, money, and effort. 
  • The failure rate is significantly lower or is in single digits. 
  • It is an easy and quick way to become a business owner and, at the same time, generate income. 
  • The company will clearly define the exit plan. Accordingly, you can either retire it or resell it to other franchise aspirants. 

Franchise Cons

  • Indeed, purchasing a franchise is a very expensive decision. 
  • It is a highly competitive market. 

Did you know? According to, a new franchise launches every eight minutes on one business day. 

  • You have to face ongoing expenses owing to inflation. This might reduce your profits. 
  • You have to bear the royalty charges or franchisee fees indefinitely, as mentioned in the agreement.  
  • Not all franchises have the same TnC. And there are a lot of loopholes that you need to take care of before signing the contract. 
  • Every corporate-level action or comment on public affairs influences your business.  

Starting From Scratch: Pros and Cons  

Startup Pros

  • A startup cost is lower than the buying cost of a franchise. 
  • In the future, your idea can pave the way for your company to open up franchises.
  • There are no rules, obligations, or restrictions, as you’re the sole decision-maker for both—your success and failure.  
  • You can quickly start your business. For example, if you’re in the United States, you have a chance to start your business in six days
  • You can enjoy accountability and flexibility.

Startup Cons

  • Startup failure rates are pretty high. It is a well-known statistic that at least 10% of startups fail in their first year, and 70% of the startups may encounter failure either in their second, third, fourth, or fifth year.  
  • You need to strive hard and long until you lay your foundation strong and people are ready to help you. 
  • You have to be ready for deep experiential learning with lots of ups and downs. 
  • You have to make the right strategic decisions at the right time to be successful.
  • As the title implies, you have to build your company from scratch.


After all, it all depends on whether or not you have a promising business idea. If yes, you can confidently kickstart your start-up with the help of financing options and guidance from industry experts. If not, it is better to choose a franchise for your business. 
Irrespectively, make use of GBCorp’s Business Lounge for developing and growing your business!

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