Should I Buy Into a Franchised Business?

If you are interested in being your own boss and running your own company, you have a few primary options to get started. One option you have is to buy or take over an existing company. Another choice that you have is to start a business entirely from scratch, building your own business concept and creating your own brand.  A third option is to buy a franchise.

Deciding to buy into a franchised business can have advantages, but also some disadvantages as well. A San Jose business law attorney at the Law Offices of Mike Ross can help you to decide if owning a franchise is a sound financial investment and a good way for you to get started on owning your own business. Call today to schedule a consultation and learn more about how we can help you become an entrepreneur.

Should I Buy Into a Franchised Business?

When you buy into a franchised business, you benefit from:

  • A proven and established business model.  Businesses become franchised because they do well and customers like them enough that they should be able to succeed in multiple locations. You already know that there is an audience for your product.
  • Help from experts. The franchisor and system’s established franchise can guide you in making decisions about your business.
  • A known brand. Customers know what types of goods or services are being offered by your business because all of the franchise branches offer precisely the same product.
  • Reduced risk. Starting your own company from scratch is usually the most high-risk way to get into being in business for yourself since you have to create everything from the ground up. There is less risk when an established company, brand and business model is already in place.

There are also some downsides to buying a franchise as well including:

  • Lack of control. You often have to follow strict protocols and guidelines and don’t have a lot of room for making the company your own.
  • Reliance on company brand management. There have been high profile incidents in recent years where companies like McDonalds and Papa Johns found themselves the targets of protests or boycotts over political and workers’ rights issues. If you are part of a franchise and the brand as a whole suffers damage, this can affect your business even if you were not part of the controversy.
  • High costs. It can be very expensive to buy into a franchised business. Often, it is much more costly to buy a franchise than it would be to start your own company from scratch

These are just a few of the many things you should consider when you decide whether you should buy into a franchised business or not. Buying into a franchise can be rewarding but there is also a big risk of losing money if your franchise does not succeed. A San Jose business lawyer at the Law Offices of Mike Ross can review your situation and provide you with advice on whether buying a franchise is a sound investment or whether you should explore alternative business opportunities.

Mike Ross

Mike Ross

Having been a general counsel of a prominent local companies for over 25 years and an attorney at Orrick, a large international law firm, Mr. Mike Ross possesses a rare combination of expertise, insight and value, resulting in a deep appreciation for how clients want legal services delivered: quickly, cost-effectively and with a focus on results.
Mike Ross

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