Business Mentor: The Power of Buying A Franchise Business

Armando Bartolome

Posted at Dec 28 2019 08:04 AM | Updated as of Dec 28 2019 08:05 AM

To franchise or not to franchise – that is what many aspiring entrepreneurs ask themselves.

Before you answer this question, you should ask yourself a few other questions:

  • Do you have the necessary skills or knowledge to put up a business?
  • Do you have enough financial resources for a startup?
  • How dedicated are you to this endeavor?
  • Do you have the right location for your business?
  • Do you want to risk building your own brand or would you rather start with an existing brand?
  • What excites you more – concocting your own business concept or starting with a known brand where all you have to do is to continue what has already been started?

The Pros of Buying a Franchise Business

  • Just like anything in this world, there are advantages and disadvantages to franchising.
  • Since a franchised business has already been operating for some time, it means that the business model has been tested and already proven effective. An aspiring franchisee thus may find it easier to get a loan since the bank already knows that it is a safer investment than starting a new business.
  • The brand will speak for itself, thus sparing the aspiring entrepreneur from having to market a new brand.
  • It is easier to purchase everything that you need for your franchise business because you only have to deal with one entity—the franchisor. This removes the burden of having to talk to different suppliers.
  • Franchisees get support from the franchisor—from site selection, design, construction, financing, training, and grand-opening programs.
  • A franchise allows you to be your own boss. You can create a flexible schedule for yourself. You can divide your time working at home and at the site. You won’t feel alone managing your business because your franchisor is just a phone call away.

The Cons of Buying a Franchise Business

  • Expect to  spend a lot of money when starting a franchise business. This covers not just the franchising fee but also the construction of the store. There are also franchises that ask a monthly royalty fee, so, better choose the kind of franchise that you can really afford.
  • All your financial information must be shared with the franchisor. The franchisor uses the information to improve their business model and audit royalty payments. Thus, there is just a little privacy or franchisees.
  • Your creativity may not be much of use since the franchises already have a predetermined brand, and to go against this would be a breach of contract. Franchisees are expected to follow everything as what the franchisor says which include the design, color, products, and services.

Owning Multiple Franchise Businesses

Owning multiple franchises can significantly increase the number of issues you need to deal with.

You must be sure that you are ready to take up the challenge of owning more than one franchise business. There is no guarantee that you will succeed in your next franchise business.

I know one entrepreneur who has started one franchise business and then opened another one just after 6 months. Apparently, the first branch was a huge success that she was able to get her ROI immediately. So she started a new one. After a few months and she was on her third branch. She thought that it would again be successful because the brand expanded over the years. But she had to forfeit the franchise for that branch because its location was not acceptable to the franchise.

If you plan to start multiple franchise businesses, you need to make sure you have enough resources, strategic locations, and enough time to manage multiple businesses.

There are store managers that can be hired to help the business owner check the everyday operations, but there are also individuals who may take advantage of the business owner’s absence. This is why if you can’t be physically present to check your businesses regularly, then you might as well just stick to one or two.

You can have multiple businesses ONLY IF you have trusted people who can work with you.


For more information, you may contact Armando "Butz" Bartolome

by email:  [email protected]

FB Page: Butz Bartolome