Discuss the Short Term and Longer Term Factors a Budding Entrepreneur Should Consider When Deciding Whether to Purchase a Franchise or Retain Their Independence.

Topics: Franchising, Advertising, Business model Pages: 3 (778 words) Published: December 9, 2012
discuss the short term and longer term factors a budding entrepreneur should consider when deciding whether to purchase a franchise or retain their independence.

Many people now-a-days are looking to purchase a franchise. A franchise is when a business (the franchisor) gives another business or individual (the franchisee) the right to supply its product or service. For example, a small business would pay a large well known company, such as, McDonalds to supply is service, this involves having the company’s name. An entrepreneur is an individual that develops a business idea; they do this despite the high risks, mainly because they receive high profits.

A huge advantage for a budding entrepreneur to purchase a franchise is that it is an already well known brand and an already proven idea, this enables the entrepreneur to be certain that it is an successful franchise; this means that the franchisor will already have a huge customer range as it is a big name globally, however if another established franchisee have given the franchisors brand name a bad reputation then the franchisee that the entrepreneur is trying to set up could be heavily affected and could have a negative effect on making money. On the other hand, the franchisor already has a huge amount of finance and are fully established to there huge target market. This will allow the budding entrepreneur to have a good lift off and high amount of sales when the franchisee business opens. This is because the franchisee will have high publicly from the surrounding franchisees and the main franchisor. Although in the long run the franchisee will eventually equal off due to not receiving profit and more franchisees opening around them. But, if the entrepreneur retains their independence then they will have a slow start off and gradually improve and increase due to the profit they are earning for themselves. Although, the franchisee will have an advantage on the competitors because of the well known name....
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