Biz Blog Wk 2

Compare the franchise model against going independent and “doing your own thing.”

The franchise model involves quite a bit less risk than the independent business model because you already know that your idea is a winner and you will earn money. This takes fairly little innovation but you do have to pay other people for the franchise and the work they’ve done to come up with the ideas and policies and designs and tried-and-true methods for attracting customers. Since you have to follow everything to the letter regarding the franchise, your ability to upgrade and morph in accordance with the popularity of your particular location is severely restricted. What I’m trying to say is that if people really like your fish sandwiches at one location but people really dislike them at all other locations, the fish sandwich will be cut from the franchise menu, regardless of how much the one location profits from the sandwiches. So it is fair to say that the franchise model is less risk/less reward than the independent business model. The latter model has a substantial amount of risk involved. You have no idea yet if the people will like your product. You are probably not 100% sure how to attract the maximum amount of customers and you definitely don’t have as much money to support your business as the franchise model does. Another problem you have to face is the amount of innovation you must accomplish on your own. The logo, the business name, the uniforms that your employees are wearing all have to be designed–and if you can’t design them on your own, you have to pay someone to come up with an attractive an unique theme.  On the other hand, except for the money that goes to paying your bills and your employees, you get all of the potential profit. Since your company is independent, you needn’t bother with paying a franchise and are under no obligation to follow the orders of anyone regarding the operation of your business. If the fish sandwiches are popular, go ahead and serve them in order to appease the customers and maximize your profit. The independent business model is clearly more risk/more reward. Although I cannot really say if one business model is truly better than the other, the independent business model seems to be a much more appealing option to an entrepreneur ready to start their own business.

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