Are-Large-Franchises-Better-Than-Small-OnesMost people associate franchising with big - really big - brands like McDonald's, Dunkin' Donuts, Subway, Pizza Hut, and all the other world-dominating chains you're no doubt accustomed to seeing everywhere you go.
But is a big franchise system necessarily better than a smaller one?
It's only natural to think so: the whole point of franchising a company is to grow in the most economically efficient way possible. And, all things being equal, a large franchise system is more likely to have been in business longer than a smaller competitor, meaning there are probably fewer questions that might remain unanswered about the brand's long-term viability.
But for an individual prospective franchisee evaluating their investment in a franchise business, it's critical to step back and examine both the pros and cons of big franchises before making any decision.
Benefits of Large Franchise Brands:
- A valuable brand and a proven operating system are firmly set in place.
- Consumer awareness and attitudes about the brand are well-known.
- Numerous franchisees are available to offer practical answers based on years of experience.
- Dependability - you know what you're getting.
- Less uncertainty due to the large amount of information available about the organization.
- Less risk - all the bugs have long since been worked out of the system.
- Strong capitalization to support the brand, large-scale advertising, and support.
Drawbacks of Large Franchise Brands:
- It's often difficult for new, unproved operators to get approval to open new units.
- Buying an existing unit may mean buying someone else's troubles.
- The bigger the system, the more rules are imposed on franchisees.
- Operators often feel more like employees than independent entrepreneurs.
- Competition to buy into a big system is tremendous. As a potential franchisee, just getting a big franchisor's attention can be a challenge.
- Conformity is favored over innovation, creativity, and independence.
- Bigger often means slower and less responsive to needs and concerns of individual operators.
Big or small, a good franchisor cares about the success of its franchisees. When shopping for a franchise, don't make any assumptions based on the size of the organization. Take the time to check out all the options and choose the best opportunity for your particular situation and circumstance.