Should I Purchase a Franchise or An Independent Business?
Business ownership comes with many privileges. As a business owner, you become your “own boss” and get to decide how your business is run. Deciding to buy a business, however, is not a decision to take lightly. New business owners who are unprepared or who do not have dependable legal guidance can fall into major financial and legal pitfalls. If you are considering purchasing a company, you may be wondering whether you should buy a franchise location of an existing business or a standalone business. The answer to this complicated question will depend upon several factors. That is why it is crucial to hire a knowledgeable business attorney to guide you through this important endeavor.
Consider the Differences Between Standalone Businesses and Franchises
The biggest difference between a franchise and an independent business is the amount of control and authority the owner has over his or her business. If you buy a franchise, you will likely have a great deal of control over day-to-day aspects of your business, but you may have little input on “big picture” concerns. The franchisor will likely decide the types of products and services the business offers, the business hours of operation, pricing, marketing strategies, and more.
Do you want to have complete control over your business, or are you willing to sacrifice some of your freedom in order to gain the security that an established franchisor can offer? Franchise locations come with an established, reproducible business model that has a proven record of success. In the majority of franchise purchases, the parent company also offers ongoing support and training opportunities to franchisees. The leadership and support available through the franchisor make purchasing a franchise an attractive option for many hopeful business owners who are considering buying a company for the first time. On the other hand, independent business owners are not limited by a parent company. They have full control over their business, but with that comes a tremendous amount of responsibility.
Franchise businesses often have lower upfront investment costs, but they also require the franchise owner to pay recurrent royalties. Standalone businesses typically have higher investment costs, but the owner also has authority over investment decisions. In order to decide whether you should buy a standalone business or a franchise, you will need to examine your own strengths and weaknesses as well as your short-term and long-term business aspirations.
Contact a Fairfield County Business Law Attorney
Buying a business is potentially one of the biggest decisions you will ever make. For wide-ranging legal guidance regarding business purchases, contact the skilled Law Offices of Peter V. Lathouris, LLC. We can help you determine the type of business that is right for you in accordance with your goals. In addition, we will provide assistance in the business valuation and due diligence process, drafting and review of business contracts, and more. To schedule a free consultation with one of our experienced Stamford, CT business acquisition lawyers, call us today.