Understanding the difference between Franchises and business opportunities

Franchises and business opportunities both provide long-term investment opportunities revolving around an irresistible principle - Own a business to be your own boss. The underlying appeal of business opportunities and franchises may almost be the same, but the two arrangements are dissimilar from each other.

A business opportunity is largely a one-time purchase, generally needing a part-time effort. It usually does not demand a continual relationship with the seller. Broadly, it involves a smaller investment and no ongoing royalties. The seller in this case acts as a product-provider, albeit some guidance material is often made available with the purchase. Trademark rights are not licensed to the buyer in most cases. The seller is also not on hand for providing any tangible business assistance when things do not go right. You are largely on your own.

On other hand, franchising is the more solid and sophisticated investment. It’s a full-time, professionally absorbing business experience. The investment required can be rather substantial, but the returns are more lucrative. Renowned franchisors carry elaborate market research before they decide to sell any new outlet, so you will experience more security owing to the fact that there’s a demand for the chosen product or service. More importantly, franchisees gain from favourable economics of scale in supplies and services like advertising, buying materials and negotiating for new locations and setting lease terms.