Franchise vs. Starting a Business: Making the Right Choice

3 min readJul 25, 2025

Years ago, I received similar questions from two aspiring entrepreneurs — Sarah and Bruce.

Sarah asked: “Is it better to buy a franchise or start a business from scratch?”
Bruce followed up with a more specific angle: “What are the benefits of buying an existing franchise vs. launching a business on my own?”

Great questions — because there’s no one-size-fits-all answer. Let’s explore the key differences to help you make the right call for your situation.

Watch the full video here https://youtu.be/Fi6f2fknDR0

Starting from Scratch: High Freedom, Higher Risk

Starting your own business gives you total freedom:

Build your own brand
Create your own systems
Call all the shots

But here’s the catch:

Most startups fail within the first year.

Why? Because they often lack:

Proven systems
Strong customer acquisition channels
Capital to survive until breakeven

That doesn’t mean you shouldn’t do it. But it does mean you’ll need:

Resilience
Strong planning
Patience for a slower ramp-up

🏪 Franchise: Brand Recognition and Systems — But at a Price

Franchises often boast higher success rates, and there’s some truth to that — with caveats.

The franchise model provides:

A recognized brand
Operating systems and training
Ongoing support and supply chains

But:

You must meet strict financial qualifications (liquidity + net worth)
You’ll pay ongoing royalties and fees
You lose some autonomy in how the business is run

So while franchises may look less risky, keep in mind that franchisees often start from a stronger financial position to begin with — and that skews success rates.

Buying an Existing Franchise vs. Starting a New One

If you’re leaning toward franchising, here’s a golden rule:

Buy an existing franchise location — not a brand-new one.

Why? Because launching a brand-new franchise is almost like starting an independent business:

You must build the customer base from zero
Marketing and brand recognition may be weak in your area
You inherit fixed costs from Day 1 without guaranteed revenue

In contrast, buying an existing location allows you to:

Review actual financial performance (sales, profits, margins)
See the operational systems in action
Forecast your ROI with more confidence

So Which Should You Choose?

Choose a Franchise If:

You prefer structure and proven systems
You have the required financial strength
You’re okay with less creative control
You buy an existing location with a positive track record

Start From Scratch If:

You value independence and innovation
You have a unique idea or niche
You’re comfortable with risk and uncertainty
You’re prepared for a long runway to profitability

Still Deciding? My New Book Can Help

If you’re still stuck on the Buy vs. Startup dilemma, I dive deep into the pros, cons, risks, and strategies in my new book:

Buying vs. Starting a Small Business: Now available on Amazon: www.DCBBookList.com

Stay in the Loop

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Here’s to making the smart move for your entrepreneurial future.

Cheers,

David C. Barnett