Posted on May 23, 2012
Is a Bigger Franchise Brand Always Better?
Most 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 franchise opportunity for your particular situation and circumstance.
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