The pros and cons of buying into a big name franchise system
Most people equate franchising with ubiquitous mega-systems: the large fast-food franchises like McDonald’s or Subway, hotel operators like Marriott or other business-format franchises like Curves or ServiceMaster. These systems are big–really big–and they have advantages and disadvantages as franchise opportunities.
When you buy a franchise, you hope to receive at least two things: a valuable brand and a proven operating system. The primary advantage of big franchise companies is that both of these are basically set in place. You can easily research consumer awareness and attitudes about the brand just by asking around. You can also pretty easily determine the franchise’s track record by visiting their numerous franchisees who have been operating for a long time.
Another advantage is that large franchise systems can offer you, the new franchisee, safety and dependability. The risk of getting into a big franchise system is usually lower, because they’ve worked all the bugs out of their systems long ago. This doesn’t mean you’re guaranteed to succeed, but there’s less uncertainty, due to the wealth of information available about the current system and its operators.
Mega franchise systems can have their disadvantages, too. Many very large systems have already built so many units that getting approved to open a new unit as a new franchisee can be difficult. These systems tend to favor successful current operators for new unit expansion opportunities, because that approach is less risky than taking a chance on a new, unproven operator.
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