
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
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Here’s to making the smart move for your entrepreneurial future.
Cheers,
David C. Barnett
from University of Washington in Seattle, WA, USA
from London School of Economics and Political Science, University of London in Minneapolis, MN, USA