On the other hand, the main disadvantage to buying a franchise over an established local business is the lack of freedom that you have when it comes to modifying policies or operations. As you you are buying a tried and tested system and are required to follow the policies, there are limits to the executive power that you hold within your business. Your expansion goals are also severely limited, and fully dependent on the Franchisor’s long-term plans and territory availability. In addition, when you buy a franchise, you are required to pay ongoing royalites and advertising fees that typically range from 6% to 12% of your gross revenues. 

The Established Local Business: More Creative Freedom

When you buy an established local business, you will be taking over every aspect of the operation. The decisions become entirely yours, and you have the freedom to implement policy changes as you wish. As an independent business owner, you have total freedom when it comes to your business; you get to decide how you would like the business to run, right down to every last detail. This is an exciting and fun challenge for many entrepreneurs who love being able to tweak and improve every aspect of their business.

The potential risk to purchasing an established local business is that you are on your own. Compare this to the franchise option, where all aspects of the operation have been developed for you, marketing strategies are provided, and the system is PROVEN to work. Being an independent business owner forces you to come up with creative solutions to everyday problems on your own, without the backing of a large company. To some people, this idea is terrifying, and to others, the excitement at the prospect of creating their own systems and shaping their own business is what gets them up in the morning.   

Before you choose the type of business that you would like to buy, consider the type of person that you are and the work environment that you are looking for. If you are the kind of person who would love the opportunity to let your management skills shine, a franchising option might be more suited to you. However, if the idea of buying and building up something that is entirely your own is exciting and appealing, then you might want to look for local businesses for sale instead. Also, and perhaps most important of all, as an independent business owner, there is no limit to your expansion goals. Both business models have the potential to be very successful, and you just need to find the right fit for you!