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Investing in a Franchise System vs. Starting Your Own Small Business – Which Strategy is Right for You?

Investing in a Franchise System vs. Starting Your Own Small Business – Which Strategy is Right for You?

Learn about the pros and cons of investing in a franchise vs. starting your own business.

There are a lot of paths you can take when becoming an entrepreneur. Maybe you’ve been working for an established company for years and are looking for a new career path. Maybe you’ve been serving in the armed forces and are looking for a challenging post-military career. Or, maybe you’re about to graduate and are entering the work force full-time.

Regardless of where you’re at now, if you share some of the main traits of entrepreneurship - motivated, innovative, diligent, dedicated, ambitious, independent – and want to embark on a path that allows you to be your own boss, then starting and owning a business can be a solid career choice.

But, it’s important to find a business style that fits you. For most entrepreneurs, that means choosing between investing in a franchise or starting your own business. There are pros and cons to each path and it’s important that you weigh all the factors before making your choice. 

Investing in a Franchise System vs. Starting Your Own Business

To help you make that important decision, we’ve listed out a few key factors along with the advantages and disadvantages of running each type of business.

Starting Your Business

One of the biggest differences between investing in a franchise and starting a business from scratch is the initial startup process.

When you start your own business, everything is on you. As a new business owner, you have to develop:

  • Branding elements – your business’s logo, colors, signage
  • Product and service offering – what you're going to sell customers as well as how you plan to go to market (e.g., systems, processes, supplies, inventory, fulfillment, etc.)
  • Positioning – why consumers would want to buy your products and services
  • Store layout – how to present your digital and physical properties (i.e., the face of your business)

When you consider buying a franchise, those elements are taken care of for you (or, at least they should be). It’s part of the reason you pay a franchising fee . Most franchise networks have support systems in place to not only help you get off to a solid start but also support you as your small business grows.

If you’re excited about the challenge of building your own company from the ground up and are comfortable with the possibility of working long hours for little pay at first, starting a new business could be for you. However, if you prefer to start with a proven business model to help get your business positioned to grow quickly, having the support of a franchise brand cam be very helpful.

Building Your Business

When it comes to growth, deciding between investing in a franchise organization and starting your own business is a risk vs. reward proposition.

Starting your own business is often the riskier option. According to an article in Entrepreneur Magazine, “25 percent of startup businesses fail within their first year, 50 percent of the remaining fail within five years and approximately 30 percent of the remaining last ten years.”

That means more than four out of every five new businesses wash out within 10 years of opening.

Growth is typically more gradual in franchise systems but the opportunity is there. While no business venture offers a guarantee, having the support of an established franchise brand does increase your chances of success.

And, many franchise brands offer multi-unit ownership opportunities. Owning multiple units within a franchise system affords the dual advantage of increasing your business’s footprint while allowing you to delegate more of the day-to-day operations.

Innovation and Creativity

If you thrive on creativity and innovation (as many entrepreneurs do), starting your own business sounds like the obvious choice. But, that doesn’t mean you should rule out investing in a franchise. Many brands allow franchisees the opportunity to innovate both within their own store and in their network. Franchise networks often establish committees that encourage owners to work together to develop, approve and manage various business, product and marketing projects.

Some franchise brands even offer non-traditional locations to accommodate entrepreneurs looking to grow their existing product offerings. For example, The UPS Store – Entrepreneurs fourth-ranked franchise in their latest Franchise 500 list – allows business owners to set up non-traditional centers within their existing businesses. This allows businesses like pharmacies and hardware stores to provide even more value to their customers, attract new customers, and become more of a one-stop shop by providing printing and shipping services in addition to the existing products and services already available.

Making the Decision

In the end, your decision depends on what business ownership style best fits your personality. Starting your own business allows you the freedom to explore any venture you want; but, it comes with the risks and responsibility of being completely on your own. Investing in a franchise business provides the framework within an existing business model while still enabling you to be your own boss,  expressing your creative side within the structure of a proven system.

With a decision this important, you need to dig in, exercise due diligence and find the path that’s right for you – like any good entrepreneur would.

2023 Entrepreneur's Franchise 500 Top Rated for Veterans badge

We Proudly Support Our Veterans

Participating partners with the VetFran program, The UPS Store offers qualifying veterans $15,000 off their franchise fee to start their new business. To learn more, contact The UPS Store Franchise Development Team.

Entrepreneur's Franchise 500 Ranked #4 in 2023 badge

Ranked for over 30 Consecutive Years

The UPS Store has been ranked #1 in the postal and business services category for over 30 years and remains in the top 5 overall for the seventh consecutive year according to the Franchise 500 list.

Kristin Howard

Franchisee, Michigan

The reason my husband and I decided to go into franchising and specifically with The UPS Store, is the different opportunities we're given with the business. The UPS Store has name recognition as well as opportunities to expand.

Debbie Adams

Franchisee, Kentucky

What I enjoy most about being a The UPS Store owner is working with my customers. We are the solution specialists for our customers.

Jim George

Franchisee, Illinios

My favorite part about The UPS Store network is the camaraderie with other franchisees. Everybody loves to help everybody else. You’re really part of a family.

Greg Murray

Franchisee, Florida

The interesting thing about The UPS Store is that when a customer walks through the door there's an extremely high probability that they're coming there to do something that is important to them. So at the end of the day, what we do for customers is very important and they are trusting that we are going to do it well.

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Mariana Huberman

Franchisee, Washington, D.C.

One of the things that I love about The UPS Store franchise system is that you're not ever in this by yourself. The franchisees of The UPS Store network are great.

Heidi Morris

Franchisee, Colorado

The thing I enjoy most about being a The UPS Store franchisee is I get to get up, go to work and know that I'm helping other business owners succeed in what they're doing.

Bob Brown

Franchisee, Tennessee

Owning a The UPS Store franchise has changed my life because it's finally given me the opportunity to engage my customers and my staff and be able to take real pride in what I do. As a franchisee, we get faced with solving peoples' problems every day and we do everything we possibly can to try to help.

Marie Jensen

Franchisee, Oregon

My favorite thing about The UPS Store is the variety. I love the variety of customers, I love the variety of services; getting to know the customers, meeting their needs, finding out how we can help them accomplish what they need to accomplish and seeing how happy they are. That makes me ecstatic.

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Tad Mollnhauer

Franchisee, Florida

With the products and services that The UPS Store provides we can make a difference in people's lives and that is the best reason for being a The UPS Store owner.

Joy Batchelor

Franchisee, Idaho

What makes being a The UPS Store franchisee worthwhile at the end of the day is the customers. The customers treat us like we're family.

Paul Erchinger

Franchisee, Texas

One nice benefit of owning a The UPS Store franchise for me has been that it gives me the opportunity to be more involved in the community. As I make relationships with others it seems like no matter what the environment is, in one way or another business comes out of that and that's not my objective—it's been a secondary benefit to being involved in the community.

Chris Reminder

Franchisee, Ohio

There are several things that I really enjoy about being a The UPS Store franchisee. First and foremost it allows me to get to know the people in the local community and that is a lot of fun. We get to see people on a regular basis. We get to know their life stories. That's a lot of fun.

Bruce Jones

Franchisee, Kentucky

Since we have joined The UPS Store, our life has changed by just having more time to spend together as a family. We've been very fortunate with the stores that we have and we have a great staff that looks out for our best interest and we look out for theirs.

Lonnie Williams

Franchisee, Oklahoma

What makes The UPS Store so successful is it gives each individual an opportunity to grow with the network and just meet the challenges that are brought to them on a daily basis. Every day gives us a new opportunity to help another person, to help another small business, to answer a question and to solve a problem.

Jeff Graham

Franchisee, Alabama

I love my customers. I love my employees. I love every person, every face that comes into my store. I enjoy every day going into work and I can't see doing anything else for the rest of my life.

Stacie Stigar

Franchisee, Alaska

I think that this franchise is so successful because of all of the resources that are available to us as center owners—we have marketing materials, we have so many different opportunities for help from the home office, and it just really makes for a great franchise.

Don Pollard

Franchisee, New Jersey

I think the thing that makes this franchise successful is a number of things. First of all we have an outstanding system, we have a great product, a great brand, and we're able to attract dynamic people to run these centers and run the business. So I think when you put all that together it really provides for a winning combination.

Mary Ellen Nichols

Franchisee, Tennessee

The thing I love about the franchise is that you have the UPS name backing you but yet you also have the autonomy to make your own decisions to promote.

Laura Griffin

Franchisee, Florida

In the eight short months I've owned my The UPS Store it has really changed my life. I've gone from being an employee of someone else to being an employer of my associates. It's a big responsibility but it's exciting every day.

Sandy Scandrett

Franchisee, Wisconsin

Being a The UPS Store franchisee has improved every aspect of my life. It's very rewarding financially, professionally, and emotionally. I have a large number of regular customers who are really, really appreciative of everything we do.

Kristie Robison

Franchisee, Alabama

I would say owning a The UPS Store location has changed my life to where I have more time and flexibility. In owning your own business you get your store up and running and you get employees that you can trust that are going to help keep your store running. This allows me to attend my two boys' ball games and also travel and do things with them so it has really changed my life for the better.