For approximately 55,000 Australians franchising has proven to be way into business ownership. For the individual wishing to go into business there advantages and disadvantages in buying a franchise.

Advantages of buying a Franchise:

1. Established business framework. Before franchising the Franchisor has had to run a successful business and then established the processes and procedures that have made it successful. You are buying a business model that should work.
   
2. Generally you are getting a well known Brand name or trade mark that has regional or national recognition. This will bring customers to your new business generating cash flow faster than an individual startup.
   
3. Buying power that comes from being part of a large group. This should lead to lower prices for the goods and services that you require. The franchisor will save time in finding and negotiating with suppliers.
   
4. Assistance with site selection. Usually the franchisor has a site selection model and in some cases may have vacant preselected sites.
   
5. Well know franchises are often preferred tenants in larger shopping centres. Good systems will also negotiate lease arrangements for you which will assist in gaining better rental rates.
   
6. Ongoing business development be it through sales and marketing campaigns or new product development
   
7. Ongoing training
   
8. Ability to expand. In most franchise systems successful franchisees are allowed to acquire further sites/areas allowing you to build greater wealth.

However, as with everything buying franchise is not for everybody and there are some disadvantages.

Disadvantages of buying a franchise

1. Loss of freedom. To be a successful franchise you need to trust in the system and follow it. You should leave any personal initiatives to local marketing activities
   
2. High cost of entry when associated to going it alone. As well as the normal start up costs you will have pay a franchise fee for the business model.
   
3. Ongoing royalty payments to the franchisor. These are usually charged as a percentage of turnover and will be the same regardless of your profitability
   
4. High standards for fitout and signage will lead to higher initial costs.
   
5. If the franchisor has a problem then this will flow onto you.
   
6. Fees for marketing activities. If the marketing is not appropriate for your business this will waste money you could have spent on your own activities.