Is Franchising Always More Feasible than Alternatives Like Startups and Joint Ventures?


When it comes to conformance to quality standards, franchising is inarguably a better alternative. It keeps a check on the standards and the regulation in which the product or service is offered. With many startups revolutionizing the way products and services are offered and always changing the way such offerings were perceived because of the uncommon growth rate, the instability the start-up ecosystem has to offer, as opposed to franchising, is not as adored by emerging entrepreneurs.

barbeque Franchise

Alternatively, a joint venture is when two entities form an agreement based on mutual profits or loss and have agreed upon providing resources to one another during a one-time deal or consequently during several years.  A joint venture usually occurs when most companies look for a more competitive marketplace where they want to collaborate with an already establish business entity and reap benefits of the business success by a prosperous amalgamation of both these entities.

A range of associated factors highly determines a franchise’s feasibility. A few of them are assessing the market potential, marketing strategies, policies, competition, target market, etc. Joint ventures can always be more viable when maintaining equilibrium in terms of a shared vision for both the entities involved. They usually share the profits equally but are also treading towards the same path of a business story wherein the parties’ vision philosophy is aligned with everything that the company aspires to do in the longer run.

Benefits of franchising over startups:

  • The level of risk involved in the franchising ecosystem is way too low compared to the startup ecosystem, as new entrepreneurs always vouch to venture into something that is risk stabilized and earns them a defined profit.
  • In a franchising model of business expansion, the franchisor often takes care of the operational activity, and they have a definite plan ahead of them as to how the goods and services will be handled and operated.
  • A deeper understanding of running a business coupled with an excruciatingly unique idea for startups and joint ventures alike is required. In contrast, the franchising model is tested and often reaps benefits with a stabled outlook of everything.

In the United States, the franchising business has always been seen as a way to abide by the normalcy of business expansion as observed in the case of Dickeys Barbecue pit franchise, amongst other fast-food chains in the U.S. Franchising involves minimal risk, but then again, for enterprising people, can take risks and don’t want to reinvent the wheel, but create something of their own with a moderately bigger investment and planning, strategizing and structuring the model, for them indulging in a startup or a joint venture seems more feasible than the former. However, as the olden saying goes, it is always better to invest one’s time, effort, and money with prospected benefits; hence franchising is always a win-win.