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Franchises vs. Business Opportunities: what’s the difference?

Are you torn between choosing a business opportunity or a franchise? Not sure what the difference is between the two? If so, don’t panic - Franchise Direct is here to help. Here are four main points of difference which should help you to make up your mind:

Costs involved in franchises and business opportunities

As with all new business ventures, both franchises and business opportunities come at a cost. A business opportunity is typically less costly than a franchise, with less royalty fees to pay to the original business owner. With a franchise, there are upfront costs involved, which many franchisees find they need assistance with, as well as the royalty fees which are paid to the franchisor.

Business structure

Franchises by nature are very structured, and a franchisee will need to adhere to a set of quality standards and business practiced laid out by the franchisor. Some people find they like this, and it can be particularly useful for those with little experience of running a business. On the other hand, a business opportunity usually comes with more flexibility, and the new purchaser will have more freedom to put in place their own systems and practices, where required.

Support for your business opportunity or franchise

One of the biggest differences between a business opportunity and a franchise is the amount of ongoing support you’ll receive as the owner of each one. Whilst a franchise usually comes with the reassurance of continual support and training from the franchisor, a business opportunity will usually only entail support at the very beginning of the venture, and once up and running, there is no contractual obligation to continue the relationship between purchaser and seller.

Legal aspects

The franchise industry in the UK is not as heavily regulated as the U.S., however any franchise purchased will be subject to UK Contract Law.  A typical franchise contract will include aspects such as granting a licence, termination or sale of the franchise, and the obligations of both the franchisor and the franchisee. This means they have slightly more legal protection than a business opportunity, as the law surrounding business opportunities is less regulated.

Still not sure?

The differences between a franchise and a business opportunity aren't clear cut, but looking at it from a practical angle can help. It’s important to think about your lifestyle and how you see yourself running a business. If support and guidance are an attractive prospect, then perhaps a franchise might be the way to go. If, on the other hand, you’re craving independence when it comes to your working life, then a business opportunity may be the option for you. Start by browsing the opportunities for both on our website; you can then request more details and find out as much as you can about what’s involved in your chosen business route.

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