5 Pros and Cons of Franchising: Is Franchise Ownership Right for You?

If you want to achieve financial freedom and self-sufficiency as an entrepreneur, the franchise business model may be an ideal choice. Owning a franchise isn’t the same as owning other types of businesses. Learn the five pros and cons of franchising to see if you’re a good match.

There are more than 821,000 franchise locations in the U.S. and the thriving industry employs 8.9 million people, the International Franchise Association reports. Franchising offers a turnkey business opportunity. You get a proven brand with a built-in customer base. You’ll have to follow existing operational and branding guidelines, but franchisees receive training, marketing support, and ongoing guidance to help achieve success.

Advantages and Disadvantages of Franchising

To understand if franchising is the right path for you, Beans & Brews Coffeehouse is sharing five of the unexpected pros and cons of franchising:

PROS:

  1. Shared marketing power: Most franchisees contribute to a marketing fund to promote the brand, and franchisors provide guidance and tools for local marketing to help you gain traction in your area. Beans & Brews conducts a real estate and marketing analysis for each trade area we are developing to help you build an aggressive marketing strategy.
  2. Bulk purchasing discounts: As part of a franchise system, you can take advantage of economies of scale to lower supply costs.
  3. Instant community credibility: Franchisees must build a solid reputation in their community, but having a recognized brand name enhances credibility. Beans & Brews has more than 80 locations across four states, with more than 110 additional stores in the pipeline. By offering standard and express models, Beans & Brews generates buzz where people live, work, and play.
  4. Scalable growth opportunities: Profitable franchisees can use their existing knowledge and franchisor support to expand by opening additional locations or adding territories. Beans & Brews opened its first location in 1993 and did not start franchising until 2005. The chain took a slow and steady approach to ensure it honed operations to scale successfully.
  5. Built-in exit strategy: Franchise locations are often easier to sell than independent businesses. Buyers appreciate having established operational procedures and franchisor support.

CONS:

  1. High initial costs: The initial investment and franchise fee can be pricey. However, securing financing for a franchise is often simpler than for a startup, as lenders are more inclined to fund businesses with an established track record.
  2. Lack of creative freedom: The backing of an established brand may prevent you from adding your creative twist to the business. Beans & Brews regularly innovates its menu, adding seasonal specials and new menu items to attract a broad audience. For example, in response to market demand, we added a lineup of all-natural energy drinks to our menu in 2023.
  3. Ongoing fees: You’ll be responsible for paying ongoing royalty and marketing fees.
  4. Risk of market saturation: Franchisors may open additional locations near yours, diluting your customer base and reducing profitability. Beans & Brews franchisees with a growth mindset can sign multi-unit franchising deals, securing their right to open locations in a certain area.
  5. Reputation: If one franchise unit gets negative press, it can damage the brand’s reputation and hamper your location’s performance. Beans & Brews provides a high level of ongoing support to existing franchisees, giving them the training and tools they need to meet their goals.

Beans & Brews: A Solid Franchise Opportunity

The coffee industry is booming. At least 45% of Americans had a specialty coffee in the past day, marking a 13-year high, reveals research from the National Coffee Association.

Beans & Brews’ high-altitude roasted coffee is unmatched and offers a unique selling proposition. We’re looking for individuals interested in opening single or multi-unit locations. If you have a passion for coffee and a desire to create a space for people in your community to gather, Beans & Brews is a solid franchise opportunity.

Get started today to learn more about joining the Beans & Brews family. Fill out our quick online form, and a franchise team member will contact you within one business day.