The Advantages and Disadvantages of Owning a Franchise     What is franchising  Back to Service Franchise

To Consumers
Franchising is a wise choice because consumers like to purchase goods and services from familiar names with reliable standards of service and quality. They like to deal with businesses where the owner is on-premise.

To Franchise Buyers
Some of the advantages of buying a franchise.

Low Risk - The U.S. Commerce Department estimates that 95% of franchises succeed; only 25-35% of independent businesses succeed. Why the difference? Since a franchise is usually a duplicate of an already successful business, it should succeed.

Quicker Startup / Higher Sales / Higher Profit / Increased Equity - When a person buys a franchise he's getting start-up support and he's buying the "learning curve". As an alternative, if he were to start a similar independent business it would take longer to achieve the sales volume associated with buying a franchise. The trial and error stages have already been done by the franchisor and as a result, profits and business equity are built faster.

Be One's Own Boss - Franchising allows an individual to feel the pride and independence of owning his own business.

Training - The training an individual receives in a franchise should help him avoid mistakes and generate more volume and profits.

Support / Ongoing Assistance - Ongoing support gives a franchise owner quick access to help solve problems and a feeling of not being alone.

Collective Buying Power - Collective buying power should help reduce costs of doing business.

Regional/National Marketing - A chain of operating units can afford to generate far more exposure and advertising than can an independent, resulting in higher sales volume.

System/Policies/Procedures Already Tested And Established - Tested and proven systems save development time and help prevent mistakes.

Trademarks - Customer awareness of the franchise name is a tremendous benefit.

Mutual Destiny - The success of the franchise owner is in the best interest of the franchisor.

Research And Development - The franchise owner can utilized the research and development performed by the franchisor. This saves valuable time and capital.

To Franchise Buyers
Some of the disadvantages of buying a franchise.

In exchange for the security, training, and marketing power of the franchise trademark, you must be able and willing to give up some of your independence. If you are a person who likes to make most decisions on your own or to chart the course of your business alone, a franchise may not be right for you. As a franchise owner, you must comply with the various controls and procedures established by the franchisor. Then, too, all successful businesses require a lot of dedication and plain, hard work. You must be prepared to make that commitment.

So You Want To Own Your Own Business

Buying a franchise business is one of the many ways that you can become a business owner.  The decision to buy a franchise should not be rushed.  For such a significant decision you need to take time to consider some important factors before you sign any purchase or franchise agreement.

Before making the big decision to buy a business, make sure that you are comfortable with the:

  • The franchise concept (the business model).

  • Level of support from the franchisor.

  • Type and size of the business in relation to your needs, experience, financial capacity and future plans;  and

  • Business performance of any existing franchisees, company owned units and/or agents.

Check the Operations of the Business


  • Check monthly and yearly sales patterns from the previous three years' financial statements.

  • Compare sales trends with industry trends.

  • Determine if the business is expanding, losing sales or remaining static.

  • Identify the business customer base and percentage of sales from new vs. existing customers. Check to see if the company's customers will stay with the business each time they purchase products and/or services. Is there an indication of customer loyalty?  

  • Find out if there are any local developments that may affect your ability to grow the business in your area.


  • Identify all fixed and variable costs.

  • Include interest expenses if you are going to obtain financing for your new business.

  • Examine the costs recorded for the franchisor.

  • Determine whether you will incur similar costs as the franchisor.


  • Analyze financial records, including balance sheets, profit and loss statements and sales records.

  • Determine whether the business generates sufficient profit for a reasonable income.

  • Look at effects of increased or decreased sales on your profit.

  • Compare gross profits with industry trends.

  • Ensure that records have been kept well and comply with tax requirements.


  • Identify all asset items that you are buying.  Refer to an asset register/list, if available.

  • Check depreciation schedule for equipment, fixtures, fittings, etc.

  • Determine book value, market value and replacement value of fixed assets.

  • Identify any current leases for fixed assets.

  • Ensure equipment is in good working condition.

  • Determine if any equipment is unnecessary for the business or obsolete.

The Franchise Agreement

Closely review the franchise agreement and other disclosure information as well as all the clauses in the agreement. 

Buying a Franchise

A franchise is a type of business ownership where an individual, partnership or company can operate a business under the trademarks of an already-established business.

Benefits of a franchise can include:

  • Support of the franchisor;

  • Flow-ons from the franchisor's advertising, buying power, established goodwill and trademarks;

  • Use of an already-established business name;

  • Access to the franchisor's management systems and industry knowledge;

  • Reduction of business risk.

Some of the drawbacks of a franchise can be:

  • Less independence through franchisor control of management techniques and, possibly, of supply sources and product/service range;

  • Reputation of franchise may be affected by factors beyond the franchisee's control;

  • Could have an unreliable franchisor;

  • Sale of head franchise;

  • Defined and limited geographical market.

Become a 1-800 DRYCARPET Franchise Owner

You might want to continue researching an opportunity with 1-800 DRYCARPET:

  • If you are looking for a full-time, "hands-on" career opportunity.
  • If you have a proven track record in business leadership.
  • If you have successfully managed your personal finances.
  • If you are a results-oriented self-starter interested in growing a business.

This might not be the right opportunity for you:

  • If you are seeking an investment or an equity position in a business.
  • If you would like to diversify your franchise portfolio.
  • If you are a person who likes to make most decisions on your own a franchise may not be right for you. As a franchise owner, you must comply with the various controls and procedures established by the franchisor.

Before You Commit to Buying a Franchise

Before entering into a franchise agreement, you should obtain the following information:

  • A complete description of the business.

  • The track record of the franchisor and current motives for franchising.

  • Evidence of the franchisor's strategic plan - where is the business heading.

  • What the franchisor offers under the agreements, such as name, product, reputation/goodwill, site location, advertising budget and back-up assistance.

  • Fees involved, including up-front capital and percentage of takings payable to the franchisor.

  • Terms of sale of goods supplied by the franchisor and if you can purchase from outside the franchise network.

  • Success/failure of other franchisees in the same business.

  • Obligations upon termination of franchise.

  • Guidelines for sale of the franchise.

  • A franchise Operations Manual, if available.

  • The franchise agreement document and the period of franchise.

The Franchise Agreement

A franchise agreement is a written document outlining the rights and obligations of both the franchisor and the franchisee.  It is a legal contract and binds both parties.  The content of a franchise agreement will regulate, to a certain extent, the way you operate the franchise.

Operations Manual

The Operations Manual details how the franchise is to be run.  Every member of the franchise operates their business according to the Operations Manual.  The Operations Manual ensures that each franchise operates consistently under the one banner.

Information Sources

International Franchise Association:  Washington, D.C., 2003. [ ]
McGrow Consulting:  Jack McBirney
U.S. Census Statistics:  U.S. Bureau of the Census, various years.

Detailed information regarding franchising

About us
1-800 DRYCARPET Systems, Inc., is a Delaware Corporation.
U.S. Patent and Trademarks:


The Lawyers  
Hq Counsel (US) Stepens & Kray - Lon T. Stephens
Intellectual Property (US) Sedgwick - Robert F. Helfing
IP & Franchise (US) Cheryl L. Mullin, P.C - Cheryl L. Mullin
IP & Franchise (Canada) Hoffer Adler LLP - Joseph Y. Adler
Groups & Affiliations International Franchise Association - Washington D.C.

The LOGOS Building
3000 W. MacArthur Blvd.
Suite 520
Santa Ana, CA 92704
Contact Us:
(800) 379-2277

What is franchising     Back to Service Franchise


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