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Chapter 1. Franchising as Entrepreneursh... > Franchising: Small and Big Business

Franchising: Small and Big Business

One of the strengths of franchising is that it provides a wide breadth of options for individuals to find an opportunity to meet their financial goals and business visions, however conservative or grandiose. Franchising allows entrepreneurs to build wealth to varying degrees according to the scale of the business enterprise. For those whose life goal is to own a pizza restaurant and earn a comfortable income, the opportunity is there. They become small business owners. But franchising may afford the opportunity to build 300 pizza restaurants using a business model that allows a sharing of both risks and rewards with other “owners” in a system.

It’s important, of course, to do your homework before choosing a franchise arrangement that suits your needs. If, for example, the company sells franchises only in small markets and keeps big markets for company stores, this may not send the best signals to the prospective franchisees. Or, if the company limits the growth potential of franchisees by tightly controlling the number of units, or if it expands with numerous franchisees in a high-potential market, mixed messages may also be perceived by prospective franchisees. You have to understand how big your appetite is and whether a franchise of interest will allow you to stay small or become big. The prospective franchise has to allow you the chance to be rewarded as desired without exceeding your tolerance for risk.


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