PowerPoint Presentation for MiraCosta Business Communications 2020 Summer Semester

1. Franchise
or Start-
Up?
NICHOLAS CHRISTENSEN

2. Introduction
Deciding whether or not to purchase a franchised sandwich restaurant or start your own sandwich
shop/business can be stressful. Through extensive research, you can make a decision on which
business path is best for you. Throughout this presentation, definitions and examples of both
franchises and start-ups will be presented, as well as pros and cons of each option, an overview of top
franchises and start-ups throughout the United States, and a profile explaining the common
characteristics of entrepreneurs that will best be suited for either alternative.

3. Franchise
A franchise is defined as a type of license that a party (franchisee) acquires to allow them to have
access to a business's (franchisor) proprietary knowledge, processes, and trademarks in order to allow
the party to sell a product or provide a service under the business's name.
Typically, a business will create a franchise for its brand and product to increase its market share or
expand at a lower cost. In order for a franchisor to purchase from the franchisee, complex contracts
must be agreed to and signed.
A franchise is in the form of a lease or rental, therefore it is only temporary. Historically, a franchises
lifetime ranges from five to 30 years. A main reason why franchises are cut short, is because of severe
violations to their binding contracts.

4. Start-Up
A start-up is a business in the very beginnings, or first stage, of its operations.
Usually, start-up companies have one or more entrepreneurial founders who want to provide a
service or idea to the public with the intent of there being a demand. Before starting the company,
the owners must consider multiple factors that will determine the business’s success.
As for location, one must determine if the product or service requires an online platform or face-to-
face interaction.
In regards to legal structure, the owner/s must decide on how they want to be identified. They can
choose from either a sole proprietorship, partnership, joint ownership, or a limited liability company
(LLC).

5. Pros and Cons of a Franchise
PROS
Due to franchising being a tried and true system, there is a high
success rate. Because franchisees only have to focus on day-to-
day operations and responsibilities, working under a common
system is a proven effective and successful strategy
Franchisees are trained in financial planning and customer
service to better position themselves as leaders.
Brand recognition is another benefit of owning a franchise.
Since the franchise already has an established brand and name,
it presents a much easier way to sell the product or idea
CONS
The astronomical fees and monthly/yearly fixed costs needed to
purchase and maintain a franchise is a con in making a decision
Another disadvantage to consider is the lack of freedom.
Because one is promoting an already-made business operation,
there is no option to change the product or service.
Having to deal with limited locations to purchase a franchise is
also a disadvantage

6. Pros and Cons of a Start-Up
PROS
Due to complete control and ownership of a business in a
start-up, creativity, innovation, and free flowing ideas are able
to be put into discussion and consideration. Instead of being
censored or having to be restricted by a corporate entity, start-
up business owners can put their own unique twist and
techniques into their company
Another advantage of owning a start-up, is that you can work
wherever and whenever you please, since there is no one to
report to other than yourself. You can determine your own
salary and work hours, as per being the owner
CONS
Unfortunately, one of the bigger disadvantages when it comes
to owning a start-up business is a significantly higher failure
rate. According to Ceren Cubukcu of Entrepreneur.com,
“statistics show that 25 percent of startup businesses fail
within their first year, 50 percent of the remaining fail within
five years and approximately 30 percent of the remaining last
ten years. Therefore, it is very risky to launch a start-up…”
Along with a high failure rate, fees and fixed costs make for
running a start-up even more difficult that could cost up to
millions of dollars a year.

7. Common Characteristics
FRANCHISE
Being a leader as a franchisee is crucial to building
influence and relationships with fellow employers to
ensure trust.
As for being adaptable, it is key to be flexible with the
constant changes in circumstances as a franchisee.
A team player is an absolute must in the franchising
world.
START-UP
Having persistency is crucial to owning your own
business, due to the constant financial struggles and
negative feedback from outsiders. Being able to “block
out the noise” aids in the fight to be successful.
Without confidence, there is no start-up business. Your
business is who you are, and confidence is the
building-block of creating a successful company.
Widely known as the most important characteristic of
a business owner is passion

8. Conclusion
After careful and extensive research, we have concluded that opting to purchase a franchise is the
best option possible. Due to the high earning revenue, established brand name, and less risky
maneuver, purchasing a franchise seems to put an ambitious entrepreneur in a great position to
succeed in the restaurant industry. Also, having the ability to expand and purchase more franchises
with the earned revenue, growth is entirely possible. Although the costs to purchase and start a
franchise are significantly higher than that of a start-up business, it appears as if the rewards
outweigh the price. May your entrepreneurial journey commence!