Is Buying a Franchise More Like Buying a Job?

Is Buying a Franchise More Like Buying a Job?

Some folks have likened the buying of a franchise to buying a job. In some cases this is true such as with the 7-11 franchises and the way they work. Inventory is automatically ordered and paid for out of deposits made and a check for the difference between the costs is paid two times per month.

Other franchises like Subway some have said is more like buying a job than actually owning a business. Why you ask? Well, because you take out a business loan for $160,000 plus and sign a lease and you must purchase all your products, paper cups and signage from the company. Meanwhile the average Subway Franchise owner only makes $2,300 to $3,000 per month per store. The answer to raising your income says the company? Buy more stores!

But in the end franchising is not like buying a job at all. Consider if you will "independent contractor" rather than a business "Sale" really when some one buys a franchise they are leasing the "business" abstractly and philosophically of course.

When you buy a franchise you are purchasing the rights for the use of a business model and brand name for the duration of the contract. That is nothing close to buying a job. It is more similar to leasing a Business Vehicle than anything else. You have the right to use the vehicle or business model for the term of the franchise agreement. So, think on this in 2006.