Analysis of

Opening a Franchise

Versus

Opening Own

Business
 CHAPTER I

BACKGROUND OF THE STUDY

1.1 Introduction

Business is the activity of making a living or making money by

producing and selling of goods and services for profit. It has a big role in

people life, because besides of having a job, business is the second way to earn

money. Starting a business is too risky that’s why having enough knowledge

and doing smart decision is very important part. Many first entrepreneurs have

the dilemma of whether a business from scratch or buy a franchise

(Ennico,2010).Having own business is a dream come true because having own

business is like having own home. Franchising make more money and get only

a small portion of commission. Business is a process that requires a lot of

preparation whether it is own business or franchising.

Own business and franchising could provide money that help a nice

living. Choosing between a franchise and own business was quite difficult, they

have both advantages and disadvantages. Doing business is not only a great

responsibilities, best feeling of achievement but also a special experience that most

of us dreaming of. Variances in the success rates of franchise and own business are

debatable. There is no conclusive evidence that either approach improves or

reduces your likelihood of success (Kroeker, 2013).The chances of success and

failure are always there, it is important to conduct research before conducting

business.

Around 80% of own business started will be gone five years, in fact

about two thirds of business survive at least two years. Failure doesn’t mean to

stop because there are some story of successful business that surely inspire a lot of

people. Shoe Mart or SM, National Book Store Inc., Meralco, Airlines and GMA

Network Inc., are some of the successful businesses in our country. In franchising

process is fast, the risk is low and success rate is high and with training from the

franchise owner to make sure the business floats, you the potential to earn big

along the way (Atbp.ph 2016). Some biggest franchises are Jollibee, 7-Eleven and

Petron which proved a biggest success.

This study shows that whatever you chose whether own business or

franchising, the risk was always there. Starting a business can be exhilarating and

wildly fulfilling. However it can be quite complicated and may challenge you in

ways you had not imagine (Lorrette, 1996). Franchising seen by everyone as a

simple way of doing business for the first time, but there is no guarantee of success

every time. “There are no secrets of success, it is the result of preparation, hard

work, and learning from failure (Powell, 2001-2019).”

 Our study aims to help a lot of people to value the importance of choosing

the right decision. Moreover, this study wants to give knowledge about which is

better, opening own business or franchising business. This research study will

tackle the pros and cons of own business and franchising. It also discuss how it

help people for decision making.

Statement of the Problem

This study attempts to provide an adequate understanding about which is better

franchising or opening own business.

This thesis topic aims to answer some questions that follows:

1. What is the basic profile of the respondents in terms of:

1.1 Age

1.2 Gender

1.3 Civil Status

1.4 Income

1.5Employment Status

2. What are the advantages and disadvantages of :

2.1 Own Business

 2.2Franchise Business

3. How much capital was needed when starting:

3.1 Own Business

3.2 Franchise Business

4. What are the strength and weaknesses of :

4.1 Own Business

4.2Francise Business

5. What are those problems that can happen during:

5.1 Own Business

5.2 Franchise Business

Significance of the Study

The study helps the future entrepreneur what is better between franchising

business or opening own business. Furthermore, the study we conducted could be

the importance of the following:

Business Management Student- The findings on this study help them to have

knowledge in case they need extra income and gain deep insight about business

industry.
Unemployed - The findings on this study may help them to make money even they

don’t have work, instead of finding a job they can open a franchise or open a

business.

Future Researchers- The findings on this study may help the other future

researchers in developing much applicable risk reduction assessment research, not

just only for school structures but other buildings, commercial or residential, for this

may serve as their basis.

Future investor- The findings on this study may help the future investors to have

an idea what their money can invest so that there is no loss in there invest.

SCOPE AND DELIMINATION

This study is focus on giving information when choosing which is better

between Own Business versus Franchising Business. It help many people to have a

knowledge before starting a business for the future.

This research conducted a survey that could gathered information that help

people to choose.

Large franchiser and famous business industry are not be included because

it’s takes more time, effort and money to conduct this research.