Franchise vs Make Own Brand : What is Better?

When you enjoy a Big Mac or indulge in a Frappuccino, the ownership of the establishment may not cross your mind. However, behind every fast food outlet lies a business model that influences everything from the meals served to the employment opportunities created. The two predominant models are franchise ownership and corporate ownership, each presenting its own advantages, disadvantages, and sustainability considerations.

Franchise Model: Local Ownership, Global Brand

Franchising enables individuals, known as franchisees, to manage their own outlets under the umbrella of a well-known brand. It’s akin to possessing a segment of McDonald’s without having to create the iconic Golden Arches.

Sustainability Advantages:

Local investment: Franchisees are typically community members who reinvest in their localities.

Incentive: Owners are often more invested in their business since their finances are at stake.

Scalability: Brands can expand more rapidly without the parent company bearing the costs of opening each new location.

Challenges:

Inconsistent standards: The management quality can vary significantly among franchisees.

Limited adaptability: Implementing sustainability measures (such as eliminating plastic straws) can be challenging across numerous semi-independent operators.

Corporate Model: Centralized Control, Streamlined Change
Corporate-owned establishments are directly overseen by the parent company, with brands like Starbucks and In-N-Out exemplifying this model.

Sustainability Advantages:

Consistent policies: It is simpler to adopt eco-friendly packaging or ensure living wages across all locations.

Enhanced oversight: Quality and ethical standards can be more rigorously maintained.

Challenges:

High costs of expansion: Directly opening and managing stores can be financially burdensome.

Reduced community ties: Managers frequently change, and ownership is held by the corporation.

So… Which Model Is More Sustainable?

The answer is not straightforward. Franchises may better support local economies and foster entrepreneurship, while corporate models can more effectively implement company-wide sustainability initiatives.

The future may lie in a hybrid model that allows franchisees to operate independently while adhering to stricter sustainability guidelines set by the parent company. Ultimately, a collaborative effort toward sustainability could yield the best results.