The Truth Behind Franchising vs Small Business Ownership: Franchise Owners Are Small Business Owners Too

The Truth Behind Franchising vs Small Business Ownership: Franchise Owners Are Small Business Owners Too
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There are many common misconceptions about franchise vs small business ownership. One of these is that people often think franchises are owned by large, national corporations in faraway places. However, the fact is that many franchise businesses are actually small local businesses, independently owned and operated by people who are also dedicated members of the communities they serve. 

Franchise vs. Small Business: One and the Same 

Franchise owners are small business owners who are wholly responsible for the success and quality of their business. However, what sets them apart from small business owners who start an idea “from scratch” is that the franchise business model allows franchisees to access many of the advantages and tools that are typically only available to much larger businesses. They get to use an established brand name and access training, support, advertising opportunities, networking groups, and many more resources to support their business’ success.  

By definition, a franchise is a business operating under a type of licensing agreement that gives a business owner access to a franchisor’s brand name, processes, systems, trademarks, and more (one of the many benefits of franchising). The vast majority of franchise businesses are small businesses owned by local entrepreneurs who often live and work near the areas their businesses serve. As a franchise business, these small local businesses are independently owned and operated, meaning their owner might just be your friendly, next-door neighbor. 

What is a Franchisor? 

A franchisor is a company that gives the franchise businesses (or “franchisees”) the right to use its trademark and recognized brand to sell goods or services according to the franchisor’s terms and for a specific cost. 

Under a franchise agreement, a franchisee is awarded the right to use a franchisor’s branding and systems, but it is up to the franchisee to manage their business and employees, as well as provide high-quality services to customers in their service area.   

Franchising Fact: Franchise Owners Are Small Business Owners 

One challenge that franchise owners often face is the perception that their businesses aren’t small businesses. This is mostly due to their affiliation with a larger corporate entity and brand. But because each franchise business is independently owned and operated, often by local entrepreneurs, it’s important to encourage support for franchise businesses the same way we would any other small business. These franchise entrepreneurs, just like those who create business ideas from scratch, are also your local neighbors and friends who work tirelessly to make their businesses successful and fulfill their personal career goals and dreams. 

Why The Franchise Business Model is Valuable for Entrepreneurs  

Small businesses are the backbone of most communities, and they provide high levels of economic value to the towns and cities in which they are located. Because franchise businesses are small businesses, as a franchise owner, you will likely become an integral part of your local economy, supplying essential services and employing community members. 

As small businesses, franchises help the local community in many ways, including paying town and city taxes and creating new jobs for the community’s residents. Their taxes support many community goods and functions, including schools, road repairs and maintenance, emergency services, parks and recreation, and other vital community services we all rely on. Franchise businesses also frequently become employers that create new jobs for community members, an excellent way to directly impact the local economy and contribute to its growth. 

When comparing franchising with starting a business from scratch, one of the most distinct advantages of a franchise model is the built-in support system designed to help you launch and grow with confidence. Rather than navigating the complexities of branding, marketing, operations, and training on your own, franchisors, like Neighborly®, provide an established framework that sets you up for success from day one.  

Franchise owners benefit from established systems, national brand recognition, vendor relationships, and a dedicated coaching process that guides new owners through every stage of setup and beyond. This level of structure and support can significantly reduce the learning curve often associated with starting a business independently. 

Why Home Service Franchises are Essential for Our Communities 

Home service franchises are particularly special for small businesses in that they provide many essential services to the community, directly contributing to the health and safety of community members and the places where they live. You can probably imagine how beneficial an HVAC franchise might be to people in Arizona for the summer heat. Or, how essential a glass repair franchise is to the communities of Buffalo, NY during the winter months. People need safe, functional, comfortable homes, something that franchise businesses in the home service industry are uniquely situated to help provide. In these ways, franchise businesses can contribute directly to the homes of your neighbors and loved ones. 

You can read through Neighborly’s list of home service brands to learn more about our local, small businesses that provide vital services to their communities every day. 

Pros of Franchise Ownership Over Starting a Business from Scratch 

Many people choose the journey of franchise ownership because it allows you to form a direct path toward your goals and dreams, and toward a more fulfilling career with freedom and independence. Starting businesses ideas from scratch can often include increased uncertainty, without great resources like a family of existing franchise owners to consult and rely on. Others choose franchise opportunities because they can allow you to contribute helpfully to your own community’s needs. No matter what your reasons are, investing in a franchise makes it possible, one of many distinct advantages over starting your own business from scratch. 

Other benefits of investing in a franchise, instead of starting a business from scratch, include: 

  • An established franchise business model that has been tried and tested before you
  • The ability to easily learn from other small business owners who have been in your shoes before and are excited to help others in their brand network family
  • Resources to support your business’ success that are typically only available to large businesses with significant financial coaching
  • On average, a faster startup timeline for your business helped by robust franchisor systems and support
  • Brand recognition for your small business from day one  

Why Neighborly’s Family of Franchise Brands Can Be a Good Investment 

Neighborly brands, in particular, provide brand recognition for your small local business that carries a long reputation of excellence and trust. Neighborly has over 40 years of experience in the home service franchise industry and is the world’s largest home services company. This track record of excellence is an added benefit that can help your small business succeed when you become part of the Neighborly family. 

Curious about starting a franchise? Take our 5-minute quiz to determine which Neighborly brands are the best fit for your specific entrepreneurial goals or read about more benefits of franchising with a Neighborly brand. 


Neighborly Can Be Your Guide to Business Ownership 

The best path to small business ownership in your local community can be investing in a Neighborly franchise brand. Let us kickstart your journey as a small business owner and help you transform your career and future. Download The Entrepreneur's Guide to Personal and Professional Freedom to learn more. 

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