It is true that corporate franchises have deeper pockets than independent family owned businesses. This is definitely true in the professional carpet cleaning industry. Other than that, what are the differences between corporate franchises and family owned businesses?
- Franchises tend to pay closest attention to the “bottom line”.
- Ideals, morals, employees, and customers usually take a back seat to the stock holders.
- Since those that profit from the business are not usually present to see these employees and customers, it is easy for them to become disconnected from the people that their decisions effect.
- Franchise owners have to pay their corporate parent company a percentage of their profits.
- I am familiar with companies being charged 15% of their gross sales.
- Franchise owners are usually forced to buy their equipment and cleaning agents directly through their parent company regardless of whether it is the best or most cost effective product.
- Deep pockets often lead to expensive advertising campaigns that drive in business. Sometimes so fast, that it reduces months of training to only a few days.
- Independent family-owned businesses are run by the morals and values of their family. Not all families are the same, but a strong morally-just family will most likely build a strong and morally-just company.
- Without a parent company to answer to, family owned carpet cleaning companies are allowed to choose the best product on the market.
- Without a 15% franchise fee to pay, family owned businesses can pay their employees more and buy more powerful equipment, resulting in better outcomes.
- Because there is no board of directors to appease, family owned carpet cleaning companies can treat their employees the way great employees should be treated. I recommend profit sharing as a means of doing this.
- Without the money to hire large advertising firms to drive in business, family owned businesses rely on repeat business and referrals through hard work, expertise, and customer service.
Although it is true that not all family owned independent businesses follow these guidelines, it is true that corporate franchises have no choice but to adhere to the guidelines that their parent companies have set for them. Franchises are more easily accessible due to their advertising, but once discovered, family owned businesses have the potential to provide far superior service than corporate franchises.