Is it good to go with a startup franchisor with good potential or with an established one?
I want to get into a child-care franchise business and am debating whether I should go with a franchisor such as Growing Room, which has three centers, and a CEO who was named 2004 National Small Business Person of the Year. It doesn't have name recognition and doesn't provide year-round training, but the fees are minimal! Versus a franchisor like Kiddie Academy, whose fees are huge, but it is a national franchisor with a good reputation, has a brand name and a good training program.
Opinions expressed by Entrepreneur contributors are their own.
You've hit the nail on the head in terms of the choice you have to make--do you go with a very well-established brand with good support but with higher fees or a new brand with marginal support but low fees? The answer depends on your tolerance for risk.
You'll probably get what you pay for in either case. You should pay less for low levels of support and no real brand presence in the market. On the other hand, there is a lot of potential excitement getting involved in a startup where the answers have to be invented as you go along.
If you're comfortable being the guinea pig and assuming more risk, then the startup is something you should consider. If you're not, then don't. Remember that someone had to be the first franchisee of many of the huge systems you see in the market, so it can work. But many others who tried to be pioneers didn't survive the journey.
More from Entrepreneur
Are paying too much for business insurance? Do you have critical gaps in your coverage? Trust Entrepreneur to help you find out.