Investing in a franchise can be a good way for an aspiring business owner to get experience and earn money, with the advantage of having the franchisor’s name attached to the business. However, Patrick Clark argues that franchises actually lose money, rather than earn it. He shows that many franchises were terminated or went out of business, losing money in start-up fees, loyalties and operational expenses. Franchisees incur many costs, and don’t have much say in the brand, but is buying a franchise not worth the risk?

I would say that franchisees aren’t exactly entrepreneurs or intrapreneurs, but have qualities of both. Franchisees invest in their franchise and run it, like an entrepreneur. However, since they have the backing of the franchisor with less risk, they’re also similar to intrapreneurs. That being said, do people buy franchises to help build the franchise, or simply because they want to see profits rise? Perhaps the latter may be most of the franchisees Clark is referring to.

I think one key aspect that franchisees should look into is innovating within the brand. They can have more impact on the franchise and their large investment would overall be more rewarding. However, this means that franchisors should be willing to let franchisees innovate. Buying a franchise can be risky even with the brand already established, but seeing it as more than a way to earn money can make it worth the investment.

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