Starting your own business is the dream. The freedom. The independence. The big idea you’ll build from scratch.
But here’s the reality: Most startups don’t survive.
According to the U.S. Bureau of Labor Statistics, about 20% of small businesses fail within the first year and nearly 50% close within five.
On the other hand, franchises often flip the script. They come with a brand, systems and support — but also fees, guardrails and less creative freedom.
So, which path actually builds wealth on your terms? Let’s break it down.
If you thrive on uncertainty, innovation and big swings, starting fresh can be thrilling. But the reality is, it’s not the fastest or safest way to a stable income.
Pros of starting your own business
Cons of starting your own business
If you want entrepreneurship without reinventing the wheel, franchising can be your path to profitability and stability. Here are the pros and cons.
Pros of franchise ownership
Cons of franchise ownership
Money talks — and whether you go franchise or solo startup, the way dollars flow in and out will shape the overall profits that affect your wealth-building journey.
Starting from scratch isn’t always cheaper. You just absorb costs in trial-and-error rather than franchise fees.
Franchise: Typically ranges from $50,000 to $500,000+, depending on industry and brand. That includes your franchise fee, buildout, equipment, working capital and initial marketing. Some “home-based” or service franchises can be as low as $10,000, while restaurant concepts can cross $1 million.
Startup: Potentially cheaper upfront if you bootstrap — but hidden costs creep in. Brand development, website, inventory, legal, hiring and marketing can easily add up to $50,000–$200,000 according to Stripe. Unlike franchises, you won’t have bulk-purchasing power or proven playbooks to streamline spend.
Franchise: A franchise with strong brand recognition often sees sales traction within months, not years. Industry averages show many franchisees reach break-even in 12 to 18 months.
Startup: Most independent businesses take two to three years to stabilize revenue. It’s harder to attract customers without a known brand, and marketing is a heavier upfront lift.
Yes, royalties are a factor, but franchisees often make up for it with higher, faster revenue.
Franchise: Expect to pay royalties of 4–12% and marketing fees of 1-5%. That reduces margins — but you gain operational efficiency, supply chain discounts and established pricing power. For many food or retail franchises, net margins land around 10–15%. Service franchises (cleaning, fitness, consulting) can hit 20%+.
Startup: Higher potential margins (no royalties), but also higher costs for marketing, staff training and systems. Average small businesses often net 7–10% until they scale.
Franchises often deliver steadier, more predictable ROI. Startups may offer higher potential upside — but that comes with much longer odds.
Franchise example:
Startup example:
Franchise: True wealth comes with multi-unit ownership. Many franchisees expand into three to 10+ locations, multiplying income streams with a playbook that scales.
Startup: Scalability depends on your model. A local business might top out at a modest six figures in profit. A tech startup could scale wildly — but again, odds are stacked against it.
Key takeaway: Franchises are like buying into a “wealth treadmill” that’s already running — lower risk, faster ROI and scalable through replication. Startups are a blank canvas: unlimited upside, but you’re also mixing the paint and stretching the canvas yourself.
Neither path is automatically “better.” It’s about your goals, risk tolerance and lifestyle vision.
The key isn’t which is “right,” but which is right for you.
At Franchise Sidekick, we get it: this decision can feel overwhelming. That’s why we cut through the noise with:
The result? You gain the freedom and income you want — on your terms.
Schedule a call with a Sidekick Advisor today to see how franchising could fit into your wealth-building journey.