What is everyone’s thoughts on the traditional search fund vs Franchising?

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December 13, 2020

by a searcher from University of Arkansas at Fayetteville in Fayetteville, AR, USA

Looking to understand why the community doesn’t talk much about becoming a franchisee for successful companies with a lot of momentum behind them. There are a lot of folks who have made fortunes doing this in the food business (Taco Bell, mcdonalds franchisee etc). But there is also a lot of non food services franchises that seem to be great lower risk options that can also scale quickly with the right capital.

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Reply by a searcher
from University of Arkansas at Fayetteville in Fayetteville, AR, USA
^redacted‌ I can see smaller franchises where you have to work in the business to manage it. But I am referring to locations that support 15 plus employees and building multiple locations so you have a general manager as well. I don't see a large difference in the flexibility I just see the extra fees that you have to pay but with it comes more certainty. Also I assume the difference in flexibility would be directed at policy changes and building upgrades the company will hold you to or force you to do.

^redacted‌ thank you for the article very interesting read.
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Reply by a searcher
from Columbia University in Jacksonville, FL, USA
You have to believe in the product/service and the management team b/c what they say goes. You might not be able to create your own social media channels or stray too much from their processes. I did a franchise where a really strong PE firm was a franchisor and it turns out they had no idea what they were doing in my space. It has been frustrating and while I have been able to turn a profit, the franchisor has been greatly mismanaged for the last 8 years or so. They are only now turning the corner with the third CEO and 5th Head of Franchise Development.
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