This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

3 Ways to Join a Company and Still Be the Boss

NEW YORK ( MainStreet) -- If you have a brilliant idea, lots of knowledge and great business sense, by all means go ahead and run that operation independently. For others who haven't created a unique product or service but know they want to be their own boss, a structured organization is likely to be better.

There are options for everyone, including those who consider themselves further to the independent side of the scale.

Understanding the difference between co-operatives, franchising and licensing can help an owner decide which avenue would be the best business for them.
The roughly 4,600 True Value hardware stores operate under a co-operative structure.

Examples: McDonald's, Great Clips, Maid Brigade, Five Guys, Subway
Pros: Essentially a business-in-a-box, already set up with proven systems and operations that are supposed to ensure success. Lots of support from the franchisor.
Cons: Franchisee has little control over the business other than day-to-day management. Buy-ins, especially for more popular names, are expensive. Franchisees must contribute to marketing funds and pay a percentage of royalties to their franchisor.
Level of independence: Low

In its most basic sense, a franchised business is an agreement for the right to sell specific services and products and market under a parent company's brand, typically within a territory. With that comes very specific business operations and systems from where to buy ingredients (for food franchises) to how the lettering in signs should look to which computer systems are to be used. The requirements come in a comprehensive franchise disclosure document.

Look around a town, city or suburb and it's likely a franchised business is there. The biggest difference between co-ops and franchises is the level of independence and flexibility -- business owners that require more structure and guidance may want to choose a franchise.

"My guess would be the folks at McDonald's (MCD - Get Report) probably don't want you tinkering with the recipe of a hamburger," says Mark Flowers, vice president of retail growth at the co-operative True Value hardware chain.

Franchises are "best for people that are very comfortable with following rules," says Joel Libava, a franchise-acquisition consultant and author of Become a Franchise Owner!

Experts typically point to military veterans as ideal candidates to own franchises because they're used to regiments and rule following. Military or not, franchisees "have to really want be willing to commit to the hours needed and the financial risk associated," Libava says.

But for entrepreneurs good at coming up with ideas and who like to make their own rules or look for ways to improve things, franchising is not ideal.
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $95.03 -2.90%
MCD $127.92 -0.30%
FB $116.73 7.20%
GOOG $691.02 -2.10%
TSLA $247.54 -1.60%


Chart of I:DJI
DOW 17,830.76 -210.79 -1.17%
S&P 500 2,075.81 -19.34 -0.92%
NASDAQ 4,805.2910 -57.85 -1.19%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs