Franchising and entrepreneurship are two paths that aspiring business owners can take. We look into the similarities and differences, and which one works best for you.

In a survey conducted by Go Negosyo, four out of five Filipinos aspire to become entrepreneurs, given that many seek alternatives to traditional employment. What's more, statistics show that around 6.2% of the adult population in the country are established business owners, while around 18.4% are engaged in early-stage entrepreneurship.

What's important to note as well is that the franchise industry is thriving in the country, as it ranks 7th in the world. It also happens to be an impressive contributor to the country’s Gross Domestic Product (GDP). 

While franchising and entrepreneurship both share the common goal of business ownership, these two differ greatly in several aspects. This article will dive deeper into what makes each of them special so that you, as a business owner, can decide which of the two is a better path toward a successful enterprise.

What is Franchising?

The International Franchise Association (IFA) defines franchising as the method of distributing products or services with the involvement of a franchisor and a franchisee. The franchisor is the one who has established the brand trademark and the system that comes with it. Meanwhile, the franchisee needs to pay a certain fee to obtain the right to operate a business under the franchisor’s established brand name. 

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