If you own a franchise, you technically do. While you’re building off of an existing brand, you own the actual franchise. You can build its value and focus on the finance aspect of it, then have an asset to sell in the future. If you work for an MLM, you do not own your business.
Ownership
Do you own your business? If you own a franchise, you technically do. While you’re building off of an existing brand, you own the actual franchise. You can build its value and focus on the finance aspect of it, then have an asset to sell in the future. If you work for an MLM, you do not own your business.
Exclusive Territory
If you work for an MLM, there is no limit to how many salespeople can work in a single area. This can lead to oversaturation, which can have a negative impact on the finance aspect of your work. There are too many sales people and not enough customers. However, if you purchase a franchise, the company won’t build another one right nearby.
Startup Cost
You need to buy the franchise before you can begin to operate it. This is a large financial investment and, while it is calculated, it is still a risk. You’re putting all of this money into the franchise upfront. This means you are invested in it and need it to succeed.
Compensation
How do you get paid? If you own a franchise, you get paid through the sales you make. Customers buy your products and you get paid through the profits. It is a very straightforward way of making money. Meanwhile, a multilevel marketing operation will pay you in two ways. First, you also get paid based on sales.
What Is an MLM?
Many people are familiar with the term MLM, but few fully understand what that means. “MLM” is an acronym for Multi-Level Marketing. The CEOs of these companies lure people in with promises of high earnings, all while working part-time at your leisure. Of course, if something sounds too good to be true, it most definitely is.
What Is a Franchise?
A franchise operates in a completely different manner than an MLM company. The two business models are hardly comparable. With a franchise, the franchisee or investor pays a franchise fee and gains the right to use the franchise name for a set amount of time. Franchisors also assist with anything that you may need to run your franchise.
100 Acre Consulting
Don’t be fooled by grand promises from MLM companies. There are plenty of other viable business opportunities for interested investors, many with better security and higher rates of return. If you’re interested in investing in a business, seek a franchise consultant to help you decide which option is best for you.
What happens if you leave an MLM?
Since you don’t own anything in an MLM business, you work as a salesman does, making only as much as you or your down line can sell. If you decide to leave an MLM company, you lose everything you’ve built, so you see no return on any initial investment you made.
Do you have to limit the number of people you recruit to your down line?
In an MLM business, you do not have to limit the number of people you recruit to your down line. While this allows you to build a large sales force, the competition gets fierce if most of your salespeople are selling in the same area. By comparison, the parent company that sells a franchise does research to determine if a market exists for the new business. If so, the company sells you the franchise and gives you an exclusive territory in which it cannot place another of its franchises, helping to eliminate direct competition.
