Franchise Vs. Sole Proprietorship

by Charles Pearson - Updated September 26, 2017
Many options exist in the business world.

Both the sole proprietorship and franchise method of starting a business are popular. Whichever option a entrepreneur chooses depends on the type of business being run.

Ownership

In a sole proprietorship, one person owns a business, along with any trademarks, service marks, trade names or service symbols. In a franchise, the franchiser owns all of the above, except for the individual businesses, which are owned by individuals who are given permission to sell trademarked products.

Expert Insight

Franchises receive expert insight from the franchiser on the ins and outs of running the particular business, while sole proprietors are typically on their own.

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Types

There is only one type of sole proprietorship, while there are two types of franchise -- the licensing of a brand and the licensing of a business model.

Costs

Sole proprietorship businesses do not have to pay fees, but they do have to pay money in order to develop products, branding and services. Franchises do not have to pay to develop products, branding and services.

Death

The death of the owner of a sole proprietorship often brings an end to the business, while the death of the owner of a business selling products from a franchise does not bring an end to the franchise.

About the Author

Charles Pearson has written as a freelancer since 2009. He has a B.S. in literature from Purdue University Calumet and is currently working on his M.A. He has written the ebooks "Karate You Can Teach Your Kids," "Macadamia Growing Handout" and "The Raw Food Diet."

Photo Credits

  • Image by Flickr.com, courtesy of Ludovic Bertron
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