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Is buying a franchise less risky than a start up?

Is buying a franchise less risky than a start up?

Who doesn’t long to be their own boss, with the choice of working flexible hours and earning a good income that rewards your hard work, skills and knowledge? If you are passionate about travel, and holiday destinations, having your own business could be a dream come true. 

But what’s the best way to start your travel business? How do you minimise any potential risks of building a new business? We explain the best way to start a travel agency, pointing you in the right direction to establish your new adventure. 

The risks of creating a new business

Starting a new travel business from scratch can be a risky endeavour with many potential pitfalls. 

One of the most significant risks is the possibility of financial loss. Many new businesses fail within the first 12 months, and even those that survive may struggle to turn a profit within the first few years. This can be due to a variety of factors, such as poor management, lack of market research, or insufficient funding.

New business owners may be unaware of all the laws and regulations that apply to their chosen industry, and simple mistakes can inadvertently lead to fines, penalties, and even criminal charges. 

Another issue is competition, as new businesses may find themselves battling against established companies with more resources and experience. This can make it challenging to attract customers and build a strong brand. 

A problem that is often overlooked is the risk of burnout and personal stress for entrepreneurs starting a new business, as it can be a costly, demanding and time-consuming process.

Buying a franchise

Fortunately, the risks of buying a franchise are far less than those of a start up business, and if your dream is to be your own boss, a franchise is a popular route to take. 

The advantages of buying a franchise

Established brand name

Franchises often have a well-established brand name, making it easier for you to attract customers. People are often more likely to do business with a company they recognise and trust.

Proven business model 

A franchise is essentially a copy of an already successful business model. This means that the franchisor has already worked out the kinks and has a business model that is known to be profitable.

Training and support

Franchisees typically receive support and training from the franchisor. This can include training on running the business and ongoing support to help you navigate any challenges that may arise.

Access to resources

Franchisees also have access to resources, such as marketing materials, bulk purchasing power, and shared knowledge. IT experts are often available to assist with building and developing websites, and access to industry professionals can deliver invaluable guidance and support. 

Marketing and advertising

Franchisees often benefit from national or regional advertising campaigns, which can help to generate more leads and increase brand awareness.

The risks of buying a franchise

High initial costs

Buying a franchise can be a significant investment. You will typically have to pay an initial franchise fee, as well as ongoing membership fees. Many franchisees, however, report that due to the high levels of support and guidance given, they have turned such a significant profit that they have made their initial investment back in a surprisingly short period. 

Limited autonomy

As a franchisee, you might have to follow the franchisor’s rules and guidelines, which can limit your ability to decide how to run your business. However, it can also protect against making those rookie errors that are common in non-franchise start ups. 

READ MORE: What are the risks of starting a travel agency franchise?

Opening a travel start-up company

Whilst opening a travel start-up company inevitably comes with risks, there are several advantages to consider. 

The benefits of a travel start-up company

Low barrier to entry

Starting your own company from scratch doesn’t always require high start-up costs or a large amount of capital but it does depend on the industry you are trying to enter. Homeworkng travel agents, for example, don’t have to invest in stock to sell or rent office premises, they just have to establish relationships with suppliers and customers.

High demand

Choose an industry where there is growth, for example travel, where there is a growing market for personal travel agents following Covid.

Personal satisfaction 

Building your own start-up business takes hard work so it’s important to be passionate about what you choose to do. Travel agents often love their work as they are dealing with an interesting service that typically brings joy. The risks of a start-up company 

High competition

The travel industry is highly competitive, and new travel agencies may struggle to establish themselves in the market. 

Seasonal fluctuations

The demand for travel services can fluctuate depending on the season, with the Peak January to March season typically being one of the busiest. . With the backing of a franchise, seasonal fluctuations can be minimised by taking advice about the variety of travel products you’ll have access to and building a bigger customer base.. 

Dependence on suppliers

Travel agencies depend on airlines, hotels, and other suppliers for their products and services. This can make it difficult to control costs and ensure the availability of desirable options.

Complex regulations 

The travel industry is heavily regulated, and travel agencies must navigate a complex web of laws and regulations to operate legally.

Risk of fraud

Travel agencies can be at risk of fraud from suppliers who may not deliver the promised services. 

What happens if a franchisor goes out of business?

If a travel franchisor goes out of business, it can significantly impact the franchisees affiliated with the company.

First and foremost, the franchisees will lose the support and resources provided by the franchisor. This can include marketing and advertising assistance, training, and access to the franchisor’s established brand and customer base. Without these resources, franchisees could struggle to attract and retain customers and may have a more challenging time competing with other businesses in the industry.

Additionally, the franchisees may also lose their investment in the franchise. Many franchisors require franchisees to pay an initial franchise fee, as well as ongoing membership fees. If the franchisor goes out of business, the franchisees may be unable to recoup these costs. 

The franchisees may also lose the ability to use the franchisor’s proprietary systems, processes, and trademarks. This can make it difficult for the franchisees to continue operating under the same name or in the same way as before. Franchisees may need to rebrand their businesses and find new suppliers, which can be costly and time-consuming.

What can a franchisee do if the franchise goes out of business?

If a franchise goes out of business, the franchisee may have a few options to consider. These options include:

Find a new franchisor

If the franchisee wants to continue operating the business, they may be able to find a new franchisor who is willing to take on the existing franchisee and the remaining assets of the business. This would typically involve a transfer of the franchise agreement and all the rights and obligations associated with it.

Operate independently

This could be an opportunity to operate the business independently, if the franchisee doesn’t want to be associated with the franchisor or cannot find a new franchisor. This would typically involve rebranding and developing a new business model that is not associated with the franchise.

Close the business 

If the franchisee no longer wants to continue operating the business, they may choose to close it down. They would have to liquidate any remaining assets, and pay off any outstanding debts.

Legal action

Franchisees may have legal options available if the franchisor has acted in breach of the franchise agreement. For example, suppose the franchisor has not provided the support or services that were promised in the franchise agreement. In that case, the franchisee may be able to take legal action to recover damages.

Join a franchisee association

Franchisees may benefit from joining a franchisee association, which can provide support and advocacy for franchisees in difficult situations like this. The association can provide guidance and help franchisees navigate the legal and financial aspects of the problem.

Overall, the specific course of action that a franchisee should take if a franchise goes out of business will depend on the individual circumstances of the situation, including the terms of the franchise agreement, the remaining assets of the business, and the franchisee’s personal goals and preferences. The franchisee needs to seek legal and financial advice to understand their rights and options in these circumstances.

What risks do I take if I buy a franchise from The Travel Franchise?

When considering a franchise opportunity, it’s essential to thoroughly research the franchisor and the specific franchise opportunity being offered. This includes looking into the company’s history, financial stability, and the support and resources they provide to franchisees. Additionally, it’s crucial to have a clear understanding of the costs associated with starting and running the franchise and the potential revenue and growth opportunities.

Talking to current and former franchisees is also recommended to gain a sense of their experiences with the franchisor and the franchise opportunity. This can provide valuable insight into the day-to-day operation of the business and the level of support and resources provided by the franchisor.

The Travel Franchise has been operating successfully for many years and has helped hundreds of people achieve their goals of running their own travel agency business. Although the risks of buying into a franchise are generally the same across the board, The Travel Franchise has developed an established and proven model that negates many of those risks. 


The Travel Franchise offers four membership packages starting from £2,995 + VAT. There are also monthly fees and commission sharing. Payment plans are available, enabling even those with limited budgets to benefit from the high levels of support and guidance their business experts give. 

Ability to innovate

Franchisees can be required to adhere to the franchisor’s established business model, making it difficult to introduce new products or services. The Travel Franchise, however, positively encourages members to develop their business ideas, supported by an infrastructure that nurtures individual endeavours. It is your travel agency and if you are successful so are they. 

Training and mentorship

Once you’ve bought into a franchise, it can be the case that training and mentorship programmes are few and far between. The Travel Franchise could never be accused of that. You’ll receive ongoing optional training, allowing you to build your skill level and grow in confidence. You’ll have access to a Business Development Manager who’s there to answer any questions and provide valuable tips and tricks to build your business, as well as an operational team who can help process bookings. 

Even with no experience in travel, sales, marketing or IT, hundreds of members have gone on to establish successful travel agencies with the training from The Travel Franchise.  

If you want to live the dream, and are passionate about travel and helping others achieve their travel goals, then joining The Travel Franchise community is a great option to consider.

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