---
title: "To rent or own franchise real estate? That is the question"
url: https://burnaze.com/article/98ae1285-0dc5-468b-9915-75efcd0b9843
source: "1851 Franchise"
original_url: https://1851franchise.com/to-rent-or-own-franchise-real-estate-that-is-the-question-1487
category: "Real estate"
industry: "Business Services"
segment: "Real estate"
published: 2015-04-16T13:08:00.000Z
modified: 2026-11-01T04:16:20.142Z
image: https://newimage.1851franchise.com/cdn-cgi/image/quality=85,format=webp,width=1280,height=720/story/featureImage/8d777f385d3dfec8815d20f7496026dc703.png
---

# To rent or own franchise real estate? That is the question

**TL;DR:** Franchisees must consider factors such as control and flexibility when deciding whether to buy or rent real estate for their businesses. Buying real estate gives franchisees more control, while renting can reduce start-up costs.

*originally published in 1851 Franchise on 2015-04-16. [Read the original](https://1851franchise.com/to-rent-or-own-franchise-real-estate-that-is-the-question-1487).*

## Story

There are plenty of plates you’ll need to keep spinning as a franchisee, but real estate is one factor that deserves your full attention. Besides the importance of selecting your site location, you’ll need to determine whether it makes more sense to buy the real estate outright or rent it.

There are many components at play when making this decision, not least of which is whether your franchisor allows you to lease in the first place. If the decision is ultimately yours, here are some general considerations to keep in mind.

**Buying means more control** If you’re renting your real estate, you’re beholden to your landlord. This can get in the way if you need to make certain changes to the building for your business. Barring local zoning ordinances, purchasing real estate outright gives you the freedom to do whatever you want to a space.

**Renting can reduce start-up costs** Purchasing real estate can be the most expensive part of entering a franchise system. Leasing will significantly lower costs, freeing up more money for other aspects of your business.

**Short-term benefits vs. long-term advantages** Time is a factor you must consider in your decision. For instance, while renting can be a short-term cost-saver, it can end up costing you more in the long run. Besides the potential for rent increases in the future, monthly leasing costs will be an expense you’ll have to deal with in perpetuity. Purchasing is more expensive at first, but will ultimately eliminate a considerable reoccurring cost for your business.

**Real estate investment can be smart in and of itself** Even if your business ends up floundering, real estate can be an excellent investment. You could end up renting out the space yourself, or selling it for a tidy profit if land values are appreciating in the area. Owning property also gives you equity you can make use of in the future, not to mention provide you with extra tax savings.

In the end, purchasing real estate is likely the smarter long-term decision, but for business owners who may not have the capital necessary to do so, renting a space can be the ideal solution.

## Entities

- 1851 Franchise (publication)
- Business Services (sector)
- real estate (topic)
- startup costs (topic)
- franchisee decisions (topic)
- rent vs buy (topic)

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Originally reported by 1851 Franchise (https://1851franchise.com/to-rent-or-own-franchise-real-estate-that-is-the-question-1487). Summarized by Burnaze (https://burnaze.com/article/98ae1285-0dc5-468b-9915-75efcd0b9843).