---
title: "How Franchises Are a Crucial Part of the Small Business Community"
url: https://burnaze.com/article/9e89bad0-0d91-4965-a0f3-0508e88e5bdb
source: "1851 Franchise"
original_url: https://1851franchise.com/how-franchises-are-a-crucial-part-of-the-small-business-community-2722764
category: "Franchise Industry"
industry: "Franchise Industry"
published: 2023-06-23T14:09:00.000Z
modified: 2026-11-01T02:07:44.872Z
image: https://newimage.1851franchise.com/cdn-cgi/image/quality=85,format=webp,width=1280,height=720/story/featureImage/c064558a02bbf1e78d5a1dce04a95b234166.jpg
---

# How Franchises Are a Crucial Part of the Small Business Community

**TL;DR:** Franchise locations are small businesses that independently own and operate their own establishments, backed by a corporate brand. Franchises have a profound and positive impact on local communities around the world, driving financial growth and job creation.

*originally published in 1851 Franchise on 2023-06-23. [Read the original](https://1851franchise.com/how-franchises-are-a-crucial-part-of-the-small-business-community-2722764).*

## Story

If a new business with a big name attached to it opens in town, it can be easily mistaken as a corporation instead of a small business. However, franchise locations are small businesses, too.

Similar to small business owners, franchisees independently own and operate their own establishments. The main difference is that a franchisee is backed by a corporate brand while a small business owner operates without support. The latter group can also follow a proven road map and benefit from brand recognition.

Both types of businesses hire local employees, serve local customers and contribute to a tax base that benefits their local economy. For aspiring entrepreneurs seeking to realize their dreams of owning a business, franchising offers a pathway to establish and operate their own business while benefiting from a tried-and-tested business model, refined training and ongoing assistance.

Although franchises are considered small businesses, there are a few distinct differences when compared to non-franchised small businesses. For one, a franchise may not be allowed to alter its products or services due to the corporate structure it must follow. On the other hand, small businesses can make changes along the way because they do not need to adhere to a certain framework.

In some ways, this gives franchisees less freedom, but it can also prove to be a good thing. Instead of having to reinvent the wheel, a franchisee can follow a proven business model while still having the appeal of a small business.

Additionally, non-franchised small businesses must establish their own marketing, hiring and sales campaigns, while a franchise business has the ability to rely on corporate-backed campaigns that are typically included in franchising fees and investment costs.

Franchised units must also pay royalties to their franchisors. Though these may seem like a burden at first glance, they can actually offer more benefits than disadvantages. For example, these payments come with the guidance that removes any guesswork of having to navigate business ownership independently.

Small businesses, including franchises, have a profound and positive impact on local communities around the world. Playing a crucial role in driving financial growth and job creation, small businesses are often the backbone of local economies.

Additionally, when small businesses open in a community, they have the opportunity to provide consumers in that market with unique products, services and ideas that can meet an unmet need. Franchises also have the ability to prioritize personalized customer experiences and build strong relationships with their clientele.

When businesses are backed by a nationwide brand, it can be easy to mistake them for a corporation rather than a sole business by a local entrepreneur. Although there are specific benefits of franchising, franchisees do similar work. Either way, both groups can improve upon the communities where they operate.

## Entities

- 1851 Franchise (publication)
- Franchise Industry (sector)
- IFA (company)
- franchise locations (topic)
- local economy (topic)
- small business community (topic)
- corporate brand (topic)

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Originally reported by 1851 Franchise (https://1851franchise.com/how-franchises-are-a-crucial-part-of-the-small-business-community-2722764). Summarized by Burnaze (https://burnaze.com/article/9e89bad0-0d91-4965-a0f3-0508e88e5bdb).