University of Santo Tomas

Espana, Manila

A research paper in partial completion of

the requirements for Senior High School

“THE IMPACT OF STARTING A BUSINESS OR BUYING A FRANCHISE ON THE

PROFITABILITY OF A BUSINESS”

12 ABM – 16
John Angelo Alcantara
Jon Brix Barangan
John Matthew Cuaresma
Bismarck Lina
Miguel Lugay
Lloyd Oliva
Azriel Matthew Pilarta
Hazell Poblete

Ms. Oderon
Research Adviser
 CHAPTER 1:
BACKGROUND OF THE STUDY

I. Introduction
Nowadays, many people are already taking risks and sacrificing their assets and
money, even their savings, to get into the business world. Many are going through
with it without scrutinizing the responsibilities and commitment of starting a business
would require.

One of the choices the people going through with business must make is whether to
buy a franchise or to start their own. A franchise is a proven system. All franchisees
operate under a common system and they are only responsible from their day to day
operations. It also brings brand awareness with their names from day one. But there is
a fee for buying the franchise and ongoing fees that you need to pay to a franchiser.
And you don’t have the freedom to change the product line, the decoration of the
store or anything else in a franchise system. Starting a business on the other hand
needs innovation and creativity. If you are a highly creative person full of different
ideas and you want to make these ideas a reality, then, you should start it up. Also,
depending on your business, you can work anywhere you want. You don’t need to
report to other people. This means you have your own professional freedom.
Unfortunately, starting a business have a higher failure rate compared to franchise
businesses. Statistics show that 25 percent of startup businesses fail within their first
year, 50 percent of the remaining fail within five years and approximately 30 percent
of the remaining last ten years.

Change is the key word. It is what makes the business a business. The business world
is changing rapidly that people need to adapt, perform and overcome in order to
survive.