Franchise or ETA? Choosing the Right Path to Business Ownership
Filed in Finding Your Fit — August 9, 2025
I frequently speak to prospective clients that are really diving into the ETA evaluation – looking at existing businesses to buy. ETA is the “sexy” and popular route for investors and people looking to own a business without starting from scratch. Many haven’t even thought about franchising – but it is becoming more popular as a way to leave corporate or diversity revenue streams. Let’s dive in a bit more:
- Franchising, where you buy the rights to operate under an established brand.
- Entrepreneurship Through Acquisition (ETA), where you acquire and grow an existing independent business.
Both models have their pros and cons, and your decision should depend on your goals, risk tolerance, personality, and resources.
Let’s break down both options to help you make a confident, informed choice.
What is Franchising?
Franchising involves investing in a business model developed by an established brand. You pay fees to become a franchisee and get access to brand recognition, systems, support, and ongoing training.
Example: Opening a Jersey Mike’s or ServPro
What is ETA (Entrepreneurship Through Acquisition)?
ETA is the process of buying an existing, independent business with the goal of running and scaling it. These are usually small-to-medium-sized companies with stable cash flow, retiring owners, and untapped growth potential.
Example: Buying a local HVAC company or a regional marketing agency.
Franchise vs. ETA: Key Differences
| Factor | Franchise | ETA (Acquisition) |
| Risk Profile | Lower (proven model) | Higher (varies by deal) |
| Startup Time | Faster (weeks to months) | Slower (6–12 months for search and close) |
| Support | Extensive franchisor support | Usually none—you’re on your own |
| Brand Control | Limited (must follow rules) | Full control and flexibility |
| Entry Cost | Often lower ($50K–$500K+) | Varies ($200K–$5M+) |
| Operational Complexity | Simpler, more standardized | Often complex (employees, systems, legacy issues) |
| Exit Potential | Depends on brand and territory | Potential for higher valuation/multiple |
| Ownership Feeling | Shared with the franchisor | Full ownership and autonomy |
When Franchising Might Be Right for You
- You want structured support and a proven roadmap.
- You’re a first-time entrepreneur looking for lower-risk entry.
- You prefer operational execution over building from scratch.
- You’re okay with paying royalties and following a system.
Best for: operators who want to plug into a successful machine and scale within clear guardrails.
When ETA Might Be Right for You
- You want to own and control 100% of the business.
- You have experience in leadership, operations, or deal-making.
- You’re comfortable with uncertainty and willing to solve messy problems.
- You’re aiming for bigger upside and long-term equity value.
Best for: strategic thinkers who want to grow and transform a business over time.
Fit Tip: You Can Do Both
Some entrepreneurs start with a franchise to gain experience and cash flow, then move into ETA once they’re more confident. Others acquire an independent business and later franchise it themselves.
Final Thoughts
There’s no “one-size-fits-all” answer. Whether you choose franchising or ETA, you’re already ahead by pursuing ownership over employment.
Ask yourself:
- Do I want freedom or structure?
- Am I more of a builder or an executor?
- How much risk am I willing to take?
Both franchising and ETA can lead to financial freedom and personal fulfillment—if you choose the path that aligns with who you are and what you want.
The biggest question I ask of anyone considering ETA or Franchise Ownership – what do you want your role to be? Define your day-in-the-life. You still need to find FIT in any business.
Have questions about either path?
