Franchise vs. Startup or Existing Business: Which is preferred?
By: Michael Alston for Franchise Insights
May 29, 2025 – Individuals seeking business ownership prefer the option to “buy a franchise” over acquiring an existing business by a wide margin according to the April 2025 Startup Sentiment survey. While over 61% indicate interest in the franchise purchase option, only 39.5% were interested in buying an existing business for sale.
Starting up a (non-franchise) business from scratch is under consideration by 57.4% of respondents, also more than the “purchase existing business” option. The totals add up to more than 100% since survey participants could choose more than one option, if they are considering multiple options.
In the April 2025 survey, 71.4% agreed that “now is a good time to start a business,” with optimism about conditions ahead. Accordingly, 73.2% of respondents see conditions for business and franchise startups “the same or better in three months”, the highest reading since September 2021. Survey results over the last several months correlate with the surge in high-propensity business applications per the St. Louis Federal Reserve..
In an April survey, aspiring business owners preferred franchises over startups up or buying an existing business.
While reasons for these preferences for startup options were not collected in the survey, the benefits and support of a network of successful franchise owners and recognized brands are well-documented, with more than 821,000 franchise units expected in the U.S. in 2025 according to the International Franchise Association. Startups of entirely new businesses fail for a myriad of reasons – poor business plan or product, insufficient capital, poor location, competition, or failures in execution. Purchases of existing businesses can require an order of magnitude more capital up front, with many of the same risks, and no network of training and support that is typically available to franchisees.
Despite high relative valuations of financial assets in recent months, alongside tariff-related ups and downs, access to funding remains a primary concern of aspiring business owners. Entrepreneurs plan to rely more on personal financial resources than in years past, likely related to the cost and scarcity of loans versus the appreciation of home values and personal portfolios in recent years.
This survey of aspiring business owners was conducted in April 2025 for the most recent Small Business Startup Sentiment Index™, which is conducted monthly by FranchiseInsights.com among individuals in the U.S. inquiring across the Franchise Ventures lead generation platform. It should be noted that survey respondents visiting these franchise directory websites may have an awareness of franchises that may not be representative of aspiring businesses owners as a whole.
Franchise Ventures is the leading franchise lead-generation platform for potential franchisees to thousands of growing franchise systems in the United States and Canada. Its franchise lead generation brands include Franchise.com, Franchise Solutions, Franchise Gator, Franchise Opportunities, Franchise For Sale, SmallBusinessStartup.com and BusinessBroker.net, and together they provide the largest aggregation of prospective franchise buyers in the U.S.
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Published on Tuesday, May 27th, 2025.