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Starting a Business vs Franchise

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Explain the differences of establishing a business from scratch and setting up a franchise. Evaluate the success of franchises in Australia (refer to examples). There are significant differences between establishing a new business and setting up a franchise. Starting a business from scratch often takes a long time and a large amount of capital to accomplish, but the rewards can be substantial. A franchise is a business that is licensed to trade under a recognised brand name for payment of a fee (e. g. McDonalds, 7-11, etc). A franchisee purchases the franchise from the franchisor and operates under their name while paying fees.
The factors involved in choosing one of these two options differ considerably and include the amount of risk, cost, operations and reputation. Establishing a new business involves the highest amount of risk due to the entrepreneur being solely responsible for everything that occurs in the business. In addition, there is a significant threat of failure for any new business which can result in huge losses for the business owner.