Aspiring entrepreneurs choosing to become franchisees certainly expect
to improve their chances of survival during the turbulent early years
of business startup and operation. Alignment with a franchisor parent
company offers the franchisee managerial assistance, access to financ
ial capital, and access to markets via the right to utilize the parent
company trademark. This study examines survival patterns among franch
ise and nonfranchise small firms started between 1984 and 1987: surviv
al through late 1991 is tracked for all firms. Although the franchise
operations are larger scale, better capitalized young firms, the indep
endent business startups are found to be more profitable and their sur
vival prospects are better than those of franchises.