How is buying a franchised clothing store different from an independent boutique?

Both businesses sell clothes across a counter, but they feel very different to own. One runs on a brand and a set of instructions. The other runs on a person’s taste. Before you pick between them, work out which kind of work you want to do each week and which kind of risk you are willing to carry.

Who chooses the stock

A franchisee generally sells what the franchisor supplies, with some say over quantities and timing. An independent owner picks labels, attends buying events and builds a look. Ask the seller of either business how the buy works, who decides, and how the last few seasons performed against what was ordered.

Who carries markdown risk

Unsold clothing has to go somewhere. Ask how markdowns are handled, whether the franchisor takes anything back, and whether you may sell off old stock under your own rules. In a boutique, a poor season sits wholly on the owner’s shelves. Study the stock list carefully with your accountant, as ageing garments can be hard to move. Ask the seller for the sell-through history of the last few seasons, and for any returns, consignment or vendor arrangements that sit outside the normal buy.

Approval and fit-out

A franchisor may need to approve you, may require refreshed fixtures at transfer, and may restrict what you can change. An independent boutique usually involves fewer approvals, though the lease and local requirements still need checking with your lawyer. Our guide to buying a clothing boutique walks through the independent route, and your lawyer can explain the franchise paperwork.