Co-ops vs. Franchises

November 26th, 2013

What’s the difference between a co-op and a franchise? Many people don’t realize there is a major difference between these two terms. For example, Hopkins Carpet One is a co-op. Let’s discuss the differences between the two so you can better understand why Hopkins Carpet One is a co-op.

A co-op is a jointly owned commercial business (usually owned by members or customers). It is generally owned and run by people who live and work in the area, so the main benefit is that the money consumers spend goes directly back to their local community. And thanks to the money staying local, more jobs are created for the community. So a number of businesses will band together to do business and thanks to that, prices stay low for the consumer. Co-ops tend to last longer than most other businesses thanks to their more democratic stance on governance – they are less likely to fall into debt than other types of businesses. Plus, each business in the co-op will pool their funds for marketing and will offer better discounts to their customers from the manufacturers.

With a franchise, a person buys into a company’s successful business model and agrees to abide by its rules and regulations. The franchisee is allowed to use the company’s trademark and distribute its goods. In return for these, the franchisee pays the company some type of fee. Usually these franchises are only good for a certain amount of time and require the franchisee to renew the contract on a regular basis. Generally speaking, franchises are a bit less consumer-friendly on the local level because some of the franchise’s profits are sent back to the original company, so a portion of the consumer’s dollar goes somewhere outside of the community.

Hopkins Carpet One is proud to be part of a co-op in the Hopkins, MN area. We take pride in the fact that our business gives back to the community, and we are happy to help the local economy by hiring people who live in the area. For more information about our business and the services we provide, call 952-933-8944 or contact us online.