preview

Advantages And Disadvantages Of A Franchise

Good Essays
1. Business model
Investors have a decision to invest in a franchise or have complete control over the business, products and employees by creating one’s own business. Many people find franchises carry less risk than the average small business and that it requires far less of their attention (Meaney, 2004). Franchises also offer the familiarity that mass advertising of big brands accomplishes. Small business owners instead must pay for their own advertising and build their own brand image which can take years and cost thousands. Some find this to be reinventing the wheel and choose franchising instead.
Also, these large corporations contain uniformity of products and continue to have a brand recognition built in upon opening a new location of a franchise. An already established customer base will already have a need for the product and flock to a new location because they know exactly what they will be getting each time they visit. Customers know that when they visit McDonald’s for instance, the hamburgers will always taste the same, just how they remembered it. These franchises have a proven format to bring in capital and keep the business successful as well as corporate quality control standards to ensure continued business.
However, there are several costs associated with the convenience and efficiency a franchise offers. The typical franchise fee, the fee to open up a location using is typically one hundred thousand dollars.
Franchises do not allow creative freedom with
Get Access