Advantages Of Franchising

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Franchising is a type of business in which a business grants the other business the right to use the brand name, business systems and processes in order to produce goods and services according to certain specifications. The party which gives out the rights to the other party to use their name is called the franchisor and the party purchasing the rights of the other business to use their name is known as the franchisee. Franchising is a type of a license given by the franchisor to the franchisee in order to allow the franchisee to sell goods and services under the name of the franchisor; the franchisee pays a certain amount of fees to the franchisor to buy their license. Franchising is one of the most popular methods in the world today to do…show more content…
There are many advantages of investing money in a franchise such as; a franchise includes an already established business with a known brand name by the people. Franchise comes up with an established business system which includes products and services. The franchisor offers the franchisee the training of employees, financial planning of the business and also approved suppliers. The disadvantages of franchising are there too, a lot of investment is required in order to buy the rights of the franchisor as well as on-going royalty costs is costly. Other disadvantages include, less creativity since the franchisee lacks the control in the territory because the franchisee has to work according the business system of the franchisor. The business of franchising is a way to grow the operations of a business; it allows the franchisor to sell its products a bigger market. The beauty of franchising is that it allows both the parties, the franchisor and the franchisee to have a win-win situation, franchisors who want to grow their business with a less amount of investment and franchisee who wants to do business without starting from the

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