What Are The Advantages And Disadvantages Of A Franchise

1. Franchisees gain numerous advantage when they purchase a franchise. First, while a franchisee may be opening a new store, it is part of an already established business and system. This means a franchisee has access to turnkey operations, allowing an increased speed to establishing and growing the business. Franchisees also get support for management and training activities, as well as financial assistance. Going hand in hand with this, a franchise already has an established brand name, quality of goods and service which have been standardized across the franchisor’s larger company, and national advertising programs from franchisors. Franchises also have large-volume, centralized buying power. A franchise has proven products, and

So basically the advantage of the franchisor is that franchising is an alternative way of building "chain stores" in order to distribute goods that avoid the investments and liability of a chain. The franchiser will succeed if the franchisees

A new business claims a great deal of time, effort and sacrifice. New individuals are motivated by their ownership of the business and the capital they have invested. So by franchising, you are going to get better talent that will work harder to form the business.

Franchising is a business model that allows companies to rapidly expand their market share. According to Franchise.com (2015), there are three types of franchises: distributorships, trademark licensing, and business format franchises. When two organizations enter into a distributorship, the originating company provides the rights another company to sell their products. An example of a distributorship is when an auto manufacturing company grants rights to a dealership to sell their vehicles (Franchise.com, 2015). Trademark licensing is when one company allows another company to use their trademark (Franchise.com, 2015). The business format franchise authorizes franchisees to sell the parent company’s products and/or services as well as utilize their business model. This type of franchising is the most common and is the type needed to obtain to open a new Cold Stone Creamery.

Franchising is simply a method for expanding a business and distributing goods and distributing goods and services through a licensing relationship. In franchising, franchisors not only specify the products and services that will be offered by the franchisees, but also provide them with an operating system, brand and support. (Franchise.org, 2016)

Second alternative in order to reach new markets is franchising. Franchising is one of the most widespread forms of cooperation between companies all around the world. A franchisor is the founder of the whole system and represents a core for the whole network of franchisees. The parent company develops and manages the conditions at which the franchisees function and actually sells its business objective. In the chain of franchisees, each one is an independent business unit but its operation is partially controlled and limited by the parent company’s marketing conception. Therefore, franchising provide both advantages and disadvantages for the franchisor as well as for a franchisee.

Franchisors are increasingly having to be more and more selective in the adoption of franchisees with factors such as economic climate and the potential difficulty with growth playing key factors in the decision making process. It is not simply an ability to grow which creates a successful Franchise and nor is it the desire of any franchisor to adopt every potential franchisee. Franchisors are becoming more and more scrutinising as the global economy declines. There is a general understanding within any franchised

An advantage of an entrepreneur buying a franchise is that there will be a higher rate of success than when owning a start-up business (Queensland Government, 2016, Online). This would be beneficial for the entrepreneur buying the franchise because it will help to generate more profit and

Franchising is a broad and a great business tool to deliver goods and services, and to flesh out a line of work. It can have a great effect on investment, but it is also one of the most likely to be misunderstood aspects of a specific project.

According to Daniels(2004), franchising is a specialized form of licensing in which the franchisor nor only sells an independent franchisee the use of the intangible property (usually a trade mark or patents) essential to the franchisee’ business but also operationally assists the business on a continuing basis, such as through sales promotion and training.

Franchising is a very important way for companies to grow and it also helps the franchisee giving them support and

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.

Franchisees are normally well established as part of the local community, either on a personal level or as a result of their past business activities. This can give them a very significant advantage in gaining new business for the franchise at a local level. They will generally live within the franchise territory, be known there and will be seen as having made a permanent commitment. The franchise system can provide a very cost-effective route for business development, but only provided that the original business is successful and that the franchisor is willing to invest sufficient an attractive franchise opportunity. The benefit of self-financing business units and a simplified management structure as

An agreement or licence entered by two parties is known as a franchise. Franchising is a method that businesses use to market and distribute their products. The Franchisor gives rights to the Franchisee to market their brand or product by using their trademark, Franchisors also support Franchisees on an ongoing basis. There are two different types of franchising which are business format franchising and product and trade name franchising. Business Format franchising is when a franchisor offers the franchisee a package of deliverables and services which include the use of their logo and trademark and assistance with site location selection, hiring and training of staff, equipment, design and layout of the store etc. The franchisee has to pay a continuing fee in return for the packaging services that the franchisor is offering and sign a contract. Product and trade name franchising is when the franchisee doesn’t have to pay an ongoing fee

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