The Pros and Cons of Franchising

cherry123

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Franchising is what a lot of people love to go into as it's as low start-up costs: As an entrepreneur you can access a well-established brand name and established customer base.
 

hastral45

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The real advantage of franchising is that it helps a business kick off effectively without necessarily having to go through the struggles small businesses go through.
Yes. Franchises means leveraging on the support of big brands in the field for support. How successful a franchise business is depends on the support it got from the big brands. They act as subordinates of the big brands.
 

arunima

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Keeping up to the standard demands of the franchise might be stressful. They are well established brands and they have put a lot of effort and hardwork into building that brand. They don't want any compromise with the standards that might bring a bad reputation.
 

Heatman

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Franchising is not for every business. The amount to be paid as royalty is always too much and I always wonder how a new business would meet up with these high fees.

You are very correct with that assessment because it is not every business that can be franchised. So the nature of your business is what determines if you're going to go into franchising it.
 

Chibson

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It is very correct because it does not need huge amount of money to establish and it's easily marketable.
Yeah, the major advantage of franchising is that you do not need to invest a lot of money. It has a lot of advantages in the future for you.
 

arunima

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Though franchising comes with a lot of benefits to begin with, it can be controlling in a long run. There is very less room for one to implement their own innovative ideas. This might not be liked by many and can also be suffocating.
 

IB D

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You are very correct with that assessment because it is not every business that can be franchised. So the nature of your business is what determines if you're going to go into franchising it.
From my observation, I think franchise really works with eateries and fast food businesses. It works considerably with clothing lines. Those are the most common businessses I see being franchised.
 

arunima

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Yes, restaurants, fast food chains, organic stores, pharmacy etc are some of the important businesses that have franchising. Now a days even gyms and fitness centres have got franchising. Education sector in India has seen a bloom in franchising especially when it comes to pre schools and play schools.
 

IB D

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A business that buys the franchise of a bigger business might end up spoiling the reputation of the franchise owner. That's because they might not be able ton meet up with the high standards demanded of the franchise owner.
 

hastral45

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A business that buys the franchise of a bigger business might end up spoiling the reputation of the franchise owner. That's because they might not be able ton meet up with the high standards demanded of the franchise owner.
This explains why proper investigation and analysis should be carried out before buying any franchise company. Most big brands do not like to give adequate support and logistic that could enable franchise companies to be independent. They made them depend upon them for survival.
 

Stardom22

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This can subsequently increase the sales on the business that leads to the accomplishment of the business purpose and the set goals and objectives as far as the business is concerned.
 

arunima

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The big brands and businesses that go for franchising set up strict rules and expectations. You qualify to get a franchise only if you fulfill those demands. So, it's not easy to get a franchising business. And if you fail to live up to their expectations, the contract might be cancelled.
 

Stardom22

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I think getting the entire contract is almost impossible.The requirements seems to be very tight and in normal circumstances most businesses would fail to comply in the Matter of fact.
 

hastral45

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The big brands and businesses that go for franchising set up strict rules and expectations. You qualify to get a franchise only if you fulfill those demands. So, it's not easy to get a franchising business. And if you fail to live up to their expectations, the contract might be cancelled.
That is why it is said that franchising companies are not independent. Their survival depends solely on the big brands. They got their contracts from them. And the contract terms of reference is influenced by the big brands. They have to comply with the terms, otherwise the contract could be revoke.
 

Heatman

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From my observation, I think franchise really works with eateries and fast food businesses. It works considerably with clothing lines. Those are the most common businessses I see being franchised.

You are very good with that assessment because even without franchising, the food and Eatery business is something that thrives very well because people will always eat no matter what.
 

uptrendfinancialsignal

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You are very good with that assessment because even without franchising, the food and Eatery business is something that thrives very well because people will always eat no matter what.
This is true because it's a kind of business that is in high demand and it will be wise to choose such enterprises.
 

arunima

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Food business and clothing lines have many successful stories when it comes to franchising. And we have a long list of them that have been pretty successful and their chains are global now. KFC, Taco Bell, Domino's, Pizza Hut, Baskin n Robin, McDonald's...we have a long list. Their presence is felt globally.
 
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