The Pros and Cons of Franchising

Knowledge Quest

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Pros of Franchising:

1. Low start-up costs: By franchising, entrepreneurs can access a well-established brand name and established customer base, which reduces the cost of starting a new business.

2. Less risk: Because the franchise has already been tested in the marketplace, there is a lower risk of failure.

3. Increased brand recognition: By becoming part of an established brand, a franchisee can benefit from the brand’s reputation and recognition.

4. Access to resources: Franchisors typically provide resources that can help franchisees succeed, such as marketing materials, training and support.

Cons of Franchising:

1. Loss of control: As a franchisee, you will have to follow the rules and regulations set by the franchisor. This can limit your ability to be creative and make decisions about your business.

2. High costs: Franchise fees, royalties and other costs associated with franchising can be expensive and may eat into your profits.

3. Limited markets: A franchisor may restrict certain markets, meaning that you may not be able to expand your reach.

4. Limited profits: As a franchisee, you will be sharing your profits with the franchisor. This can limit your ability to maximize profits.
 

freelancermaria

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Advantage: When investing in a franchise, you are getting a turnkey operation. Getting a franchise could be a smart alternative if you like to begin a company but do not wish to deal with the hassle of coming up with a business plan, deciding what to offer, and designing a store's interior. You get many of the rewards of becoming an entrepreneur when you become a franchisee, but with fewer of the hassles.

Disadvantage: Options are limited. Franchisees are legally bound to follow their franchisor's policies and perform in accordance with the terms of their franchise license. The merchandise you sell, the store's design, and the employees' attire cannot be changed.
 

eldavis

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Like you said one of the reasons why most business owners do not go into this is due to the fact that they do not want to loose total control of their business.
 

Heatman

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The nature of the product that you are interested in making a franchise is always going to determine how successful it is going to be when it comes to breaking into the market.
 

Niyi Briggs

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If you are able to purchase the franchise of a well rooted business, you would just ride on the integrity of that business and make massive sales.
 

IB D

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Franchising helps you to build a business in the name of a successful brand. You inherit whatever goodwill that brand has.
 

Chibson

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The major advantage of franchising is that it does not cost a lot of money to get started and the risks are not so much also. That is why many business will consider it.
 

Yohanna

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The major advantage of franchising is that it does not cost a lot of money to get started and the risks are not so much also. That is why many business will consider it.
It is very correct because it does not need huge amount of money to establish and it's easily marketable.
 

Niyi Briggs

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The advantage is that the cost and efforts in trying to create a brand and then pushing it out is eliminated. You step into an existing brand and your business kicks off at once.
 

IB D

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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.
 

hastral45

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Pros of Franchising:

1. Low start-up costs: By franchising, entrepreneurs can access a well-established brand name and established customer base, which reduces the cost of starting a new business.

2. Less risk: Because the franchise has already been tested in the marketplace, there is a lower risk of failure.

3. Increased brand recognition: By becoming part of an established brand, a franchisee can benefit from the brand’s reputation and recognition.

4. Access to resources: Franchisors typically provide resources that can help franchisees succeed, such as marketing materials, training and support.

Cons of Franchising:

1. Loss of control: As a franchisee, you will have to follow the rules and regulations set by the franchisor. This can limit your ability to be creative and make decisions about your business.

2. High costs: Franchise fees, royalties and other costs associated with franchising can be expensive and may eat into your profits.

3. Limited markets: A franchisor may restrict certain markets, meaning that you may not be able to expand your reach.

4. Limited profits: As a franchisee, you will be sharing your profits with the franchisor. This can limit your ability to maximize profits.
Well detailing analysis as contained in the above. But what I discover is that most big brands corporations don't allow franchise companies to flourish. In some scenarios, they find ways to grab most customers introduced by franchise to them.
 

arunima

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Franchising takes off a lot of initial work of starting and establishing a business off your shoulders. It saves you time for all planning and analysis. That's a big burden off the shoulders and so many people opt to go for franchising.
 

IB D

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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.
 

Bisolami

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Pros of Franchising:

1. Low start-up costs: By franchising, entrepreneurs can access a well-established brand name and established customer base, which reduces the cost of starting a new business.

2. Less risk: Because the franchise has already been tested in the marketplace, there is a lower risk of failure.

3. Increased brand recognition: By becoming part of an established brand, a franchisee can benefit from the brand’s reputation and recognition.

4. Access to resources: Franchisors typically provide resources that can help franchisees succeed, such as marketing materials, training and support.

Cons of Franchising:

1. Loss of control: As a franchisee, you will have to follow the rules and regulations set by the franchisor. This can limit your ability to be creative and make decisions about your business.

2. High costs: Franchise fees, royalties and other costs associated with franchising can be expensive and may eat into your profits.

3. Limited markets: A franchisor may restrict certain markets, meaning that you may not be able to expand your reach.

4. Limited profits: As a franchisee, you will be sharing your profits with the franchisor. This can limit your ability to maximize profits.
It is true that there is less risk in franchising because you must have bought a very good business name
 

IB D

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Before you buy a franchise, be sure that the brand you are buying the franchise from is well accepted in the location where your own business would be located. Another challenge is keeping up to the standard of the owner of the franchise
 
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