Question

3 paragraphs of the advantages and disadvantages of franchising

Answer 1

3 paragraphs of the advantages and disadvantages of franchising

Franchising is the arrangement where one party (the franchiser) grants another party (the franchisee) the right to use its trademark or trade-name as well as certain business systems. There are various advantages and disadvantages of franchising. Expansion can be achieved in less time because franchisees provide the labour and their sales provide the growth. Successful locations of franchisees can return high royalties and benefit the company.

The franchisor puts relatively little money into new locations as this comes from the franchisee. Franchisees are responsible for their company’s success so they are more motivated. On the other hand, disadvantages can be-It is difficult to manage and control a franchise from a distant location. The brand image of company is at stake. Quality issues can jeopardise the image of the company

The upfront investment required can be huge.  Disadvantage of the costs and reduced profit and control might put people off from investing in franchises. Finding the cheapest suppliers to minimise your overheads and maximise your profits is bit difficult in franchise business.