Question

Historically, the failure rate for franchises has been lower than that of other business ventures.

True or False

Answer 1

It shall be noted that there are various advantages of franchises, unlike other business venture. They are:

1) MANAGEMENT AND MARKETING ASSISTANCE, providing a greater chance of success through:
a. An established product
b. Help in choosing a location
c. Assistance in all phases of operation
d. Intensive training
e. Local marketing efforts
2) PERSONAL OWNERSHIP
3) NATIONALLY RECOGNIZED NAME: One gets instant recognition and support.
4) FINANCIAL ADVICE AND ASSISTANCE
a. Franchisees get assistance arranging to finance and learning to keep records.
b. Some franchisors will even provide financing to potential franchisees.

Thus, the franchise gives more security from the beginning. New independent businesses are known to have as high as a 90% failure rate, often causing the business owner heavy losses and at times bankruptcy.

Hence, historically, the failure rate for franchises has been lower than that of other business ventures.

Thus, the correct answer is TRUE