Franchise Advantages and Disadvantages

Purchasing a franchise is an important decision, not only financially but also personally. It is critical to weigh both the positive and negative aspects before arriving at your final decision. In this article we will be presenting you with listings of the Advantages and Disadvantages of owning a franchise.

Advantages

• Your chances of success are greatly increased due to aligning yourself with proven products and methods.



• You will be given a certain level of independence by the franchise in order to operate your business.



• A franchise will give you a widespread brand-name recognition on the established product or service. It normally takes years to establish customer awareness, but you will acheive that from the start.



• Consumers will be attracted to the quality and consistency of Franchise products and services due to it being mandated in the franchise agreement.



• Your Franchise will offer some or all of these support items prior to opening:
  
  
  1. training
  2. site selection
  3. design and construction
  4. financing
  5. grand-opening program



• Your Franchise will offer some or all of these ongoing support items:
  
  
  1. training
  2. national or regoinal advertising
  3. operating procedures and assistance
  4. ongoing supervision and management support
  5. increased spending power and access to bulk purchasing

Disadvantages

• You will not be able to operate completely independent of the Franchise. You will be required to operate according to procedures and restrictions stated in the franchise agreement.



• You must pay ongoing royalties and advertising fees along with the initial franchise fee.



• The public image of your business can be damaged if other franchisees are performing poorly or the franchisor encounters problems.



• Normally, the term of a franchise agreement is limited.

Remember to look at both sides when determining if a franchise is right for you. Franchising is a wonderful way to go into business, and its levels of profitability are limitless.