Problem
• What are some of the major advantages of franchising? Cite and explain Three
Some advantages of franchising include brand name appeal, having a proven track record, and financial assistance. Brand name appeal, consumers are already aware of the product and or services that are provided. Having a proven track record, by franchising with an established well know national franchise. It is highly likely, that they will have a successful future. Allot of fear and hesitation is removed when becoming a franchise owner because there is already an established market for your product and or services. Additionally, financial assistance may be available. Franchise companies have been known to help secure loans or sometimes lend funds without repayment until the operation is up and running smoothly.
• What are some of the major disadvantages of franchising? Cite and explain at least two.
Some of the major disadvantage of franchising include franchise fees, and franchisor control. Franchisor fees from national chains can range from $50,000 to $1,000,000 depending on the franchisor size as well as its success. Additional fees include equipment, inventory, building, and payment of royalties. Secondly franchisor control. To establish a standardization between franchisors. Controls are put in place, and they are enforced. If these controls are not abided by. Then the entrepreneur, may run the risk of not having their franchise license renewed once the contract expires.
References
Kuratko, D. F. (2019). Entrepreneurship: Theory, Process, Practice (11th ed.). Cengage Learning.