1) The business you are franchising is already successful and is a proven idea. Usually, before offering the business for franchising, the original owners have already build it up and have already made it successful. Franchising, for them, is a way to expand the business; it is not a way to build the business from a small one to a big one.
2) The brand name is already recognized and name-recall is already very easy. Plus the franchisor or the owner of the franchise will take it upon himself to promote the franchised name or product, which will benefit the franchisee.
3) You may have exclusive rights to market the franchised products in your territory. One example is Starbucks Philippines. This one is franchised, yes, but the franchise belongs to just a single entity in the whole country.
4) A franchisee will enjoy the benefits of being supported by the franchisor. This is part of the franchise agreement. In return for the franchise fee the franchisee pays the franchisor, the latter commits to support, to train, to share ideas and even manpower to the franchisee.
5) Systems are already in place. From getting the supplies to cooking the food (if you’re franchising a fast food or a food cart business) to selling the products or services to summarizing your numbers and producing your financial reports, the systems are already there for you. You just need to follow them.
6) You will get to leverage on the good name and purchasing power of your franchisor when it comes to sourcing your supplies from suppliers.
Disadvantages of Franchising:
1) You may be exposed to fraud. If you fail to investigate the background of the franchisor or you’re taken in by promises of quick profits with low franchise costs, chances are, you will just find yourself holding an empty bag (after paying the franchise fee).
2) Costs may be higher than if you start your own business from scratch. Other than the initial cost of acquiring the franchise, you may