List and describe three major advantages of franchising for the franchisee
List and describe three major advantages of franchising for the franchisee.
1. The most valuable advantage to a franchisee is that you are selling a proven product or service. (Hatten 112) Having a product or service that customers are aware of, they know the name and they know what to expect, is essential for a franchisee.
2. Franchising often gives the franchisee important pre-opening and on-going support. Such as marketing expertise, financial assistance to professional guidance. Professional guidance can be ongoing supervision and management support, technical support, purchasing and equipment support. (franchise.org) 3. Potential for business growth is another advantage. If the franchisee is successful with their first location, they may have the opportunity to develop another store in another location.
List and describe three major disadvantages to the franchisee when considering franchising.
1. The cost of the franchise is a major disadvantage. Even though the franchise may provide pre-opening and on-going support, it may come at a price. Every franchisor will charge a franchise fee, the onetime payment to become a franchisee. Also a royalty fee will be charged which is a specified percentage of sales revenue. (Hatten 114)
2. Restrictions on freedom or creativity is another disadvantage. Most people start their own business to have more independence. When you decide to purchase a franchise, you have to uphold their policies and procedures, and you have to have a franchisee agreement. The franchise agreement is the legal contract that binds both parties involved in the franchise. This contract explains all the fees, and territory you can pursue to place your new franchise. Restrictions can also include which products or services which can be offered with prices. If an item is not selling well in your store but good in another, you still have to have that item on your menu.
3. Poor performance of other franchisees can lead to problems for you. If
1. The most valuable advantage to a franchisee is that you are selling a proven product or service. (Hatten 112) Having a product or service that customers are aware of, they know the name and they know what to expect, is essential for a franchisee.
2. Franchising often gives the franchisee important pre-opening and on-going support. Such as marketing expertise, financial assistance to professional guidance. Professional guidance can be ongoing supervision and management support, technical support, purchasing and equipment support. (franchise.org) 3. Potential for business growth is another advantage. If the franchisee is successful with their first location, they may have the opportunity to develop another store in another location.
List and describe three major disadvantages to the franchisee when considering franchising.
1. The cost of the franchise is a major disadvantage. Even though the franchise may provide pre-opening and on-going support, it may come at a price. Every franchisor will charge a franchise fee, the onetime payment to become a franchisee. Also a royalty fee will be charged which is a specified percentage of sales revenue. (Hatten 114)
2. Restrictions on freedom or creativity is another disadvantage. Most people start their own business to have more independence. When you decide to purchase a franchise, you have to uphold their policies and procedures, and you have to have a franchisee agreement. The franchise agreement is the legal contract that binds both parties involved in the franchise. This contract explains all the fees, and territory you can pursue to place your new franchise. Restrictions can also include which products or services which can be offered with prices. If an item is not selling well in your store but good in another, you still have to have that item on your menu.
3. Poor performance of other franchisees can lead to problems for you. If