Chapter Objectives 1 of 2


Advantages and Disadvantages of Franchising as a Method of Business Expansion



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Franchising

Advantages and Disadvantages of Franchising as a Method of Business Expansion

  • Advantages
  • Disadvantages
  • Rapid, low-cost market expansion.
  • Income from franchise fees and
  • royalties.
  • Franchisee motivation.
  • Access to ideas and suggestions.
  • Cost savings.
  • Increased buying power.
  • Profit sharing.
  • Loss of control.
  • Friction with franchisees.
  • Managing growth.
  • Differences in required business skills.
  • Legal expenses.

Buying a Franchise From the Franchisee’s Point of View 1 of 3

  • Buying a Franchise
    • Purchasing a franchise is an important business decision involving a substantial financial commitment.
    • Potential franchise owners should strive to be as well informed as possible before purchasing a franchise and should be aware that it is often legally and financially difficult to exit a franchise relationship.

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