advantages and disadvantages of franchising

A:

A:As a former franchisee, I can tell you, DONT DO IT. The only reason to buy a franchise is for the intellectual knowledge and the brand. Put in a little elbow grease and research time and you can easily acquire the knowledge. As for the brand, unless you are going to open a McDonalds or Harley franchise, it's not worth as much as you think. Franchisors do as little brand advertising as possible to support their owners. A franchise can be a nice little turnkey package, but for that convenience you will pay a commission for the rest of your days. That's your money you are earning! I learned once I got into it that I didn't really need the franchisor or anything he could offer. But I was contractually obligated. And even after I sold it, I'd signed a non-compete (standard franchise agreement), meaning that even though I'd learned the business I couldn't start one independently for FIVE YEARS.

A:I work for a store that is a franchise store. There are diffinately advantages of being a franchise and disadvantages... People recognise the name, which can be both an advantage and disadvantage. If they had good service at another location, if you open a store in a location closer to them they may switch to your location. If they had bad service at a location elsewhere they may choose not to go to any of them. The corporation of your parents company will have rules that you have to follow, some of them can be kind of irrelevant to your area. Like a store I work for will only let us sell items that are from corporate. We have things that we used to sell, now they made that rule, so we don't have as many options for our accessories. Some parent companys will be more open and allow you to carry the products you want, so that can be an advance. A lot of times the parent company will do advertising for all the locations, so that could save you money on advertising. You probably pay for it, but you share the cost with all the other stores. Being a franchise versus a corporate store gives you more freedom on how you run your business. The store owners that I work for are really great, they run the store very efficiently so things run smooth. We have really good customer service, and everyone that works there gets along really well. It's like we are a family.

A:The advantages are that you have a chance to pay later and to build up your credit if you pay the bill off ontime. The disadvantages are that you have to pay more than if you would have just bought up front because of interest. a franchise is a like a restaurant that you buy but you have to operate it a certain way. For example, someone could purchase a subway restaurant, but they have to operate it according to certain guidelines. They cant change the items on the menu and things like that.

A:I will do my best to answer some of these questions. First off franchising started to take off in the 1950s. The advantages to franchising is it has a proven track record and support system. Franchises very seldom fail, which makes it quite attractive to become a franchisee. The disadvantage to franchises is that they take a cut of all sales and profits. Also they take a franchise fee to get started in a franchise. The benefits of this to you is that the owner of the corporation would like you to succeed so they can keep the profits comming into them. The chamber of commerce as always looking to help businesses succeed in the town that it serves because when a business succeeds they generate more revenue for the town. The advantages to owning your own business and not having a franchise is obvious...you don't have to pay anyone a cut of your gross. However you don't have a support network, and the odds of you succeeding are stacked against you. Another disadvantage to franchises is many times you have a decreased freedom in what you can offer since it must fall within their set standards. Preparations for becoming a franchise usually mean you have liquid cash available and can purchase the franchise fee. Also you must attend their classes and many times work at one of their franchises before you start your own. This gives you a feeling on how a successful franchise is run. Conclusion is it is VERY good to own a franchise. It is an almost guarenteed success, plus franchises often offer promotions and commercials at no cost to you (except the ammount collected from gross sales). Take for example the success rate of a franchise Jimmy Johns....Last time I checked (2002) they had 100 franchises and off the 100, 2 had closed...of the 2 that had closed 1 had been relocated and was successful. This would equate to a 99% chance that if you owned a Jimmy Johns you would be successful. Versus starting your own business with a 5 year rate of success for small business at 10%.