Franchises may offer consumers the attraction of a certain level of quality and consistency because it is mandated by the franchise agreement. Franchises offer important pre-opening support: site selection design and construction financing training grand-opening program Franchises offer ongoing support: national and regional advertising operating procedures and operational assistance ongoing supervision and management support increased spending power and access to bulk purchasing The franchisee is not completely independent.
Franchisees are required to operate their businesses according to the procedures and restrictions set forth by the franchiser in the franchisee agreement. I nose restrictions usually Include ten products or services wanly can De ore pricing and geographic territory. For some people, this is the most serious disadvantage to becoming a franchisee. In addition to the initial franchise fee, franchisees must pay ongoing royalties and advertising fees.
Franchisees must be careful to balance restrictions and support provided by the franchiser with their own ability to manage their business. A damaged, system-wide image can result if other franchisees are performing poorly or the franchiser runs into an unforeseen problem. The term (duration) of a franchise agreement is usually limited and the franchisee may have little or no say about the terms of a termination.