Franchises/ Franchisees

Question 1

Advantages to the franchiser

Answer 1

Less expensive than expansion
Products necessary for franchise to operate uder framchiser control
Applicants can be carefully selected wide professional selection attracted by brand

Question 2

Disadvantages to the franchiser

Answer 2

Control issues
Cost of supporting franchisies
Possible conflict
Potential diseconomies of scale (too big)

Question 3

Advantages to the franchisee

Answer 3

Lower risk (proven business concept)
Support advice and training
Marketing (national)
Easier to obtain finance

Question 4

Disadvantages to franchisee

Answer 4

Franchise fees
Shared profit
Supplies have to be bought through the franchiser
Less control and independence
Business cannot be sold without permission