ENTREPRENEURSHIP

Detailed explanation-1: -Over‐dependence on the system: Loss of independence, if taken to extremes, leads to a further disadvantage: over‐dependence on the franchise system. Franchising succeeds when financial and emotional risks motivate franchisees.

Detailed explanation-2: -Costs may be higher than you expect. As well as the initial costs of buying the franchise, you pay continuing management service fees and you may have to agree to buy products from the franchisor. The franchise agreement usually includes restrictions on how you can run the business.

Detailed explanation-3: -Lack of independence. Franchise businesses typically have a high failure rate. Lack of brand identity. Training is not normally provided by the franchisor.

Detailed explanation-4: -One of the reasons why franchises are more successful than independent business, is the simplicity of the business model. Operators aren’t starting from scratch. Rather than setting up a business with no guarantee of a future, franchisees likely have an established brand behind them.

Detailed explanation-5: -Limited creative opportunities. Financial information is shared with the franchisor. Varied levels of support. Initial investments and start-up costs can be expensive. Contracts aren’t permanent. You’re your own boss, but you have less individual control. 30-Aug-2021