Franchising has taken up the world by storm today, where almost all the major and known brand names across the world have distributed their franchises to the public for purchase and most of them are doing a good business. It is no doubt easier to start up a franchise business than open up your own independent business from the scratch, because the risk involved in the earlier is minimal, for the fact the people know the brand and associate them selves with the product. However, there are both sides to the coin, meaning, there are advantages and disadvantages of franchising to the franchisee.

The Following are the Advantages of Franchising to the Franchisee:

•    One of the biggest advantages of franchising to the franchisee is that an entrepreneur need not bear all the risk associated with starting a new business. Generally, the entrepreneurs would face issues in the areas like operating and structural controls, management expertise, product acceptance, knowledge of the market and meeting capital requirements.

•    Another advantage of franchising to the franchisee is that a franchisee would generally step in to a business which has a reputed name and brand acceptance in the market. If you open up your own business from ground zero, it would take a lot of time for you to connect with the public and there is a risk involved too that it might fail. Thus having a successful and a well known brand name as your franchisor is one of the greatest advantages of franchising to the franchisee.

•    Yet another advantage of franchising to the franchisee is the managerial aid offered by the franchisor. All new franchisees are generally expected to take up a training program on various aspects of running the franchise. This training program might include lessons in marketing, personnel management, accounting, production etc. The education and training provided is in fact an important criteria and sums up for a great advantage of franchising to the franchisee.

•    One more essential time and money saving advantage of franchising to the franchisee is that this is an opportunity for the franchisee to begin a new business with a good support which could save him a great deal of money and time as well. This is a great advantage of franchising to the franchisee, as there are a few franchisors that conduct area market research and do an analysis of the location which could include an assessment of demographics, traffic, competition and business conditions. Sometimes the franchisors can even finance the franchisees the initial investment needed to begin the operation of the franchise, thus making it again one of the biggest advantages of franchising to the franchisee, for an entrepreneur. The initial capital needed to buy a franchise typically shows a fee for the construction costs, the purchase of equipment and franchise.

•    Another of the biggest advantages of franchising to the franchisee is that as a franchisee, you would be purchasing a whole package – trademarks and brand name, service or product, operations manuals, advertising and marketing, and proven successful systems and it can’t get any better, thus this too is one of the most crucial advantages of franchising to the franchisee.

The Following are the Disadvantages of Franchising to the Franchisee

•    One of the biggest disadvantages of franchising to the franchise is that you might be open to fraud. In case you do not conduct a proper back ground check of the franchisor or in case you are taken by the promised words of low franchise costs and quick profits of the franchisor, then the chances are that you might be duped and taken vantage of and the franchisor might disappear after taking an initial investment from you, thus making this one of the greatest disadvantages of franchising to the franchisee.

•    Another disadvantage of franchising to the franchisee is that the costs involved can be more than what would otherwise be, if you start up your own independent business. Apart from the initial cost of purchasing the franchise, you might also have to pay up an agreed portion of your advertising, marketing, or sales fees, which again makes this one of the biggest disadvantages of franchising a franchisee.

•    One more disadvantage of franchising to the franchisee is that most of the times, you would not be allowed to do what you want to do, as there are specified rules and regulations in running a franchise business you are required to follow. You would not have a lot of control on the working of the system, the sold products and at times even deciding the location for your franchise. You would have to abide by the franchise contract, hence making it a big disadvantage of franchising to the franchisee.

•    Yet another disadvantage of franchising to the franchisee is that if anything bad or anything wrong happens with your franchisor or in case your franchisor all of a sudden develops a bad reputation in the market for supplying poor quality products and service , then your franchised business can also get affected this way and if the worse of the worst is to happen, your franchisor could all of a sudden run out of business, which means that you too will run out of business, thus this too is a big disadvantage of franchising to the franchisee.

•    One more disadvantage of franchising to the franchisee is at times the franchisors might cut slack on their dedication and promise to back up the franchisee. At times, the franchisor might also end up making wrong decisions which could have a bad effect on the franchisees business, hence making it a huge disadvantage of franchising to the franchisee.

Purchasing a franchise might be an easy way to get in to the business world of enterprising, but it is not at all a cake walk to be able to sustain your self. As an entrepreneur, you need to keep in mind all the advantages and the disadvantages of franchising to the franchisee. Apart from the advantages and disadvantages of franchising to the franchisee, the most crucial thing you ought to look at is whether or not you have the guts it takes to survive and grow in the franchising business. It all depends on person to person, however, no matter what business you take up, you cannot neglect that there are advantages and disadvantages of franchising to the franchisee in the franchising world, so keep your self prepared.