What are the biggest disadvantages to owning a franchise..?
On an online business forum, a member posed a question asking what the biggest disadvantages were, to owning a franchise. I answered the question within the forum and felt that it may be useful to place my answer here as it may provide some benefit to others also. My response appears below…
Based on my experience I’d say the following;
1) Lock – in. This isn’t necessarily a downside per se however some of my clients who are franchisees have reported that they would have preferred shorter contract periods with additional end of contract options.
2) Other franchisees – Again, this isn’t necessarily a downside however if some of the other franchisees aren’t up to scratch, then this could be damaging to the brand and, subsequently your business.
3) Lack of freedom. The franchisee will want to protect the brand. In doing so there will likely be certain restrictions on how you can trade – For example geographically, selling only certain specific products and / or services, purchasing from certain pre – selected suppliers. If you like to “do your own thing” some franchise systems may seem a little too restrictive for you.
I wrote a brief about franchises that you may find useful. It can be viewed here; http://www.focus.com/briefs/small-business/what-exactly-franchise-and-how-do-franchises-work/
I hope my response has been of some assistance. If there is anything else that I may be able to assist you with, don’t hesitate to get in touch,
About the author
An entrepreneur at heart, Andrew Salmon started and ran his own successful IT business for a decade before successfully executing a harvest strategy. Afterwards he worked with an international E-Learning organisation providing a learning portal to educational authorities and private institutions across Australia, USA, UK, South Africa, New Zealand, Hong Kong & Papua New Guinnea, serving over five million students.
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