Franchise Definition
A franchise can be defined as a business agreement between a franchisor and a franchisee.
In the joint business venture, the franchisor is the real owner of the business. The franchisee buys the right to use the name, brand, and idea to sell the franchisor’s goods or services within a stipulated time frame.
Before deciding to own a franchise, you should weigh all the options to see if the system is right for you or not. This is because franchising has its benefits as well as some potential risks you may come across in the course of engaging in the joint venture. Here are franchise opportunities.
Advantages of Owning a Franchise..
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Benefits of Enjoying an Existing Customer Base
You don’t need to struggle to start vigorous marketing in looking for new customers or clients. The brand is already known. A franchise comes with existing customers or clients.
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Having Experience is Not Necessary.
By choosing to own a franchise, you are involving yourself in an established and successful business, so you need little or no experience to kick-start it. The franchisor will provide you with the necessary training about the industry.
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Expansion of The Business
You are dealing with a business that is already popular and established, so you have a great opportunity to have branches of the business in different locations.
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The Risk is Low.
The experienced franchisor has already worked out the strategies of his business, so you shouldn’t be afraid of too much risk.
Disadvantages of Owning a Franchise
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There is not much opportunity for creativity.
As a franchisee, you have to adhere to the rules of the business, including the logo and marketing mix. There is little or no opportunity to use your own creativity.
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You Don’t Have the Freedoms to Control
Apart from the area of creativity, you also lack control and authority over other areas of the business, such as working days and working hours, public holidays, and products.
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The Contracts Have a Stipulated Time frames.
The contract is not always permanent, and when it ends, the franchisor may not renew it. As a result of this, you may start the process of looking for a new franchisor.
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You Share Financial Details with the Franchisor.
You won’t have financial freedom, as it would be as if you were running your own business. You are required to share your financial information with the franchisor.
