Pros and Cons of Buying a Franchisee today

The advantages offered by investing in a franchise have grown considerably. In this day and age entrepreneurs are looking for the best possible opportunities and fast. They want to jump in to the next bandwagon that's available. So why should you consider a franchise? That's simple.

Advantages of a franchise

• Owning your own business. Because when a person works for himself, the efforts are recompensed fast and at a high level.
• A franchise allows many business objectives.
• A franchise is a part of a business that has already been established and is profitable for the original owner and has a mature customer base, which will reduce the risk of starting a business alone.
• The franchise allows to obtain the key to operate the business, the "know - how", the success in the market.
• A fast and safe development, since it has been demonstrated that people who go with franchises reach the success point quicker, which is needed in order to achieve long-term stability.
• The business has a brand guaranteed by the previous marketing activities, a prestigious brand, accepted and recognized both nationally and internationally.
• The franchisee will benefit from new developments in its network and will be implemented and paid by the franchisor, thus satisfying the demands of the market.
• The franchise is continuously updated.
• The franchisees pay to the parent company to provide the ability to implement important improvements in the system that was subsequently implemented in the main business successfully.
• Buying groups are cheaper. While your firm belongs to a franchise, you get more favorable purchasing conditions, more favorable payment terms and the security to obtain the materials. In addition you will benefit from the updated and comprehensive information regarding the franchisor's knowledge of the market and the sector.
• Plans for initial and ongoing training to give you the opportunity to work at a level regardless of your previous experience and success/failures.
• The franchisee benefits from a brand known nationally and internationally and investing large amounts in advertising both in newspapers, radio and television.
• The franchisee benefits from a brand with financing facilities, training and permanent assistance.

All this plus other benefits are added to the advantage of a franchise, but we also must provide the disadvantages of acquiring a franchise.

Disadvantages of a franchise

• When opening a franchise we must contemplate and cover the high costs of entry, the royalty and advertising.
• Disagreement between franchisor and franchisees can arise in the processes and they can have different opinions about the business methods.
• The low efficiency and other outlets of the network can seriously affect the image and reputation of your establishment.
• The franchisees have no freedom to make the necessary decision to run their businesses, this is the franchisor exclusivity.

In addition

• Sometimes you will receive poor service, support and assistance from the franchisor, because their interest is to attract new franchisees and not to care for what they have already collected on.
• Resource constraints that affect service delivery.
• Signing with an unethical franchisor who wants nothing to do with the building of the franchise’s name, and only wants to earn from selling its brand.

As you can tell it is important to analyze as many factors and aspects before purchasing into a franchise.

Source: http://www.ozcarguide.com/business-money/start-ups/796-pros-cons-buying-franchise