Pros and Cons of Franchises

Many small businesses are franchises and this is a good option for those who want to run a business. It allows them to operate under a well-known brand name, thus getting all the advantages of an established business. The product that they sell is already popular, thus ensuring that sales will be good right from the start. The capital investment need not be so large and they can share the expenses of advertising with other franchisees. They also have the continued guidance of the franchiser, who is more experienced.

Being a franchisee allows a smaller business to compete with a larger business more easily by taking advantage of combined purchasing powers. There are some disadvantages though. For those free spirits who want to do their own thing, the continued guidance of the franchiser may be limiting - even causing frustration and annoyance.

The agreements that have to be signed are very complicated and must be understood thoroughly before signing. Some franchisers tend to be more aggressive in their guidance, while others are merely interested in selling the franchise and are not experts in running the business at all. Anyone considering a franchise should be sure to get advice from an expert before signing up.

by Mick