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ADVANTAGES
Some of the advantages of franchising to the franchisee
are that it gives them the opportunity of sharing some
of the benefits of a large business such as:
- An established reputation
- A known brand name and image
- Skilled management
- Large scale advertising programmes
- Economies of scale
DISADVANTAGES
However, with the advantages come some disadvantages for the franchisee worth considering:
- Royalties / fees are payable to the Franchisor
- Territorial restrictions may apply
- Contractual constraints via franchise agreement, the degree of control exercised
by the Franchisor via the franchise agreement may
be onerous
- Dependant on management assistance, the quality of which may be questionable,
assistance may not materialise
- A lack of ownership of the goodwill or intellectual property rights associated with the franchise system.
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