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Disadvantages
of a Franchise
As with
other businesses and investment opportunities there are advantages
and
disadvantages.
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It
is the would be franchise owner’s responsibility to weigh the
advantages of a franchise
to the disadvantages and then make the
decision if a franchise is the right option of them.
Do not
avoid the disadvantages of a franchise, the disadvantages are important
and being aware of them in for your benefit as a would be franchise
owner.
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The
disadvantages of a franchise are:
- The
costs of a franchise can be higher than most people expect. The initial
costs of the franchise need to be paid as well as the continuing
royalties.
- You
may have to agree to buy products from the franchisor at their prices
even if you can get the same products cheaper somewhere else.
- It can be difficult
to sell a franchise as you can only sell it to someone who is approved
by the franchisor.
- Your
freedom and creativity is restricted by the franchise agreement. You
might not be able to make changes to suit your local market.
- Other franchisees
could give the brand a bad reputation, which can hurt your business.
- Expanding the
business can be limited by a franchise.
The
disadvantages of a franchise are important, but the advantages are just
as important. If you are considering a franchise, then you might be
interested in comparing a franchise to
starting your own business.
After
taking the advantages and disadvantages into consideration you will be
able to make an informed decision if a franchise opportunity
is right
for you.
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