Advanteages and Disadvantages of Franchise Business
Franchise system is usually done after a company or service, build a successful business or brand and has several outlets. It is offered in addition to permission to use the brand name or well systems (management, finance, training, quality standards, promotion, etc.) that have been tested. According to the study, the success rate is much higher franchise, rather than build its own brand or business. But of course the franchise business also has its drawbacks kekuranga. Here is a brief description of the advantages and disadvantages of franchising
The Advantages
1. Business can be quickly opened.
Since you have decided to buy a particular franchise business (outlet) opened, a relatively short time. The process can be faster if the franchisee has sduah place (one’s own, lease, or bank loans) in a suitable location.
2. There is a system.
Franchise buyers do not need to find or design the system (financial, human resources kriteris, equipment or technology, supply of goods or services or raw materials, set prices, and others. Franchisor (franchise owner) had already prepared everything. Parties franchisees stay run according to the instructions and rules given.
3. The training.
as a franchisee, you will receive guidance and training (training) of doing business. By doing so, you are not confused as to how to manage this business.
4. Ride the big names and well known.
Building a business or a brand, take a long time. By purchasing a franchise, the franchisee the right to use the name of a well known and proven success in the market.
Disadvantages
1. The cost for a franchise business is usually higher than a business that started from scratch. In addition, franchisees are required to pay an initial fee and continue to pay the parent company a royalty fee, which can range from 2-15 percent of the total gross sales.
2. A franchise typically must comply with all company policies parent. A system and a set of rules that must be followed, in addition to helping buyers and facilitate franchise turns on the other hand makes franchisees feel restrained or not free. If you want to add or change a menu which was considered more like the franchise sells food, for example, must be with the consent of the franchisor.
3. Usually, the goods / services and prices are determined franchisor. The goal is to maintain the standard of service among all the outlets in the network in an area. On the other hand, not all the outlets in the network that has a business environment that is always the same. In many cases, the franchisee feels that the goods / services and the price set is not very relevant to the stores.
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