The Advantages and Disadvantages To Owning a Franchise

The Advantages and Disadvantages To Owning a Franchise

Buying into a Ben et Florentine franchise has many advantages.

BRAND RECOGNITION

Probably the most immediate benefit you will find when investigating a franchise to buy is something called brand recognition.  One of the purposes of starting a franchise is to develop a brand that customers will remember and come back to.  Think about your car, your clothing, the type of food you eat or where you shop. All of these are companies are brands that you can easily recognize—and that is the whole point.  When you trying to figure out what to buy, you remember a pleasant experience from the last time you bought that brand, and you repeat your business.

This is what a franchise can do for you as a business owner.

CORPORATE SUPPORT

Of course, the bigger benefit might not be something that you can see at first: corporate support.  Corporate support ensures that you have not only all the materials crucial for operations but all the training materials and resources necessary to get started.  Furthermore, when you have trouble or encounter hiccups—and you will—there is an entire team of people ready to help out.

Here are a few of the disadvantages:

UPFRONT COST

Starting a franchise can be costly.  Some may cost a few hundred thousand while other could cost several million. A McDonald’s franchise, costs about one million dollars to get started. Now, it is important to note that some franchisors will do all of the work in terms of finding the real estate and erecting the building while other franchise fees only include a few materials and the rights to use the brand.  Either way, though, they are expensive ventures (and you take all the risk).

CORPORATE ENVIRONMENT

The appeal of owning a successful business is attractive to many people but when you buy into a franchise you are also buying into a corporate environment.  When you start your own business, you can call all of the shots; but when you buy into a franchise, you still have an entire corporation to contend with (if you do not agree sometimes).

CORPORATE ISSUES

At the same time, even if you get along great with your franchisor and have no problems with money, you do bear the risk of absorbing any issues that corporation might incur over time. Maybe the CEO makes an inflammatory statement or there is a health scare or a harassment lawsuit.  Keep these in mind, too, when considering in which franchise to invest.

Categories: Restaurant

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