What are the benefits and drawbacks of buying a franchise?

Question

What will be an ideal response?

Answer 1

Franchise agreements normally spell out what both the franchiser and franchisee are responsible for and must do. Each party usually desires the success of the other. The franchiser brings proven and successful methods of operation and business images to aid the franchisee.
Another reason for buying a franchise is that it probably has many of the requirements for success. The market niche has been identified, and sales activities are in place. Also, the business may already be located, managed, and running. Most potential small business owners do not have the competencies or resources to get started successfully. But the franchiser can provide supplemental help through its experience and concentrated study of the field. These talents come from both successes and failures in the past.
However, buying a successful franchise is probably beyond the means of the ordinary entrepreneur, as the best ones are quite costly. Expenses include initial investments and fees, as well as royalty payments. The costs may outweigh the benefits from its purchase. It may not fit the owner's desires or direction, or it may not give the franchisee enough independence. Finally, overpriced, poorly run, uninteresting, and "white elephant" franchises are potentially disastrous.