What are the primary advantages and disadvantages of a franchise arrangement for a franchisee?

Question

What will be an ideal response?

Answer 1

Franchising offers several advantages to a franchisee. It enables a franchisee to start a business with limited capital and benefit from the business experience of others. Franchised outlets are generally more successful than independently-owned businesses. Generally speaking, franchises have lower failure rates than independent retail establishments. However, franchise failure rates vary greatly depending on a particular franchise. If business problems arise, a franchisee can obtain guidance and advice from a franchisor at little or no cost. Also, a franchisee receives materials to use in local advertising and can benefit from national promotional campaigns sponsored by the franchiser.
Franchise arrangements also have several drawbacks. Franchisees must pay to use a franchiser's name, products, and assistance. Usually, there is a one-time franchise fee and continuing royalty and advertising fees, often collected as a percentage of sales. Franchisees often must work very hard, putting in 10- to 12-hour days six or seven days a week. In some cases, franchise agreements are not uniform, meaning one franchisee may pay more than another for the same services.