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Pros
1. Brand name recognition. If people recognize your name, they will be more
likely to purchase your product. Brand names represent a certain quality that
repeat customers look for. If you started your business by yourself, you will
have to build your own reputation.
2. The success rate is much higher for a franchise, than for an individual business.
In fact, the success rate is 80% for franchises, vs. only 30% for independent
businesses. This is mostly because franchises have survived the test of a
competitive environment.
3.You are not alone. The franchise is there to help you. They start you up, they
supply you with all the equipment you need, they give you a business plan. If you had
to do it yourself, you would have to start from scratch.
4. Being your own boss and possibly a manager.
Cons
1. High Costs - Besides the original franchise fee and royalties, a percentage of
your franchise’s business revenue will need to be paid to the franchisor each
month. The franchisor may also charge additional fees for services provided,
such as the cost of advertising.
2. Lack of control - You will most likely have to do everything by a set of
rules created
by the franchisor. Sometimes, you will have to buy their items, i.e. cups, uniforms, even if
you can find it cheaper elsewhere.
3. Risk - Just because its a franchise doesn't mean automatic profits. You still
need to do some independent research on your franchise. Franchises are not all
sure things. Small franchises can be just as risky as independent businesses.
Use your common sense, and don't take everything at face value. Look around and
do your homework.
4. Difficult Exit - If you don't want to own your franchise business anymore, it's
not like quitting your job. You may have to find a buyer for your business,
because you put so much money into the start
up you'll probably want some of that money back.
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