Some Benefits of Franchising

Franchising provides benefits for both seller and buyer. For franchisors, the main benefit is the opportunity to use other people's money to expand the brand faster than they could either on their own or through investors or lenders. For franchisees, benefits include a higher chance of success than a sole proprietorship, a shorter time to opening, initial training and ongoing support, assistance in finding an optimal site, and lower costs through group purchasing.  

Franchises have potential downsides, including mandatory company-wide promotions that may not work in their market, costly required redesign of their unit(s), and change in management or ownership.  As with any business opportunity, there are trade-offs to be made, and franchisees have some power of their own. Franchisees must follow the franchisor's operating system and keep the franchisor's proprietary system and trade secrets confidential. They must also sign some type of noncompete agreement. Not everyone is cut out for franchising. The franchisee must be comfortable with the franchisor's culture, values, and goals, and vice versa, for the partnership to succeed.