Entrepreneurial Marketing

Assignment 2

Topic: Pros and Cons of Franchise

Submitted by:

Hassan Shahbaz (L1F18BBAM0059)

Submitted to:

Syed Shujaat Ali Shah

Date:
8th- Dec- 2021

1
 Pros and Cons of Franchise
Franchising is an agreement in which one party gives right to a particular individual or a
group to trade their franchised goods or services in a specific region.
THE ADVANTAGES OF FRANCHISING
1. Haider being the franchisee here can face much less risk through franchising Al-Fatah
in Quetta, because through starting a business from scratch, according to many studies
have lots of risks that can affect deeply. The lower risk is related to other advantages
of franchising that stem from being affiliated with a proven company.
2. Franchisors can also provide Haider with a proven and efficient method of operation
through their years in the business, with management assistance and training, and with
marketing assistance and advantages.
3. Franchisors usually conduct national or regional marketing campaigns developed by
professional advertising agencies and it can help Haider run local ad campaigns in
Quetta, though he generally must contribute 1-5 percent of their gross profit to
advertising funds.
THE DISADVANTAGES OF FRANCHISING
1. The cost tendency is usually costly with the initial cost and the service fees that are
applied which aren’t good. In return for the benefits Haider can receive, he must pay
fees and royalties to the franchisor. The franchise fee may range anywhere from
$5,000 to over $1 million and hence can be a major expenditure for a Pakistani person
in an area where he doesn’t have any relations.
2. Second, disadvantage would be the restrictions that are imposed on Haider in
Franchising Model for Al-Fatah in Quetta. Certain changes may not be allowed that
can hurt the market value of the business as well as Less autonomy for Haider being
franchisee.
3. Another disadvantage is that a percentage of the profits are usually shared by Haider
with the franchisor as well. Because, purchasing a franchise means continuing
partaking of profit with the franchisor and it can make Haider very less remained with
profits if the business in retail business is not going in its way at any time.

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