Advantage of franchises

 Increased ability for franchisor to expand

- Because franchisees finance their own units, franchisors can grow without making a major
investment.
 Recognized name, product, and operating concept
- Consumers know they can depend on product from franchises, as a result, the franchisee’s
risk is reduced and the opportunity for success increased.
- The franchisee gets a widely known and accepted business with a proven track record.
 Management training and assistance
- The franchisor provides a structured training program that gives the new franchisee a crash
course in how to start and operate their business.
 Financial assistance
- The franchisor typically gives the franchisee advice on financial management.
- Also, many fanchisors offer short-term credit for buying supplies, payment plans, and loans
to purchase equipment.
-> Although franchisors give up a share of profits to their franchisees, they receive ongoing
revenues in the form of royalty payments.