When balancing the advantages and disadvantages of a partnership, you also need to consider if you're able to cope with unpredictability. 5. Cost â Even after you invest in franchising your business, on-going, franchising requires that you invest your time and capital. The advantages and disadvantages vary depending on: If You Want to Franchise Your Business â Soâ if you are a successful business owner and you want to expand thenâ naturallyâ franchising is an option that you will want to consider. Franchise Opportunities . Ongoing Support: While the initial advantages of operating a franchise have been illustrated, one of the most important aspects of having a franchisee is the fact that the parent company will provide you with ongoing support throughout your venture. Advantages & Disadvantages of a McDonald's Franchise. Getting a loan for your own business can be challenging. Advantages: âOwning a franchise allows you to go into business for yourself, but not by yourself.â A franchise provides franchisees (an individual owner/operator) with a certain level of independence where they can operate their business. Franchise your business Advantages and disadvantages of franchising your business. What are the advantages of a franchise? Advantages and disadvantages of Franchising. In the US, there are 800,000 franchises operating today. What are the pros and cons of a franchise business opportunity? For the overwhelming majority of Australians who have become franchisees and operate successful businesses, the advantages have outweighed the â¦ Compared to starting a business from scratch, that's a huge advantage. What are the advantages of investing in a franchise thatâs been operating for less than 12 months? What are the main features of the following business organisations? Owning and operating a franchise can significantly lower the cost of goods sold (COGS). That usually requires the help of a franchise attorney or ... as a royalty for letting the franchisee use their brand name and operating system. Products and services will have been established and tested. When a customer complains to a Best Buy saleslady, for example, the customer will most likely hear the statement, âOur policies state that so-and-so.â ... the advantages â¦ Explain how buying and operating a franchise differs from starting up a regular business. Advantages of an independent restaurant include potentially lower startup costs, full control over operations and avoidance of franchise risks. On the negative side, to open a franchise a franchisee must pay an initial fee to acquire the brand, business system, and other resources; pay on-going royalties; and follow the franchise system. Buying a franchise may be an easy way to enter your chosen market or business but it is definitely not a walk in the park. Benefits of operating in a niche franchise market When starting to look at franchise opportunities, if itâs all new to you youâll quickly recognise the franchise brands youâve probably already seen â¦ What are the disadvantages of a franchise? Even if you have a solid exit strategy in your partnership agreement, the change triggered by a partner's situation can cause instability in the business. There are advantages and disadvantages to any course of action, and choosing a franchise is no different. You will never have to worry about being on your own. i)a sole trader (ii) a partnership (iii) a multinational Explain the advantages and disadvantages of operating a business as a franchise. Franchise business are excellent, since they provide lots of advantages to the franchisee, permitting them to run their own business as well as gain revenues, while giving a format to assist direct your business. Franchise opportunities let you go into business for yourself, but not by yourself. Other than these advantages and disadvantages, the most important thing you need to consider is whether you have the appetite to enter into franchising. The Pros Of Buying A Franchise . â¦ When the iFranchise Group compared the valuation of the S&P 500 vs. the franchisors tracked in Franchise Times magazine in â¦ Much of the work needed to launch a business idea has already been done. As a franchisor youâll be entering a new industry and over time youâll need to invest in your franchise system. Running your own franchise is still hard work, and there are drawbacks to opening a business that requires operating by someone elseâs rules. You need a high net worth to begin operating a franchise. Disadvantages include full accountability, more time needed to become profitable and resale difficulties. While the franchisee meets all the costs and collects the income, you receive franchise fees and royalties or a mark-up on products sold by the franchisee. Expert Answer . ... as well as requirements on the suppliers to be used or operating hours. Chairman of The Franchising Centre. Many lenders will not approve loans that they deem to be risky, and small businesses are typically deemed risky because the majority of them fail. Explain the advantages and disadvantages of operating a business as a franchise. The following are five advantages to buying a franchise vs starting a business: 1. The most obvious benefit of franchising to a prospective franchisor is the ability to expand a business by utilising the manpower and capital of others.