Question

Briefly explain two (2) challenges an entrepreneur is likely to face if he or she wants to opt for franchising.

Answer 1

Challenges an entrepreneur is likely to face if he or she wants to opt for franchising-

1. Rules of the franchisor:

One of the challenge in buying a franchise is that you must conform to the rules and guidelines of the franchisor. Some franchisors exert a degree of control that you, as a supposedly independent business entrepreneur, may find controlling. Depending upon the agreement, the franchisor can direct to so many terms like location, working hours, employees ratio, structure etc. The argument for this level of control is to maintain the uniformity of the product so that each franchise location has the same look and feel to the customer.

2. Cost:

The cost of buying a franchise is very high as it is already a set up business with a good name. Also its maintenance cost is very high. You need to provide the amount accordingly and maintain your finances.