The Detriments of Franchising

There are many business advantages to franchising. However, if you are looking to buy a franchised business , it is important to be aware of the potential constraints of buying a franchise as well. Understanding the scope and franchise model will help you assess if buying a franchise is the best decision for you.

The Franchising Model

If you considering the prospect of buying a business, franchising may have crossed your mind because of all the assistance you stand to gain from your franchisor and the “business in a box” model. As is the case with most things in life, of course, there can be some disadvantages.

Here are some of the constraints of franchising you should be aware of:

  • Restrictions: As a franchisee, you are allowed to be your own boss, but you are not necessarily in control of the business and cannot make certain decisions without getting your franchisor’s approval. You must strictly conform to the franchise system and model, so much of the operation is dictated by the franchisor. It eliminates much of the entrepreneurial nature of owning a business. However, these restrictions exist to maintain a sense of uniformity for the overall brand and put into place the franchisor’s years of experience.
  • Initial cost: Although the initial investment of your franchise fee provides a lot of benefits such as training, the initial cost to open your franchised business needs to be explored and taken into account, since much of the “build-out” is dictated by the franchisor.
  • Conflict: When you join a franchise, you will receive a network of support from the franchisor and other franchisees. Ultimately the franchisor has the final word on operations and the system, and in some cases, conflict may have to be resolved out of state where the franchisor resides, instead of locally to you.
  • Franchisor’s will have full access to your records: Your franchisor will have access to all of your business records and computer operations, allowing them to audit your business at their discretion. The franchisor will always be monitoring your operations, and in many cases inspecting your business operations to insure compliance.

Schedule a Consultation with Our Experienced Franchise Attorney Today!

At Franchise Legal Support, our skilled franchise attorney has been involved in the franchise industry for more than 34 years. With our team on your side, you can rest assured you will receive the legal advice and guidance you need to tackle the franchise issues you are faced with.

Reach out to our law office today at (888) 631-0048 to schedule a free initial consultation with our attorney to get started.

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