Low risks of business failure and other benefits of franchising
The business of franchising can offer several benefits to a franchisee. Some of them are as follows:
• Despite having no general business or management skills in hand, or no good knowledge of the proposed activity, an individual can usually make a success of a franchising business. • Franchisees can benefit from the name and reputation or brand which has already been created by the franchisor. This way the franchisor can take the advantage of lessened lead time that may be required to operate business efficiently. • A franchisee is not required to invest much of his capital into the business as there are usually financiers ready to assist franchisees on account of the proven track record of franchising, providing there is a sufficient level of investment and commitment from the franchisee as well. • Franchisees can easily avail finance compared to others who set up their own businesses from scratch. • There are lower risks of business failure for a franchisee. • A franchisee can utilise the purchasing power of the franchisor, as well as the size of the franchisor’s business. • During the franchise term period, the franchisee is provided with assistance and training by the franchisor at a continual rate. • In some cases, a franchisee also gets territorial protection.