The limitations of franchising

Franchising can sometimes be viewed as a double edged sword. Some of the benefits of the process can be disadvantageous from certain angles. It is the relationship between the franchisor and the franchisee that maintains a balance and imposes some kind of control in the system. Some of the major limitations of a franchising relationship can be illustrated as follows:

1.    Franchisees may be confined to merely marketing and promoting an already existing brand without making any contributions or including their innovations in the business 2.    Assessing the quality and the authenticity of the franchisor can be a difficult task at times and is a task that should be afforded careful consideration. 3.    At times, franchisees might become dependent on their franchisors and lose their perspective. This increases the risk of stagnancy in the business. 4.    A loss in the reputation of a franchisor due to reasons beyond the franchisees control might consequently also lead to a loss for the franchisee as well. 5.    Any mistake made by the franchisor regarding policies and decision making could adversely affect the franchisee as well. 6.    Getting out of a franchise relationship becomes tough especially if the franchisor has included restrictions to that effect in the franchise agreement. 7.    There might be a loss of control in some arrangements as the franchisor is generally reluctant to relinquish control. 8.    The franchisee might not have an opportunity to recommend innovative marketing strategies or any other ideas that will serve as less expensive alternatives.

The franchisee therefore must therefore learn to balance the system's restrictions with their personal aspiration to manage their own business.