11 Oct The Most Significant Disadvantage Of A Franchising Agreement Is That
Franchises can offer consumers the power of attraction of a certain level of quality and consistency, since the franchise agreement requires it. The International Franchise Association has indicated that 2012 will be the year of the resumption of franchising. In its Business Economic Outlook franchise for 2012, the IFA said: “After three years of moderate growth due to the recession and its lingering effects, franchises are showing signs of recovery next year.” The IFA continued that “the growth of the franchised business has been tempered over the past three years due to underlying factors such as the weak recovery in consumer spending, which have weighed on the economy as a whole. In addition, stricter credit standards have limited the creation of new small franchised businesses and the expansion of existing ones. “This is a major drawback for most franchises – the cost. A franchisee is often expected to pay the initial purchase fee in the franchise agreement. As part of the current franchise agreement, they then pay a current fee for the assistance and training of the franchisee. In the long run, this means a limit on the amount of winnings (and money in your pocket) you can make as a franchisee. Entering into a business creation to set up your own limited liability company is often the best choice, as there are fewer restrictions on how you run your business and more potential opportunities for profit without overhead. Home-to-home franchising operations have made franchising more accessible and affordable than ever, but still require knowledge and expertise….