THE PROS AND

CONS OF
FRANCHISING
THE FRANCHISOR

 A franchisor is a person or company that grants the license

to a third party for the conducting of business under their
brand name. The franchisor owns the overall rights and
trademarks of the company and allows franchisees to use
these rights and trademarks to do business.
CHARACTERISTICS OF A GREAT FRANCHISOR

1. Honesty
2. Marketing Oriented
3. Good Communicators
4. A Visionary
5. Altruistic
6. Passionate and Pragmatic
7. Fully Committed
ROLES AND RESPONSIBILTIES OF A
FRANCHISOR
1. Selecting the right franchisees
2. Providing leadership
3. Giving franchisees access to your expertise
4. Providing ongoing support
5. Protecting your brand
6. Developing marketing standards
7. Being a great communicator
Advantages of Franchising to Franchisor

1. Business Expansion
2. Buying Power
3. Operational Convenience
4. Franchisee Contribution
5. Motivation and Cooperation
6. Competitive Advantage
7. Converting Franchises
Disadvantages of Franchising to Franchisor

1. Lack of Freedom
2. Franchisees’ Financial Situation
3. Franchisee Selection, Recruitment, and
Retention
4. Communication
THE FRANCHISEE

A franchisee is a person or company that is granted a

license to do business under the franchisor's trademark,
trade name, and business model, by the franchisor.
The franchisee purchases a franchise from the franchisor.
The franchisee must follow certain rules and guidelines
already established by the franchisor, and in most cases,
the franchisee must pay an ongoing franchise royalty fee to
the franchisor.
ROLE AND RESPONSIBILITIES OF
FRANCHISEE
1. To protect the franchised brand by operating the franchise in strict compliance
with system operating standards.
2. To build a strong and loyal customer base by offering only approved products
and services and by providing superior customer service.
3. To ensure that all employees are properly trained and the franchise is properly
staffed at all times.
4. To advertise and promote the franchise and its approved products and services
according to the guidelines provided by the franchisor.
ATTRIBUTES OF A SUCCESSFUL FRANCHISEE

1. Be willing and able to learn new skills

2. Be able and willing to follow system standards
3. Be ready to move from big business to small business
Advantages of Franchising to Franchisee
1. Established Concept
2. Tools for Success
3. Technical, Operational, and Management Assistance
4. Synergistic Relationship
5. Standards and Quality Control
6. Minimum Risk
7. Less Operating Capital
8. Access to Credit
9. Comparative Assessment
10. Benefits from Research and Development
11. Advertising and Promotion
12. Franchising Laws
13. Unique Opportunities
Disadvantages of Franchising to Franchisee

1. Financial Requirements
2. Unfulfilled Expectations
3. Lack of Freedom
4. Advertising and Promotion Practices
5. Services Provided by the Franchisor
6. Overdependence
7. Monotony and Lack of Challenge
8. Franchise Termination, Renewals, and Transfers
9. Franchisee’s and Franchise System Performance