Potentially, the main disadvantage for the franchisor resides in the franchisee’s thirst for independence, especially if the project lacks real loyalty incentives. The brand could also suffer from the mistakes and scheming of unsatisfactory franchisees.
The only way to avoid this is to employ an appropriate selection process and training programme and establish an effective system of periodic monitoring.
It is more difficult to impose specific behaviour on franchisees than on branch employees.
Another disadvantage could be the obligation to share profits with franchisees, however the franchisor’s overheads are also reduced and a more compact organisational structure (personnel) can be operated.
What Are The Main Disadvantages Of Franchising For The Franchisor?
July 1, 2008 by Cris | 1 Comment
In Franchisors, Franchisees, Franchises, Basic Guidelines, Law & Agreements
danakeith on July 1st, 2008 at 8:16 am
this happens to most franchiser who thinks they can handle it by their selves.. as far as i know, when franchising certain business, it needs to follow the companies strategy.