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What Are The Disadvantages To Franchising?

The disadvantages of franchising relate to the additional layer or regulation and expense that many perceive to be a cost of franchising. To understand the disadvantages of franchising you also need to know the advantages of franchising, however the disadvantages of franchising, include:

  • FOR FRANCHISORS: (that is someone interested in franchising his or her business) the disadvantages of franchising relate to the fact that to start a franchise you need to work with a qualified franchise lawyer to satisfy both federal and state regulatory requirements. If done correctly - for the right business - the advantages of franchising should outweigh the disadvantages.
  • FOR FRANCHISEES: (that is someone interested in buying a franchise) the disadvantages of franchising relate to the fact that, as a franchisee, you will incur additional fees in the form of an upfront franchise fee and continuing royalty fees. However, if you select the right franchise hopefully the disadvantages will outweigh the advantages.

Learn about the advantages of franchising.

Charles Internicola

by Charles Internicola
National Business and Franchise Lawyer

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