IGCSE, A Level Business Student Forum

[KN] Brand Reputation.
[AN] Negative experiences or failures within franchise can harm the overall brand reputation so franchisors needs to actively manage and monitor the performance of franchisees.
[AN+] Thus this can increase the chances of business failure.


[KN] Loss of control.
[AN] One of the main drawbacks is this, hence this will occur because of share of responsibilities hence can result in conflicts.
[AN+] Thus the franchisor may introduce new variation too and if it is not preferred by customers, large pool of customers could be lost.

(KN) poor management of the outlets
(AN) thus due to this it will lead to bad reputation of the franchisor and the business,
(AN+) and hence due to this the business may become unpopular or could even fail in the long run.

(KN) the franchisee keeps profits from the outlets
(AN) thus due to this a share of the profit is not earned by the franchisor from the franchisee,
(AN+) and due to this the franchisor ends up getting overall less salary than they should due to this incident, which could lead to alot o problems for them in the future.

KN] Control loss
(AN) A business that wants to franchise must give its franchisees some degree of control. Although the franchisor offers standards and guidelines to ensure brand coherence, franchisees are somewhat independent in day-to-day operations.(AN+)This may result in disparities between franchise locations' customer experiences and levels of service quality.

KN]A franchisor offers training to a franchise company 
[AN]Experts and specialists who must be paid for their training may raise the cost of production
 [AN], resulting in lower profit margins.