While a Franchise is a low risk means of stepping into and operating business for a franchisee, franchised businesses can and are unsuccessful. Before you respond to a franchise for sale ad you must think about the downsides of a franchise opportunity, including the main disadvantage of going into any business; the chances of losing the capital and/or resources you have invested in that Franchise.

In reviewing with franchise owners who had disputes with their franchisor, or who suffered substantial setbacks and disappointment, many had only investigated the advantages of franchising before they opted for on the opportunity, but they had not contemplated the unique obligations that a franchise contract places upon a franchised owner operator as opposed to an independent organisation. A completely independent owner answers only to themselves, whereas when involved in a Franchise one has responsibility to the franchisor, fellow franchisees and to the business system under which the franchise operates.

Like any business model, the franchise opportunity has both advantages and disadvantages. In choosing whether a franchise is the right way for you to go into business, take into account what the disadvantages of franchising may be, this can lead to a better understanding of the franchising business model generally. It will also lead to better decision-making and as a consequence, a more fulfilling business life as a franchisee.

With planning, the right strategies and foresight, a lot of potential downsides can be kept at bay, and successfully managed. Depending on your perspective, the disadvantages of choosing a franchise opportunity revolve around the obligation to follow the franchisor’s structure.

Most franchisors will offer a Franchise for Sale only if one business operates from a specific location or territory permitted and/or specified by the franchisor. In some cases, there are no territories, and a franchise opportunity will be presented that allows a franchise operator in the franchisor’s network to conduct business by competing with other franchisees for the same business. This has the potential to limit the Franchise Opportunity, and may limit the franchisee in for instance opening other shops or mobile units, advertising the franchise, or it may result in better franchisees drawing business away from inferior operators in an unrestricted territory model.

Franchise opportunities are often constrained to selling only stock and/or services specified or approved by the %KEYWORD1% and in some cases, may only purchase that stock or service from the franchise itself, and no other third-party. In additionFurthermore, the franchisee may be expected to carry specified amountsquantities of certain stock items, irrespective of turnover.