Franchising benefits and perils with an illustration

FRANCHISING BENEFITS AND PERILS WITH AN ILLUSTRATION
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Benefits of Franchising
Franchising have a low risk of reimbursement and are likely to loan money based on that ground. Franchising a business has very low set up cost meaning that the returns are very high therefore one can loan to customers at a good interest rate. Franchisee also get easy financial support from banks and lending companies as they prefer to fund or finance a known business rather an unknown new business. Entrepreneurs usually have an important thing when entering into business which is low risk for failure. There are differences existing when one ventures into a known market and one that ventures into a new market. (Cavaliere &Swerdlow, 1988) suggest that franchising failure risks are low than failure rates for venturing into a new business. This means that franchisee get to have low risks n their enterprises by giving their businesses up for franchising.
Reputation of businesses is very important therefore it is helpful in branding the business as branding is a very powerful and important aspect of a business. Branding allows consumers be aware that a certain company exists in the market. Franchising helps a business brand itself and make people familiar with the brand. For example, a national franchise consulting and marketing company helps business people to polish their brands.
Building a business in a new market is one thing that is challenging to an entrepreneur. Franchising provides an early and easy setup hence minimizing or eliminating the problem of building a business (Menekse &Orkide 2013). This means that the franchisee gets to get a whole business format from the franchisor including; business strategy, plans, operating standards, operating manuals an...