What are the advantages and disadvantages of the franchise model?

1. The advantages of the franchise model are as follows:

(1) Franchisees can maintain a small scale while implementing centralized control, which can not only earn reasonable profits, but also involve high capital risks, not to mention taking care of the daily chores of franchisees.

(2) Because franchisees have a deeper understanding of the region, it is often easier to find the business scope that the enterprise has not yet involved.

(3) Because franchisees don't need to participate in the employee management of franchisees, there are relatively few employee problems to deal with.

(4) The franchisee does not own the assets of the franchisee, and the responsibility for ensuring the safety of the assets completely falls on the asset owner, and the franchisee does not need to bear relevant responsibilities.

(5) Franchisees engaged in manufacturing or wholesale industries can establish a distribution network with the help of franchising to ensure the market development of products.

2. The disadvantages of the franchise model are as follows:

(1) It is precisely because of franchising itself that franchisees get a perfect and rigorous management system. But because of this, it is difficult for franchisees to change this business model to adapt to various changes in the market and policies. In addition, because of the different needs of consumers in different regions, it is difficult for franchising to maintain a sustainable advantage anywhere.

(2) For consumers, the frequent changes of franchisees bring them doubts, which leads to unclear responsibilities among franchisees, current franchisees and former franchisees, and shirking responsibilities.

(3) Franchising can only focus on a certain field, and it is impossible to achieve strategic victory in all markets.

Extended data:

Characteristics of franchising

The word franchise is translated from English camp system, which is used to engage in business activities and pay operating expenses to franchisees. Although different countries and organizations have different definitions of franchising, in general, franchising has the following characteristics:

1. Franchise is a contractual relationship between franchisor and franchisee.

2. Franchisor will allow Franchisee to use its own trade name and/or trademark and/or service mark, business know-how, business and technical methods, continuous system and other industrial and/or intellectual property rights.

3. Franchisees invest in their business and own their business.

4. The franchisee shall pay the fees to the franchisor.

5. Franchising is a continuous relationship.

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