Colin Ong TS

Article Summary:

What are the advantages and disadvantages of buying a franchise?

The Advantages and Disadvantages of Buying a Franchise

There are advantages and disadvantages of buying a franchise. 

Current Status
Many franchises do fail, thus prospective franchise buyers must do their financial sums. 

What's at Stake?
Franchise failure does not only lead to financial problems but may give emotional stress.

Here are the pros and cons:

Pros

1. The Franchise is a recognised brand. There is no need for exorbitant initial investment promotion.

2. The Franchise has a predetermined procedure.

3. The Franchise has been time-tested.

4. The Franchise has met regulatory requirements.

5. The Franchise is patent-protected.


Cons

1. HOWEVER, do remember that with strong brand recognition, consumers may not support your franchise if there are future problems. These events are unpredictable.

2. You cannot solely rely on the database of the franchisor. The database may be shared by other franchisees.

3. You have to be able to adapt to the routine of being part of a franchise. In most cases, you need to seek permission before you embark to change various procedures.

4. You may be required to pay extra promotional expenses for example participating in franchise conferences.

5. You have to constantly research on the feasibility of remaining in the franchise. An exit strategy is important.

Thus as a quick conclusion, prospective franchise buyers should be careful in doing their market research and manage their financial liquidity well.

Mr. Colin Ong TS is the Director of MR=MC Consulting Pte Ltd (www.mrmc.com.sg) which specializes in Corporate Training, Career Guidance and HR Content Producing. Their mission is to "create training programmes in the area of creativity, branding and innovation for organisations and educational institutions." A sought-after public speaker, Colin is also the copyright owner of the B2F2B Model.

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