Franchise Disadvantages | SkillsAndTech

• The franchisee is not completely independent.
• Franchisees are required to operate their businesses according to the procedures and restrictions set forth by the franchisor in the franchisee agreement.
• These restrictions usually include the products or services which can be offered, pricing and geographic territory.
• For some people, this is the most serious disadvantage to becoming a franchisee.
• In addition to the initial franchise fee, franchisees must pay ongoing royalties and advertising fees.
• Franchisees must be careful to balance restrictions and support provided by the franchisor with their own ability to manage their business.

See Also: Servpro Franchise In USA

• A damaged, system-wide image can result if other franchisees are performing poorly or the franchisor runs into an unforeseen problem.
• The term (duration) of a franchise agreement is usually limited and the franchisee may have little or no say about the terms of a termination.