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What are the disadvantages to Franchising?

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For franchisees, the main disadvantage of franchising is most noticeably, a complete lack and void of management and business-strategy control. Even though the franchisee gains and has the ability to use and market, promote and distribute a brand name product or business that has already been established and is stable, the franchisee gives up the ability to change, alter or oversee the direction of the business and thus, is always at the whim of the franchisor�s decisions and control.

Another problem, for both the franchisor and franchisee, is that the sensitive and essential communication and relationship that must exist between the franchisor and franchisee can often result in litigation when either the franchisor or the franchisee is not very apt or good at running a business or acts with alterior motives in underhanded ways. Basically, the franchisee can damage the brand name through incompetent service or bad customer relations and the franchisor can inhibit the possibility for the franchisees success through bad management practice and decision making/implemenation.

In addition, most regions and communities are finding ways and using means to limit the ability for chain stores or franchised business to infiltrate their area and put other, independently owned businesses in the area out of business.

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