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The Drawbacks to Franchising

Like any business start up, franchising is not without some disadvantages. Knowing exactly what these are will help you make an informed choice.

One downside to franchising is that in order to trade under a particular brand of franchise you need to pay an initial lump sum as well as an agreed percentage for the period of the contract.

Another drawback is being bound by contractual obligations i.e. set working practices /procedure that need to be adhered to for the period you've signed up to. These working standards are in place to maintain a level of professional excellence. If franchisees under perform or fail to maintain high working practices this can have an impact on the wider franchise company.

But how you like to work, manage tasks or delegate may not be compatible with how the franchisors have set out their model. This is a key reason why franchising doesn't suit everyone.

Franchising is also, without doubt, less adaptable than other business models and is disadvantaged when it comes to responding to changing market conditions at local level.