Corporate Information

UNIVERSITY OF LIBERAL ARTS BANGLADESH

ASSIGNMENT

SUBMITTED TO:

Moinak Kanungo

SUBMITTED BY:

Anowar Hossen

ID: 11225578

Course Title: International Business

DATE OF SUBMISSION: 09-04-2014

Advantages and Disadvantages of franchising

Advantage:

As the business is established and financed by the franchisor, the franchisee avoids the risk of setting up their own business and financial risk. The franchisee doesn’t need to develop the product or do expensive market research because the franchisor does the regular market research. The franchisee has an opportunity to run a proven business concept with a successful operational track record. They get a continuous support from a qualified team of professional consultants on everything. The franchisee doesn’t need to involve establishing a brand name because the brand will already know and trusted by the market. The franchisee can take advantage of the business relationship which already established by the franchisor such as relationship with supplier and advertiser etc. The franchisee gets benefit from national marketing and national market research that predict consumer attitudes and perception. The franchisee also gets benefit of investment in sponsorship by the franchisor which builds the brand image.

Disadvantage:

The franchisee is not completely independent they are require to operate their businesses according to the procedures and restrictions which are set by the franchisor. As the franchisee need training and skill development programmes which is essential for them but they have to fund for it themselves. They have to follow the franchisor’s operating systems, standards, policies that they can’t change. The profit or return from any outlet will vary depending on a wide range of internal and external variables. The payment of loyalty fees to the franchisor reduces the profit margin. The franchisee has a...