The advantages of operating a franchise include that the franchise business is formed with a basis of a proven idea supporting it. Moreover it is possible for business to assess the performance and the success of other franchises of the same company before committing one. (Peterson & Dant, 1990)Aside from this, in a franchise the business can use recognized brand names and trademarks. The franchisor also provides support to the franchisee and the financing in case of a franchise is easier to obtain from the bank as well as from investors.
The risk of operating and success is reduced as the risk is shared with the franchisor. (‘Advantages and Challenges of Franchising’, 2006) Moreover the franchise business has access to the market share and customers of the franchisor. Additionally relationships with suppliers are already established in this case. Other benefits are available to the franchise as well. These pertain to the
“franchisers generally providing training to new franchisees. Such training can be extremely valuable for neophyte entrepreneurs. Many franchisers provide constant national or regional advertising (ever had a McDonald’s jingle stuck in your head?). Furthermore, two or more nearby franchises can pool funds and advertise together.” (‘The Advantages of Franchises’, 2008, p2)