Advantages & Disadvantages of Franchising

Whether you&#;re a successful entrepreneur considering franchising your business or a go-getter thinking about buying a franchise, franchising can be a great option for building and growing a business.

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As one of the most successful business models in the United States, franchising is both a legal and business framework that&#;s focused on growth, expansion, unit-level economics, and opportunity. Like any important business decision, though, franchising can have advantages and disadvantages depending on your individual goals. Franchising isn&#;t for everyone, and it&#;s important to understand its benefits and risks before jumping in.

In this article and video (above), you&#;ll learn about the advantages and disadvantages of franchising so you can make the best decision for yourself and your business.

The Advantages and Disadvantages of Franchising Depends on Whether You&#;re a Franchisor or Franchisee

Understanding the difference between franchisors and franchisees is important for evaluating and determining the advantages and disadvantages of franchising.

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A franchisor is someone looking to scale and grow a business by selling a franchise. A good example of a franchisor is the corporate team behind major brands like McDonald&#;s and Dunkin&#; Donuts. As a franchisor, when you franchise your business, you&#;ll be the one granting others the rights and license to open their own locations using your established brand, adhering to your operations systems, and relying on your support to run their franchise location.

A franchisee is a person buying a franchise. As a franchisee, you&#;re seeking new business opportunities and looking to join an established brand that ideally has a great track record, team, and plan for success. As a franchisee, when you buy a franchise, you&#;ll be investing your capital, time, and managerial efforts in developing and opening a new franchised location.

The advantages and disadvantages of franchising depend on who you are, your goals, and whether you are a franchisor or franchisee. Below, we provide a deep dive into the advantages and disadvantages of franchising.

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