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Frequently Asked Questions - FAQ

What are the main disadvantages of franchising for the franchisor?

Potentially, the main disadvantage for the franchisor resides in the franchisee’s thirst for independence, especially if the project lacks real loyalty incentives. The brand could also suffer from the mistakes and scheming of unsatisfactory franchisees.
The only way to avoid this is to employ an appropriate selection process and training programme and establish an effective system of periodic monitoring.
It is more difficult to impose specific behaviour on franchisees than on branch employees.
Another disadvantage could be the obligation to share profits with franchisees, however the franchisor’s overheads are also reduced and a more compact organisational structure (personnel) can be operated.
Santiago Barbadillo, Consultant

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