As with advantages, the franchise system also has some additional disadvantages. As already mentioned, the advantages and this amount is often that of Outlook other person. The same point that is an advantage for one person can be a disadvantage for another depending on what he wants out of his business set up. For example, a franchise is a great idea for someone who has no business experience because they offer ongoing training and they give you a system within which you are required to work. You don’t need to change a lot of things or come up with the very different ideas to run a business to make it successful. This syntax can be a disadvantage for people who are independent and want to do things completely their own way. For those people these restrictions, regulations may be too stifling. Anyway, these are some of the potential disadvantages of buying into a franchise system to do business from home.
You work without a great deal of supervision. This could be a disadvantage because even if you start a business from your on your own, there is really not going to be any supervision and you are going to have to be in a place where you drive yourself and motivate yourself and your employees to reach a business school.
You are required to pay an ongoing fee to the franchisor. This may or may not be an advantage depending on the kind of business you’re doing. If you’re doing a lot of business, the marginal royalty that you have to pay to the franchisor may not matter much. However, if your business is marginal, basic fee and royalties can quickly become an anchor that drags a business down.
Ultimately, even though you have a business of your own, the franchisor is the boss. The franchisor lays down the rules and regulations about how you run your franchise business. You have to adhere to these laws otherwise you run the risk of terminating your agreement or be in violation of it. Violating franchise agreement could not only result in a termination but could also result in the nasty possibility of a lawsuit, loss of income etc. Any business is the risk. However it should be mentioned that choosing a successful franchise model, this is considerably reduced as long as you have determined that there is a demand for the franchise’s products and services in your particular area.
In the long run independent businesses tend to be more successful and financially rewarding to people. Because all efforts at a person puts in a business of his own goes directly to benefit the person, self started businesses tend to be more successful in the long run provided the person can make a success of the startup. Of course, there is more effort involved in starting a business from scratch such as doing market research, making business plans, hiring the right people and making right decisions all along.
Having a franchise also limits you in the way you compete with the competition in your area. Because of the restriction by the franchisor, you may not be allowed to counter the promotional tactics by the distributors, retailers and competitors in your area. It is mostly up to the parent company to promote itself and make sure that you are suitably advertised and promoted.
If you have decided that the franchise is the right way to go about setting up your home-based business, you should explore and do all research. If you have identified a particular franchise system, try and talk to the current owners of existing franchise and get a candid opinion from them. Spending time in existing franchise and talking to existing franchise owners is an extremely good idea as it may get you a direct feedback. Disgruntled franchisees may not be very shy about telling you about their bad experiences. However, do not get discouraged by negative feedback since they may be a result of a lot of factors some of which might not have to do anything with the incompetency or bad behavior on the part of the parent company. Buying a franchise is usually more expensive than starting your own business so take your time and give in the due effort to find the right one for yourself.