Q&A

Question: What are the disadvantages of buying a franchise?

Taking on the brand power of another business is certainly an advantage to buying a franchise. But it also means that you are tied to the franchise’s collective identity and your business can suffer as a result of another outlet’s conduct aka unsafe food or a bad review.

You also have little power over managment decisions and there is a possibility of getting into conflict with the franchisor.

The franchise agreement is also difficult to change or terminate, and are usually have very specific terms relating to geographical limits and time frame. Franchise agreements usually favour the franchisor’s interests so it is important to have a franchise lawyer review the contract.