Victor owns a highly successful bakery and coffee shop,Mocha & Muffins.Others have expressed interest in starting nearly identical shops at various locations.Victor decides to sell franchises of Mocha & Muffins.Why is this option a less expensive way to increase the distribution of her treats?

Question

Quizplus · Accepted Answer

By selling franchises, Victor will not have to construct and operate new shops himself, which can be very costly. Instead, the franchisees will bear the costs and responsibilities of opening, maintaining, and running their own Mocha & Muffins locations. This makes franchising a less expensive way to expand the distribution of the treats, as Victor can earn revenue from franchise fees and royalties without having to incur the same level of financial risk and investment as he would if he opened new company-owned stores.

Victor Owns a Highly Successful Bakery and Coffee Shop,Mocha