Which of the following is a disadvantage of franchising?
A) It restricts the franchisor from expanding.
B) It results in the franchisor taking all the financial burden of the franchisees.
C) It results in the delegation of authority to franchisees, and the franchisor may not enjoy complete control.
D) It does not provide enough incentive to the franchisees to run operations effectively because franchisees are not entrepreneurs.
E) It requires the franchisees to create a new business model and plan strategies.

Question

Quizplus · Accepted Answer

Franchising involves delegating authority to franchisees, which means that the franchisor may not have complete control over operations. This can be a disadvantage if the franchisees do not manage the business effectively, as their actions may reflect negatively on the franchisor's brand. However, this disadvantage can be mitigated through careful selection and training of franchisees. A, B, D, and E are not accurate disadvantages of franchising.

Which of the Following Is a Disadvantage of Franchising