Small Business Essay Example | Topics and Well Written Essays - 500 words

Small Business - Essay Example The major advantages are that a franchisee is able to establish and operate a well established business in a new area where the whole marketing system inputs and guidelines are provided by the franchisor on a continuous basis. The franchisee is able to start business with a relatively small initial investment that has prospects of good return with immediate effects. The recurrent training and proven marketing strategies provided by the franchisor boost the confidence of the franchisee and help him to expand his business significantly. The main limitations are the loss of independence in running the business as one wants and restriction in the operational area comprising mainly of the goods and services that can be sold in specific areas. Other conditions like the restrictions on resale of franchisee rights and the individual advertising efforts are hurdles that restrict further scope for the franchisee. The main advantages of franchisor are that they are able to expand their business and spread them in wider areas of operation in a relatively short time and with reduced capital cost. By facilitating goods and services to the franchisee, the franchisor is relieved of the pressures of day today operation and therefore is better able to focus on his core business and developing network activities and franchisee support programs and strategies. The major aspect is that he is able to control the appearance and operation of the franchisee outlets as per his standards, thereby help maintain the credibility and high standard of his brands. The limitations of the potential franchisor are that it needs to keep updated with the training and strategies for its franchisee to meet the emerging challenges of the advancing technologies. Though the profit margins are considerably reduced but the widening network of franchisee, selected judiciously, help increase the overall profit with considerably less stress. Another major limitation is that expanding in foreign