Question

A) Suppose you wanted to start your own coffee shop in your home town. What kind of business formation would you choose? Explain the advantages and disadvantages of this choice

F) What do you believe are the advantages of franchising? What are the disadvantages?

Answer 1

A) For setting up a coffee shop in my home, I would indeed go for franchising a famous brand this is because of the fact that I would actually benefit from the like saved expenses like advertisements expenses and building a brand as it would be covered by the franchisor and also the recruitment and training will be covered by them and therefore without must risk as a risk averse person, I could actually move into it on the whole.

F) Advantages of Franchising

1) One of the low cost methods and can reach out people better.

2) Training and Recruitment will be covered by franchisor.

3) No risk of brand building as it is done by franchisor through advertisements and the advertisement expenses are saved.

Disadvantages of Franchising

1) There would be no scope for innovation in your businesses

2) Fees for Franchising

3) No control over the manager.