Franchising: Friend or Foe?

There are several advantages offered by a franchise distribution system. The four main attributes are: 1) rapid access to markets; 2) reduced investment by the franchisor; 3) risk‐sharing between franchisors and franchisees; and, 4) highly motivated owner/operators. Other advantages include: managerial work sharing between franchisor and franchisee, protection from antitrust action, ability to service marginal locations, promotion of independently‐owned business, reduction in economic concentration, and protection against unionization. If the concept to be franchised is new, or rapid entry into the market is needed, franchising can minimize the risks of the venture.