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challenge doing franchise and conventional business

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challenge doing franchise and conventional business
Franchising business is based on relationship as the franchisor will licenses its trade name like the brand and its franchising operating methods to the franchisee who agrees to operate according to the terms of a contract. Franchise business provide advantage to the franchisee as it offers reduced uncertainty, well-known trademark product or service, faster opportunity to earn profit , leadership and support. However, with new franchise concepts popping up constantly, not all are destined to succeed, and even franchisors are not always able to overcome the hurdles and challenge that come with building a franchise.
The new franchisee will faced a challenge regarding the initial capital. The cost of creating the franchise system required sufficient capital as the cost of supporting new franchisees usually exceed royalty revenues and franchise fees in the beginning. This is because, the capital need not only for initial investment and franchise fee, but including capital to cover building an infrastructure to support incoming franchisees in sectors including operations, marketing, administrative, and accounting, and to develop a franchise sales program. Other than that, franchisor will face with the probability abuse of any independent by franchisee that could result conflict and adverse consequences on the franchisor and franchisee relationship that lead to dysfunctional to the franchise system as a whole. Is that so, franchising system could have detrimental effects upon the maintenance of standard of performance, consistent of quality, productivity and the maintenance of desire uniform image. As the franchisor provide a proven business format to franchisee, abuse of independent will occur if standard are being compromised such as failing to meet the quality of the product or services or franchisee purchasing inferior product components from non-franchise source or failing to use promotional tool developed by franchisor.
Moreover, in order to ensure high

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