A disadvantage of the direct ownership system used by early manufacturers in the 1830s like McCormick and Singer was the lack of direct control and control over quality levels.
A right of first denial states that a franchisee must decline continuing a franchise agreement before the franchisor can offer the franchise to someone else.
From the perspective of the franchisor,one of the biggest advantages of offering franchises is the expansion of the business happening much faster than if the franchisor were in business alone.
Franchisors often have several sources of income built into franchise agreements,including franchise fees,operating revenue percentages,and product/supplies revenues.
One way in which franchisors have dealt with the complexity of serving differing customer tastes covering large geographic areas is through company owned franchises.