Which of the following is a disadvantage of franchising?
A) Franchisors face tariff and nontariff barriers when trying to enter a market.
B) Franchisors face a loss of control when they sell businesses to franchisees who are thousands of miles away.
C) Franchisors face power struggles and a lack of leadership when trying to adapt the franchisee's management practices.
D) Franchisors can eventually become competitors, especially when a licensing agreement includes access to important technology or proprietary business knowledge.

Question

Quizplus · Accepted Answer

Franchisors may face a loss of control when they sell businesses to franchisees who are located far away, as they may not be able to directly monitor and ensure that the franchisees are adhering to the franchise system's guidelines and standards. This can result in inconsistencies in the quality of the products or services offered, which can harm the franchisor's reputation.

Which of the Following Is a Disadvantage of Franchising