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 give up control over the quality of a product or service sold by foreign licensees.
D) Franchisors can eventually become competitors, especially when a licensing agreement includes access to important technology or proprietary business knowledge.

Question

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 give up control over the quality of a product or service sold by foreign licensees. 
D) ​Franchisors can eventually become competitors, especially when a licensing agreement includes access to important technology or proprietary business knowledge.

Quizplus · Accepted Answer

When franchisors sell businesses to franchisees who are located far away, they face a loss of control over those businesses, which can lead to inconsistent brand standards and negative impacts on the franchisor's reputation. The other options present different disadvantages of international business, but not specifically of franchising.

Which of the Following Is a Disadvantage of Franchising