Limitations of buying a franchise

There are many things a franchise controls in order to maintain uniformity for all their franchisees across an area.  Without uniformity, a franchise loses its power.  However, without the ability to make crucial decisions that directly affect your business, you as a business owner, lose a certain sense of ownership.  Buying a franchise is a serious decision that you should think carefully about.  Knowing some of the areas where restrictions could be placed on your decision making authority will help you make an informed decision. Here are a few examples of areas that may controlled by the Franchisor.

Approval of the franchise location

The Franchisor has a few reasons for choosing the location of your franchise outlet.  First, it is in their best interest for your franchise outlet to be successful, so they choose the location that seems best for business to them.  Another factor that may force a franchisor to insist on choosing the location of your franchise is the running of other franchisees in the area.  To avoid competition between franchisees, a Franchisor will carefully map out locations that don’t interfere too closely with the running of another franchisees business.  This means that even if there is a chance that you would be more successful somewhere else, the Franchisor not you, has the final say.

Restrictions of what goods and services you can sell and/or offer

Out of all the restrictions placed on a franchise, this one is perhaps the most crippling in terms of taking away ownership from the franchise owner.  The limiting of goods and services a franchise can buy and the controlling of where a franchise can order its stock from, are serious decisions that many small business owners would proudly refuse to give up.  If you want to start a small business, think carefully about these restrictions before you choose to buy a franchise.