The Benefits and Disadvantages of Franchise Agreements

The Benefits and Disadvantages of Franchise AgreementsIf you are the owner of a tutoring center and would like to expand your business by hiring some additional staff or looking for more students, you may want to consider opening a franchise. Businesses that use franchising frequently sell at a premium because of the opportunity they offer; however, there are benefits as well as disadvantages to owning a franchise.The obvious benefit is the cost savings. With franchise agreements, a business owner is not investing capital and often will save on advertising and marketing costs. Because there is little inventory to maintain, there is no need to spend money on re-stocking supplies or equipment.Also, franchise agreements allow a business owner to retain control over the location of the tutoring center. By owning a franchise, the franchisor provides all of the operational functions, and sometimes even the ownership of the furniture, to the business owner. This gives them more flexibility in their planning.However, there are some disadvantages to franchise agreements. For example, it can be very difficult to decide on a franchisee if you are unsure of his or her qualifications or experience. In many cases, the franchisor does not have much input into the decision and therefore cannot ensure quality service.A franchisor also may restrict how the business operates. By law, any action taken by the franchisor must be 'reasonable.' This means that a franchisor must be prepared to deal with any disputes that arise between its franchisee and its customers.It can also be difficult to find the perfect candidate to work for a potential franchisee. Some franchisees require the same qualifications as those for an entry-level position at a regular school. Because of the need for a person to complete a specific number of hours of training, it is difficult to find someone who meets all the qualifications necessary to become a teacher without having to pay the fees required by tradi tional schools.If you are looking for a way to expand your tutoring centers and make them more efficient, consider opening a franchise. It is important to carefully consider the pros and cons before making a final decision. It may also be helpful to find a mentor or consultant who is knowledgeable about the industry to provide valuable information to help you determine which choice is right for you.