Disadvantages of the franchise system

For the franchisor

- Risk of loss of uniqueness

Intellectual property, trade secrets - the wider the franchise network, the higher the risk of information leakage.

- The threat of creating a serious competitor.

There is a risk that the unscrupulous franchisee will not immediately extend the license agreement, but will continue its activities, studying the entire internal structure of the franchisor's business.

- Reputational risks

One random mistake of the franchisee can create a negative attitude of consumers towards the brand as a whole.

- Lack of sufficient income