SME Toolkit UAE
Khalifa Fund
Home  > An overview of franchising, and its pros and cons
 Share  Print Version  Email

Other Translations

An overview of franchising, and its pros and cons

Provided by, Content Partner for SME Toolkit UAE


“Franchising” is a form of business where the Franchisor, who owns a trademark, good and/or service, authorizes the Franchisee to invest, market and/or distribute this trademark, good and/or service, for a specific period of time, in exchange for a specified payment structure.

So how can you determine whether franchising is right for you or not?


Have a thorough grasp of the benefits of franchising: 1) using a readily available, reputable, and reliable trademark, good, and/or service, 2) adopting a proven operating system, 3) abiding by defined quality standards, while enjoying a certain level of independence, 4) gaining from the economies of scales, customer and market awareness, 5) providing extensive trainings to help the Franchisee work on the business; not in it, and, 6) providing field support specialists to help keep the Franchisee on track.


Be aware of the drawbacks of franchising as well: 1) relying on the Franchisor, 2) placing a number of burdensome operational restrictions on the Franchisee; including limitations on products, pricing, employee performance & policies, territory, marketing, etc., 3) becoming negatively affected by the Franchisor’s reputation or un-sustainability, and, 4) incurring  additional unforeseen fees.


Ensure nurturing the following personality traits: resilience, innovation, consistency, ethics, optimism, hard work, respect, openness to new ideas, entrepreneurial thinking, reliability, leadership, management, delegation, wisdom, presence of mind & speed of learning, effective communication, risk-taking, flexibility, patience, and persistence.


Understand the basic elements of a franchise agreement: business operating system, brand exclusivity & intellectual property, territories, premises, equipment, & supplies, training & operational support, the initial duration of the agreement & renewal options, fees & payments, Franchisor & Franchisee legal obligations, and dispute resolution & termination terms.


Franchising is a strategic alliance amongst groups of people, who have specific relationships and responsibilities, with a joint goal to dominate markets!

 Share  Print Version  Email
Ratings (0)
If you are a human, do not fill in this field.
Click stars to rate.