Advantages and Disadvantages of Franchising

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Drawbacks to the franchisee

Central reservations generally produce between 17 and 26% of reservations

Benefits to the Franchisee

Centralized reservation system

Drawbacks to the Franchise Company

Difficulty in maintaining control of standards

Drawbacks to the franchisee

Franchisees must conform to the franchisor's agreement

Drawbacks to the franchisee

Franchisees must maintain all standards set by the franchisor

Drawbacks to the franchisee

Franchisees must pay high fees both to join and ongoing

Benefits to the Franchisee

Participation in volume discounts for purchasing furnishings, fixtures, and equipment

Drawbacks to the Franchise Company

The need to be very careful in the selection of franchisees

Benefits to the Franchise Company

Up-front fees

Benefits to the Franchisee

A set of plans and specifications from which to build

Benefits to the Franchise Company

Increased market share and recognition

Benefits to the Franchisee

Listing in the franchisors directory

Benefits to the Franchisee

Low fee percentage charged by credit card companies

Benefits to the Franchisee

National advertising


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