Franchisers typically limit how franchisees conduct business, and these controls may restrict your ability to exercise your own judgment. The following are examples.
- Site approval
Many franchisers pre- approve sites for stores. This may increase the likelihood that your store will attract customers. The franchiser, however, may not approve the site you want.
- One design
Franchisers may impose design or appearance standards to ensure customers receive the same quality of goods and services in each store. Some franchisers require periodic renovations or seasonal design changes. Complying may increase your costs.
- Brand consistency
Franchisers may restrict the goods and services offered for sale. As a restaurant franchisee, for example, you may not be able to add popular items to your menu or delete items that are unpopular.
- My way or the highway
Franchisers may require you to be open during certain hours, use approved signs, employee uniforms and advertisements and abide by certain accounting or bookkeeping procedures. You also could be required to buy supplies only from an approved supplier, even if you can buy similar goods elsewhere at a lower cost.
- Sales area
Franchisers may limit your business to a specific territory. While that may ensure that other franchisees will not compete with you for the same customers, they could impede your ability to open additional stores or move to a more profitable location.
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