Franchise Start-Ups Offer Benefits But Also Pitfalls


The word franchising conjures up a myriad of sometimes conflicting images. To the average consumer, a franchise may mean a sizzling burger on a sesame seed bun or a cardboard bucket of crispy fried chicken. However, mention the term to a pro football scout, and he’ll probably think you mean a “franchise” player who can take a team from the cellar to the Super Bowl. A politician might think of the right to vote in a public election; an attorney, a lengthy contract; and an accountant, a royalty obligation. However, to a government regulator, franchising might be a red flag for investor fraud.

“From a cultural perspective, the franchise phenomenon is both a driving force and a reflection of public tastes in food, fashion, and personal services,” according to Dennis Foster, author of Franchising: The Inside Story. “In some way or another, franchising has managed to make its way into almost every corner of the earth. From Bangor, Maine to Bangkok, Thailand, franchising has captured the public imagination and, in doing so, recruited to its ranks hundreds of thousands of believing entrepreneurs.” Read more.

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