Which of the following is an advantage of franchising for the franchisee?

• A. The franchise is a well-known business with an existing customer base, so the risk of business failure is reduced.
• B. Very little autonomy over decisions as the franchiser decides on products, store layout, uniforms etc.
• C. Royalties have to be paid each year, so not all of the profits can be kept.
• D. The franchiser can decide not to renew the franchise.

Answer: (A)

Having an established brand with an existing customer base gives a franchisee a real head start. This built-in recognition means people already know what to expect from the business, trust the name, and are more likely to buy, which lowers the risk of failing compared with starting a new, independent venture. These factors often translate into quicker customer acquisition and steadier revenue, making it the strongest advantage in franchising for the franchisee.

The other ideas highlight downsides rather than benefits: limited autonomy means decisions are driven by the franchiser, royalties cut into profits, and the risk of losing the franchise if the franchiser chooses not to renew.