Reena opened a franchise of a well-known fast food chain. One of the main reasons she entered into this business was that it already had an accepted…

Reena opened a franchise of a well-known fast food chain. One of the main reasons she entered into this business was that it already had an accepted name. She did not have to spend resources trying to establish the credibility of the business as it already exists. The franchisor also provided managerial assistance to her. She was offered training on all aspects of operating the franchise including accounting, personnel management, marketing and production. The franchisor also offered her years of experience in business and knowledge of the market. However, she started facing challenges soon. The franchisor exerted a high degree of control which limited her ability to experiment with new ideas leaving her feeling over-guided or over-influenced. Moreover, apart from the original franchise fee, Reena had to share a percentage of her revenue as ongoing royalty. Additional costs were also charged for services like advertising and training. These expenses made the business model far more expensive than she had anticipated. Identify and explain three advantages and two disadvantages of the franchise mode of expansion, as discussed above.