Established Franchisor versus New Franchisor

Established Franchisor

  • Established Franchisor

  • Name Recognition

  • More regional and national advertising

  • Experienced management

  • Better chance of competing with competitors in a price or advertising war

  • More refined training and support

  • Better purchasing power with established price discounts

  • More likely to have franchise financing available

  • More established and efficient working prototype or company-owned stores

  • Improved assistance from existing qualified franchise owners through advisor councils

New Franchisor

  • Less desirable choices of location for new franchisees. The best choices are frequently reserved for veteran owners

  • Less locations to choose for all franchises

  • Less opportunity to multi-unit ownership

  • Higher franchise fee and royalties

  • Higher original investment

  • Lack of personal attention from key personnel of the franchise corporation

  • Less opportunity for growth and profit potential

  • Higher chances that there is a larger markup on franchisor furnished items - leases, fixtures, inventory, supplies, products, or services

  • Less enthusiasm by the consumer for products or services that may be considered "old hat"

  • Tougher requirements for applicants?