IGCSE Edexcel Business Practice Test

Which of the following is NOT an advantage to the franchisor?

Franchisees take some of the risk Fast method of growth Cheaper method of growth Franchisees may get merchandise from elsewhere

Correct Answer:

Franchisees may get merchandise from elsewhere

Explanation:

Franchising helps the franchisor by spreading risk, enabling rapid growth, and allowing cheaper expansion since franchisees invest their own funds and run their stores within a set system. The idea of franchisees buying merchandise from elsewhere is not an advantage because it breaks the brand’s control over product quality, price, and presentation. When franchisees source outside suppliers, the uniformity and bargaining power the franchisor relies on can disappear, hurting the whole network’s consistency and value. So, sourcing from elsewhere undermines the franchisor’s control and is not beneficial, while the other factors describe real benefits of franchising.

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