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?