he reading and the lecture are about the advantages and disadvantages of buying a business franchise. The author of the reading believes than buying a franchise can be quite advantageous for people who are interested in owning a business. The professor casts doubt on this claim. She believes that a recent study calls this idea into question.
First of all, the author claims that first-time business owners often struggle to gain reliable access to the goods and services needed to run a business. It is noted that buying a franchise, however, eliminates this problem because the franchising company specifies which suppliers must to be used. The professor challenges the validity of this assertion. She notes that the approved suppliers tend to overcharge. She elaborates on this by noting that even if there are cheaper goods available, the franchise owner is forbidden from purchasing them.
Secondly, the author points out that owning a franchise can result in more affordable advertising and promotion. This is because buying a franchise means joining a well-established brand with a sophisticated marketing program already in place. The professor, in contrast, points out that franchise owners are typically required to pay an amount equal to up to six percent of their total sales to the parent company for advertising services. She contends that the sort of advertising purchased by the franchise company results in less overall benefit to the franchise owners than what they would get if they paid to advertise their business directly.
Finally, the author observes that a franchise offers increased security. The article observes that many independent businesses fail during their first few years of operation, and that this can sometimes be avoided by starting a franchise business. The professor casts doubt on this assertion. She points out that buying a franchise is not the least-risky option for people who want to start a business. She points out that it is even less risky to purchase an already existing business from an independent operator.
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