What Are the Primary Advantages and Disadvantages to Establishing a Franchise

question 29

Essay

What are the primary advantages and disadvantages to establishing a franchise system (from the franchisor's point of view)?

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Definitions:

Financial Accounting

A branch of accounting that focuses on the process of recording, summarizing, and reporting transactional information related to business operations to external parties.

Period Cost

Costs that are not directly tied to the production process and are expensed in the period in which they are incurred, such as administrative expenses.

Product Cost

The total expense incurred in creating a product, including materials, labor, and overhead costs.

Indirect Cost

Expenses that are not directly attributable to a specific product or service, such as administrative and facility costs.