There has been a lot of ink spilled freshly approximate the plight of the small businessman in the recession. In specified, there has been a great sell of consultation as to whether franchising as a commerce model has done relatively superior or relatively sicker than non-franchised businesses. There is no definitive answer. If the react is that franchises have done relatively sicker why might that be the case? There are myriad reacts – from surplus liquidity in the funds markets to the plain observation that franchising did so well across the past pair decades that it was merely natural that it would experience a temporary set-back.
Another possible purpose, and the subject of this essay, may be that via its very nature franchising has a greater underlying threat profile due to the observation that franchising necessarily means the transmission and transference of import mysteries and confidential. Consequently, the more democratic a franchise becomes the more difficult it is to perpetuate its import mysteries and confidential information. This, in turn, impacts the lengthy term financial medical of the franchise. A franchisor hence produces a bet that it can parlay its franchise system into a profitable venture without losing the quality it already has staked in its import secrets.