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Advantages And Disadvantages Of Debt Financing Strategy

1464 Words6 Pages

1. Executive Summary This report provide an analysis and recommendation of three financial strategies which are debt financing, franchise and crowdfunding as the whole picture of business. Beginning with one tools in debt financing called commercial bank that lender borrow money and need to pay back with interest in future. The main benefit of this methods is owner can control the whole business but it also has high risk in financial, if the business is not going well but company still need to cover all expenses. Next franchise is agreement which is made between chain company and property owner for allowing to use trademark, materials and support from brand chain. With the high reputation of brand and know-how of doing business, this will help …show more content…

Firstly the franchisee business is just part of control systems because many important decision will be made by head quarter and need to follow rules and regulation from franchisor (Franchise : Advantages and Disadvantages of franchising, n.d.). Next franchising have higher cost in term of fee and also have the risk of aggression from other franchisee avenue, restricting in resourcing that might increase cost and also exposure to reinvestment in franchised business (Rushmore, 2002).Thirdly, franchising might be inflexible changing over a longer period of time in new technology, environment, competitive and customer behaviour due to the long- term contracts and agreement. That will difficult for franchisee to make rapidly change in marketing strategy, operation, brand image and product that need to follow franchises standard program. Fourthly, sensitive information from public disclosure will be weak point of franchising. Executive information can be available to competitors or the others in system which is located nearby have poor performance may be effect to franchise brand image. Negative word of mouth from another franchisees can affect business in the same brand (Franchise : Advantages and Disadvantages of franchising, n.d.). Lastly difficulty with owner, Brand chain has to deal with many property owner and companies so it quite difficult that the objective of brand chain will always satisfy with inspiration and characteristic of all franchisee (Rushmore,

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