A third factor is the number of franchises that have failed, including those bought back by the franchisor. Experience of franchisor. The experience of the franchisor's management team increases the potential for success. Group purchasing power. It is often possible to obtain lower-cost goods and supplies through the franchisor.
Lower costs result from the group purchasing power of all franchises.
To protect this benefit, most franchise agreements restrict the franchisee from purchasing goods and supplies through other sources. Established franchisors can offer national or regional name recognition. This may not be true with a new franchisor. However, a benefit of starting with a new franchisor is the potential to grow as its business and name recognition grow. Efficiency in operation.