Editing Franchising (section)

==Rationale and risk shift==
Franchising is one of the few means available to access [[venture capital]] without the need to give up control of the operation of the chain and build a distribution system for servicing it. After the brand and formula are carefully designed and properly executed, franchisors are able to sell franchises and expand rapidly across countries and continents using the capital and resources of their franchisees while reducing their own risk.

There is also risk for the people buying the franchises. However, failure rates are much lower for franchise businesses than independent business startups.<ref name="Martin 1988 954–968">{{Cite journal |last=Martin |first=Robert E. |date=1988 |title=Franchising and Risk Management |url=https://www.jstor.org/stable/1807159 |journal=The American Economic Review |volume=78 |issue=5 |pages=954–968 |jstor=1807159 |issn=0002-8282}}</ref>

Franchisor rules imposed by the franchising authority are becoming increasingly strict. Some franchisors are using minor rule violations to terminate contracts and seize the franchise without any reimbursement.<ref name="Martin 1988 954–968"/>