Which of the following is NOT an advantage to the franchisee?

• A. Less risk - a tried and tested idea
• B. Back-up support is given
• C. Set up costs are predictable
• D. Profit is shared with franchisor

Answer: (D)

This question is about what benefits a franchisee gains from joining a franchise. Franchising can lower risk because the idea has been tested, the brand is established, and training and support are provided. It also often offers predictable setup costs since the franchisor provides a defined package of fees, equipment, and procedures. In contrast, profits being shared with the franchisor is not an advantage for the franchisee; royalties and ongoing fees reduce the portion of earnings the franchisee keeps, making it a disadvantage rather than a benefit.