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The parent company would receive a portion of gross revenues from the franchise. In addition, if a breach of contract occurs, the aggrieved party can terminate the contract.
The main disadvantage from franchising is the differences between the internal control systems of the franchise and the company-owned restaurant. With the company-owned restaurant, central operations pays for all operational expenses incurred, which is an advantage compared to a franchised restaurant, which requires the franchisee to individually pay for all operational expenses. The franchisee may not possess the long-term money required to sustain the business, and the restaurant may shut down...
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