KBRA releases research examining the potential benefits conferred to entrepreneurs by joining a strong franchise system. Although the franchise model comes with costs and success is not guaranteed, advantages can be wide-ranging and include navigating profound economic turbulence.

Key Takeaways

• Brand value, which often includes broad consumer awareness and positive expectations, is a key component of the value proposition provided to franchisees by large and long-tenured franchised systems.
• In addition to a wide range of technological advantages, franchise systems can often offer franchisees an edge in identifying prospective locations.
• The marketing reach of a strong franchise system far outstrips that of a typical independent operator. For some KBRA-rated WBS issuers, the advertising can range from a microtargeted push notification to a Super Bowl commercial.
• Technology can give franchisees a significant advantage over independent operators, attracting consumers with a strong brand message and a predictable, consistent experience across the franchised system.
• A strong franchise system can help franchisees navigate downturns, leveraging the franchisor’s expertise and process efficiencies. Many KBRA-rated WBS issuers were able to recover quickly from the revenue impacts of the pandemic, dynamically addressing stay-at-home restrictions, personal protective equipment (PPE) availability, financial constraints, and other unexpected challenges.

Click here to view the report.

About KBRA

KBRA is a full-service credit rating agency registered in the U.S., the EU, and the UK, and is designated to provide structured finance ratings in Canada. KBRA’s ratings can be used by investors for regulatory capital purposes in multiple jurisdictions.

Doc ID: 1003567

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