Domestic firms developing a global entry strategy might consider franchising; however, the disadvantages need to be considered. Which of these is NOT a disadvantage of franchising?
A.
The franchisor has limited ability to ensure that foreign operations follow all the concepts and ideas that made the firm successful domestically.
B.
The franchisor might end up becoming a competitor.
C.
Franchising limits profit potential, since profits will have to be split with the franchisee.
D.
Franchising is the riskiest way to enter a foreign market.
E.
All of these are disadvantages a firm must consider.
Answer: D