Financial, career, and reputational risks are the primary concerns for franchisees. Financial risk includes losing the money invested in the franchise if the business fails. Career risk comes from the franchise's success or failure impacting the entrepreneur's future business opportunities. Reputational risk means the franchisee's reputation suffers if the franchise fails, making it difficult to start new ventures. Operational costs and conflicts with the franchisor that damage relationships also pose risks.

1. Like all other ventures a franchise has many business and personal risks,such as
financial,career,reputational/market,credit, operational cost and reputational.
Personal risks
Financial risk:The financial risk associated with a franchise is usually restricted to the
franchise's investment; that is, the total amount of money invested in the business is at risk.
Career risk:A franchisee's career as an entrepreneur can be impacted by the success or failure
of their business. If the firm fails, it may be difficult for the franchisee to launch a new
venture, but if the franchise is successful, the franchisee's career as an entrepreneur is likely
to succeed as well.
Reputational/Market risk:The success of the franchise affects the franchisee's reputation; if
the franchise succeeds, the franchisee can create another successful business because of their
positive reputation; if the franchise fails, the franchisee's reputation will suffer and they will
find it difficult to run other businesses.
Credit risk:If your personal assets are linked to the franchise and it fails, you will be
responsible for paying off the debt using your personal assets, which could negatively affect
your personal credit.
Operational risk:The franchisor and franchisee split operational costs.
Reputational:Conflicts between the franchisor and the franchisee have the potential to
damage both parties' relationships as well as the franchisee's reputation.

2. Business risks
Financial risk:Franchisees risk losing a lot of money if the company doesn't succeed after
investing a lot of funds in it. Any money invested in the franchise runs the risk of being lost if
it experiences hardship.
Career risk:The success of the franchise has a direct bearing on the franchisee's career, while
failure might have a negative financial consequence.
Reputational/Market Risk: Challenging encounters with the franchise can damage both the
market standing of the brand and the reputation of the franchisee.
Credit Risk:The financial performance of the franchise may have an influence on lending
availability.
Operational Costs Risk:Franchise profitability depends on effective cost management.
Reputational Risk:The reputation of the franchisee may suffer from unfavourable incidents or
problems with the business.