Some of the key disadvantages of this mode of expansion are  Right and the only way of doing things: Franchisees are required to operate their businesses according to the procedures and set forth by the franchisor in the franchisee agreement. Entering into a franchise contract limits the degree of freedom for the franchise. The franchisee is not completely independent. It shows that, one gets an over-guided and overinfluenced degree of control exerted by the franchisor. 

This restrictions results in losing the freedom to innovate to some extent.

1. Continuing cost implication: Excess of the original franchise fee and royalties, a percentage of revenue gets shared perpetually with the franchisor. The franchisor may also charge additional amounts towards sharing the cost for services provided such as advertising and training. 

2. Risk of franchisor getting bought: When the franchisor either fails or gets bought out by another company, the franchisee faces serious problems and difficulties. 

3. Inability to provide services: 

(a) Anytime if there is a problem and inability of the franchisor to provide services advertising and location. 

(b) When promises made in the franchise agreement are not kept, the franchisee may be left without any support in important areas. For example, Curtis Bean bought a dozen franchises in Checkers of America Inc., a firm that provides auto inspection services. After losing Rs 200,000, Bean and other franchisees filed a lawsuit claiming that the franchisor had misrepresented advertising costs and had made false claims including that no experience was necessary to own a franchise.