The advantages a franchisor gains through franchising are related to expansion risk, capital requirements and cost advantages that result from extensive buying power. It is clear from the Subway example that Fred De Luca would not have been able to achieve the size and scope of his business without franchising it. In order to use franchising as an expansion method, the franchisor must have established value and credibility that someone else is willing to buy. 

Quick expansion: 

(a) Franchising for allows an entrepreneur an easy way to start the business the venture and to expand quickly using little capital. 

(b) It helps to reflect on the problems and issues that an entrepreneur faces in trying to manage and grow a new venture. 

Cost advantages: Many franchise businesses produce parts, accessories, packaging and raw materials in large quantities, then in turn sell these to the franchisees. The franchisee are usually required to purchase these items as part of the franchise agreement and they usually benefit from lower prices. One of the biggest cost advantages of franchising a business is the ability to commit larger sums of money to advertising.Each franchisee contributes a percentage of sales (1 to 2 %) to an advertising pool.