Assertion: Franchising model is very helpful for the start ups.
Reasoning: The startups adopting the franchising model are able to offer an established product and thus able to save time and money involved in developing a new product.
Reasoning: The startups adopting the franchising model are able to offer an established product and thus able to save time and money involved in developing a new product.
Answer & explanation
Correct answer: option 1
One of the most important advantages of buying a franchise is that the entrepreneur does not have to incur all the risks associated with creating a new business. Typically, the areas that entrepreneurs have problems with in starting a new venture are product acceptance, management expertise, meeting capital requirements, knowledge of the market, and operating and structural controls.