Major drawbacks or disadvantages of multiple shops/chain stores can be studied as follows:
1. Large Capital Requirement
It requires large amount of capital to operate multiple shops. So, the producers and entrepreneurs with less capital cannot establish and run such stores.
2. Limited Choice
This is another main drawback of chain stores or multiple shops. These shops offer limited line of products to their customers due to the absence of varieties.
3. High Operational Costs
Administrative and supervision costs are very high in this type of stores.
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4. Poor Customer Service
Chain stores do not provide home delivery service, after sale services and credit facility to the customers. There is also no selection facility to the buyers. It negatively effects the image and goodwill of the business.
5. Lack Of Efficient Employees
It is difficult to find efficient and qualified staffs to run multiple shops. Delegation of authority and responsibility is another complex task for the central office.
