How a Franchise Agreement and a Franchise Disclosure Document differ
There are two documents that are of vital importance...
"How much money can I make?" and "Where are the rules of the system?" are often the dominant topics in questions a prospective franchisee asks a Canada franchisor. While these are all necessary and perfectly understandable areas of inquiry, there are some deeper questions you can ask to get more clarity on whether this is the brand you should invest your time and money into.
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What's the mission?
A successful company will be very clear on what its foundation is and what the core values behind the decision-making are. Take a look under the hood of the company's mission to ensure that the mission is clearly defined and is one that you can get behind personally.
Find out more about the core values and whether the company actually does things to further and live up to those stated values. Even if the values resonate with your own completely, it won't mean much if they don't exist within the company outside of being printed on paper to be handed out to prospective franchisees.
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What's the support like?
Hearing that support is in place is good, but that is where many prospective franchisees stop when they should be asking for more information. Ask how often you will see the brand's field support rep, how you can share your ideas and input, what methods and systems the company has in place to keep everyone on the same page, and what tools are provided to franchisees.
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What's the tech like?
Technology is a significant part of small business today. Ask the franchisor what type of tech is provided and whether it is easy to use. Follow this up by speaking to current franchisees about the tech they're using right now, how well it achieves its goals and how easy it is to use. If what you hear from the franchisees paints a vastly different picture from what the franchisor told you, that's a pretty big red flag.
Due diligence in a franchise search goes beyond the numbers; it is about making sure you are joining the right system for you at the right time. While asking a bunch of questions all the time and then mulling over, researching and considering the answers can seem tiring after a while, it's necessary to ensure you are making sound, fully-informed choice about your investment and your future.
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