How a Franchise Agreement and a Franchise Disclosure Document differ
There are two documents that are of vital importance...
You'll have many chances to ask a Canadian franchisor questions, and their answers will play a pivotal role in your decision whether to join the brand or look for another opportunity. While the answers to some of your questions--such as how many units the brand has--will be cut and dry, others are less concise. With these less straightforward answers, you can gain valuable insight into the franchisor.
.
What sets you apart from your competitors?
A vague answer to this question is not a great sign. You want to know just how this brand is working to gain an edge over its competition as this is crucial to the long-term health and survival of the brand. Your franchisor should be able to tell you what the competition in the market is, who those major players are, and what they are doing to beat those competitors in detail.
.
What is the ongoing support like?
If the idea of receiving initial training only and then being left to your own devices appeals to you as a business owner, the answer to this question is moot. However, if you're concerned about having support on an ongoing basis, find out what the franchisor offers and how that compares to similar brands. Which support staff members will you be able to reach out to a daily basis? Is there ongoing training available? If you need on-site help, can you get that from the franchisor?
Whatever the level of support the franchisor offers, you must be comfortable with it before you decide to join the brand. You don't want to find out after you've opened your business that there is no support available when you need it.
.
What can I make?
No franchisor can predict your future success as a franchisee. However, they should have a realistic idea about your income potential based on what a franchisee typically earns in the system. Avoid any franchisor who tries to promise or guarantee any sort of income or profit. Keep in mind that a franchisor may offer you gross sales figures, but these figures don't necessarily account for operating costs or rent expenses.
When you're asking the franchisor questions, also consider how open and honest they appear to be with their answers. This will tell you whether you're dealing with a professional franchisor who is upfront with its future and current franchisees or one that may be trying to hide something from you.
