Pre-COVID, food franchises looked like a very...
As part of your franchise search, you may very well be thinking about joining a newer brand. Being among the first to invest in a newer franchise does have significant benefits if the brand does well, namely strong profits with a lower start-up cost. Of course, there are risks involved in investing in a new brand because there are so many unknowns. Before you decide to join a newer Canadian franchise, here's what you must keep in mind.
Is the brand actually new?
Many people opt to go with a franchise because there are brands that are already established, with proven track records of success and support. If that's the main draw for you, going with an emerging brand may not be the best move. However, before you decide against a new brand, look into just how new it is. Perhaps this franchisor has had successful company-owned stores for a number of years and has just decided to enter franchising. Maybe key personnel in the brand's headquarters are seasoned franchise veterans; this doesn't provide proof of concept, but it can ease some concerns you may have about operations.
Are the financials sound?
The financial state of any franchise brand is a crucial part of your research. You want to join a financially strong and responsible brand; otherwise, support and other areas of your operations could struggle. For a newer brand, look into how the franchisor is using the franchise fees and how well other early franchisees are doing. Ideally, you want to see early franchisees doing well and that the brand is reinvesting franchise fees back into the system.
What is the support like?
The level of support you receive from a franchisor is another area you need to research for any brand, and this is very important with emerging ones. Although the brand is new, you don't want to be its test run candidate. The franchisor should have training materials, guidelines and support documents ready for you to review. Looking at these materials may also allow you to spot any strengths and weaknesses within them.
Who is steering the ship?
Look at the leaders in the brand to find any weak spots. While the type of leadership the brand needs will depend on its industry and goals, it's wise to know beforehand if there are any experience gaps you may be called upon to fill in.
As long as you are comfortable with the risk, a newer franchise could be just the right system for you to join. Perform a full assessment on any newer brand you may want to invest in before you make a commitment.