Franchise ownership is a significant financial...
The Canadian franchise industry is massive, with the International Franchise Association reporting that it is the second largest in the world (www.franchise.org/sites/default/files/ek-pdfs/html_page/CanadaFranchising_1.pdf). With great choices comes great responsibility, so you must do all your homework before deciding on a franchise. Here are five things you’ve simply got to do before you make this significant decision.
Talk to current franchisees
Franchisees from the system you are considering can provide a wealth of knowledge. Ask them about everything you can, from their opinions on market conditions to how much support they get from the franchisor. These are the people who are already in the role you are planning to take on, so learn as much as possible from them.
Know who your partners really are
If you decide to go into the franchise business with a partner or two, get to know them well. After all, you are going to be doing business with them, so you want to figure out just how effectively you can all work together. Talk about potential pitfalls and challenges you may face so everyone is on the same page.
Research your target market
This one may seem obvious, but surprisingly, some people end up with just a surface analysis of their target franchise market. Go deeper into your research and compare areas. Look at demographics, large employers, the employment market, homes sales—everything that can possibly affect your business.
Get to the root of those numbers
While owning your own business is rewarding in a lot of ways, it is an investment and you will want to realize a return. Put together revenue projections and an operational budget so you can see the numbers clearly. Speak to your franchise for help when it comes to important areas, such as the cost of goods sold, advertising costs and royalties. A thorough numbers evaluation will help you see when you can break even, how much you will need to get through your first year and how much is necessary to get to profitability.
Check out the support
The level of support you receive from your franchisor can make a big difference in your business. Find out who you will be working with on the support side and what systems are in place to provide your business the help it will need. Do not be afraid to look into the support person, either, as this is someone you will want to feel comfortable with and confident in.
Owning your own Canadian franchise is a huge investment that will change your life. Start out on the right foot by putting in the legwork now.