As part of your franchise search, you may very well be...
Never have so few owed so much to so many!
Sure this is a variation on an old cliché but you can use it as your theme song as you investigate buying a franchise business. To do so successfully you’ll need a team of investigators and advisors. Here are just a few areas.
Who plays which role and which is most important?
Let’s look at these step by step in order of sequence.
Your first requirement is to narrow down your shopping list. With questions such as:
For example, with food:
Especially if you’re unsure of what you are looking for, this will be invaluable.
Here are some questions you should ask:
Take a look at:
The franchisor’s Disclosure Document in Alberta & Ontario will list all current franchisees and also recent past franchisees. Contact them. Arrange to meet with a number of them at a convenient time. Ask them basic questions such as:
A franchise agreement and its associated agreements are serious legal documents. Source out experienced franchise lawyers and call them. Get an overview of their experience.
Get experienced advice on your potential investment. Look at your cost in light of:
You may well be able to borrow some of the investment from a bank. Keep in mind a bank will want to see you investing first as a note of your confidence in the business. This might be on a ratio of one dollar from you - one from a bank loan. The Canadian Small Business Loan program may be helpful but you’ll pay a small premium for its backing. The government backing and the openness of this style of loan can make it worthwhile.
After all the preceding questions and steps, one of the prime factors should be you, your business background and your gut feel.Will you enjoy doing this day after day, year after year? Will you be proud of this business? What are its rewards?