Not Everything is Non-Negotiable in Your Franchise Agreement

Once you sign your franchise agreement with the Canadian brand you've decided on after your research, you will be legally bound to the terms in that agreement. While there are areas of the agreement your franchisor will likely never budge on--if any of those areas are big "no"s for you, it's time to search for another brand--you may be able to engage in some negotiations in certain areas. These are usually small areas of the agreement where you can get yourself better terms, but they won't really have an impact on the main operations of the franchise. Keep in mind that a younger, less established franchise may also be more flexible when it comes to negotiations than a more established brand.

Grand opening assistance

Your grand opening is a significant event as it will be the first contact your potential local customer base has with your store. You may be able to get the franchisor to agree to send personnel for the grand opening to offer training and guidance, and some brands may even be willing to contribute to the cost of marketing and advertising the new location in this phase.

Franchise fee in installments

Some franchisors are reluctant to let you pay your fee in installment payments, while other brands offer financing in-house. Either way, it won't hurt to ask for installment terms if they are not offered to you at the start.

More time to cure operation defaults

A default can mean you will lose your franchise if you don't correct it within the time frame stated in your franchise agreement, so getting an extension here can prevent this from ever happening. Of course, it's important that you operate your location according to the franchisor's standard and therefore corrections should be made immediately, but things do happen.

A waiver on the personal guarantee

Your agreement may include a personal guarantee, and this applies if you form a business entity to own and operate your location. A franchisor may be willing to limit your liability or waive the guarantee if you can show that your formed business entity alone will be able to handle the loss if the franchise fails.

Your franchise agreement sets the stage for your relationship with your franchisor the entire time you are in business, so it's important you fully understand and can live with its terms before you sign. If you are unclear about any part of the agreement, it's wise to consult with a franchise attorney or adviser for help.