Recessions are always a possibility, even when an...
You've likely come across the term "turnkey" in your Canadian franchise search and wondered what it meant. This generally refers to a package that is so complete that everything needed to start your franchise will be done for you. On the surface, this may sound perfect--the franchisor researches locations, signs a lease, builds out the unit, supplies the startup inventory, locates and trains staff, and even orchestrates your opening. All you need to do is "turn the key" to start the business and get yourself off the ground.
However, it's vital that you weigh the pros and cons of this type of franchise because there are potential drawbacks, particularly in terms of price and package features.
What to know
A package that is turnkey could be a great benefit to you because it does save work and aggravation, but it can also be an unnecessary drag on your bottom line if it's overpriced. If the franchise you are considering is advertised as turnkey, here are some ways you can take a closer look at the true value of what's being offered.
• Many franchisors only offer a program that is partially turnkey, so you’ll have to do some things yourself. Be sure you know exactly what the franchisor will help with and what is on your shoulders at the end of the day.
• The price for the labor needed to put it all together should be reasonable. If the price seems high, get a breakdown of all the services provided.
• Ask current franchisees, whom you should speak to doing your research anyway, what they think of the value of the turnkey program.
The wave of the future
As franchising itself becomes more sophisticated, more and more franchisors are offering some turnkey features because they know it can help set a franchisee up for success. However, it's crucial that you know what you are paying for and whether that cost reflects the value of what you are actually receiving. If you find out after the fact that you have to do something you though the franchisor would handle, you're essentially starting your new business off on the wrong foot.
Research a turnkey opportunity the same way you would a franchise without any turnkey features. Since you will be investing a significant amount of your money and time, it's crucial that you understand exactly what you are paying for and what is included.