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Buying into a franchise in Canada makes sense because you're getting brand recognition, a support system and a proven way of doing things. However, as a prospective franchisee, you may be concerned about the level of control you will have over your location. While this varies by brand, there are some general things you can expect to control yourself and other areas that will be governed by the franchisor.
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What your franchisor controls
As a franchisee, you will be bound to follow the franchise agreement that you sign. Usually, under this agreement, your franchisor will control the areas below.
- Branding: Branding is a broad topic, but it generally covers what a customer sees, including products, services, logos and colours. It is consistency that will build customer trust, so this is something a franchisor guards at all times.
- Advertising: Like branding, advertising needs to be consistent across the board. You may be able to promote your location locally, however, subject to the franchisor's rules.
- Systems: Part of a franchisor's success is their tested, tweaked and proven operational systems. You will be expected to follow these as a franchisee.
- Franchisee selection: Ultimately, it is the franchisor who decides which individuals are a right fit as franchisees with the brand.
- Fees: Franchise fees are something you should know about in advance, and they are set by the franchisor. This includes the initial fee and other fees you may pay going forward.
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What you control as the franchisee
Although you will play by the rules set by the franchisor, you do have many responsibilities to manage, including the ones outlined below.
- Hiring and employee management: You will choose the employees for your location. You will also deal with payroll and labour regulation compliance.
- Sales and revenue: A franchisor hands you tools for success, but it is up to you to use them once you open your doors. You will have to build a customer base and, ultimately, your revenue streams.
- Finance and accounting: You may be able to use built-in accounting software provided by your franchisor, but you still must manage it and keep it up to date.
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The franchisor will control areas of your franchise, but in the end, it is still your business. How you handle your location is largely what will determine how successful you will be. Be sure to do your due diligence and research as much as you can before you decide to join a particular brand.
