Owning a profitable business can do wonders for your financial health. However, the stress involved in market research, identifying unique opportunities and finally getting the business up and running is no small feat. It can take months to do this. And even then, you’re still working with an educated guess at best – nearly 50% of all start from scratch businesses fail after five years (industry Canada 2011). Thankfully, there’s a more proven way to go: buy a franchise.
For thousands of people, buying a franchise in Canada can be a proven way to fast track your success and improve your likelihood of doing well in business, provided that you pick the right franchise. Doing so helps eliminate the potential bottlenecks and challenges you would otherwise encounter if you were to start from the ground floor up.
A good franchise is essentially a proven business system. Proven because the franchisor has been able to help numerous franchisees take the same business model and implement it successfully in other locations and often other regions. So, it is generally assumed that if the franchisee duplicates their process, should be able to produce the similar results that existing franchisees are already experiencing. This is not as easy as it sounds though… You have to thoroughly understand what the business requires in order to drive success (which typically takes many weeks of research), AND you want to ensure that you have the transferable skills to be able to perform those core business activities, coupled with the motivation to do so day in day out!
Steps to Take When Buying a Franchise in Canada
When you’re new in the market and looking to get a franchise business, there are several things that you need to do – heres a brief synopsis; for a more in-depth perspective, please review my nine rules on finding the right franchise: https://canadasfranchiseexperts.com/franchise-buying-advice-9-rules-finding-ideal-franchise-business .
1. Analyze your core skills, interests and capabilities
This is one of the most important steps that often gets overlooked. Do a thorough inventory of what your transferable skills are, what year primary interests are; just as importantly, what you do not like to do are or are not prepared to do on a day in/day out basis. Only after youve crystallize the thorough understanding of what you bring to the table, and what you want the business to do for you personally, are you in a position to start looking for franchise concepts. In essence, your criteria become your filtering mechanism.
2. Find several franchisors to consider,
We recommend that you find two or three concepts to look at so you get a more broad perspective of how various business models work. While certain aspects of one business may really appeal to you, aspects of another business may be better suited to your transferable skills and experience. When you only look at one business, you risk a having an imbalance between emotional and logical connection for your business. If you are too emotionally involved (i.e. you really like the product or service), you might overlook some of the logical aspects that you may not be suited to (what the core roles are that drive success, i.e. cold calling). Looking at multiple businesses gives you the greatest opportunity for finding that ideal match.
3. Consult with Other Franchisees
it is critical that you do your due diligence. Talk to at least 8 to 12 other franchisees and see what they have to say about the franchisor, and understand what their experiences have been like as a franchisee. Look for both positives and negatives. No business model is perfect. What youre seeking here is a thorough understanding of what it takes to drive success in the business so that you can assess to what degree you can and will be able to do what it takes to drive your desired levels of success.
4. Consider the Brand Reputation and Marketing Reach
n any business that you buy, you should be willing to be the “brand evangelist” for your business in your community, regardless of how strong the franchisors brand may be. While branding may be a contributing factor to success, the more important factor will be what the local marketing execution strategies are, and what the processes for responding to them and eventually getting in front of your prospective customers. Some of the best opportunities in Canadian franchising today are often franchise concepts from other jurisdictions where no local brand has been developed, but the business operating systems and processes have been thoroughly refined. If market conditions and demographics are similar to other markets where the company has already proven success, then there is strong likelihood for success in Canada, and early movers can have a significant advantage.
5. Consult with a Franchise Lawyer
A franchise contract is a very specific form of business agreement; it is very different than a typical business agreement. In addition, many jurisdictions in Canada have franchise legislation in place so it becomes critical that you have a franchise lawyer review your franchise agreement. (one whose primary focus is handling franchising affairs). The lawyer will review your contractual agreements to ensure compliance with legislation, and most importantly, explain your rights and obligations as well as the franchisor’s rights and obligations – it is critical that you are comfortable with this prior to signing your franchise agreement.
Gary Prenevost is one of North America’s leading franchise matchmaking experts. Gary truly brings a 360° perspective to helping his clients find and buy the optimum franchise for them. Please visit www.CanadaFranchiseExpert.ca for more information about Gary and his no-cost franchise matchmaking services.
Gary has been a licensor, a master franchisor, a franchise consultant and a franchisee. As a Senior Advisor with iFranchise Group, Gary also works with companies to franchise their businesses; he also helps existing franchise systems improve their systems and processes. Prior to becoming an entrepreneur, Gary was a banker for over seven years, so with over 20 years of experience “on all sides of the franchise table”,
About Gary Prenevost
Gary Prenevost is one of North America’s leading franchise matchmaking experts. He has been a licensor, a master franchisor, a franchise consultant and a franchisee. As a Senior Advisor with iFranchise Group, Gary also works with companies to franchise their businesses; he also helps existing franchise systems improve their systems and processes. Prior to becoming an entrepreneur, Gary was a banker for over seven years, so with over 20 years of experience “on all sides of the franchise table”, Gary truly brings a 360° perspective to helping his clients find and buy the optimum franchise for them. Please visit www.CanadaFranchiseExpert.ca for more information about Gary and his no-cost franchise matchmaking services.