So you’ve spotted an enticing franchise opportunity – now what? Signing a franchise agreement may be one of the biggest financial decisions you ever make. Before you do, make sure you know these 5 franchising realities!
- The franchise model – the basics. Franchise systems are called “franchise opportunities” for a reason. After all, the franchise system was once called “the greatest business model ever invented.” But why?
The premise of any franchise model is simple enough: somebody comes up with a business idea, implements it, succeeds, then realizes it can be replicated for big profit in different territories. However, the owner doesn’t want to use all of their money to grow the business, so they look for some investors. It’s just that these “investors” are not looking to “make their money work for them” – they want to run the business, too! These “investors” are also known as franchisees, and they help the franchisor grow their brand through a mutually-beneficial arrangement. It’s important to understand this dynamic; if you aren’t comfortable following somebody else’s protocols to grow their brand (even when it puts money in your pocket!), then a franchise opportunity is probably not right for you.
There will be risk involved. Franchisors like to tell their prospects that franchising is virtually risk-free, and that’s just not true. While franchise opportunities minimize risk through streamlined training, ongoing community support, and established processes for startup, marketing, and expansion, every business venture involves putting some of your money at stake. If you have not identified the risks involved in pursuing your particular franchise opportunity, you’re simply not looking hard enough! Consider contacting a franchise consultant to help you properly assess your chosen franchise opportunity – FranNet gives advice for free!
You need to walk the line. There will be rules involved in franchising. Imagine walking into a local Burger King and finding out that the owner decided to discontinue the Whopper at their location. It simply wouldn’t fly. Before you commit to that franchise opportunity, assess your responsiveness to being coached and willingness to follow the franchise rules that preserve the consistency of brand products and services.
- Your finances need to be in check. Unless you know exactly where you stand financially, you should not pursue a franchise opportunity. Conduct a simple net-worth statement before you delve into your franchise research. Add up your assets and liabilities – most franchisors have minimum net worth requirements, so you’ll need to do this at some point, anyway!
- How to search for franchise opportunities. Does your franchise research start and end with a Google search? We like to think that transparency is reality in the Information Age, but it’s not. Any information you find online about your chosen franchise opportunity has likely been put there by the franchisor themselves. It’s always better to look at the Franchise Disclosure Document and talk to current franchisees to get a sense for the brand’s profitability and process. We recommend that you practice due diligence during your research phase and reach out to a non-biased franchise consultant. At FranNet, we provide free consultations and assessments, and have curated countless educational resources for prospective franchise owners. Don’t base your biggest business decision on internet marketing copy you find on your franchisor’s website!
You can get more information about any franchise opportunity by visiting our website at http://www.frannet.ca.
About FranNet Canada
FranNet is a 29-year-old company with roots in the U.S. Its purpose being to nurture every entrepreneur’s dream of business ownership. We actively employ a specific profiling and consultation method. This method is geared to each investor with a specific business model and based on franchise trends typically found in Toronto, Ontario, Vancouver, British Columbia, or Calgary, Alberta. The most lucrative Canadian franchise opportunities are waiting for you. For more details visit – http://frannet.ca/buy-a-franchise/canada-franchise-buying-process/