Franchise Red Flags ? Why a Particular Franchise in Canada Might Not be a Good Fit for You

There are many great franchise opportunities in Canada. If you’ve already taken the time to do a self-assessment and explore some of the businesses out there, you may even have a good idea of what sort of business you’re looking to invest in. However, even if you find a Canadian franchise in exactly the sector you want, there can still be other signals that a particular franchise simply isn’t the right fit. If you notice any of the following red flags, you may want to give the franchise a pass and keep looking:

They are reluctant to show you the numbers

Any franchise that you are considering investing in should be completely open with their financial data from other franchisees. A newer franchisor might not have a lot of data to share, but if a franchisor has been around for years, you should definitely question it if they are hesitant to reveal the numbers.

The fees don’t make sense

Every franchise charges fees – it is the necessary cost of working within a system that provides a proven business model and support such as training and marketing. But if a Canadian franchisor’s fees or royalties are significantly higher than similar types of franchises, you should ask why. Perhaps, it’s because they offer greater benefits – but then, maybe not.

There are a lot of existing franchises for sale

It’s one thing for a franchisor to be offering many new opportunities in new markets, but it’s quite another thing when there seem to be a lot of existing franchisees jumping ship. If there are too many people trying to get out of a business, it might be a sign that this is one business you don’t want to invest in.

You don’t get a warm and fuzzy feeling from other franchise owners           

Part of your research on a franchise that you’re considering buying should be to speak with other franchise owners. If you find that owners of a particular franchise in Canada just don’t seem to have anything good to say, it could be a sign of trouble.

Word on the street

When you’re considering a particular franchise, it’s a good idea to find out what the brand image is like. Is it a positive one, or are people raising concerns? Has it had bad press in the media lately or been the subject of lawsuits? Or is the brand simply getting a little tired? If the franchise is experiencing any of these things, it could be a struggle to get your business off the ground.

If you’re looking at a franchise with any of these issues, it doesn’t automatically mean that the franchise is bad – but it should signal caution, some extra research and questioning on your part. A franchise consultant from FranNet can help you sort through a lot of franchises that aren’t the right fit and help you narrow in on your ideal choices. Every entrepreneur has their own set of skills and their own set of criteria in what makes a Canadian franchise right for them. The important thing is to know your own criteria so that you can find the perfect fit.

About FranNet Canada

FranNet is a 27-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 –  

Dec 8, 2015