How to Buy a Franchise: Understanding the Basics

In today’s post, we explain some franchise fundamentals for readers looking to buy a franchise.

What is a franchise?

Distilled to its essence, a franchise is a business strategy and structure that follows a proven roadmap to success. When you become a franchisee, you don’t “buy” a franchise, but rather license their brand name, operational systems, and marketing assets to support your venture. So long as you choose the right franchisor, it’s win-win; the franchisor gets paid a lump franchise fee and ongoing royalties, and your business maximizes its chance for success.

That said, when you buy a franchise, you take on certain obligations. You will be expected to follow the rules set by the franchisor, and run your business according to their chosen operating system. Additionally, some franchisees will have to buy products from brand vendors, and keep the layout of their storefront “on-brand.”

What is a franchise system?

Think of a franchise system like a pop-up tent; rather than struggling to set up the metaphorical tent poles, your business deploys in no time at all. A franchise system is a ready-made business model that lays out every step you need to take from pre-opening and startup, to long-term expansion strategy. Most franchise systems will assist you with hiring, training, book-balancing, marketing, and product and service development.

The franchise system is integral to the success of the franchise family. It is designed to maximize profitability for franchisees, who benefit from the full power of a national marketing campaign, streamlined startup process, and proven brand reputation from day-one. At the same time, the system benefits the overall franchise family, ensuring brand consistency and quality assurance with its step-by-step guidelines.

What is a franchise license?

A franchise license is a legal agreement created between the franchisor and franchisee. This document establishes terms including the initial license fee, ongoing royalties, and duration of the agreement, as well as any other rules that the franchisees must abide by.

This document also lays out the license term, which refers to the length of time that the franchisee has to “rent” the system. Terms are typically five years or longer.

Prospective business owners should remember that the franchise license is written by the franchisor, which usually means its terms will lean in their favour. For this reason, it’s never a bad idea to have a franchise adviser review the franchise license, especially because their services are free.

I want to buy a franchise – where do I start?

Franchise advisers help with initial research, planning, and goal setting. Additionally, we offer a number of free webinars and educational resources to supplement your franchise search at

We recommend scheduling a free franchise search and consultation with a franchise adviser. Here’s what you can expect:

  • Step 1: First, we explore your business goals and dreams during our Entrepreneur Profile (Entrepreneur Profile). Profiling prospective franchisees helps us get a feel for which business would work best for you.
  • Step 2: Next, we help you outline a business model that complements your Entrepreneur Profile. Determining which business structures work for you helps us narrow our franchise search and maximize relevant results.
  • Step 3: Now it’s time to find your franchise match! We recommend specific businesses that match your personal and professional goals.
  • Step 4: Once you’ve selected a few interesting franchises, we support your research with valuable resources, guidelines, and sample questions to ask the franchisor.
  • Step 5: You buy a franchise and live your dreams!


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 TorontoOntarioVancouverBritish Columbia, or CalgaryAlberta. The most lucrative Canadian franchise opportunities are waiting for you. For more details visit –

Jan 23, 2017