Dream about owning a franchise? Before you sign on the dotted line, make sure you follow these 7 steps.
- Look inside yourself. Do you know what you want to achieve by owning a franchise? Your instinct might be to say “money,” but that’s a given. Think a little harder and decide what kind of hours you want to work, what sort of work day would be pleasant and sustainable for you, how much investment capital you have on hand, and where you’d like to settle in for the next few years. Owning a franchise means a lot of different things in this day and age; you could end up working all day and night to manage a business you open down the street, or invest in a remote franchise to run on autopilot. Once you’ve completed this mental checklist, you’ll have a much better idea of what franchise opportunity is right for you.
- Get your financing in order. Franchising expenses are a little different than those you’d expect owning an independent business. Though the initial start-up cost varies from brand to brand, you may find yourself spending a little more upfront to cover the franchise fees, royalties, and training packages. These investments quickly pay for themselves, but you’ll still need to have enough money to get over the hurdle. Fortunately, a number of financing options are available to you, including traditional bank loans, independent lenders, franchise funding specialists, and of course the contributions of friends and family. Whatever your course of action, make sure you think it through before you sign the dotted line!
- Find the industry that suits your interests. Swear off working in food after spending one too many high school summers flipping burgers? Then why would you ever consider investing in a fast food restaurant franchise? When choosing which industry to get involved with, you need to be sure that you balance profitability with passion. It doesn’t matter how much money you make – if your chosen industry is duller than a hockey puck, you’re not going to enjoy this new career. On the other hand, pursuing pure passion with no profit is more of a hobby than a career. At this stage, don’t worry about selecting specific companies; identify the different industries out there and find out which ones can make you money while still falling within the criteria you laid out in step 1. It may also be helpful to look for recession-resistant segments like damage restoration, fast food, senior care, and hair cutting.
- Start to pinpoint individual franchises. Once you’ve narrowed down your list, it’s time to start choosing prospective franchisors who have opportunities available in your desired area. Refer back to the criteria you laid out in Step 1 and choose a handful of franchise brands to explore in greater detail.
- Request consultations and preliminary information. Franchising is all about using proven systems, so it shouldn’t be a big surprise to learn that most franchises have protocols in place whenever somebody contacts them with an interest in owning a franchise. Most brands will offer you a free consultation at the very least, though full webinars and preliminary information packets are quite common.
- Study the Franchise Disclosure Document. The FDD contains loads of valuable information about your chosen franchise, from the history of the executives to record of any litigation that the brand has been exposed to. Most FDDs will also contain a copy of the franchise contract for you to review, so take advantage of this opportunity to see what’s in store. Look closely at renewal information and royalty fees.
- Contact existing members of the franchise family. The best way to get an idea of what to expect is to speak with people who have already signed on. You can contact franchisees by attending franchising events, or by simply walking into their location during store hours.
You can learn more about pre-purchase preparation for free 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/