George Cohon, renowned businessman and founder of...
Negotiation is a big part of the Canadian franchise purchase process. If you're successful at it, you will probably start out your new business with better terms and more benefits than someone who is not as skilled. Even if you've never negotiated anything in your life before, here are five tips to help ensure your franchise negotiation process goes smoothly and in your favor.
Have some confidence
You don't need to be brazen or overly confident to make a good deal with a franchiser. Research and prepare yourself so you're ready and able to ask for mutually beneficial terms, handle objections and recognize issues that will resonate with your franchiser. The key here is to not just have confidence in all of those areas, but also to back up that confidence with solid information gleaned from your research.
Assume everything is negotiable
A hallmark of an experienced negotiator is believing that nothing is off the table. While you still need to adhere to table rules to keep talks on track and sidestep confusion and chaos, you can modify those rules if you're providing viable and ethical alternatives that benefit you and the franchiser.
Ask for what you want
Naturally, no one wants to be rejected, but you have to ask for what you want when you're negotiating with a franchiser, even if you feel a little unsure doing so. Being told "no" in business usually isn't personal; it just means you didn't present a viable argument and need to re-think your approach.
Get everything in writing
All your work at the table could be for nothing if you don't get the final franchise agreement you negotiated in writing. This spells out exactly what you are getting, protects your interests and those of the franchise, and removes any ambiguity about the deal.
Read before you sign
No matter how large the agreement is, read all of it before you sign. With life being as fast-paced as it is these days, wanting to skip over reading a large legal document is understandable, but it can cause big problems for you later. Even a written agreement can have hazy or vague terms, so it's important you read it carefully and understand exactly what you are agreeing to. If there changes need to be made, re-read the entire agreement again after those alterations are done and before you sign.
Negotiating your franchise deal is an important aspect of the franchise process as it is the terms of that agreement that will spell out your rights, responsibilities and business life as a franchisee. Come to the table prepared, ready and willing to get what you want.