George Cohon, renowned businessman and founder of...
When you're meeting with a prospective Canadian franchisor, it's often recommended that you have a list of questions to ask. Many of these questions are fairly intuitive, such as what the fees are, how the royalty is structured, and what the investment entails. However, there are some other less-common questions that you may not think of but should learn the answers to before you formally sign the agreement.
What are you looking for in a franchisee?
Beyond the ability to invest and devote time to the business, what skills and traits does the franchisor want to see in a prospective franchisee? The answer to this question can shed some light on whether you are well-suited for a particular opportunity. If, for example, you're told the franchisor likes outgoing personalities but you are more introverted, it's possible the brand won't be a good fit. You may also learn you're lacking in some skills needed for your success, or that the franchise isn't quite what you thought it was. Either way, consider the franchisor's answers seriously before you make your final choice.
What makes you different?
Dig deeper into what makes the franchisor's service or product different from its competition. Marketing, of course, plays a part, but it's important that the franchisor tells you exactly what its product differentiators are, along with how it plans to and is currently selling those advantages to customers or clients.
What input do I have in advertising and marketing?
As a franchisee, you may be required to contribute to an ad fund that is meant to fund marketing and advertising at the national, state and/or local levels. Ask what you are expected to bring to this fund, what it does and what, if any, input you have when it comes to how that money is spent. You should also find out whether you are permitted to do local advertising within the franchisor's guidelines or if they handle that area completely. If, for example, you had marketing strategies as part of your business plan but find out you may not be able to execute them, you'll want to be able to factor this in before you make your decision.
Ultimately, take your franchisor's answers to these questions and how those answers are given--open and freely or more guarded--into account as you evaluate the franchise opportunity. With such a significant investment on the line, it will pay to evaluate franchisors from all the possible angles.