George Cohon, renowned businessman and founder of...
Note: This fictional "Dear Fran" article is based on questions we receive from people interested in buying a Canadian franchise.
I love being around food and people, so would like more information on food franchises. What is the best kind of franchise for me to open? What do you think about the opportunities in food franchises? Are they good?
Let’s peel back the layers on that onion. People are always going to want food, so it’s never going to be a bad idea, but your question is too broad at this point. Here are some of the concerns and options so we can consider how they might work for you.
Buying an established business vs launching a new location
A very important element of the environment is the personality of the brand and how that meshes with your own.
You ask what kind of franchise you should open, but consider that it is also possible to buy one that is already in operation and has a success record. The advantage here is obvious, if you can afford the cost of it and the payments, you at least know you have a turnkey operation that only needs your elbow grease to maintain success.
Or, you can find one that should be doing well, but has been underperforming, you might be able to get it at a very favorable rate and turn it around. The advantage here is that if you are right about the undiscovered potential in the location, your rate of return on investment can be high.
What is it that you like about working with food?
Almost certainly, you like being around food, you love the smells, and enjoy either serving people, or seeing to it that they are served.
Maybe you really like a particular brand, you eat their food all the time, and you like the idea of making it your daily routine. That makes choosing a lot easier. When this is true, you just look up the terms and conditions, research the opportunity, and assuming all is well with that, raise the capital and move forward. We have any number of food brands to recommend on this page, perhaps your personal favourite is there.
What kind of environment do you want to work in?
If you are looking for a home-based business, you might be interested in something that has you being the local distributor for prepared meals. This is an opportunity that would suit a person who enjoys talking and working with the elderly, building relationships and making sure that people are taken care of.
With this business you could choose either to treat it as a self-employment, managing mainly yourself, or build the territory with additional personnel.
Or, you want to work with several employees, you like being able to get to work without having to experience the elements, you enjoy having choice of other foods around you, and you like being able to get your daily routine accomplished easily from where you work.
Maybe what’s most important to you is that it has a storefront location in your neighborhood, where you can walk to work and be part of your community.
Whatever it is, make sure that the environment you buy into is one that you enjoy being in, because you will be there a lot for the life of the contract, typically 5 – 10 years.
Personality of the brand
A very important element of the environment is the personality of the brand and how that meshes with your own. The brand and the style of the business should be a good fit for your personality.
Once you have answered the above questions and have some idea of which businesses interest you, you’ll need to examine the financial aspects of the specific opportunities and your own position.
How much money is available to you to start your business?
How much do you want to make?
What is the buy in of the property that interests you?
What are the fees?
What is the potential payout?
In addition to the upfront costs and the ongoing fees, you need to have enough money to live on a minimal budget for at least one, and ideally two years. That part is something that needs more specific information to advise you on.
This should give you a good starting point to ask more questions and come to the right answer.
If you want more information, feel free to download our free
ebook: Franchising in Canada,
a Safe Alternative