George Cohon, renowned businessman and founder of...
As the saying goes, "It takes money to make money." This is also true of just about any business venture you decide to embark on, including joining a Canadian franchise. During your research phase, you may end up spending some cash to get where you need to go, including on some of the common pre-investment areas highlighted below.
Business plan creation
A solid business plan is the blueprint for success for any business. Without a plan, you may struggle to stay on top of things and hit your goals. Additionally, if you want to access funding, the lender is going to want to see a comprehensive, accurate and realistic business plan first.
If you've never written a business plan before, this can feel like a bit of a daunting task. There are free online resources, but these are going to be surface guides only. If you find you need more assistance, you may need to buy business plan software or online tool access, or reach out to a financial professional for help.
Franchise legal help
One of the most important documents you'll encounter during your franchise search is the franchise disclosure document, or FDD. This outlines all of your rights and responsibilities as a franchisee and your franchisor's obligations to you, and it also contains important information about the brand. You must fully understand this document before you sign any contract with a franchise. You don't want to find out that something isn't what you thought it was after you've opened your doors.
A franchise legal professional, such as an attorney experienced with the industry, can review the FDD and make sure you have an accurate understanding of its terms. You will also want an attorney to review your franchise agreement before you sign it. This agreement is legally binding, and you need to know exactly what it means before you agree to it. Additionally, an attorney may spot issues or concerns within the FDD or with the agreement that you may have overlooked, and they can also help with other areas of your business, such as your building lease if you are going to rent space for a physical storefront.
While spending some money before even investing in a franchise can seem counterintuitive, it's important that you go into your new business fully informed and with a clear plan. A franchise, like any other business, will likely not make money immediately, so be sure you are financially prepared for all of its financial commitments.