; Three People You Need to Talk To Before Investing in a Franchise

Three People You Need to Talk To Before Investing in a Franchise

Any time you are buying something, you need to understand the motivations of the seller. When, for example, a person is selling their house, they're naturally motivated to show it the best light possible. It doesn't mean they are dishonest in all that they tell you, but it does mean you still need that home inspection before you buy.

In a similar vein, when you finally have a short list of prospective Canadian franchises, it's time bring in some outside experts. When you are going to buy a business, you want some neutral professionals on your side to tell you "No" when it applies, just like you would want that home inspector to point out each and every flaw.

Your lender

Whoever you are getting financing from wants to make their money back on the deal, and they will have a hard time with that if your business goes south. The lender's job, before lending the money, is to look for anything that could go wrong and risk the money they gave you, and that's generally going to take the form of business plan flaws, financial plan problems, operational errors and other issues that you would want to know about before you invest.

Your accountant

Accountants, of course, are motivated by their fees, but they are still invested in your best interests because if they don't do a good job for you, you won't come back or refer anyone else to them. In addition, if they do a poor job, they could face legal liability and even professional repercussions.

Have your accountant review all of your financial calculations in detail, and make sure they understand the premise behind each of your calculations. They, like your lender, can identify flaws in your figures and assumptions that you missed in addition to other problems you haven't considered.

Your attorney

Last but certainly not least, you should speak to an attorney who has experience in the franchise sector. Like the accountant, the attorney is motivated by their fees, but they are also professionally bound to their role as a sort of devil's advocate. However, you don't want to get them involved in the process as early as the lender and accountant. They may not know the financial side of your business, and that's not what you are paying them for anyway. Involve the attorney after you have had your lender and accountant run and double-check the numbers. In the end, if the deal is bad financially, it won't matter what the contract says because you are not signing it.

Keep in mind that you do need to find professionals who are going to bring strong advice to the table, and this means finding people with good and relevant experience. Ask about what franchises they have worked with before and whether they can provide you with any references. Don't be afraid to interview more than one professional to see if you want to work with them first.