How a Franchise Agreement and a Franchise Disclosure Document differ
There are two documents that are of vital importance...
There are so many franchise brands in Canada right now, and if you don't approach your search methodically, you'll likely waste a lot of time on the wrong opportunities. To stay productive and organized while you search for the right franchise brand to join, follow the ABCs of franchise buying.
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"A" is for alignment
Before you spend too much time on your search, you need to set goals that align with what you want the franchise to do for you or what you want from that business. Do you want a business that matches your core values? Do you want a franchise that you can make into a family business? Do you want to own a bigger business with multiple franchise locations?
Once you know what your goals are, you can look to see which franchise businesses align with those goals and work from there.
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"B" is for budget
You must know where you stand financially before you can search for a franchise. Many of these brands have minimum net worth requirements that you will have to meet. Gather all of your financial documentation, including bank statements, asset statements and debt paperwork, so you can determine your net worth and how much money you have available to invest in and support a franchise. Remember that in its early days, your franchise will likely not turn enough profit to support itself or you, so you must consider that as well.
Once you have your financials down, commit to only looking at franchises that are within your budget. This will help you stay efficient in your search.
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"C" is for contact
You can find a lot of information on the internet about franchises, but you will need to double check all of that information. You cannot completely rely on data you found on the web. Reach out to the franchisor directly so you can get information directly from the source.
This does not mean you should disregard all of the information you find online, particularly items that are negative, such as an account from a dissatisfied franchisee. You do, however, always need to consider the sources and how their perspective may skew the information you are getting.
Due diligence during your franchise search is what will help lead you to the right opportunity. Take the time you need to research and find the best fit for your new business.
