Three Hidden Costs of A Canadian Franchise
Expenses are always at the top of the concern list for prospective Canadian franchisees. Naturally, the exact cost of a Canadian franchise varies by brand, but there are similar expense categories you'll encounter across just about every franchise. You're probably already familiar with expenses such as the franchise fee and royalties, so take a look at these other less-discussed costs you'll need to plan for.
Attorney consult fees
Legal fees are entirely on you, and although it's optional, you should consult with an attorney who understands franchise law in your province before you sign any agreements with a franchisor. The attorney will review the disclosure and go over it and your franchise agreement to ensure you understand all the terms and that the documents are fair. While you can ask your franchisor questions about the franchise agreement, the company can't provide you with legal advice like your attorney can.
Inventory and supplies
Depending on where you are in your search, you've likely already seen build-out costs, or the expenses associated with constructing your location and building it. Beyond that, however, there are also supplies and inventory. If you have a food franchise, for example, you'll need items beyond food, such as napkins, plates and cutlery. A retail franchise, such as furniture, will need inventory to start out with. Your franchisor should be able to give you a list of what you'll need to open your doors and the estimated cost of all these items so you can factor it all into your financial planning.
Training travel and living expenses
Many franchisors provide training for franchisees and even members of their management team. The training itself may be included in your franchise fee, but the cost of any traveling you have to do and your living expenses during that time may not be. Training could be a few days or a week or more, and it is often done at the franchisor's headquarters, although you may receive additional training at your location later. Find out what you are responsible for when it comes to all the costs associated with your training.
Opening your franchise will be just as expensive as opening a business on your own, but it comes with a proven brand, system and support. By planning as much as you can for all the potential costs associated with your new franchise, you'll be able to best position yourself for success.