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Franchise FYI Blog

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Q & A with Frank Zaid: Franchise disclosure and rescission

Posted Friday, May 18, 2012 in Franchise Info

By Frank Zaid

All Canadian franchise legislation is founded on two major principles. The first principle involves the requirement for a franchisor to provide a disclosure document—which outlines in considerable detail the franchise being offered—to the prospective franchisee, unless an exemption is available. The disclosure document must be delivered at least 14 days before any agreement is signed, subject to certain provincial exceptions, or any consideration is paid.

The franchisee then has a statutory right to rescind the agreement within two years, in the case of no disclosure, or 60 days, in the case of deficient disclosure, after the date he/she entered the franchise agreement. If the agreement is indeed rescinded, the franchisor is required to (a) refund any money received from or on behalf of the franchisee to him/her, other than money for inventory, supplies or equipment, (b) purchase any inventory, supplies and equipment at a price equal to the purchase price paid by the franchisee and (c) compensate the franchisee for any losses incurred in acquiring, setting up and operating the franchise, less the amounts paid for the inventory, supplies and equipment.

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Tags: alternative dispute resolution, arbitration, disclosure document, Frank Zaid, mediation, rescission

You’ve Got What It Takes: Greg Brown’s franchise journey

Posted Thursday, May 17, 2012 in Home Services

By Peter Saunders

Photo courtesy Granite Transformations

Greg was born in Swift Current, Sask., and grew up in Medicine Hat, Alta. After he graduated from high school, he followed his uncles into land surveying work for the oil and gas industry.

In 1989, during a particularly cold spell that prevented field work, Greg moved to Calgary, where his girlfriend lived. He became involved in municipal land surveying for construction, but since it did not pay as well, he returned to the oil and gas industry in 1990.

Greg worked for McElhanney Land Surveys for 14 years. At first, this meant a lot of time on the road, but over the years the work became steadier and more convenient.

In 2004, Edmonton-based Precision Geomatics presented an opportunity for Greg to become a partner and open a Calgary location, with responsibility as vice-president (VP) to grow the business in the new territory.

The Calgary office grew from zero to 50 employees over six years, with annual revenue reaching nearly $10 million. Greg had issues with a partner, however, and decided to leave in 2010. “I didn’t know what to do next!” he says.

Greg bought his first Granite Transformations franchise and opened in September 2010. “It all came together nicely,” he says. “I had staff already in place, including some employees from my previous business, along with my wife Brenda, who has a background in accounting.”

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Tags: building services, Granite Transformations, Greg Brown, Home Services, Peter Saunders, You've Got What It Takes

Converting an Independent Business into a Franchise: A case in point

Posted Wednesday, May 16, 2012 in Home Services

By Bob Fraser

In 2003, I started a small business called Closet Concepts in Niagara, Ont., supplying and installing wire shelving closet systems to new homebuilders and eventually the retail market. Initially, I operated out of my garage and was the sole employee. Within a year, I began to hire employees and expand my business offerings with more products.

By the end of 2009, I was servicing 15 builders and catering to a fast-growing base of retail customers. It was rewarding to see something I started from scratch grow into a business with a strong reputation in my local market.

In early 2010, however, I started to grow tired of builders dictating my revenue. The invoice payments were always on their terms and my cash flow became precarious. I was at a loss as to how to grow the retail portion of the business.

In spite of strong sales, the guesswork began to pile up. I had so many questions. Am I doing this right? Am I advertising enough? How much can I discount to beat out the competition and still make a profit? Are customers going to stop buying my products? What’s next?

At that point, I received a phone call from Jerry Egner, president of Closets by Design, a franchise system with more than 30 units. The company designs, builds and installs storage systems for closets, customized home offices, garage cabinets, wall units and other structures.

After Jerry asked me a few questions about my company, he explained he was interested in launching a new franchise in Niagara. He asked if I had ever considered converting my business into a franchise.

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Tags: Bob Fraser, building services, Closets By Design, Home Services

Running Seasonal Home/Building Services: Winter

Posted Tuesday, May 15, 2012 in Home Services

By Alex Roberts

There is plenty to do in winter—and plenty of time to do it. Indoor project requests include improvements to kitchens, bathrooms and bedrooms.

Painting probably tops the list of unfinished tasks inside the typical home, but other possibilities include upgrading flooring (e.g. to ceramic tile), repairing drywall cracks or holes and installing crown moulding. Winter is also a great time of year to tackle odd jobs like closet, garage and laundry room organization, which may involve building shelves, assembling furniture, changing out cabinets or installing new fixtures.

Winter is a busy season for holiday lighting and decorating services, of course. Technicians can add themed lighting to a house’s roofline, outlining windows, doorways, other architectural features and walkways, as well as highlight trees and bushes.

Read the full article: Running a Seasonal Business

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Tags: Alex Roberts, building services, Home Services, Mr. Handyman

Why buy a franchise? – The appeal of franchising

Posted Monday, May 14, 2012 in Franchise Info

By Brian Miller

IHS Global Insight, which provides financial analysis, forecasting and market intelligence for more than 200 countries, recently prepared a report for the International Franchise Association (IFA) that cited a total of 735,571 franchise establishments in 2011. The report had a strong and positive outlook for growth in 2012, as franchising continues to attract individuals from all walks of life who are ready to “fire their boss and hire themselves.”

They have come to realize, unlike those earlier times, they do not have to rely on an employer to determine their success and worth. Their dreams—and the path to achieve them—are completely in their own hands.

Also, for the many budding entrepreneurs who feel they do not have the necessary knowledge or experience to start a new business entirely on their own, franchising offers a comprehensive blueprint for success. Indeed, franchising can be a lucrative vehicle to entrepreneurship because it combines many of the benefits of business ownership with an experienced franchisor’s well-established brand, proven operating system and ongoing support.

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Tags: Brian Miller, Franchise Basics

Ask the Experts: What does a new franchisee need to know about hiring?

Posted Friday, May 11, 2012 in Franchise Info

By Gary Prenevost

There are ‘hard’ and ‘soft’ costs involved in hiring and training staff. The hard costs include advertising open positions, conducting training, buying uniforms, etc. The soft costs are harder to see, but can be a bigger drain on the bottom line, including extra coaching and management time for marginal employees and lower productivity caused by poor staff morale.

One of the most important factors is how an employee’s performance will contribute to or otherwise impact customers’ experience with the franchise. I’ve talked to a lot of business owners and, consistently, they prefer to hire people with a healthy attitude and strong aptitude and then train them, rather than look first for the desired skills.

The right attitude and aptitude affect the franchise’s bottom line because they mean the employee will learn the necessary skills faster and be more attentive to customers, yielding a more positive overall experience, keeping those customers coming back and earning higher revenues. In addition, there will be a greater ability to cross-sell and upsell other services or products.

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Tags: Ask the Experts, Gary Prenevost, hiring

Ask the Experts: What opportunity exists for Canadians to import international franchises?

Posted Thursday, May 10, 2012 in Franchise Info

By Joe White

The opportunity is vast and significant. As franchise consultants, we receive a lot of inquiries from international franchisors who want to export their businesses to Canada. Many of them do not know how to get involved with markets outside their own countries, even though their franchise systems are often easily transferable. One of the reasons they actively seek to embrace the Canadian franchise market, in particular, is the multicultural background of our nation.

As a potential master franchisee, you need to be prepared not only to evaluate these systems, but also to understand how the franchisor is going to allow you to operate, as you will need to adapt the franchise concept to the nuances of the Canadian marketplace.

For this reason, I would suggest that Canadian businesspeople who looking for these kinds of opportunities should engage franchising experts to help them evaluate different options.

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Tags: Ask the Experts, international franchises, Joe White, master franchising

Ask the Experts: How much freedom to franchisees have in HR policies?

Posted Wednesday, May 9, 2012 in Franchise Info

By John DeHart

One of the advantages of a franchise system is a lot of the baseline hard work is done for you, including employment policies, which are fairly standardized to ensure consistency across a brand. That said, franchisees often have a great deal of latitude when it comes to making their workplaces more enjoyable for employees. They are free to set their own incentives and rewards. Engaging employees has to happen on a personal level.

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Tags: Ask the Experts, Human Resources, John DeHart

The Aftermath: Franchise Relations After Conflict

Posted Tuesday, May 8, 2012 in Franchise Info

By Lori Karpman

In any relationship, there is the potential for disagreements and misunderstandings. The franchisee-franchisor relationship is no exception. When major problems arise, litigation and government regulation are among the ways to deal with them, but both of these options threaten to cause irreparable damage, rather than find real solutions. As with a marriage, if the parties involved eventually take their case to court, an unpleasant split is often the outcome.

The foundation of any successful franchisor-franchisee relationship begins with a spirit of mutual trust and respect. To achieve this, both parties must be diligent about creating a culture of exchange and open communication, reinforcing their commitment to a long-term business relationship and to meeting their personal, financial and professional goals.

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Tags: Building Your Future, Lori Karpman

Financial Reporting and Payments: The cheque’s in the mail?

Posted Monday, May 7, 2012 in Franchise Info

By Peter Snell

In the past, franchisees calculated at the end of each month how much revenue had been generated by their business since the previous month. Then they prepared and mailed a report, along with a cheque for the royalties and other amounts owing, to the franchisor.

Today, this process has changed significantly. No franchisor is going to believe the old excuse, “the cheque is in the mail,” any more than a teacher believes a student claiming, “the dog ate my homework!” With the advent of computerized systems that can monitor franchises’ performance on a daily or even hourly basis, together with the ability to direct-debit the franchisee’s bank account, few systems still rely upon their franchisees to develop monthly reports or to send cheques for the payment of their royalties.

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Tags: financial reporting, Franchise Agreement, Peter Snell, Taking Charge

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