By John Woodburn
A shopping mall (or shopping centre) is a large indoor collection of several different types of retailers. In Canada, it has been a few years since new enclosed malls were actively being built, mostly due to higher build costs and marketing saturation. The newest Canadian mall, Vaughan Mills, opened just north of Toronto in 2004.
Advantages
● A variety of tenants provide a strong customer draw;
● Higher customer traffic;
● Sales per square foot (by tenant and category) can be obtained from the landlord. Sales should be higher than strip locations;
● Usually, shoppers use the mall as a destination location; and
● Great traffic during the holiday season.
Disadvantages
● Rent cost per square foot will be higher than strip locations;
● You must open and operate according to mall hours;
● There will probably be competition within the property;
● You may not have an option to renew your lease (this is often held by the landlord);
● You won’t easily be able to get an exclusive use clause;
● Certain franchises may not do well with the mall demographic; and
● Possibility of rent being charged as a percentage of sales. While you’ll be given a fixed rent (cost per square foot) the landlord may add a percentage option compelling you to pay the base rent or a percentage of sales—whichever amount is higher.
Read the full article: Location, Location, Location: Finding the right site for your franchise
Frank Robinson
Lawyer
Q What options do I have when it comes to ‘getting out’ of a franchise agreement?
Frank says:
Generally speaking, your rights to end your franchise relationship before the predetermined expiry date of your franchise agreement are weaker than those of the franchisor, who will have drafted its standard form agreement to its advantage. For this reason, most termination mechanisms are available to franchisors upon default by a franchisee, not the other way around. In rare occasions, however, a franchise agreement will provide that certain franchisor defaults may give you the right to terminate the relationship early.
If you don’t have termination rights, you may be able to sell or assign the franchise agreement to another party. However, in almost every agreement, your ability to initiate a transfer is subject to the prior consent of the franchisor, which is conditional on meeting the transfer provisions in the franchise agreement.
If you live in a province with a franchise statute, and your franchisor failed to properly comply with applicable disclosure rules, rescission (i.e. the unwinding of the franchise agreement) may be another option. For instance, if a franchisor fails to provide full or timely disclosure, you have 60 days to rescind the agreement; if there is a complete failure to disclose, you can rescind up to two years after entering into the franchise agreement.
Read the full article: Ending a Franchise Relationship
Two Canadian ActionCOACH franchisees have been honoured with the company’s ‘ActionMAN’ awards. Jamie Cunningham, whose territory is Cambridge, Ont., and Greg Stonehocker, who serves clients across Alberta, were among 20 honourees recognized at the company’s global conference held in Barcelona, Spain this summer.
By Lloyd Shears
While many people seem programmed against making their franchise dreams come true, others appear hard-wired for success. If any of the following descriptions fit you, your odds of establishing your own franchised business are likely better than most.
For example, if you come from a entrepreneurial family, you are far more likely to be self employed than if your family was traditionally employed. The explanation for this is simple. By growing up in a family with entrepreneurial parents, grandparents or aunts and uncles, you get the message that self-employment is not only safe and normal, but also desirable. As a witness to the benefits of entrepreneurship (e.g. making more money, having more freedom, etc.), it’s only natural to aspire to the same thing.
The same logic prevails for those in families where most members work for an employer. This becomes the definition of safe—owning or starting one’s own business is considered the risky choice. After all, it is natural for most of us to have anxiety about things with which we are not familiar.
In my experience, the majority of people who do go into business can be categorized into three groups:
1. People from entrepreneurial families, for whom investing in a business is a natural step. They have the support of family and are doing what they always expected to do.
2. People who always thought about business ownership but never pursued it until circumstances (e.g. a sudden job loss) pushed them to seek new opportunities.
3. People for whom business ownership is their only option. They have always wanted to be entrepreneurs and cannot abide working for someone else.
The trait common to each of these groups is that, like any successful person, they are goal oriented. They may not be able to predict the end result of their search, but they have a general plan, including when the search will begin, when it will end and a deadline by which to make a final decision.
Read the full article: Do You Really Want to Own Your Own Business?
By Leonard Polsky
Defamation
This includes any social media communication subject to libel, which covers written acts of defamation (e.g. blog postings), and slander, which covers verbal or spoken defamation (e.g. a podcast or other online video). This can occur no matter how the message is delivered to the public. Even if you are using social media as a means of personal and informal communication, you and your employees can still commit acts of defamation, or improper comparative or misleading advertising. This occurs if any individual, corporation or other business brand, product or service are defamed or disparaged.
Employment law
Staff members’ use of social media to make comments about other employees they work with can potentially result in discrimination or harassment claims. Further, employees who use social media during their work time or using work computers are likely in violation of their terms of employment. Going forward, you and your employees need to understand that these uses of social media are inappropriate in the workplace. In fact, they may even be inappropriate outside the workplace, when references are made to the franchise system.
Third party liability
It is important to note that the acts of a franchisee’s employees can raise the potential for third party liability for both you and your franchisor (just as your actions can leave you and your franchisor susceptible to third party liability). This can arise through:
● defamation or other torts (acts causing damage to others), as explained above;
● contract or franchise disclosure laws, when misrepresentations or inadvertent earnings claims or financial performance representations are made in association with the franchisor’s trademark and franchise;
● infringement of the intellectual property rights of others, such as making use of or references to another party’s trademark, or importing others’ copyrighted content into a website or webpage; or
● other communications associated with the franchisor’s trademark.
Read the full article: Understanding Your Franchise Agreement: The Use of Social Media
By Katherine Christie
During my online search, I discovered U Weight Loss Centres. The concept intrigued me. As a hairstylist, I helped people improve how they looked and felt about themselves; with this franchise, I could accomplish the same thing, though in a slightly different way.
Along with Kaylah, I travelled to Toronto to meet the owners of the company. I headed into the interview armed with pages of questions (from franchise magazines, my lawyer and other people close to me) and proceeded to ask every single one of them. I was later told it was one of the longest franchisee interviews the executives ever had.
When we left, my daughter laughed and said, “I can’t believe you asked them all of those questions!” My reply: “This is my money, I’ve worked hard for it and I need to know they can answer my questions. If they can’t, they’re not the franchise for me.” Plus, Red Deer is a small city; I had integrity in my community all my life and I wasn’t going to risk that on a franchise unless it was the perfect fit.
Thankfully, U Weight Loss was the right choice for me. What they were offering was different than anything I had ever seen, and they had the expertise to back it up. Each U Weight Loss program is broken into three phases that address key aspects of successful weight loss—detox and cleanse, hormonal balance and increased metabolism—through macronutrient meal plans (calorically balanced combinations of protein, carbohydrates and fat) and easy-to-follow exercise plans. After reaching their goals, clients enter a final maintenance phase to ensure lasting results. I could see myself being successful and helping people at the same time. With that, I signed on to buy the Red Deer franchise in February 2008.
Read the full article: Born to Be an Entrepreneur
By Brenda Jean Lycett
Deciding on who will assume the day-to-day management of your franchise may be based on various employee factors, such as the:
● length of time in a responsible role;
● ability and performance level;
● absenteeism record; and/or
● individual career aspirations.
The designated employee(s) will need to have a good understanding of the day-to-day business, supervisory skills and the ability to deal with customers, suppliers and, if necessary, your franchisor. Don’t forget to communicate when you are going to be away, and who the contact will be in your absence, to your customers, suppliers and franchisor. It is a good idea to train more than one employee to fill in, to avoid a situation where one employee is unable to fill the role at the last minute (due to illness or some other circumstance), forcing you to cancel your plans.
Remember, not all employees are willing to take on this managerial role. Try asking individual staff members, possibly during performance reviews, if they are interested in taking on more responsibility. This will help you identify or discount potential candidates.
If more than one employee is interested in stepping up, establish a fair and consistent process that allows each employee to take on increased responsibility at different times. For example, you can rotate the management role between two or more employees for each of your absences over the course of the year. This will give more people a chance to develop their careers and give them added confidence. This will also help alleviate your concerns when it is time for your vacation, since you know more than one employee is qualified to temporarily fill your shoes.
Read the full article: Planning for Absences
James Bond
Lawyer
Q What is the role of a mediator? What are my options if his or her ruling does not go the way I would like it to go? What is the difference between a mediator and an arbitrator?
James says:
A mediator is a dispute resolution expert who works with you and your franchisor in an attempt to arrive at a co-operative resolution to a problem or set of problems. Mediators do not formally ‘rule’ on matters. They may provide opinions or views on possible reasonable compromises, but ultimately, a mediated resolution is only binding on the parties if they agree to it.
An arbitrator is also a dispute resolution expert, but rather than seeking a co-operative resolution, the arbitrator essentially serves as a ‘private judge’ to hear the issue in dispute and make a decision. An arbitrated resolution is usually binding on the parties; they will have agreed in advance to be bound by the arbitrator’s decision.
Often, a franchise agreement will set out the process and terms governing the mediation and/or arbitration of disputes between you and your franchisor. However, even if the franchise agreement does not have these provisions, the parties are free to agree on one of the processes to resolve a dispute, instead of going to court.
By Shawn Saraga
The average crisis is often not a result of one thing going wrong, but several compounded occurrences. Take, for example, restaurant employees who forget to check the fire extinguisher for several months. One day, while a new staff member is being trained in the kitchen, he is left unsupervised while his trainer runs to the back to accept a delivery. Still unfamiliar with the stove, the trainee starts a fire that he tries to contain, only to encounter a malfunctioning fire extinguisher. As result of several factors, a situation that could have been manageable snowballs into a crisis. Again, a good franchisor will help you avoid these situations by providing a detailed operations manual and, in some cases, regular inspections of your unit.
Read the full article: 5 Questions for your Franchisor: Crisis Management
By Sam Hall
Before franchisors start to franchise their businesses, they typically operate multiple successful locations and prove the viability of the concept before granting franchises to others. The same approach should be taken by franchisees looking to purchase an additional franchise unit.
If you plan to open a second franchise, you must first operate one profitable location, in order to minimize the risk of business failure. Rushing into multi-unit ownership may be tempting, but it could lead to disaster. As the old adage says, slow and steady wins the race.
Just as you did with the your first franchise, you must perform extensive due diligence; in particular, you need to determine whether there has been any material change in franchisor operations since becoming a franchisee. You will need to carefully review the franchisor’s latest disclosure document with the assistance of a legal professional who has specific expertise in franchise law. Of course, before adding another location, you must also be sure you have enough resources (e.g. money, time, staff, etc.) to support the additional demands of a multi-unit investment.
There are a number of advantages to being a multi-unit franchisee. For starters, as owner of more than one location, you may be able to share costs between units and take advantage of economies of scale (e.g. volume discounts) when it comes to local marketing efforts and purchases from suppliers.
Read the full article: Multi-Unit and Master Franchising: A guide to growing within a franchise system
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