::this post ID is 6362::::in categories of ..Franchise ABCs..::

Identifying, researching and buying a franchise

You can expect to be bombarded with information from the franchisor. These days, franchisors use multiple methods to share their business opportunity with you, from phone calls and webinars to printed materials, brochures and documents, including the disclosure document. The purpose of this phase is for you to gain a solid understanding of all aspects of the business model from the franchisor’s perspective, but it can prove a bit overwhelming.

Also known as ‘validation,’ this is probably the most important stage of your research. You should allow four to six weeks to complete it properly, talking to at least 10 to 12 existing franchisees in the system, including an even mix of top-performing, middle-performing and unhappy franchisees. This will provide a broad perspective of what a day, week and month in the life of a franchisee looks like.

As you get deeper into this phase of research, you should start to see whether or not there is a solid fit between the franchise concept and your own skills, interests, natural abilities and passions.

It is critically important to have the franchise agreement reviewed by a lawyer—and not just any lawyer, but a franchise lawyer who can explain both your rights and obligations as a franchisee and the franchisor’s rights and obligations to you.

By now, you should be very close to feeling ready to buy a franchise, but most of your franchisor-level discussions will likely have been with a salesperson representing the organization. It is highly recommended that you (and your spouse, if you have one) visit the franchisor’s head office to get a better sense of the team and infrastructure that support the franchisees.

This visit is typically referred to as a ‘discovery day.’ You will need to make sure you and the senior management team are well-aligned in terms of business values, philosophies and corporate culture.

If you are like most people, you have never bought a business before, so all of the above research is entirely new ground to cover. It can be incredibly intimidating and daunting at first, so you may want to use a franchising consultant’s services.

Just as most people would never buy their first house without the assistance of an experienced real estate agent, so too will the professional guidance of an experienced consultant help effectively assess franchise opportunities and identify any problems, so you can make an informed decision. In many cases, franchise consulting services are free to you, as the consultants are instead paid by franchisors for successful matches.

There are lots of good franchise opportunities in Canada today, but there are also many weak concepts, so it is important not to buy the hype. Just because a business has been franchised, that does not mean it is good, it simply means it can be duplicated.

As the mantra in franchising goes, ‘investigate before investing.’ The aforementioned exercises will help you get closer to achieving your dream of finding the ideal business. It is better not to buy a franchise than to buy the wrong one, so take your time, do your research and only pursue a franchise you fall in love with both logically and emotionally.

The Canadian Restaurant and Foodservices Association (CRFA), now rebranded as Restaurants Canada, recently surveyed the public about how restaurants should provide information about the nutritional content of their dishes. This subject has become increasingly relevant as provincial governments roll out new regulations and programs, such as British Columbia’s Informed Dining initiative and Ontario’s proposal to require food-service chains—including franchises—to post calorie counts next to prices on menus.

The study found 92 per cent of Canadians feel it is important to understand the nutritional breakdown of the foods they eat and 90 per cent feel they would be missing out on potentially important information if restaurants were to provide only calorie counts. Indeed, they ranked total fat, sodium and trans fat data more important.

Developed and administrated by the government of British Columbia and also endorsed by the government of Manitoba, Informed Dining is a voluntary program that uses posters, brochures and/or nutrition menus to disseminate information about 13 core nutrients, including but not limited to calorie counts. Many restaurant companies in Canada—including major franchise systems like Tim Hortons, McDonald’s Canada, A&W, Swiss Chalet, Pizza Pizza, Harvey’s, Milestones, Montana’s, Dairy Queen and Quiznos—have committed to implement Informed Dining nationally by the end of 2014.

“Given the research findings, we call on Ontario’s government—and all governments across Canada—to implement Informed Dining,” says Garth Whyte, president and CEO of Restaurants Canada.

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