If you’re ready to dive into the franchising world, you’re going to want to be as prepared as possible. The process of buying a franchise in Canada isn’t particularly complicated, but you should be aware of a few key points before moving into those waters.
Let’s take a look at the procedure for buying a franchise in Canada, and how you should start out.
#9) Make Sure You’re Ready
Buying a franchise means adhering to established guidelines set forth by the parent company, including branding guidelines, sales practices and corporate culture. If you’re enticed by buying a franchise that has done all this work for you, then you’re in a great spot. If you don’t like the idea of adhering to what you may perceive as a rigid structure, you could be in trouble. Once you’ve made your decision, you’ll have to decide on the logistical questions. Are you Ok with working long hours, weekends or holidays? This may be necessary, at least for the first while until you’ve built up enough money to hire a general manager. The prospect of franchising is exciting, but the right mindset is needed to make it work.
#8) Determine The Right Location
Planning your franchise purchase involves determining the right location where it’s going to end up. You’ll need to evaluate your surrounding area to figure out where you’re going to operate from, and that means checking the data. Check business statistics within your province and locale to see which kinds of companies are thriving, and which are unsuitable. This will also give you an opportunity to check up on things like special conditions, taxes and permits. Finally, keep an eye on traffic in the area. If it’s sparse, you’re going to have trouble attracting customers.
#7) Talk To Other Franchisees
The best way to gauge how to move forward as a franchisee is to talk to others who’ve already done it. Ask to speak to the manager of a franchise in another location so you can quickly assess their experience with the process, and gain a few tips at the same time. Make sure to ask about the relationship the franchisee has with the franchisor, and see if you can identify any red flags. They’ve done the work already, so don’t hesitate to hear their wisdom.
#6) Discovery Days
Attending a corporate discovery day is a great precursor before you decide to sign on the dotted line and purchase your franchise. It’s a window into the company’s culture, practices and successes. Usually these take place at corporate headquarters, which will allow you to meet with representatives, and possibly the CEO at the same time. During this period, make sure to ask about what the franchisor will do in terms of support, while keeping an eye on internal operations. If it looks like a well-oiled machine, you can probably relax.
#5) Secure Your Funding
When you’ve decided to move forward, craft your business plan and package it for presentation to the franchisee. This will kick off a series of actions on your part, including identifying potential leads, as well as securing the right financing option. You may qualify for a Canada Small Business Financing Loan, a federal or provincial grant, or a common bank loan. Don’t bet the farm on any of these, however. You’ll want to have the right amount of cash in the bank to deal with certain operating expenses until the franchise becomes profitable, so make sure you have enough in reserve. The more, the merrier.
#4) Sign The Agreement
If possible, have a lawyer with you before you sign the franchise agreement. This will help identify any areas of contention that need to be resolved before moving forward. Some franchisors are quite particular about the terms of their agreements, while others may be open to a bit of haggling. Don’t be put off by a strict franchise agreement, either. This is usually a strong indicator that the franchisee has developed a system that works very well, with a proven track record of success.
#3) Get Your Permits In Order
This step is less fun, especially given the fluctuation between individual cities and provinces. It’s important to make sure you have these in order, however. The last thing you want is to be hit with a violation in the first week of opening. Both BizPaL and the Canada Business Network are excellent resources you can check to figure out what permits you’ll need. Don’t forget about insurance, either. You’re going to need that in order to operate within established laws and guidelines.
#2) Train Your Staff
You will have figured out how much staff you’ll need to hire in your business plan, so now it’s just a matter of finding them, and training them. Make sure you’ve streamlined your operational procedures as best you can, before you open. This will prevent you from hiring employees that you don’t need, when all that’s required is a little logistical tinkering. Similarly, you can re-evaluate this moving forward, and hire only the people you need, rather than simply throwing money at a problem. Sometimes a franchisor will have strict expectations on staff behavior that adheres to company culture. They may even provide all the training materials you need to get your staff up to speed, such as video tutorials, in-house training or an operations manual.
#1) Open The Doors
Now that you’ve taken all the right steps in purchasing and setting up your franchise, it’s time to reap the rewards! Don’t automatically assume that customers will flood in when you do, however. You’re going to need to get the word out, as well. Sure, those passing by may notice that you’re up and running, but don’t stop there. Kick off a marketing campaign, advertise your presence, and use incentives such as a grand opening event to your advantage. On the flip side, you could opt for a soft opening, which is designed to serve customers while evaluating the operation of your franchise before declaring a full-on grand opening. Don’t be afraid to tweak the operations as you go, and above all else, never get discouraged! Stay on target, remain positive, and customers will come.
These steps will help you prepare for purchasing a franchise in Canada. If you’d like to learn more about franchise opportunities with St. Louis Bar & Grill, we’d love to hear from you, so contact us today!