Immigrants entrepreneur: How to Research a Franchise in Canada
One of the most important parts of buying a franchise is doing your homework. So get out there and grill the people who know the franchise best.
Franchisors can dazzle prospects with glossy brochures and slick presentations, but you’ll need to get beyond those to the hard facts about their offer.
When it comes to Canadian franchise opportunities, there’s certainly no shortage of companies to choose from, but finding the one that’s right for you can be a slightly more difficult task.
Fortunately, the Internet has made access to information monumentally easy. There’s no shortage of rankings, reviews and articles to point you in the right direction. Look a little harder and you may even dig up information about company lawsuits and complaints from existing franchisees. Meanwhile, social media is adding a whole new dimension of interactivity as millions flock to sites like Facebook and Twitter to share news and information.
Once you identify a brand you’re curious about, start by requesting and thoroughly reading the Franchise Disclosure Document, or FDD, that each franchisor is legally required to provide to prospects. If you don’t understand everything in it, have a franchise attorney or consultant explain the terms.
Then you’re ready to start talking to franchisors.
As a potential franchisee, surely you can only benefit from this 360-degree view. Or is it really beneficial? What happens if the amount of information becomes overwhelming and you begin to lose perspective on what’s accurate and what’s not? For help, we turned to Luz Pardo, CEO of Light your Light., part of a business immigrants referral consultants, Here are her tips on how to use the Internet wisely when researching a franchise:
•Begin your search with a look at the various Canadian franchise rankings and listings. A lot of research goes into those listings — more than you could possibly compile alone — so they’re a good starting point.
•Always apply critical thinking when researching online. In an unregulated environment such as the Internet, you’re bound to come across information that’s tainted, biased and flat-out wrong. Go in prepared for what he calls “the good, the bad and the ugly.”
•Don’t assume that just because something is published, it’s accurate. After reading an article, always take a moment to ask yourself, “Is the author trying to sell me something?” If your decision to purchase a franchise will be partly determined by articles you find online, you need to make sure that what you’re reading represents both sides.
•Place more trust in major sites that attract a lot of traffic. “Their long-term success depends upon being reliable, so they are going to make every effort to present credible content. Likewise, gather information by visiting the official company Web site. “Even though they have a clear bias and are in fact trying to sell themselves, they also know that they may be held accountable by state regulators and perhaps even find themselves in a future franchisee lawsuit if the information they publish is inaccurate or misleading.
•Use social media to contact those already involved in the franchise you’re researching. “Franchisees can directly post their interest in a brand and, similarly, potential investors or candidates can now use these engines to communicate with existing franchisees,” . Use social media tools to get a glimpse into what people are saying about the company you’re interested in.
•Make sure to use the information you find online as just one part of your research. Simply having a world of information at your fingertips doesn’t mean you will automatically make a wise investment decision. Don’t rely solely on online information; also talk to people, meet with company executives, and carefully examine the Franchise Disclosure Document that all franchisors are required to provide. By using all the avenues available, you’ll get the fullest possible picture.
There’s a bottom line to being a franchisee. You’re giving up a portion of your sales in royalties to the franchisor in exchange for its help running your business.
“What you need to know from franchisees in the end,” ,is what the franchisor does that makes it worth the fees.”
Marisol Diaz is an experienced workshop presenter, specialized information publisher, and a SOHO specialist. She also has been writing on Canada settlement and immigration law since 2006. contact her @ firstname.lastname@example.org. You can improve your Canada job search through the Canadian database for Int’l Professional or Hineni CED , a Paid Content or Informational Services site run by Hineni Media.
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