How to choose the right food franchise

Subway? Fresh Slice? KFC? Dairy Queen? Tim Hortons? Which franchise is the right one for you to buy into?

Do want to start your own business and ensure it will succeed? Then the franchise business might be the business for you.

In Canada, at the end of 2010, there are around 1,300 franchises with 76,000 points of sales. The franchise business is a good way to ensure success and a lasting business.

This weekend, the franchise show will take place at the Vancouver convention centre from November 5 to 6th. Take this great opportunity to learn about opening your own franchise.


What exactly is a franchise?

First of all, you have to understand the meaning of the word franchise. It’s a legal agreement between two parties : the franchisor and the franchisee. The franchisor gives rights to the franchisee to use the trademark in order to sell their products or services. In return, the franchisee must pay royalties and fees to use these rights. Both parties share an interest in ensuring the company succeeds.

Franchisors want franchisees to succeed. To grow, they must add franchisees. Franchisees rely on the franchisor business model to assure a success and a good income. That’s why the relationship between the parties must be defined.


What are the benefits of buying into a franchise?

  •  The power of a well-known brand. Everyone already knows about your brand/product. You already have a customer base.
  •  The franchisor provides you with a business model in order to reduce the financial risk
  •  You can get a loan and finance your business without difficulties. You can get the franchisor to help you out with that.
  • The franchisor will teach you everything you need to know. He can assist you at the beginning and in your daily tasks including training, mentoring, employee management, food and store organization, equipment acquisition and equipment repair, reporting, accounting requirements, premises research, pretty much advice for anything and everything.
  • The franchisor will provide you with the market research. He will provide you with things like brochures, leaflets, folders, posters, business cards for the local campign. As well, , the franchisor is able to advertise through media such as through tv, press or radio in order to create a national and regional identity
  •  It is an easy solution to get food products. The franchisor selects the good products and/or ingredients for you. He will do the work of negotiating prices for the products and dispatch them to you the franchisee.
  •  The marketing research will do the work of changing the menu and food, you have just to follow the guidelines.
  •  You will have the use of the franchisor’s tools like websites, intranet sites, phone directories etc.
  •  You get better deals for your business. Some franchisors have agreements with companies. For example: contractors, architects, leasing materials, equipment


There are lot of food franchisors in Canada, but how do you choose the right one ?

 Before meeting the franchisor, ask yourself these questions:

  • What am I interested in?
  •  What kind of food do I want to offer?
  •  Who are my customers?
  • Do I want to open on the morning, midday and/or evening?
  • What’s my investment?
  •  What are my finances?

It is highly recommended that you do a market survey on your future products and franchisor in order to find the answers to important questions about things such as obstacles, certifications, risks, tendency, technologies, environment, laws, opinions about the brand etc.

After this survey, it’s time to see the franchisor. You can easily obtain information from their websites or attend a franchise show.

 Theses points can help you in your choice :

  • Meet the staff and the director
  • Ask the franchisor for a document to present the market, the financial model, the store organization, the products, the fees and the royalties
  •  Try to understand the distribution pattern works in terms of food reception, the orders, and the marketing prospectus.
  •  See and test the products to see if they correspond at yours values (quality, presentation, shape)
  •  Try to learn about the services provided by the franchisor (meetings, intranet sites, directories, tools, software, training)
  •  Discuss how much assistance you will receive when beginning your franchise
  •   Talk about the advertising campaigns and the guidelines needed to be followed
  •  Ask to see prospectuses
  •  Try to understand the obligations of both parties and check to see if the franchisee’s rights are protected
  •   A good tip when starting your franchise is to test it out first. Ask if you can assist the staff and the manager for one or two days in a store in order to understand how the business works and how the store is managed


All images from photo libre.



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