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Get a franchise minus the risk
You want to be your own boss and are opting to buy a franchise? If so, you most likely already know the advantages of buying a franchise over starting a business from scratch. The advantages of buying a franchise can include getting help with business start-up, getting solid business advice and training, and benefiting from brand recognition.
Some franchisors offer more than just business advice and training; they might also offer a "Manage to Own" program. Such programs enable you to manage a franchise for a certain period, before you decide to buy. Getting your feet wet before buying can seriously mitigate risks for both you and the franchisor.
Through "Manage to Own" programs, you get a feel for running your own franchise and learn about the business you are getting into. You see first-hand what the hours are like, the demands and the environment. Maybe running a franchise is not what you imagined. If so, it's a good idea to find out before buying one.
Generally, you would take home a small salary during the training months of the "Manage to Own" program. The Franchisor would put some money aside for you towards the purchase price, in case you do decide to buy.
If this path to entrepreneurship interests you, look for businesses that offer such programs for potential franchisees. You may also want to ask other franchisors if they would be willing to implement a "Manage to Own" program.
For more information, visit the Canadian Franchise Association and our page on Franchising.
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There are other steps you can take to mitigate the risk when buying a franchise. Here is a check list:
Questions to ask a franchisor when researching a franchise opportunity:
1. How long has the company been franchising?
2. How many franchise locations does the franchisor have?
3. Have any failed in the past? What was the cause of failure?
4. What type of training and on-going support will I get?
5. What is the duration of training?
6. How long is the term of the franchise agreement?
7. How much liquid capital do I need to invest?
8. What type of finance options are available and is there any financing assistance?
Questions to ask yourself before buying a franchise:
1. Can I afford the franchise?
2. What are my goals, both short and long term?
3. Am I ready to take on the responsibilities of running my own business?
4. What industry sector interests me? And why?
5. Would I be happy focusing on the business in the industry sector of interest for the next 5, 10, or 20 years?
6. Will my family or spouse accept my choice of business and support me?
7. Do I like dealing with people considering I will have to interact with customers, employees, and the franchisor.
There is a lot to consider when looking for a franchise opportunity that will fit your life style.
By Lisa on August 11, 2010
will myfamili or spouse accept my choice of business and support me
By jawed on September 18, 2010
Hello Jawed,
It is indeed important to consider how entrepreneurship can affect family life. Being your own boss can be very rewarding, but it is not for everyone. Before you take the first step, you may wish to take some time to find out if you are well suited to being an entrepreneur.
BDC’s Entrepreneurial self-assessment tool may help you determine if your experience, attitude, goals and lifestyle are compatible with owning your own business.
You can find more information about entrepreneurship on our web page Is entrepreneurship for you?
Best of luck.
By Canada Business on September 20, 2010
Even when buying a franchise, as discussed above, it’s important to do your due dilligence, as there are still many risks.
By Allan on October 6, 2010
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