Franchises lead to business careers
Published Saturday January 17th, 2009
More than 1,000 franchises available to those looking to enter the world of business
William Bourque is rolling in dough - literally.
Bourque, the well-known meteorologist with Radio-Canada Atlantique and the French-language news channel Réseau de l'information, isn't rich. That dough comment is just a play on words for the veteran weatherman who has joined his son in the pizza business, operating a Little Caesar's franchise in Dieppe.
When's he's not delivering weather forecasts for Atlantic Canada, you'll find Bill up to his elbows in flour and other pizza fixin's at their franchise on Champlain Street, right across the street from Champlain Place.
"I like doing that," Bourque says.
"It's now my hobby, you might say. It's fun for me. I really enjoy it. It takes a lot of my time, but it's fun."
Franchising is a business relationship where a company or individual who owns the franchise system grants a licence to a franchisee (a company or person who contracts to use the franchise system) the right to use the franchisor's trademark, brand, operating system and ongoing support, for a fee. In return, the franchisee pays an up-front fee and provides a share of the income back to the franchisor.
For those looking at going into business, a franchise might be worth exploring.
There are about 1,200 franchise opportunities in Canada today, with about 78,000 franchises in operation, according to the Canadian Franchise Association.
The bottom line is that you invest your own money and time into creating your own job, but you are doing so with a proven brand, within a system that has worked for years or often decades, so you don't have to start from scratch.
"You are in business for yourself, but not by yourself," is the way Lorraine McLachlan, CEO of the Canadian Franchise Association, describes it.
"You're not inventing the wheel again all by yourself."
Think of a franchise as a successful business model that you can copy.
Don't fall into the trap of thinking most franchises are coffee shops and fast food restaurants, which are nevertheless fantastic opportunities by themselves. Franchises today can range from institutes of learning to flower shops to jewelry stores to health care to accounting firms. About 70 per cent of McLachlan's members are not food outlets.
"When you think about it, even the major sports teams are franchises," McLachlan points out.
A franchise isn't something you jump into without a lot of forethought, though. For example, beauty shops for pets are booming right now, but if you don't like dogs, maybe you should consider something else. In a souring economy, auto shops are a great bet as consumers keep their vehicles longer before trading up. But if you don't like getting your hands dirty, well . . . .
However, with that in mind, "you don't have to be the mechanic," McLachlan says, "you have to be able to hire the mechanic."
Most franchises do require a lot of sweat equity, meaning you will likely be working there yourself, not just hiring someone to run the show and then sitting back and counting up your sales.
"A franchise is not a guaranteed investment certificate."
Check out the more than 1,200 opportunities listed by the association at www.cfa.ca. They also have a list of questions to ask yourself, and your potential franchisor, before taking the leap.
You'll need a solid business plan in order to secure financing, something many franchises can help you with. Some franchises require only a small initial investment; others can cost millions.
Some offer enticements from time to time.
For example, Bourque is the first Canadian to take advantage of Little Caesars Canadian Veteran's Program, which offers $5,000 off the franchise fee for the first store; $5,000 credit on your first equipment order; and up to $35,000 in similar benefits for medically discharged military personnel. It offers additional incentives for veterans as well.
Bourque qualified as a former U.S. Marine, the same corps in which Little Caesars' owner Mike Ilitch served.
"I noticed that there was a veteran's program available and so I told them, 'Hey, I'm a veteran.' I sent them a copy of my discharge and I was the first one in Canada to receive that," Bourque says.
The program makes sense for Little Caesars which wants to see more franchises in this country, says Richard Greville, general manager and vice-president of Little Caesars of Canada. McLachlan says potential franchisees of any kind should foremost "think about what you love doing."
Take a hard look at your own business experience and educational background.
Be clear what territory you will cover; are you prepared to move to open your franchise?
Some franchises require that you replicate exactly what other outlets in the chain are doing; others allow for more individual creativity. If you are looking for the chance to let your business acumen roam free, be sure you will be permitted to do this.
Take your franchise agreement to a good franchise lawyer.
Talk to existing franchisees and those who got out of that business. A key question to ask is a question the CFA asks franchisees all the time: "Knowing what you know now, would you do this again?"
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