Franchising: Reliable or Risky?
I was surprised to learn recently that more than half of all retail sales in Canada--accounting for more than $60 billion--are currently conducted through franchises. Given these statistics, one might think that purchasing a franchise is a perfect introduction to business ownership for aspiring entrepreneurs.
As with all new business ventures, though, it's important to conduct extensive due diligence--or research--to determine if franchising is a good match for you. A recent Toronto Star article featured an unfortunate story about a franchising opportunity that did not work out for a group of pharmacists who bought into Target stores in Canada. Target closed Canadian operations within two years and an opportunity that initially appeared so lucrative for the investors turned out to be a big disappointment. This is not to suggest that all franchise opportunities end this way. Some franchise arrangements can work very well because buyers profit from well-established business models and instant brand recognition.
The business department at the North York Central Library has a variety of resources to help you quickly get up to speed on the important challenges related to this growing field.
The Canadian Business Franchise Handbook is a great place to start. The first half of this guide walks the reader through the issues involved in setting up a franchise. This includes information about legal obligations, franchise agreements (or contracts), hiring strategies, bookkeeping, marketing, social media and dispute resolution.
The chapters are written by various experts in the field, including lawyers, marketing and communications specialists, public relations advisors, bankers and franchise consultants.
The second half of the handbook contains an index of franchisers
For a more global perspective on potential franchise operations, Bond's Top 100 Franchises gives an in-depth analysis of their top annual picks.
Canadian Business Franchise magazine, published five times a year, includes articles on a variety of franchise-related topics. One of the feature articles in the January 2015 issue is "Franchise Basics: The Seven Most Common Negotiating Mistakes," which sounds very useful!
For accurate contact information, our Canadian Business Franchise Directory contains the names, phone numbers, email addresses and websites of a diverse range of franchisers. Additionally, we have the annual Franchise 500 by Entrepreneur magazine, containing the top-rated American franchises divided by business type.
Whether a franchise business turns out to be right for you depends on a variety of factors. Please visit us on the fourth floor of the North York Central Library to gather more information. In the meantime, consider putting a hold on the following books--we will deliver them to the library of your choice!