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Why Franchising is like Fishing

Estimated Reading Time: 10 mins, 30 secs.

If you’re reading this blog, you are probably considering owning a franchise, or maybe you’re really into fishing. If you think about it, franchising is like fishing.

When you own a franchise business, you are the captain of your own ship. As a result, you chart your own course. You also have the added benefit of the franchisor as a seasoned navigator. The franchisor has traveled the waters before and is there to provide advice to keep you afloat. Here are some key things to consider about franchising before you dive in.

Franchising is like Fishing - Postcard Portables

Prepare Before You Launch

It can be hard to let go of your current job, even when you’re dissatisfied. You may cling on hoping things will improve and pray your steady income continues. It is important that you prepare before you launch and choose the right franchise opportunity to achieve your personal and business goals.

With so many franchise opportunities available, you may not know where to start. The Canadian Franchise Association, Canada’s franchising authority for over 50 years, offers many resources including government primers, statistical data, reports, and articles. You can buy their official starter kit which includes guidebooks, member directory, magazines, and question checklists for just $40.

Since it’s an important decision and you’ll invest a sizable sum, don’t rush the process. The following suggestions will help you narrow your choices, pinpoint good franchisors, and find the one that suits you best.

What Are Your Goals?

Everyone has their own motivation for entrepreneurship so consider your goals. Are you interested in a better work/life balance, greater income, building equity, or unlimited growth potential? The franchise you select should flow from what you’re trying to accomplish.

What Role Do You Want To Play?

Some franchises offer hands-on opportunities as an owner/operator who’s directly involved in running the business. Others involve hiring staff who manage day-to-day operations and the franchisee provides oversight. Consider what you see yourself doing on a daily basis.

How Much Time Do You Have?

Few franchises allow you to work part-time and retain your full-time job. Some allow you to start as a home-based business and as your business grows you have the option to transition to a brick and mortar establishment.

However, if you’re just looking to supplement your income by working evenings or weekends, you’ll find far less opportunities. Franchisors want dedicated franchisees to strengthen their network and increase profits.

What Are Your Skills?

When considering a franchise, you may not need to know the industry, since many franchisors provide system training and support. However, good franchisors are also very selective. They search for the best-qualified candidates with the skills and capital needed for success.

If a franchisor is too eager to sign you without understanding what you offer, be wary. Good franchisors want to know whether you have entrepreneurial drive and basic business skills such as sales, marketing, and customer service experience, before they welcome you into the fold.

What’s Your Budget?

Franchise costs vary greatly and buying a franchise for $10,000 isn’t necessarily a good investment. It is more likely to be in a very competitive, saturated market with a high turnover rate. Additionally, inexpensive franchises usually offer little support or training and it’s harder to build a business you can resell.

Weigh your initial investment against the expected return and whether the business model suits your goals. If you don’t want to invest heavily, consider a home-based business that you can start quickly and affordably.

Thoroughly analyze your financial situation and calculate your maximum budget, including a financial cushion during the startup period when your business will not earn substantial income.

How Much Risk Can You Assume?

Once you’ve reviewed your financials, you’ll understand what you can afford. Nonetheless, some franchise opportunities are riskier than others.

If you’re risk adverse, look for a well-established company with a long track record of franchising success. If you’re more willing to take chances, a cutting edge company could potentially offer higher returns, but you will assume substantially higher risk.

Request A Franchise Information Package

After going through the previous steps, you’ll have a list of potential franchisors and many questions too. Reach out to the franchisors and ask for a franchise information package.

They’ll provide you with information such as a company history, support and systems summary, pertinent media articles, their mission statement and vision, answers to frequently asked questions, statistical data, estimated startup costs, application information, and more.

Read through the documents carefully and don’t be afraid to ask questions. Franchise laws vary between regions. The Canadian Franchise Association maintains a current list of laws and legislative developments for each province and territory here. You should understand the requirements for your region.

Ask For Franchise Disclosure Documents

Once you’ve reviewed each Franchise Information Package, you’ll have a shorter list and much more to do. Franchisors are in the business of selling businesses and glossy brochures and slick presentations do not guarantee a good franchise or franchisor.

Your province or territory may not require the franchisor to provide you with a franchise disclosure documents (FDD). Nonetheless, a good franchisor provides them voluntarily and they should meet the minimum legal standards for your business location.

Good franchisors are proud of their accomplishments and not afraid of scrutiny. All CFA members are required to provide disclosure documents in all Canadian provinces and territories.

Comprehensive Franchise Disclosure Documents allow you to truly size up the operation and compare it to others.

Review the FDD

Seek assistance from a franchise attorney if you don’t understand anything within the documents and definitely before you sign a contract.

Areas of particular interest include whether the franchisor has been or is involved in any litigation such as a bankruptcy. Lawsuits can also indicate a flawed system or poor franchisor management.

Check the payments and revenue model carefully. It describes the initial franchise and ongoing royalty fees and whether you’ll pay for marketing and advertising. You’ll also find information regarding unit financial performance.

Rules and restrictions are extremely important. Franchisors impose these to ensure uniformity and to describe operational and reporting requirements, your sales area and your rights to terminate, resell, or renew your franchise.

Some franchise owners buy with the intention of business growth and equity so they can later flip it and turn a profit. Consider whether the franchise suits your goals and offers the growth potential and flexibility you need.

Talk To Franchisors

After reviewing the Franchise Disclosure Documents you will probably have a very short list. Talk to the franchisors in-person to get a sense of their management style and personality.

We also suggest you ask for the following information, even though the answers may be in their written material. Personal conversations give you a good idea of the franchisor’s management skills and how well they know and interact with their business:

What is your business background? Have you owned a small business?
How long have you run the franchise?
What is the experience of the management team?
Are you a member of the CFA?
How do you determine exclusive territories?
What are the franchisor’s plans for future development?
What kind of system, marketing, and advertising support and training do you provide to franchisees? Is it ongoing?
Have any franchisees failed? Why do you think they did?
How do you resolve conflict?
How do you choose franchisees? What skills and experience do they need to succeed?
Describe a typical franchise owner (age, gender, marital status, background).
Describe the typical day of a franchisee.
Would you be willing to share your business plan complete with your marketing strategy and financial projections?

The CFA starter kit offers many more questions beyond what we’ve provided here. The Globe and Mail suggests membership in the CFA is an essential factor when assessing a franchise. They are the only association of franchisors and service providers in the franchise industry in Canada and follow a strict Code of Ethics.

Ask about everything and anything that concerns you. Discussions help you judge what it would be like to work within the network and with the franchisor. Remember, you won’t experience the benefits of franchising unless the franchisor and network function well.

Talk to Franchisees

Once you’ve thoroughly vetted the franchisors, you’ll need to talk to the franchisees. Don’t waste their time as they have busy schedules.

Establish a rapport and let them know you’ve already researched the brand and want their valuable input. This makes them more likely to be forthcoming. Additionally, the franchisor may ask them what they think of you if you decide you want to invest.

Ask each franchisee whether they felt well-prepared to operate the business. Did the franchisor provide in-depth training and support during the startup process? If so, that’s a very positive sign the franchisor cares about franchisee success.

Also ask them about any difficulties they’ve encountered. Did the franchisor handle issues tactfully and for the benefit of the network? What do you think the franchisor might have done differently?

Don’t shy away from financial questions. Franchisees understand the true cost of operating a franchise and how soon you might expect to start earning money. They can also clue you into how long it took them to earn decent income. Of course, these are only estimates since every area varies as does the business savvy and determination of the owner.

Always weigh their comments carefully and follow your gut instincts. A good franchise network includes like-minded individuals working hard to achieve common and franchise goals. Adding another great franchisee to the network benefits them too so they should offer honest advice and accurate information.

Ask the franchisee if it is possible to spend a day with them to see how they spend their time. Meeting a person face-to-face is a great way to build a relationship and to see first-hand how they create success. If possible, visit several franchisees near you to get a broader picture of operations and how they may differ.

You’ll also want to understand how the franchisee perceives the franchisor’s management style. Do they listen to network members and adopt worthwhile suggestions? Or are they top-down managers that dictate the direction of the company and ignore member feedback?

Finally, ask the franchisees whether they feel they get value from the fees they pay. The advantages of networking include avoiding expensive mistakes and tapping into a track record of success. Consequently, the franchisor must provide you with training, support, and a proven business model to create success and outweigh these costs.

Further Research

Besides investigating potential franchisors, you’ll want to check out the industry, competition, and any failures in your area. Statistics Canada provides data based on the industry or the NAICS code.

A simple Google search is the easiest way to find competitors in your area. If you discover someone tried a similar business but failed, try to discover why. Nearby businesses and even competitors can often provide information about work quality, business practices, financial strains, and reputation that led to their demise.

Buy Your Boat & Start Fishing!

Once you’ve done your research, you’ve probably identified a clear leader. The only thing left to do is to start the application process to discover whether the franchisor feels you’re a good match too.

If you’ve done your due diligence and discussed the opportunity with the franchisor and franchisees, this is usually a formality. You and your franchisor become partners for the mutual benefit of growing the business.

You’ll pay the appropriate fees and the franchisor prepares the documents which you’ll review with a franchise attorney. The franchisor then starts the training process so you can start fishing and reel in customers.

*****

Postcard Portables has franchise opportunities throughout Canada. It is simple to get started operating your home-based business.

Our highly-respected brand and franchise network offers unlimited growth potential for a low investment amount. Ask yourself: Are you ready to get off the dock and into your own boat? If so, contact us – we’re always happy to help.

Financial Freedom is Better than Exercise

Estimated Reading Time: 8 minutes, 30 seconds.

Think about it. Financial freedom and exercise have a lot in common. They both can give you flexibility, reduce stress, and make you feel great. When you exercise, you reap all the benefits. The same can be said for achieving financial freedom through entrepreneurship.

The benefits of entrepreneurship include retaining your profits, making your own decisions, and deciding how and when to spend your energy. Successful entrepreneurs do enjoy a better work/life balance. While not everyone likes to exercise, entrepreneurship also isn’t for everyone.

If you’re an aspiring entrepreneur, a franchise can be a great option. It reduces risk, offers guidance while you build your business, and relies on an established, proven business model. Even better, the financial freedom that comes from franchise ownership feels even better than exercise so ask yourself these 15 questions. They should help you better understand whether you’re financially and mentally prepared to own a franchise business.

1. Are You A Visionary?

Creating a successful business involves more than performing day-to-day tasks. You must also be able to see where you want to be in a week, month, and year down the road.

Ultimately, you want financial freedom so you need to be a person who can recognize and seize opportunities, continually innovate, and constantly adapt.

2. Are You Driven To Succeed?

If you choose to operate a franchise, you need motivation and the willingness to put in the time and effort necessary to make your new business grow. You won’t follow orders from a boss, because you’re the one giving them through the good and bad times.

It also means you can’t ignore paperwork and finances and you’ll need solid organizational skills for success. You will have days where you might feel like giving up, but entrepreneurs don’t. They’re driven by an internal desire to succeed, even in the face of adversity.

3. Do You Thrive On Challenge?

When you work for yourself, you set the goals and if you want to succeed you can’t sit back and hope things will happen. Every day you’ll face new challenges so ask yourself whether you’re a person that can face them constantly and look forward to even more.

Some people prefer the predictability of regular work and new challenges make them feel insecure and fearful. Entrepreneurs blaze through them, revel in their successes, and learn from their failures.

4. Are You Willing To Wear Many Hats?

Successful entrepreneurs perform many business functions themselves, so they must be willing to learn. While the franchisor does provide a system, you’ll still need to learn business basics for day-to-day operations such as budgeting, bookkeeping, marketing, IT, sales, and more.

It doesn’t matter which business type you choose – you need to know how to sell yourself, your products, and your services. If you decide on a franchise, they provide you with a business blueprint, but you still need to find your customers and sell them what you offer.

Even if selling doesn’t come naturally to you, you can learn. Nonetheless, you can’t expect to create financial freedom by sitting back waiting for people to come to you. Some business models cater more to business instead of directly to consumers, but you still need to actively and continually generate sales and grow your business.

As the franchise owner, you also have full financial responsibility for your business operations. This includes investing your initial capital and budgeting for ongoing expenses.

Even if crunching numbers isn’t something you enjoy, you definitely need to manage your money and especially during startup when money management is so crucial.

5. Are You Willing To Work Hard?

We all hear the inspiring stories of famous entrepreneurs. They started out with nothing and now enjoy incredible success. However, the one element many of these stories ignore is the years of hard work and dedication they put into their businesses before they achieved their dreams.

Achieving financial freedom through entrepreneurship does take hard work. You need to work as long as it takes to get the work done. Even if you’d rather be at home, you may need to complete orders, catch up on paperwork, organize marketing efforts, or become familiar with a new trend, product, or service. If you’re a person who finds great satisfaction in seeing the results of your work, entrepreneurship could be for you.

6. Are You Ready For A Long-Term Commitment?

Famous entrepreneurs will tell you long-term commitment is a vital component of success. If you’re expecting your business to magically generate income quickly, entrepreneurship probably isn’t for you.

You need to commit to running your business for at least several years, but even more if you want to create a lasting legacy. Financial freedom is the result of measured steps and forward thinking.

7. Can You Handle Failure?

No wants to fail, but it’s impossible to avoid when you run a business. You might lose a great customer, fail to collect money, pay too much for goods or services, or miss your sales targets.

However, the difference between a successful entrepreneur and a failure is whether you learn from your mistakes and move on, or not. Not everyone rebounds quickly, but it’s an essential quality when you run a business. You don’t have time to wallow in self-pity.

8. Can You Handle Isolation?

If you leave your existing job and start a franchise you’ll lose the daily contact with co-workers, and that’s not always easy. Initially, you won’t share your workplace with others and some people thrive on this stimulation.

Additionally, you won’t have anyone readily available to provide you with feedback. As a result, you’ll need people you can rely on for their candor and wisdom such as peers or business mentors.

9. Do You Communicate Well With Others?

When you run your own business good people skills are essential. You’ll need to communicate with your franchisor, suppliers, customers, peers, and employees.

Ask yourself whether you have or are willing to learn the communicative and interpersonal skills you need to deliver the best possible service and motivate others.

10. What Is Your Risk Tolerance?

Starting a business from scratch does allow you do things your own way, but it also involves significant risk. Alternatively, franchising limits many of your risks since it relies on a tested system, products, and services. Plus the franchisor provides training and guidance as you build your business.

Ask yourself whether you’re willing to risk all for a new venture or if limited risk exposure appeals to you more. Obviously you need to thoroughly investigate all potential businesses, but investigating a franchise opportunity is usually much simpler. A good franchisor willingly reveals financials, discusses market opportunities, and answers your specific questions.

11. Do You Need Work Flexibility?

Many people working in regular jobs want to start their own business since they need more flexibility in their lives. If you’re starting a business from scratch, that can be difficult to achieve.

However, many franchise businesses start as a home-based business so you can put in the needed hours and still take your kids to the dentist or step out to watch their concert or soccer match. You may need to work later, but you’ll still be there for them when they need you.

12. Do You Have Your Partner’s Support?

If you’re considering investing in a franchise, it is very important your partner’s onboard. Initially, running your own business can demand plenty of time, energy, and money which may impact family and social activities.

Discuss the idea with your partner and ensure you’re in complete agreement. They’re the ones that will pick up the slack while you’re building your business. Also consider whether your children are ready to handle change.

Friends can also offer their candid opinions about your emotional, mental, and physical suitability for entrepreneurship. They can point out your strengths and weaknesses, but it’s up to you to decide whether you’re willing to do what it takes to overcome your shortcomings.

13. Do You Have The Financial Resources?

Buying a franchise includes an initial investment, but you’ll also need sufficient resources to pay your bills while you build your business. Prepare a balance sheet of assets, liabilities, cash, and a detailed budget of expenses.

Plan for a year of savings so you have ample time before it is crucial you generate substantial revenue. If your partner will continue working while you build your business this will definitely lighten the load. However, you should also source possible sources for additional funding such as a bank loan, family members, or friends.

Don’t invest in a business unless you have ample resources. You’ll always have expenses you didn’t expect and you don’t need additional stress during a time of significant change.

14. Can You Cope With Income Fluctuations?

When you start a business, you hope to gradually increase your sales and increase your income. However, most new businesses usually have lean months and months when you do well. This income fluctuation can lead some business owners to overspend when the money comes in, instead of budgeting for less profitable times.

If you have a tough time restraining your spending or you can’t imagine months where you earn little, entrepreneurship might not suit you. However, if you’re a person who’s persistent and can manage the initial income inconsistency, it’s well-worth it.

You’ll enjoy unlimited growth opportunities and the potential for much more income than you could ever earn working for someone else.

15. Are You Willing To Follow An Established Business Model?

If you want to start your own business, you may want to run every aspect of it your own way. However, this also means you need to create the products and services and that takes plenty of time and money. Plus, even if you do extensive research you don’t know whether they’ll work in the actual market.

Alternatively, when you buy a franchise, you work within the franchisor’s business model. They have a brand and a predetermined concept and a proven business model.

They’ve already developed the products and services used by other franchisees. This significantly reduces risk since you can see how they actually perform, ask vital questions, and learn from their experiences.

The franchisor develops the policies and procedures, so you must be comfortable with following someone else’s lead. Fortunately, this doesn’t mean your franchisor ignores what you have a say.

A good franchisor listens to the concerns of the franchisees to improve overall success. After all, when you succeed the franchise succeeds too. Nonetheless, the franchisor decides what is best for the entire network’s success, not the individual owner.

Obviously, it’s important you align yourself with the best franchise network for business success. The franchisor should offer quality products and services, a great reputation with industry-recognized awards, extensive training, access to other franchisees, and a user-friendly reporting system.

*****

If you think you’ve got what it takes to become an entrepreneur, Postcard Portables has franchise opportunities throughout Canada. The merits of entrepreneurship with Postcard Portables include operating a home- based business.

Our highly-respected brand and franchise network offers unlimited growth potential for a low investment amount. Ask yourself: Are you ready to make a mark in your community and have the work/life balance you deserve? If so, then it’s time to sign. Contact us to learn more.