Well, I’m actually thinking about buying a franchise
Canadians looking for work are unlikely to get much comfort from job figures as the unemployment rate is expected to stubbornly hover around the eight per cent mark for the foreseeable future.
After a few months of futility, some of these formerly employed will come to believe that the only way that they can hope to match their past salary will be to start a business of their own – more than likely by buying a franchise.
Good luck with that.
Legally, franchising is very document-intensive and it's important for prospective franchisees to understand what they are signing, says Tony Wilson, author of Buying a Franchise in Canada – Understanding and Negotiating Your Franchise Agreement.
Things are often not what they seem, he warns, offering a brief summary of what to look out for.
If current franchisees are nervous about discussing the business with a total stranger like you, or they fear it could get them into trouble with the franchisor, consider asking three simple questions, Wilson suggests:
• Are you happy you bought it?
• Are you making money?
• If you had to do it all over again, would you buy it?
How much does it take to get started? Blogger Boomer and Echo has put together a list of popular franchises and how much they typically cost to open, pointing out that the amount of liquid capital needed to start a major franchise is much larger than most people expect.
The cost of a full Tim Hortons store will run from $430,000 to $480,000, plus taxes – more still in larger markets with higher development costs. At least $144,000 of this overall cost must be in cash. As well, you’ll need $50,000 in working capital to get started.
His vote for the best value: Subway. For a minimum of $78,000 plus the $15,000 franchise fee, you can have one of the most recognized restaurant brands in the world, he writes.
Are you a franchise owner? If you had to do it all over again, would you? Any cautionary tales?
By Gordon Powers, MSN Money