– Entrepreneur Frequently Asked Questions (FAQs)
Are you looking to be your own boss, buy a business franchise and join the ranks of entrepreneurship at a business Franchise? As an entrepreneur you have some questions about opening a franchise. Here we tried to explain franchise terms and questions an entrepreneur may have logically. The answers are general in nature which may vary from one franchise to another. See if we covered questions and concerns you may have below and if not, feel free to contact us.
What’s franchise fee and what’s included in it?
This is one time initial fee paid by a franchisee at the time of starting the franchise. The use of franchise brand name, operating systems, logo, trade dress etc. is included in the fee.
What are the ongoing fees for a franchise?
Royalty and advertising fees, generally, based on percentage of sale are charged.
What do I receive for my royalty payments?
The franchisor provides ongoing support to its franchisees in all aspects of their daily operations.
What are the steps in becoming a franchisee?
Following is the general procedure with some variations from franchise to franchise
- Submit your information
- A franchisor representative will contact you for an initial phone meeting
- Attend a franchise showcase, webinar or and information session.
- Fill out a franchise application and submit
- Attend discovery day
- Become a franchisee
Do franchisors help entrepreneur secure financing to become a franchisee?
Franchisors may direct you to a number of lenders that have provided financing options to other franchisees.
What type of training do I receive?
Franchisor provides necessary training covering all aspects of conducting day-to-day business that may include classroom training and hands on/ in store training for you and your management employees.
What support do I receive from a franchise?
Among many other things, franchise provides proven business model, site selection support, lease negotiation support, construction support and guidance, store opening support, ongoing operational support.
What is the total investment?
This includes the franchise fee, construction cost, opening inventory, first and last month rent, opening promotions and working capital
What is unencumbered cash?
Unencumbered cash is cash on hand, in a savings account, chequing account or GIC account, otherwise known as “liquid capital”. Home equity and RRSPs are not usually considered unencumbered, unless you can borrow against your home or RRSP. Your assets must be in Canada and you must be able to provide appropriate documentation to substantiate all assets.