Introduction To The Canadian Franchise Guide Lloyd Shears It is indeed an honor and privilege to have been asked to write the introduction to this fine publication. In the past 18 years, having been a franchisee, a franchisor, and a franchise consultant, I am uniquely blessed to see the industry from many angles, and over a substantial period of time. Franchising in Canada is an enormous industry, accounting for more than $90 billion in sales in 1996. We live in a country where more than 13,000 business owners have chosen franchising as their means of self employment, and the numbers grow daily. From the earliest roots of franchising, thought to be the tiny brewing companies in medieval Europe, who gave their kegs of beer to Pubs and Inns for distribution by the glass, and received a portion of the sale, franchising has grown to encompass virtually ever segment of our marketplace. Today, franchisers are involved in food, retail, business services, education, automotive, home services and more. There are franchises operating from busy malls, street corners, offices, industrial parks, homes, and vans. Health clubs, and a business that sanitizes washrooms are among the offerings to be had. Investments as low as $20,000 and others costing millions, are to be found in the franchise industry. If you are a first time investor, or investing on a limited budget, the news is good. The amount you invest, will not necessarily dictate the amount you are going to make. As this book is evidence of, Canada is home to many franchise companies. Some of the larger companies we are so very familiar with are actually based in the United States. With our common language and culture, it is a natural fit for companies south of the border to come here. Many do, with great success. The thoughts of anyone reading the Introduction to this publication, will of course be about going into business. Self employment is perhaps the most widespread unrealized dream in our country today. Most people want to own their own business, and for most people it will never happen. The reasons are varied and many. If you are waiting for the "right time", it will not happen. Time is something we make right. Money and courage will also need to be present, and in equal amounts if we are going to invest. However, money and courage are frequently inversely proportional to each other. I have yet to meet anyone with no money, who does not have incredible courage. In fact if they could find someone to give them, or lend them money they would be in business tomorrow. However, once we have worked hard and saved money, the encourage to invest is usually gone, and we spend our time looking after what we have, not trying to get more. Self employment in general, and franchising in particular, will not be right for everyone. So, who is right for franchising? The big attraction of franchising to many will be the fact that a good franchisor will train us how to run our business. They will support us with marketing materials, advertising, and a proven systems. Some Franchisers will have very strict systems … in fact frequently, they will be the most successful companies. In these systems, we need to be prepared to follow a tightly operated structure, and any deviation from this will not be appreciated. There will be lots of room for input through your Franchise Advisory Council (a council of franchisees voted into position to represent you with the franchisor) but change has to occur across the entire system … not just in your franchise. There will also be franchises in which the system is far less structured. As long as you operate within a certain framework, you will be free to operate with a degree of flexibility. If however you are someone who likes to do everything your way, franchising may be a very unwise investment. (I do not understand why someone would pay a franchisor tens of thousands of dollars for a system of operation, and then insist on doing everything their way). If you are not happy with the system as it is, don't buy. Approach buying this franchise as you would buying a house. Like a house, the business is not a lifetime commitment, and can be sold at any time. Just as we rarely have the luxury of buying our dream home in the beginning, it is also not necessary to buy our dream business day one. Buy the business you can afford. Know what you want to accomplish in buying the business, and buy a business where you can accomplish your dreams. Prior to buying, make sure you have spoken to franchisees in the system who have been able to accomplish what it is you want to accomplish. Think of the franchise you are buying as the vehicle to get you to your direction. Buy the vehicle going where you want to go. The larger the franchise system, generally, the better are your chances of success. Just as a child learning to walk does not lack enthusiasm, neither will a new franchisor. However, like that child, the new franchisor will have to fall down a few times, during the learning process. If you buy from a young company, you will be part of the learning curve. Some new franchises will go on to be huge. However, it's all but impossible to know which ones. I always like the strength of a major company as my partner. With the exception of Alberta, no Canadian Province requires "disclosure", as is required in every American State. However, if the companies you are considering, operate in any American State, the Province of Alberta, or are members of the Canadian Franchise Association, they will have a document to give you called a Uniform Franchise Offering Circular (UFOC). This document contains a copy of the franchise agreement, a list of franchisees in the system, a litigation page telling you if the franchisor is suing or being sued by anyone, and the financial statements. The financial statements are a must to review. Just as you would not buy a house without reviewing the foundation, and finding it sound, do not buy a franchise, without first seeing sound financial statements. The reason we are buying a franchise is to have the long term benefits of the franchisers help and support. To do this, they will need to be financially solid. Buying a franchise is a series of steps. Remember to take one step at a time. It will require 20 to 30 hours of research over a 4 week period to discover whether a franchise will meet your requirements or not. Thinking about it will never bring results, action will. I leave you with this anonymous quote. "Upon the plains of hesitation bleach the bones of countless millions who, on the threshold of victory, sat down to wait, and waiting, they died". Your future is in your hands.