As a Canadian restaurateur, buying a restaurant franchise is a great way to bring your entrepreneurial vision to life. Franchises are a distinct and highly advantageous model, streamlining every day operations to create an efficient and profitable foundation for your business.
If you plan to go the franchise route, there’s one key detail to keep in mind: every franchisor is different.
Beyond brand recognition and the actual products they serve, Canadian franchise brands can vary greatly when it comes to support systems, commission costs, owner restrictions, parent companies, and more. That’s why it’s important to choose your restaurant franchisor carefully.
In this blog post, we’ll look at everything you need to know about researching and choosing a restaurant franchisor.
Start your journey on the right foot.
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What is a Restaurant Franchisor?
Before we talk about franchisor compatibility, let’s cover the basics.
While ‘franchise’ can be used in a handful of different contexts, it typically refers to a single location of a franchise restaurant. A ‘franchisor’ is the corporation that owns, manages, and sells the associated brand and business model to independent franchise restaurant operators (known as ‘franchisees’).
It’s also important to note that some franchisors operate independently while others belong to larger corporate networks. For example, brands like A&W, Mary Brown’s Chicken, and Pizza Pizza all operate independently. Other popular franchisors like Tim Hortons (Restaurant Brands International) and KFC and Taco Bell (Yum! Brands) have expansive, high profile parent companies.
You’ll need to understand the full picture of a franchisor’s operational and ownership structure before you sign on to become a franchisee.
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Know Yourself as a Restaurateur
Every restaurant franchisor offers something different. In order to find the right brand for you, you’ll first need to make sense of your objectives as an entrepreneur.
Define Your Goals
You can’t find the perfect match until you know what your exact vision is.
What’s your drive for buying or opening a restaurant franchise? Do you have a passion for the restaurant industry? Are you looking for a proven entrepreneurial opportunity in a specific market or community?
What’s Your Experience?
Some franchisors are welcoming to first-time franchisees, while others limit their partnerships to established entrepreneurs.
Take stock of your experience as a business owner and operator. Have you worked in franchise restaurants before? Do you currently own other businesses in or outside of the restaurant world?
What’s Your Budget?
Buying a franchise restaurant isn’t cheap, and premium brands can demand premium prices. You’ll want to have a clear understanding of your financial picture before you head to the market.
How Hands-On Would You Like to Be?
Decide what type of operator you’d like to be. Some franchisors require franchisees to take a hands-on, on-site role at the restaurant.
Explore Your Market’s Top Brands
Once you know yourself as an entrepreneur, you’ll want to explore the franchisors of your local market. If you’re not sure which franchises are most reputable or relevant to your parameters, talk to a restaurant real estate agent.
Here are a few key variables to consider when exploring your options.
How Established Are They?
A great franchisor will have a strong track record of success. You’ll want to know about the brand’s history, overall establishment, and recognizability among local consumers.
How Many Locations Are in Operation?
You’ll want to know how many locations the franchisor has sold both in your local area and across Canada. This will provide insight into demand, saturation, and larger brand recognition.
What are the Franchisee Requirements?
You’ll also want to look into the franchisor’s requirements for prospective franchisees. What is the required financial investment? Do they demand specific industry experience? This will help you understand what is expected of you and whether your circumstances will be a good fit for them.
Do Your Due Diligence
Familiarize yourself with the franchisor’s systems, structure, and support. What type of operational oversight or training is provided? What’s their approach to marketing? How do their supply chains function?
Ask for References
Ask to speak to current franchisees. Ask them about their experience working with the franchisor. What are they happy with? What would they change? Do they feel supported by the franchisor and parent company?
We’re serving up even more advice on our blog. Check out these posts next:
- How to Finance a Franchise Purchase
- How to Interview a Franchisor
- What is the Average Profit Margin for a Restaurant?
Buying a Franchise? Work With Us
If you’re looking to buy a franchise in Canada, the best place to start is with a restaurant real estate agent, like us at Carve Real Estate.
Franchises are a unique world in the greater realm of commercial real estate. Carve’s industry specialization gives you a leg up in finding the right opportunity for you. This includes finding the best franchisor based on your goals.
We’ll also guide you through the buying process from start to finish, from acquiring financial and legal support to navigating the key policies and disclosures surrounding the transaction.
Considering the purchase of a franchise? As seasoned experts, we’re here to help. Send us an email at ryan@carverealestate.com or give us a ring at 416-618-0054 to get started.
