Criteria You Need to Consider When Buying a Franchise
How to Decide Whether to Buy into a Franchise
Once you’ve made the decision to start your own franchise,the next big decision is which franchisor to invest in. This decision should not be made lightly, and you should only enter into a franchise agreement with a franchisor after extensive research and thorough vetting.
When doing your due diligence, it’s important to look at several different franchisors and evaluate them based on a set of criteria that will help you decide which franchise is best suited to your needs.
Interested in learning more? This article will outline the most important criteria all prospective franchisees should consider when evaluating a franchisor.
What Is a Franchise?
A franchise is a type of business that is owned and operated by an individual but falls under the umbrella of a larger corporate chain. Franchise operators must maintain the same branding, systems, and procedures as the franchisor and will often receive training and support.
Examples of successful franchises in Canada include:
- McDonald’s
- Starbucks
- Tim Hortons
- Rona Home & Garden
- Your Independent Grocer
- Gorilla Bins
- Mr. Lube
What Are the Benefits of Buying into a Franchise?
There are numerous benefits of investing in a franchise compared to starting a business completely from scratch. Some of the most significant benefits include:
- Lower start-up costs
- Support and guidance from the franchisor
- Instant brand recognition
- The franchisor provides training supports
- Less risk
- And more
What Makes a Franchise Worth Investing In?
From a business standpoint, some franchises are better than others. When it comes to any particular franchisor, if you can answer yes to the following questions then it may be a franchise worth investing in:
- Are you interested in the franchisor’s line of business?
- Does the franchisor offer its franchisees lots of ongoing support?
- Do you share the same values as the franchisor?
- Is the franchisor profitable?
- Do you understand the franchise’s processes, rules, and restrictions?
- Does the franchisor have a low closure rate?
Things to Take Into Consideration Before Investing in a Particular Franchise
Franchise Fees
As a franchise operator, you will be required to pay a franchise fee in exchange for using the franchisor’s branding, systems, and procedures, along with gaining access to support and training from the franchisor
However, the cost of the franchise fees and what kind of support you receive from the franchisor varies from franchise to franchise. They can range anywhere from $10,000 to $100,000, so it’s important to compare the franchise fees required by different franchisors.
The Franchisor’s Marketing Plan
While you will often be responsible for the marketing and advertising for your own franchise location, franchisors will typically have national marketing campaigns in place that will benefit your franchise. Plus, many franchisors will have a written marketing plan in place that offers guidance on how to market your franchise location.
The Franchise Agreement
One of the most important parts of doing your due diligence is carefully reviewing your franchisor agreement and also having a franchise lawyer review it as well. Buying a franchise is a big decision and you don’t want to end up trapped in an agreement that isn’t favourable to you.
Also, ask yourself the following questions:
- Do you fully understand the terms and are you comfortable signing the agreement?
- Do the terms of the agreement meet your expectations?
- Are you feeling pressure to sign the agreement before you’ve had a chance to review it with a lawyer?
The Franchisor’s History and Success Rate
You would never buy a car with a history of failure so why buy a franchise that hasn’t been successful with other franchise operators?
It’s important to look at other franchise locations and see if there are any concerning patterns. If there are numerous franchise locations that have closed their doors after less than five years in business, that could be a red flag that you should look into.
Also, consider the following:
- What are the franchisor’s business record and reputation like?
- What do other franchisees have to say?
- Does the franchisor have any outstanding legal actions against it?
- How many years has the franchisor been in business?
The Amount of Training and Support the Franchise Offers
As previously mentioned, franchisors typically offer support to their franchisees such as:
- Training
- Marketing plans
- Advice
- Mentoring
Look for a franchisor that wants to see you succeed and will help your franchise thrive by offering in-person training and ongoing support and advice on increasing customers and revenue by phone and/or video calls.
How Much Competition You Have
When researching franchises, look at how many locations a franchise already has in your city/neighbourhood. Also, look into how many similar businesses are operating nearby. Running a business and growing your customer base is challenging enough without having to compete against tens or even hundreds of other businesses.
How Many Locations a Franchise Has
Look for a franchisor like Gorilla Bins that has many years – if not decades – of experience and numerous franchise locations. This is a sign that a franchisor is stable and has strong brand recognition and a built-in customer base.
Restrictions Imposed by the Franchisor
As a franchise operator, you own your own business, however, there are restrictions and limitations put in place by the franchisor. It’s important that you are fully aware of and are comfortable with these restrictions before investing in a franchise and signing a franchise agreement.
Partner With Gorilla Bins
Still haven’t found a franchise to invest in? Consider partnering with Gorilla Bins.
Gorilla Bins is the top waste management business in Ontario with several locations across the Greater Toronto Area. Even if you have no experience in waste management, Gorilla Bins offers lots of training and support to ensure your franchise is fully set up for success.
Contact us today to learn more about why you should consider franchising with Gorilla Bins and how we can work together to form an incredible partnership.
How to Decide Whether to Buy into a Franchise
Once you’ve made the decision to start your own franchise,the next big decision is which franchisor to invest in. This decision should not be made lightly, and you should only enter into a franchise agreement with a franchisor after extensive research and thorough vetting.
When doing your due diligence, it’s important to look at several different franchisors and evaluate them based on a set of criteria that will help you decide which franchise is best suited to your needs.
Interested in learning more? This article will outline the most important criteria all prospective franchisees should consider when evaluating a franchisor.
What Is a Franchise?
A franchise is a type of business that is owned and operated by an individual but falls under the umbrella of a larger corporate chain. Franchise operators must maintain the same branding, systems, and procedures as the franchisor and will often receive training and support.
Examples of successful franchises in Canada include:
- McDonald’s
- Starbucks
- Tim Hortons
- Rona Home & Garden
- Your Independent Grocer
- Gorilla Bins
- Mr. Lube
What Are the Benefits of Buying into a Franchise?
There are numerous benefits of investing in a franchise compared to starting a business completely from scratch. Some of the most significant benefits include:
- Lower start-up costs
- Support and guidance from the franchisor
- Instant brand recognition
- The franchisor provides training supports
- Less risk
- And more
What Makes a Franchise Worth Investing In?
From a business standpoint, some franchises are better than others. When it comes to any particular franchisor, if you can answer yes to the following questions then it may be a franchise worth investing in:
- Are you interested in the franchisor’s line of business?
- Does the franchisor offer its franchisees lots of ongoing support?
- Do you share the same values as the franchisor?
- Is the franchisor profitable?
- Do you understand the franchise’s processes, rules, and restrictions?
- Does the franchisor have a low closure rate?
Things to Take Into Consideration Before Investing in a Particular Franchise
Franchise Fees
As a franchise operator, you will be required to pay a franchise fee in exchange for using the franchisor’s branding, systems, and procedures, along with gaining access to support and training from the franchisor
However, the cost of the franchise fees and what kind of support you receive from the franchisor varies from franchise to franchise. They can range anywhere from $10,000 to $100,000, so it’s important to compare the franchise fees required by different franchisors.
The Franchisor’s Marketing Plan
While you will often be responsible for the marketing and advertising for your own franchise location, franchisors will typically have national marketing campaigns in place that will benefit your franchise. Plus, many franchisors will have a written marketing plan in place that offers guidance on how to market your franchise location.
The Franchise Agreement
One of the most important parts of doing your due diligence is carefully reviewing your franchisor agreement and also having a franchise lawyer review it as well. Buying a franchise is a big decision and you don’t want to end up trapped in an agreement that isn’t favourable to you.
Also, ask yourself the following questions:
- Do you fully understand the terms and are you comfortable signing the agreement?
- Do the terms of the agreement meet your expectations?
- Are you feeling pressure to sign the agreement before you’ve had a chance to review it with a lawyer?
The Franchisor’s History and Success Rate
You would never buy a car with a history of failure so why buy a franchise that hasn’t been successful with other franchise operators?
It’s important to look at other franchise locations and see if there are any concerning patterns. If there are numerous franchise locations that have closed their doors after less than five years in business, that could be a red flag that you should look into.
Also, consider the following:
- What are the franchisor’s business record and reputation like?
- What do other franchisees have to say?
- Does the franchisor have any outstanding legal actions against it?
- How many years has the franchisor been in business?
The Amount of Training and Support the Franchise Offers
As previously mentioned, franchisors typically offer support to their franchisees such as:
- Training
- Marketing plans
- Advice
- Mentoring
Look for a franchisor that wants to see you succeed and will help your franchise thrive by offering in-person training and ongoing support and advice on increasing customers and revenue by phone and/or video calls.
How Much Competition You Have
When researching franchises, look at how many locations a franchise already has in your city/neighbourhood. Also, look into how many similar businesses are operating nearby. Running a business and growing your customer base is challenging enough without having to compete against tens or even hundreds of other businesses.
How Many Locations a Franchise Has
Look for a franchisor like Gorilla Bins that has many years – if not decades – of experience and numerous franchise locations. This is a sign that a franchisor is stable and has strong brand recognition and a built-in customer base.
Restrictions Imposed by the Franchisor
As a franchise operator, you own your own business, however, there are restrictions and limitations put in place by the franchisor. It’s important that you are fully aware of and are comfortable with these restrictions before investing in a franchise and signing a franchise agreement.
Partner With Gorilla Bins
Still haven’t found a franchise to invest in? Consider partnering with Gorilla Bins.
Gorilla Bins is the top waste management business in Ontario with several locations across the Greater Toronto Area. Even if you have no experience in waste management, Gorilla Bins offers lots of training and support to ensure your franchise is fully set up for success.
Contact us today to learn more about why you should consider franchising with Gorilla Bins and how we can work together to form an incredible partnership.
Call us today! 
