Things To Look For When Buying A Franchise in Alberta
There are many benefits to being a franchise owner in Canada – primarily that you get to be your own boss and join approximately 1.14 million small business owners in Canada as an entrepreneur. At Verhaeghe Law Office – our Edmonton franchise lawyers have assisted numerous clients in the buying and selling of franchises across Canada. We recommend consulting with a franchise lawyer who is familiar with franchise laws in Alberta in order to make an informed decision prior to purchasing one. The Canadian Franchise Association is also a fantastic resource for franchise owners if you are in currently in market to buy a franchise.
In an effort to assist interested buyers – we have put together a list of rudimentary questions you may want to find answers for prior to purchasing a franchise. Please note this is not an exhaustive list – and instead is intended to act as a general overview. As we state in all our other online publications – please consult with a franchise lawyer in order to get tailored and specific legal advice if you are considering purchasing a franchise.
Initial Questions To Ask A Franchisor:
- Who are the main shareholders of the franchisor as well as the officers and directors
- How experienced are these individuals in franchises?
- If applicable, are there any other companies or franchises within the franchisor organizational group?
- How are all these companies related to the franchise group?
- Have any of the franchisor’s directors, officers or shareholders ever declared bankruptcy in the past?
- How many years has the franchise been operating for?
- How many years has the franchise group been selling franchises for?
- How many franchises are within the franchising group and how many are corporately owned?
- What is the franchisor’s online reputation like as well as customer service ratings like?
- What are other franchise owners saying about the franchisor?
- Are you able to connect with an existing franchise owner to get their opinions and experience firsthand?
- Does the franchisor have any plans for expansion?
- How are the franchises monitored by head office?
- Does the franchisor offer marketing and advertising budgets?
- Does the franchisor have dedicated vendors for their marketing and advertising efforts or are you able to select your own?
- What is the failure/turnover rate for franchisees and what are the reasons for failures/turnovers?
- Will the franchisor regularly provide financial statements?
- How are the franchises inspected periodically and what do they look for during inspections?
- What are the franchisor’s future plans for technology, development and introducing new products/services? How will this affect you?
- Are there any pending litigation matters against the franchisor?
- What is the corporate culture and vision for the franchisor and are you comfortable with this?
- How innovative is the franchisor? Ask them to give you examples
- What is the required initial investment and ongoing investment?
- What are the fees associated with owning this franchise
- What additional costs may be incurred?
- How extensively involved is the franchisor in the franchise operations
- What is the expected time between start-up and profitability?
- Is your franchise territory exclusive? If not – is there any territorial protection measure in place?
- How easy/difficult is it for you to expand your territory?
- And more
Speak With An Edmonton Franchise Lawyer At Verhaeghe Law Office If You Are Interested In Buying A Franchise
In addition to the above-mentioned questions – there are various other things to consider and investigate prior to buying a franchise. In Alberta – there is legislation that mandates the provision of disclosure documents and they must comply with the franchising disclosure statute. Our franchise lawyers can assist with the confidential and sensitive nature of these types of transactions and have assisted numerous clients with purchasing franchises. Contact us today by dialing 587-410-2500 and book a consultation to speak with an Edmonton franchise lawyer today.
Disclaimer: This blog is intended to act as a general overview on a commonly asked legal topic. It is not intended to act as legal advice, nor does it establish lawyer-client relationship in any way. If you require legal assistance on this topic, we suggest you consult with a family lawyer regarding your unique situation.