The Life Cycle of a Franchise

By sprokop

 Thousands of Canadian would be entrepreneurs in Canada clearly recognize the trend that franchising in Canada is a major industry and a leading contributor to the economy as a whole. You want to be a part of that trend!

So, that being said how does the entrepreneur translate that opportunity into his or her ability to kick start franchise financing funding in a manner that makes getting a franchising loan a success as a part of their overall entrepreneurial strategy?

Let’s share some solid advice on what type of financing you should utilize to successfully complete your new or existing business acquisition. Yes, existing franchises can be purchased and financed also!

The amount of money that you yourself put into the business is a key factor in your potential sales and profit success. But two questions immediately arise: Do those funds necessarily guarantee you success based on how much you put in, and secondly, where do you access the balance of the finances you require?

One somewhat intangible issue that also always comes up is the ability of the entrepreneur/ borrower to demonstrate how much experience they have in a chosen industry or business. So things like your own outlook on being an entrepreneur / business owner (it’s not as easy as you think) and matching your skills to the type of business you buy and finance are critical.
By the way, we think there are very few executives in even the largest most successful corporations in Canada that have the total skills involving sales, marketing, operations and finance as a total skill set . Those people are the real superstars.

Naturally one of the reasons you purchase a franchise is that you are buying into, hopefully, a proven system of a brand, business model, marketing and advertising assistance, etc.

OPM is important when it comes to franchise financing. That of course stands for Other People Money, which represents the balance o the funding you need for your franchise purchase. In Canada, along with your equity, or we’ll call it a down payment the balance of your financing comes from either a commercial finance company that either specializes in franchise finance, or one that can compliment the financing you need. A good example of that is an equipment finance company that can acquire and lease assets for you such as POS systems, other hard assets, vehicles, etc,

In general anywhere from 10 to 40%, sometimes more is required as a down payment or equity contribution to your business. We quickly add that that doesnt always necessarily mean that money is permanently contributed or ‘ tied up ‘, but you just must show that you have access to liquidity to get the busines off to a good start for working capital and growth purposes.

Two key points for the franchisee – a solid majority of the franchising loan scenario in Canada is done via the government BIL/CSBF program. It offers great rates, terms and structures for the acquisition of your business. Where the program falls down a bit is when it comes to a service type business where there are limited or no assets to purchase / finance.

Our other key point – have a crisp ‘ package ‘ in place when it comes to a business plan, industry overview, financial projections, etc. This isn’t the rocket science it sometimes seems when it comes to getting a good proposal in front of your lender.

You can’t afford to miss out on your business purchase just because of a poor presentation package, and it can also be easily accomplished by using an expert such as a Canadian business financing advisor that is experienced and has success and knowledge of franchise finance.

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By Daniel Cargille

 There are a number of benefits to starting an environmentally friendly business – especially if you’re starting a franchise. Not only will you save money on getting your business launched but you’ll earn the respect of the local community as you strive to improve your carbon footprint. It’s great for positive branding as you prove that you’re a globally and economically responsible company.

Here are steps to help you develop an environmental strategy as you get ready to choose and open a new franchise.

Target Environmental Regulations with your Franchise

Every business in the US is governed by a minimum set of environmental standards and regulations that have to do with trash and cleanliness, drainage, etc. Keeping up with these helps to avoid legal issues but if you want to build your brand and tout yourself as a green business then you need to go beyond the minimum standard.

Create an Environmental Management Plan for your Franchise

When you want to open a business you will more than likely sit down to create a business plan if you haven’t done so already. This typically includes financial and marketing information but it can also include an environmental management plan. This takes into account practical ways to reduce carbon footprint and utilize energy-saving equipment for reduced local impact as well as savings to utilities and reductions in budget. This can be as simple as planning to source food products from local providers.

Build a Green Franchise from the Start

If your franchise requires that you build a new structure to gain the most benefit and local impact with your target audience (or its just a sound decision financially) then you should aim to use green building products wherever possible in the business. This includes better HVAC systems, high-quality insulated windows with Low-e ratings, efficient lighting, solar panels and more.

Buy Green Products

Every business needs supplies, and depending on the franchise and brand you choose to invest in, you may need more than others. Food services franchises for example use far more cleaning supplies than a clothing chain. Make sure you source and buy products that are bio based and non-toxic. Where possible, such as with paper towels, try to purchase products made from post-consumer recycled materials.

Conserve Water

Every business uses water to some degree – but more so for a food-service based franchise. The increased demand on the water supply of our nation is threat to human health as well as the environment. If you implement a water-conservation program you’re working to conserve a precious resource that is in fact limited. Likewise, you cut a general utility cost by a portion through conservancy. You can boost conservation of water by having your local water agency conduct an audit of your systems. Likewise, invest in better technology and water-saving equipment. Lastly, try to minimize discharges of sewer and wastewater.

Make a Green Marketing Strategy for your Franchise

When you launch as a green business or franchise, there is a great deal of potential for building brand visibility – but people won’t know that you’re running a green business unless you tell them. Add those “green” claims to all of your marketing materials and make sure that your customers, vendors and business partners know that you’re working with conservation in mind. People love to do business with environmentally friendly companies.

You should take the time to build relationships with the people and organizations that can help you spread the word about your overall message and goal. Of course you want to turn profits with your business but you should work to share your attempts to help the environment. Not only are industry partnerships a good idea – such as with other business owners – but groups and organizations can help you share your missions as well.

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