employee with two moving trucks

Franchise Advantages and Disadvantages

Franchising is an opportunity to become your own boss and pursue your passion for small business ownership while plugging into an established brand and network willing to help. Is franchising the right choice for you? It’s certainly an appealing option though there are admittedly advantages and disadvantages to franchising in Canada. For would-be business owners and entrepreneurs, here’s the ultimate guide on the positives and negatives of what to consider when buying a franchise.

Advantages

  • A franchise is a low-risk and low-cost investment. A franchise is certainly more secure than an independent small business as you have the support of an established corporation behind you. The business model has been proven successful in other franchise setups and regarding any support from financial institutions or banks, they know they’re investing in a business with a strong opportunity to be successful.
  • Buying a franchise instead of starting your own small business, there’s a higher likelihood of being successful. The meaning of franchising is that you get resources and support you wouldn’t have otherwise while operating under a brand that’s already investing in business factors like marketing and creating awareness in the marketplace. A franchisor is already investing into making their franchisee a success before a location’s even been established.
  • The best franchise is one that provides an extensive business network, filled with supports you’re encouraged to take advantage of. As a franchise business, you still have the independence of being your own boss. The primary advantage of franchising is when you have questions, require assistance or guidance on a business issue, or want to tap into resources to help you manage your business, there’s a network of management-level personnel ready to direct and assist.
  • You don’t need any business experience to own and operate a franchise. Few franchise opportunities in Canada require prior experience. All that is wanted is your ambition, commitment, responsibility, and dedication to becoming a successful business owner. Franchisors provide a lot of training into how to operate their business model. After all, when a franchisee is successful so is the franchisor. There’s incentive on their part to do everything they can to support you in your journey as a small business owner.
  • Inside a franchise business, you’ll oftentimes find financing easier to secure. For example, Metropolitan Movers is Canada’s top moving company franchise opportunity going and franchisees are offered what’s called a ‘BP Interest Free Loan’. This loan can help set up a franchisee, resulting in a much lower cost than what it would take to start your own independent company.
  • Franchises are plugging into brands that have established reputation and images. Consumers already know who you are. There’s no educating them on your products or services, or what your brand stands for. You have continual support of Internet marketing and potentially local advertising which will help bring you customers without you having to lift a finger. If you’re franchising on a national brand, that’s even better as it adds to the legitimacy of your operations.
  • A franchise investment allows you to hit the ground running. Franchisees oftentimes don’t need to wait to become profitable. As a start-up, you’re given significant resources in selecting a site to rent, equipment to purchase, suppliers to work with, in employee training, and with grand opening events. In some cases, corporations like Metropolitan Movers’ Canada moving company franchise opportunity will even provide a start-up loan and similar forms of financial assistance to help make starting operations simple and easy.

 Disadvantages

  • When you buy a franchise, you enter into an agreement with your franchisor. This can involve certain stipulations and a commitment to pay certain fees over time. Every franchisee-franchisor agreement is different so be sure to thoroughly look over what’s being offered and don’t hesitate to ask questions to get a clear sense of responsibility.
  • Franchise agreements can dictate a lot of aspects about how you run your business. If you’re creative and want to mix things up with branding, products, or services, you likely will have to receive prior approval. There are also usually restrictions into where you operate, what products you sell, and the business relationships you have to use.
  • The performance of other franchisees can affect the operation of your franchise unit. As you’re operating under the same brand, low standards of performance of other franchise partners can affect the reputation of the brand and your performance accordingly. Make sure to spend some time researching the brand and speaking to existing franchisees to ensure that a high-quality standard is taken by the brand seriously. 
  • One of the differences between a franchise and a non-franchise business is there’s no requirement for a franchisor to renew a franchise agreement once it is over. For argument’s sake, if you’ve purchased a franchise from a franchisor that you’re having issues with, a franchisor can terminate the relationship at the end of an agreement which puts you out. Fortunately, if you are building a small business with a company you believe in, you are unlikely to run into the issue of a franchisor not wanting to renew the agreement.
  • Buying a franchise in Canada, you as a franchisee will be required to share profits with the franchisor under the conditions stated in your franchise agreement. This profit-sharing isn’t generally problematic as a franchise is benefiting from branded marketing, awareness, online advertising, and lead generation strategies. If you owned your own independent company, you wouldn’t have to profit-share however you wouldn’t have the same advantages to plug into to arrive at a profit to begin with.

 Do you want to become a franchisee?

 For a lot of Canadians, franchising was their way to financial independence, professional growth, and small business success. It’s a low-cost, low-price investment that provides a franchisee the chance to earn money from day one. If you’re interested in information on how to start a franchise in Canada and/or to become a franchisee, we at Metropolitan Movers would like to hear from you.

Through our exclusive franchisee support network, we work hard for our franchisees as they do for us. Gain more autonomy over your career, have peers to look to for advice or assistance, and open a small business for yourself with the highest chance of success. Tap into one of Canada’s top low-cost franchising opportunities today and speak with a representative.

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