How to choose a franchise: franchisor terms in one place
First work out the full cost of entry
The advertised sum “from $8,400” in a franchise rarely means everything. The full cost is made up of the upfront franchise fee, fitting out and equipping the premises, the first stock, rent, salaries and marketing at the start. The gap between the stated sum and the real costs can be big, so you must compare not the headlines but the full budget.
On BlaBlaPrice you write once what you want to open, in which city and with what budget, and franchisors send their terms.
What to put in your request
- field — coffee shop, fast food, beauty salon, pharmacy;
- investment amount — for example, up to $25,000;
- city of opening — Toronto, Montreal or another;
- premises — whether you already have them, what size;
- payback — what you look for, say up to 12 months;
- upfront franchise fee — the maximum you are ready to pay, or “no fee”;
- royalty — the acceptable monthly percentage or none at all;
- franchisor support — training, launch, marketing, supply;
- your experience — whether you have some in business or this field.
Example: “I want to open a coffee shop franchise in Montreal, I have premises of 400 sq ft. Investment up to $25,000, payback preferably within 12 months, fee up to $6,700, no royalty or a minimal one. I need a turnkey launch, and I have no experience in food service.”
Franchise fee, royalty and payback
The franchise fee is paid once for the right to work under the brand. Royalty is a monthly payment, often a percentage of turnover or a fixed sum. Some franchises have none, but then money may be taken through compulsory purchases from the franchisor. The payback a franchisor promises is a calculation, not a guarantee, so ask for real cases of working outlets and the contacts of their owners.
Also ask about territorial limits: whether the franchisor will open another outlet close to yours.
How to compare offers
Franchisors reply in the chat with entry terms, fee, royalty and what they give at the start. BlaBlaPrice compares the offers and shows the best one for you first, with seller reviews alongside. Sellers can see where they stand among the others and may improve terms, for example by lowering the fee or adding training.
- Count the total launch costs, not only the franchise fee.
- See how many working outlets there are in your region and whether they are profitable.
- Find out what happens if you want to leave the contract early.
Common mistakes
Signing a contract without reading the section on penalties and compulsory purchases. Relying only on the promised payback. Not allowing for your own involvement: this kind of business often needs your time, not only money.
If you want a ready place instead of a franchise, look at cafes, restaurants and coffee shops or shops. And for an online format there are online shops.
