So Many Franchises, How Do I Choose the Right One?...6. What Does a Franchisor Expect From A Franchisee?...16

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2 Introduction...5 So Many Franchises, How Do I Choose the Right One? Questions to Ask a Prospective Franchisor...And Why You Need to Know!...12 What Does a Franchisor Expect From A Franchisee?...16 Financing Through the Banks, What Do They Look For?...20 Purchasing a Franchise...23 Let s Talk about Disclosure...27 Location, Location, Location...33 I Bought a Franchise, Now What?...38 What our Franchise Winners Know...42 My Journey to Selecting a Franchise...48 In Closing...52 Rob Lancit s Bio...55 Gary Prevenost s Bio...56 Marietta Snetsinger s Bio...57 Bill Hamam s Bio...58 Charley Scrivener s Bio...59 Chad Finkelstein s Bio...60 Ned Levitt s Bio...61 Dale Willerton & Jeff Grandfield s Bio...62 Patti Hone s Bio...63 Ken LeBlanc s Bio...64 Troy Martin s Bio...65

3 Introduction A wise man once said, If you don t take a risk in life, you will always find yourself working for someone who has. Finding your true calling often involves taking risks and making a leap. For me, I took my big leap into the world of franchising over 15 years ago and have not looked back since. I have been involved in every aspect of franchising. I have been a franchisor, a franchise consultant, a franchise matchmaker and even a franchisee. In this ebook, I wanted to use my experience and the experience of others to help you decide whether franchising is right for you and to explain how to become successful in franchising. Most people would like to be their own boss. Yet when they think about business ownership, most would assume they re talking about entrepreneurship and starting their own business, without even considering the alternative Franchising. When in reality, franchising offers a much higher chance of success due to the fact that roughly 90% of all new franchisees succeed and only 15% of entrepreneurial ventures achieve true success. Why is it that most assume you have to start from scratch and re-invent the wheel? The answer is simple: franchising seems complex and confusing to some. Many people just don t seem to realize that franchising is quite simple and a much safer alternative to business ownership. Having been involved in the Franchise Industry for over 15 years, I have assisted franchisors with their expansion plans in both Canada and the US and have helped 100s of new potential franchisees find the perfect profitable partnership with a franchisor. Now, the reason I put this ebook together is to help you make a well informed decision as to whether franchising is right for you or not while giving you expert knowledge on how to succeed with franchising.

4 When I first decided to put this ebook together, I wanted the best of the best in the Canadian Franchise Industry to help out, and luckily I was able to gather key professionals to offer their advice. In this friendly, no-nonsense, easy-to-read guide to franchising in Canada I will personally introduce you to some of Canada s TOP Franchise professionals within the franchise industry. They will provide you with answers to all the questions you should be asking. In this ebook, you will get advice on how to get started, including dealing with the legalities and financing. You ll also hear from other professionals who will share their knowledge and experience on different aspects when it comes to buying a franchise in Canada. Keep in mind when you find something you truly enjoy doing, you will never work another day in your life! So let s get started. To your success! Rob Lancit President of BeTheBoss.ca

5 Deciding What Franchise is for YOU! Given the fact I started in franchising over 15 years ago, I can ramble on forever, so I decided to reach out to a guy I ve known for years. He s a straight shooter, no-nonsense kind of guy who is well respected, and has your best interests at heart. Gary Prenevost will tell you like it is when you re considering a career transition into franchising. He is one of Canada s leading franchise experts who has been an entrepreneur for over 25 years, and has been in a number of successful self-employed businesses, both franchised and non-franchised. Gary uses his experience and knowledge to give you inside tips on how to discover yourself, avoid franchising mistakes and traps, and help you become aware of the critical elements necessary to find a proven and viable franchise model. Name: Gary Prenevost Position: Franchise Consultant Company: FranNet of Southern Ontario gprenevost@frannet.com So Many Franchises, How Do I Choose the Right One? With all of the uncertainty that still remains in our current economy, the last few years have certainly changed how we look at long-term wealth creation, probably forever. Many people have lost faith in the four biggest traditional wealth/security creation strategies that we ve been relying on for decades (real estate, financial institutions, stock markets and corporate employment). In turn, a new solution now appears to be emerging due to this loss of faith, as experienced corporate professionals search for ways to stabilize their financial portfolio and begin the rebuilding process. Is self-employment the answer? Many mid- and senior-level executives seem to think so, and more of them are now considering self-employment options where they can leverage their knowledge and experience, and rely more on themselves for their own future security.

6 More executives are seeking non-traditional ways to maintain their lifestyle and rebuild their wealth and security through franchising! According to our recent experience over the last 11 years, the rate of interest appears to have more than doubled in the last 3 years despite the slowed economy. Historically, only about 15% of transitioning mid and senior executives would consider selfemployment as a career option, but since September 2008 we ve seen a marked increase in this number to between 30% and 40%. The majority of these executives and professionals are attracted to franchising, which when done correctly provides good systems and structure, and most importantly, because of a proven track record of success, is typically a far safer option than starting out on one s own. This does not mean that all franchises are good businesses this is simply NOT the case. Nor does it mean that the search is easy as there are many traps in finding a proven and viable business what appears to be a good business on the surface might end up being a really poor choice. So this article will help you to become aware of critical elements necessary to find a business where you have a strong likelihood of achieving success. Big Mistakes to Avoid I ll Know it When I See It: To find a franchise, we ve seen that almost all people start their business search with one of two methods: 1. Look at which franchised businesses and/or industries are performing well; or, 2. Look for types of products or services they really like.

7 Then most of these people surf the Internet or go to the franchise shows and hope that they find something that appeals to them I call this the I ll know it when I see it syndrome. The scary part is that employing either of the above methods prematurely is one of the biggest mistakes someone who s looking for a business can make, because there is a great peril in each of these scenarios here s why: Are You Suited? For the first option, just because other people have achieved success in a business does not automatically mean that everyone will. What does determine success is how well suited the owner is to performing the key roles that determine success for their business. Even franchisors with very strong brands don t take someone on just because they have enough money; instead good franchisors go through a rigorous matching process to make sure that the individual has the necessary skills and ability to perform the key roles that drive the business. When you think about this, it s no different for an employer who is looking to hire the right employee their decision has to be based on skills/ability fit with the key roles of the position, not just on the candidate s desire to do the work. Exercise 1: 1. Make as detailed a list as possible of the core skills that you possess, that you want to leverage in a new business; 2. Rate which skills are most important and impactful for you, second most important, and so on.

8 You Do Not Have to Love It! For the 2nd option, I get a lot of pushback on my view here, but please take a moment to ponder this the common view is that a key requirement to be successful in business is having a passion for a particular product or service. I believe strongly that is simply wrong. Instead, I believe that to be successful, the business owner doesn t have to love, or even like, the product or service. Instead, they must have: 1. An absolute conviction in the value offering to the end user client; 2. Passion that is connected with the key roles that drive the success of the business. Having passion for the product or service is a bonus; not a necessity. Take the owners of a maids service business do they like cleaning? Probably not instead, they like managing people and business systems, enjoy marketing, and also like interacting with people, and they re convinced of the value of the service they provide and therefore can persuade others that it s worthwhile to buy from them. Exercise 2: 1. From the first list, identify which roles give you ongoing, long-term satisfaction; 2. Make a list of things you don t enjoy doing and that you would not be prepared to do day in and day out (e.g. cold calling this seems to be one of the most popular answers I get!).

9 The C Word - Competition While considering the above two scenarios, you ll also want to consider that some of the most successful businesses are where the business is offering basic products or services, AND where there s a proven and sustainable demand for the product or service. Source By: christina-turcan.blogspot.com These include basic, non-flashy businesses with little curb appeal, as well as more glamorous businesses. This also means that there s lots of competition. Unfortunately, many people overlook a lot of businesses because of the perception that there s too much competition, when this actually works in the franchisor s favour strong franchise systems are very savvy and sophisticated, and therefore consistently outperform independent operators. So, would you rather have a business with lots of competition, but with proven and sustainable value differentiators, or world you rather be in a niche business with few competitors and possibly, a lot fewer clients? Regardless of whatever industry and business you might be attracted to, the two most important things to remember are that; 1. Your success will be primarily determined by how well you fit the key roles of the business you eventually buy, and; 2. Your motivation to drive your business and overcome the challenges you ll face will come from what the business will do for you personally.

10 Reverse Engineering The Most Important Step! In order to significantly increase your odds of finding the RIGHT business, this is where you should focus first to reverse engineer what your ideal business looks like. Instead of trying to find a few good business possibilities by first going to the Internet or to franchise shows, what you want to do is similar to what we do with our clients that is, to reverse engineer the whole search process by first determining the ideal business model what you re good at, what you re not good at, what your key criteria are, etc; as well, what are your short-term, mid-term and long-range goals, then start looking at only those options where the franchisor s business model is a close match to what you ve defined in the reverse engineering process. Only then are you prepared to truly analyze any franchise against the criteria and needs that you ve defined; not against other business opportunities. Think about it a franchised business is nothing more than a vehicle that s designed to get you where you want to go, while enjoying the ride along the way In other words, it must be able to satisfy your financial and lifestyle goals! It s Way More Than Just Food & Retail While franchise shows and the Internet are somewhat effective places to search, the companies that show up most frequently there are not necessarily the best companies they just invest more in marketing. When you engage in a bit of advance thinking (much like you would a major decision in your corporate life!) and gain greater clarity on your ideal business model before you start your search, it will be much easier for you to then go looking, and qualify or disqualify potential businesses. In other words, only invest time in those businesses that are a strong possible fit, and don t waste your time on businesses that don t fit, regardless of how cool they might be, or how successful they might be for others. While business ownership is hard work, most people usually find that they have way more drive, energy, focus and satisfaction, than in their corporate careers. After all, financial gain is only a by-product of a well-run business where returns are commensurate with well-focused efforts, and when you find the right business for you, you are in a position to build wealth on your terms. Franchise ownership is absolutely not right for everybody, but when there s a strong fit, it s a great place to be, because owning a franchise is not just about realizing your financial goals, it s about having a lot of fun along the way!

11 Found Your Franchise? Learn the Right Questions to Ask I ve known Marietta Snetsinger from her days back at Baskin-Robbins. She has been a big asset to many big names in franchising, and when she decided to go into business for herself as a franchise consultant, I was happy for her. Marietta has more integrity than most and goes the distance to help people. And now that you have an idea about what type of franchise you are interested in, I knew she was more than qualified to list the 10 key questions to ask before you even consider getting into a partnership with a franchisor. Marietta has played a pivotal role in developing and implementing tools to assist franchisees with their success during her tenure at M&M Meat Shops and Dunkin Brands Inc. (Baskin-Robbins Canada). That s why she was the right person to ask about what you need to know before working with any franchisor. Name: Marietta Snetsinger Position: Chief Solutions Officer Company: Ascend Franchise Solutions marietta@ascendfranchise.com 10 Questions to Ask a Prospective Franchisor... And Why You Need to Know! As a franchisee of any organization, your passion, energy, enthusiasm and business acumen will absolutely be key components that contribute to your level of success. The pre-work and due diligence you conduct prior to determining which organization you join is equally, if not more important to both your success and your overall satisfaction. Deciding which franchise concept is best for you can be fun and exciting; it can also be overwhelming. The variety of concepts available is immense, and the importance of making the right choice, imperative!

12 Beyond asking the standard questions around investment level, fee structure and financial requirements, knowing what else you should ask and more importantly the why you need to know, is critical. Making an informed business decision means finding out everything you can about a concept. The due diligence must be completed well before you commit to moving forward with a franchise agreement, and often that means probing with challenging questions. Ten questions that you need to ask: 1. What is the UFP (unique franchise proposition) and USP (unique sales proposition) of the franchise? What differentiates you from your competitors? The UFP and USP of the franchise need to be well defined and recognized. Understanding what makes the concept different will help you to identify any competitive advantages or potential shortcomings. Knowing the uniqueness of the offering will help measure the long-term viability and determine how the brand is positioned in relation to the competition. 2. What are the mission, core values, and guiding principles of your organization and how are they reflected in the day-to-day operations? How do you ensure that all franchisees are aligned with the aforementioned? A well-developed brand and franchise concept will also have a strong understanding of their own core values and can explain how they are integrated into the day-to-day operations. Preservation of high standards, core values, and performance that franchisees find compelling is critical. Everyone needs to know and understand what makes the brand successful. A popular Canadian frozen food concept has an excellent example of a Mission Statement, built on execution; To provide a friendly food-shopping experience which makes our customers say I ll be Back!. The statement centres everyone from marketing to construction on creating an environment and culture that is focused on customer retention.

13 3. How satisfied are franchisees? How likely would they be to recommend this franchise opportunity to friends and family? One of the best ways to gauge the health of a franchise system is to meet with existing franchisees. Try to find a cross section of franchisees based upon their Image Source: By K. MacKillop, Wisepreneur.com length of time in the system as you will want to speak to the newest franchisees, those who have recently completed training, as well as the veterans who can share the history of the system with you. Validation of the concept would be evident if relatives have since joined the organization. 4. How do you deal with disruptions and changes within your industry? How easily can you adapt to changes in the market place and how have you done this in the past? It is crucial to adapt and transform in accordance with the times. Being aware of industry developments and creating a plan to adapt within the concept is paramount. Ask the franchisor for specific examples and times when changes to the model were required and how they were implemented. 5. What are the KPIs of your franchise concept? How do you measure a franchisee s success? Key performance indicators (KPIs) are important, and a culture or system that respects and strives to achieve these indicators is more likely to be successful and sustainable. Strong franchisors make sure this attitude is engrained as part of the franchise system as it keeps everyone focused on profitability. A strong franchisor will be committed to your long-term financial success and viability. 6. Is there an opportunity to mentor or work with an existing franchisee as I complete my due diligence so I can fully understand what is expected of me? Do you currently recommend or require potential franchisees to work at the unit level? Some franchisors require candidates to speak with and visit several locations as part of their application process. If you have the chance to actually work in the franchise as an employee or even as a volunteer, do it! It will be a great chance to see if it is really the way you can see yourself spending your days for the next 10 years or so.

14 7. What can you tell me about your training program and on-going franchisee support programs? This is where you will learn how to implement the unique business model offered by the franchisor. The complexity or type of franchise system will determine the length of training. A strong systems-oriented franchisor will be dedicated to your financial well-being as a franchisee and have the proper personnel and systems in place to set you up for the best likelihood of success. Find out how often field staff will be in contact or on-site and the tools they offer to measure your success. Tools may include benchmarking, on-going staff training resources, business planning, unit business review/inspection. 8. How would you describe your current growth strategy? Growth certainly helps to develop a strong franchise base and increase brand awareness. Balancing the resources between operational support and recruitment efforts, especially early on, may prove challenging. Find out how many franchises are awarded on average each year and ensure sufficient resources are available. 9. How are territories and areas defined and established? Franchisors use many different ways to determine the boundaries of a given territory or market. Understanding how a territory is determined will facilitate your planning for future opportunity. Determine if adjacency strategies are utilized and the status of neighbouring territories or markets. 10. What is the exit strategy for franchisees who want to leave the system? Make sure you contact former franchisees and keep in mind that people leave franchise systems for a variety of reasons including retirement, lifestyle, and illness, or perhaps the franchise just didn t meet their expectations financially. Eventually, you may want to exit the system, so finding out how the franchisor structures the exit is important. The degree to which each of the responses to these 10 questions impacts your decision to join a particular franchise system will vary and likely depend upon where you are in your search for the perfect opportunity for you. Timing is everything. Diligence is the mother of good luck. - Benjamin Franklin

15 The Franchisor s Expectation Bill Hamam is a soft-spoken, humble man and someone I respect, admire and look up to even though I wouldn t say it to his face for fear of embarrassing him but I guess now it s in writing oops! Bill is a busy guy, so when he agreed to contributing to this ebook I was overjoyed since I felt it was important to hear from a large-scale franchisor. Bill Hamam, General Manager of MTY Group, which owns many well known franchises like Taco Time, Jugo Juice, Thai Express, and many more, will help you understand what a franchisor looks for in someone interested in acquiring a franchise potentially you. Here he will explain the application process to become a franchisee, the interview, and what questions to ask the franchisor during the interview, and what franchisors double-check for during the process. Here you will get a great idea as to what franchisors look for in their future partners. Name: Bill Hamam Position: General Manager Company: MTY Group bill@mtygroup.com What Does a Franchisor Expect From A Franchisee? Franchising is in many ways a partnership and a form of business association between a franchisor and a franchisee. It is incumbent on both parties to do their due diligence to make sure that this business association has a good chance of success. Every time a franchisor awards a franchise to a new candidate the franchisor is trusting their brand and systems with a yet unknown personality. Therefore, it is prudent for the franchisor to define the ideal franchisee candidate that works best for their system. There maybe different requirements for a ideal candidate for different franchise systems, however there are more commonalities than differences for what makes an ideal franchisee.

16 The Application Every franchisor has an application form that requires their franchise candidates to complete. Many of the forms require similar information, however the way the form is completed reveals many things about the candidate. Just like in a resume, the continuity in the timelime, whether it s employment or business ownership, is important. The financials should add up. A candidate should present a complete financial picture to the franchisor. All the information presented by the candidate must be supportable and verifiable. Look for neat and complete information. The more the gaps in the application, the less thorough and accurate the candidate is. This should raise concerns which must be addressed and answered at the level of the franchisor s due diligence: The Interview. The Interview This is a crucial step in deciding the suitability of the new franchisee candidate. This is where the franchisor s impression is mostly formed. Listening carefully to the candidate answer your questions and listening to the type of questions they ask the franchisor normally gives you the good or the bad Gut Feel about the candidate. This where the franchisor makes their decision if the candidate is a Good Fit or not. Asking open ended questions to all parties attending the interview allows you to evaluate their listening and comprehension, their command of the language and their communications skills, how well they articulate their ideas, and how structured is their thought process. Always ask about their expectation from the business. The answers always reveal whether they have a grasp of and an understanding for the potential of the franchise they intend to acquire. It indicates whether they have a Real Grasp or an Unreal Expectation.

17 If the candidate comes from the corporate world, they may not have the skills required to handle the multitasking required to run a small business and may not be comfortable with dirtying the hands as is needed in the case of many small businesses, such as a restaurant franchise as an example. If they ve previously owned other franchised or non- franchised businesses, then in addition to their expectations from the franchise they are applying for, ask them questions about their previous businesses. How did they get started? For how long did they own it? What did they achieve from it? Were they satisfied with their achievements? If they were to do it all over again, what would they have done differently? Why do they believe their prior experience would be an asset in their new franchise? Always ask them what their understanding is of the role of the franchisor. Their answer is a key indicator for their understanding of a franchisee / franchisor relationship. Ask to see if they have a basic understanding of a P&L (profit and loss statement). See whether they have an idea of various expenses associated with running a business. Do they have an idea about the ratios they need to achieve to generate a profit? Cost of goods sold, labour costs, occupancy costs, bank financing costs. The stronger the grasp on the number, the less likely they will manage their business and make decisions that are based on their bank balances but rather based on understanding of what makes a business profitable. If the gut feel after the interview is good, it is always a good practice to involve another department in a subsequent interview with the candidate. Your operations team should also feel comfortable with the candidate before the approval is granted.

18 Prior to Signing and Paying the Fees Encourage your candidates to seek both legal and business advice. Legal advice is important before the candidate finalizes their decision on entering into a franchise agreement with the franchisor. Legal advice should extend to the real estate side of the business. A lease or a sub-lease document is vital to the business. A good candidate understands the value of a good business plan. It must be real and realistic. Real in assuming numbers that are derived from proper due diligence and realistic by assuming and projecting sales and revenues also derived from proper due diligence. A prudent franchisor will not allow their franchisee candidates to over leverage and finance an unreasonable ratio of the entire project cost. Banks like to lend more, especially to reputable franchise systems that they have had a good success and track record with. However, it is also the duty of the franchisor to only allow financing that makes sense for the particular project. Just because a candidate qualifies for 90% financing, it does not mean the franchisor should allow it. Do the Checks Check the references from previous employers, from previous franchisors and from business associates. Just like in employment, references can reveal important information that is hard to discover unless you ve worked with or known the candidate. As hard as it is sometimes to turn down a candidate s application, a franchisor knows well that managing a difficult relationship is time consuming and counterproductive to the efforts of a franchisor, which should be focused on helping the System grow and strengthening the Brand for all franchisees. In summary, the selection process is very important for recruiting a candidate that is a good fit with the culture of the franchisor. A good candidate takes pride in building the Brand and contributing to the System.

19 Get Financing for Your New Franchise When I was looking to cover the topic on financing, I wanted to go after the best of the best; the guy who can deliver what you re looking for, and the only name that made the list, was Charley Scrivener. With his 25 years managing CIBC s franchise finance business and total of 33 years at the bank, there is nobody better qualified to address the topic of financing in regards to franchising. Charley is a really well-respected professional who will show you how to get money from the banks to finance your new career. Charley walks through what the banks looks for, the key pieces you should have in your business plan, and other finance options you can look into to finance your franchise. Now, get ready to learn what you need to prepare to get financing from your local bank. Name: Charley Scrivener Position: President Company: Charley Scrivener & Associates Limited charley@scrivener.com Financing Through the Banks, What Do They Look For? In my days as a small business lender I was often amazed at the lack of attention prospective franchisees displayed when considering the purchase of a franchise. The usual deficiencies were typically around financial analysis, planning, and projections. It was all the more surprising to me given that the would-be franchisees were making the biggest financial investments of their lives and putting the bulk of their personal financial resources on the line. As a lender, I had to turn a number of franchise-based credit applications aside because the applicant had no clue as to how the financial projections were arrived at. This is obviously an important detail for lenders who are being asked to fund the purchase of a start up business.

20 To get the most favorable reaction from a lender, the applicant needs to build a business plan, which is effectively a road map to convincingly show how the business will be successful. A good business plan discusses, among other things, the franchise system s product or service offering, its track record, the competition, and the things that the franchisor does to differentiate itself from the competition. Then the focus needs to move to the location and why it will be successful. And how the applicant is qualified to run the business. The business plan needs to include an opening balance sheet, a cash flow forecast, and a projected income statement. The balance sheet will show the assets the franchisee is buying (i.e. equipment, leaseholds, franchise fee),and then how the purchase will be funded (a mixture of savings and bank credit). Much of the information on the cost side will come from the disclosure document. The income statement projections will require discussion with the franchisor (and your accountant). All franchisors are rightly most cautious with income projections; with the franchisee signing a waiver, most will provide low, medium and high income projections based on existing store data. The cash flow forecast is probably the most useful document of the three because it will show how much cash the business will have on hand on a month-by-month basis. This information is important to know, for example when funding the business until financial breakeven occurs. Once you have the business plan done, take the time to review and understand it. For example, bankers will want to understand and challenge the assumptions supporting the numbers especially on the revenue side. Be prepared for that. However, if you do get thrown a question for something you don t have a ready answer, don t make up the response. You will blow your credibility. Simply say that you don t have the answer and that you will get back to them shortly.

21 Turning now to the request for credit, most start up businesses use, or should use, a long-term loan to finance the bulk of the purchase. The reason for this is not just because of the type of assets you will probably be financing (longer-term assets such as equipment, leaseholds, fixturing), but so you can spread the repayment out over a number of years. This approach definitely helps with monthly cash flow budgeting. The loan term, or amortization, will typically be the lesser of the remaining term of lease and useful life of the assets. Fees and interest rates and conditions of credit will depend on the quality of security provided to support the loan. For example, strong supporting security such as a charge on your home should bring the spread over prime rate very close, if not down to, prime rate. But not everyone has the means, or wants to, pledge their home as security. My way of thinking is that it is optimal to leverage the business to support the business loan. While some larger franchise systems have financing programs in place with banks so that financing is easily and readily available for their franchisees, most franchises don t have that luxury. This is why many lenders will finance the franchise purchase through the Canada Small Business Financing Program (CSBFP). According to Industry Canada, over $1 billion is lent every year through this program. In short, the Canadian government guarantees loans under the CSBFP. Loans can be advanced to $500,000, though not more than $350,000 can be used for furniture, fixtures and equipment. Banks are permitted to advance up to 90% of the cost of real estate, leaseholds, and equipment if they wish to. The loans are not to be used for intangible assets such as goodwill, franchise fees, working capital, research or development costs. Loans carry a maximum rate of prime plus 3%. There is a 2% insurance fee paid by the borrower to the lender (and then paid over to Industry Canada), which can be financed. Lenders may choose to take personal guarantees up to 25% of the loan amount. Hopefully this short article will help guide you on how to successfully own your own small business. I hope this article gives you a glimpse into how to obtain financing for your next franchise Good luck and happy franchising!

22 Purchasing a Franchise? Get a Legal Perspective Ned Levitt is a true franchise guru, a consummate professional and a real mensch. He has helped shape franchise legislation significantly in Canada and has been an integral part of the franchise industry for more years than he d probably like to admit. Ned has a very unique way of simplifying a document so folks like me can understand it. And that is exactly why I asked him to write the next chapter. Most people get confused and very nervous around the legalities of purchasing a franchise since the legalese language is hard to decipher into normal English most of the time. In this chapter, Ned clearly and easily explains the most important document you ll need to understand before officially getting into business with a franchisor the very comprehensive Franchise Agreement. Ned walks through the importance of getting an experienced franchise lawyer to help you decipher it and gives you a list of some of the most important things to know about a franchise that are not required to be disclosed. Name: Ned Levitt Position: Senior Partner Company: Dickinson Wright LLP nlevitt@dickinsonwright.com Purchasing a Franchise Purchasing a franchise is one of the most significant and challenging things anyone can do in their lives. It involves many legal matters, the most important of which is the signing of a typically very comprehensive franchise agreement. This agreement is a franchisor s document, which means it is intended primarily to protect the franchisor and the integrity of the franchise system from you, the prospective franchisee.

23 It is absolutely crucial that you, with the assistance of an experienced franchise lawyer, review the franchise agreement carefully and thoroughly. In newer systems, there is often some degree of flexibility on the part of the franchisor to make changes to their standard form agreement. In more mature systems, the importance in the review process is to find out if the prospective franchisee can live with the contents of the franchise agreement for five, 10 or even 20 years. Next, if the location of the franchised unit is important, as is the case in retail franchises, then the prospective franchisee needs to know, or ascertain from a real estate professional, that the proposed location is a good one for that particular business. In addition, the prospective franchisee and their lawyer must review leases and subleases. However, most often the difference between a happy franchisee and one that regrets buying a franchise is the amount of due diligence they did before signing the franchise agreement. In the bad old days, before the passage of the modern provincial franchise statutes, there was very little reliable information easily available to prospective franchisees. Now, provided the franchise is being purchased for operation in one of the five provinces with franchise disclosure legislation (Alberta, Manitoba, Ontario, New Brunswick or Prince Edward Island), there is a wealth of information literally handed to the prospective franchisee, before contracts are signed or money changes hand. These statutes compel franchisors to disclose, among other things, the names and background of directors and officers, the costs of establishing the franchise, the background of legal proceedings involving the franchisor, its directors and officers, any bankruptcy history of the franchisor or its directors and officers, financial statements of the franchisor, and information about the existing and past franchisees.

24 While this information is crucial and very valuable, it is a huge mistake to assume that it is enough information upon which to make an informed decision about purchasing the franchise. Some of the most important things to know about a franchise that are not required to be disclosed by this legislation. For example: How sound (profitable) is the concept? How does the franchisor treat its franchisees? Is the franchisor knowledgeable about the particular market in which the franchise is to be operated? Is there general contentment with the franchisor among existing franchisees? Are the system marketing programs effective? Does the franchisor assist the franchisees to acquire equipment, inventory and supplies at good prices? Does the franchisor invest in market research and keep up with changes in technology? And that is just the beginning of a much longer list. So what should one do in addition? Well, at a very minimum, a search of the Internet for news articles about the franchise system might reveal problems that have been exposed to public scrutiny. Talking to bankers, suppliers and landlords who have dealt with the franchisor or the franchisees in the system may reveal valuable information. Having the available financial information scrutinized by an accountant of other financial advisor and compared with available financial information on other similar businesses could be very revealing. A face-to-face meeting with employees of the franchisor can help you to gauge the quality and attitudes of the very people who will be responsible for supporting you as your franchise is being established.

25 Without a doubt, however, speaking with existing franchisees in the system and former franchisees, if possible, is the most valuable thing a prospective franchisee could do, before committing to the franchise purchase. Face-to-face meetings are the best, but telephone conversations will suffice in order to save money and time for travel. exchanges are less fruitful, as the franchisees may be reluctant to reveal their attitudes to and experiences with the franchisor in writing, which could be shared later with the franchisor. The prospective franchisee should not simply accept the list of franchisees presented for such interviews by the franchisor, and should endeavour to find franchisees on their own. Some attempt should be made to talk to franchisees who operate in markets and locations similar to what is planned for the prospective franchisee, e.g. mall locations or street locations. It is also a good idea to talk to franchisees who are new to the system, ones that have been around a long time, and those in mid-term. In this way, the prospective franchisee will be able to get some sense of the direction in which the franchise system is heading. Once you have done as much investigating as you can with the amount of time, money and stamina available to you, it is time to distill and analyze what you have learned. This process may require the services of a chartered accountant, franchise lawyer or other advisor. All of this takes time and effort and you should not feel rushed by the franchisor. The best franchisors want their prospective franchisee to investigate them as much as they will be investigating the prospective franchisee. The process should be more like dating than buying and selling. Regret is a terrible thing to have to live with, but regretting the purchase of the wrong franchise can also be financially disastrous. Following the best due diligence practices will make all the difference.

26 Get Clear on Franchise Legalities Let s Talk about Disclosure Chad Finkelstein is one of the hippest and most passionate lawyers in the franchise industry. His enthusiastic personality and lend-a-hand attitude made me think of him to help educate you on exactly what a franchise business is, what franchise legislation involves, the Franchise Disclosure Document (FDD), what a rescission means, and the legalities around the FDD. Plus it was easy to get him to contribute to this ebook since he contributes regularly to my site and writes often about Franchising Legalities for the Financial Post. Name: Chad Finkelstein Position: Partner Company: Dale & Lessmann LLP cfinkelstein@dalelessmann.com Let s Talk about Disclosure Let s start by making sure that we re all clear on what a franchise actually is. There are three essential elements that comprise the legal definition of a franchise in those provinces that have franchise law. If you hit all three, you re operating a franchise system. If one or two of these elements can t be established, you re not.

27 A franchised business is one where: a) someone grants someone else the right to use a trademark in connection with the operation of a business; b) that latter person has to pay some sort of fee for the right to operate that business, and; c) the someone getting paid has the right to exercise a significant amount of control over the person s business and operation. It s that last element that goes a long way in differentiating franchising from other methods of distribution, like straight-up licensing, and it makes a lot of sense why the control factor would be determinative of a franchise. After all, what is franchising if not a network of uniformly-operated businesses offering a consistent menu of products and/or services delivered in more or less the same way? We all know from our experience as customers that when we walk into franchised-restaurant-x, we already have an expectation about what will be on the menu, its quality, the look and feel of the restaurant and the overall customer experience. It s what makes franchising such an effective and attractive business model. But maintaining that uniformity does not happen effortlessly.

28 A franchisor has to flex a considerable amount of control over its franchisees to recreate that experience, and with that great power comes great responsibility. So recognizing that there is this inherent imbalance of power in the franchise relationship, in that the franchisor has the bulk of the bargaining power and ongoing control and assistance rights over the franchisee s business, legislators in (to date) five Canadian provinces have enacted franchise legislation to ensure that franchisees rights and interests are adequately protected (Ontario, Alberta, Prince Edward Island, New Brunswick and Manitoba, with British Columbia potentially on its way in the coming years). The hallmark of franchise legislation is the Franchise Disclosure Document (FDD). Ever bought shares in a public company? If you have, before you made your investment, you would have been provided with a prospectus, which would detail all of the pertinent information about the company so you d know what you were getting into. That s sort of what an FDD is like it s a compendium of information about the franchisor, the franchise system and the franchise offering that is designed to assist a franchisee in making an informed investment decision about a business where someone else will have so much of that aforementioned control.

29 And before we get into what you can expect to learn in an FDD, it s important to be aware of one of the most critical components of franchise law and FDDs. In the provinces where a franchisee is required to receive one, that franchisee has a 14-day cooling off period during which a franchisor cannot require that franchisee to sign any agreement relating to the franchise or pay any money to it. During that protected 2-week stretch, a franchisee should be consulting with its legal and financial advisors, as well as friends and family, to make sure that the franchise opportunity they are about to invest in is one that makes sense. And since franchise law exists primarily for the protection of franchisee rights, a franchisor faces severe penalties if it doesn t comply with the various disclosure requirements. Specifically, if a franchisor has a franchisee sign something or pay something in advance of the franchisee receiving an FDD or before the 14-day cooling off period has expired, the franchisee may have up to 60 days from the date it made the payment or signed the agreement to rescind its franchise agreement. Going further, if the franchisee never received an FDD at all, or received an FDD that was so deficiently prepared that it was equivalent to a franchisee never receiving an FDD at all, the franchisee may have up to two years to rescind its franchise agreement.

30 So what does rescission mean? Basically, that the franchisee should be put back in the place it was before the franchise agreement was signed, meaning a refund on fees paid to the franchisor, a repurchase of supplies, inventory and equipment and compensation for operating losses. It s a big penalty for non-compliance. The contents of a disclosure document are intended to assist the franchisee in making an informed investment decision, so franchisees can expect to learn the following information about the franchise: Background information on the franchisor, its affiliated companies and any other brands it offers or operates Biographies on the franchisor s officers and directors Litigation and bankruptcy history of the franchisor and its principals Estimated costs of establishing the franchise Estimated costs of operating the franchise on an ongoing basis Summary of training and support offered by the franchisor Details of the franchisor s advertising programs List of the franchisor s trademarks and other intellectual property being licensed to the franchisee Summary of a franchisee s restrictions with respect to obligations to purchase or sell certain products or services Summary of the franchisor s policies regarding exclusive territories A list of current and former franchisees Summary of the termination, renewal and transfer provisions in the franchise agreement A copy of the franchisor s most recent financial statements Copies of each agreement that the franchisee will be required to sign as a condition to acquiring the franchise

31 It is important to note that an FDD is not required to be delivered in those provinces which do not have franchise legislation (although Quebec does have its own particular rules in this respect), so if you live in a non-disclosure province, don t be afraid to ask a franchisor for a copy of its FDD. The disclosure document is a critically important instrument that contains tremendous amounts of information to help a franchisee understand the franchise system and the business that is being offered. While disclosure documents can range anywhere from 40 to 400 pages, prospective franchisees should be reading them carefully, and definitely with the assistance of professional advisors who know the industry well, and can guide a franchisee to points which raise red flags, may be negotiable with the franchisor, or are otherwise inconsistent with industry standards. FDDs are required for a reason. Make sure you are reading and understanding what you are required by law to receive.

32 Select Your New Franchise Location I ve known Dale for over 10 years and when I sent him some business a while back he sent me a mini grandfather clock that still sits on my desk in my office today. Dale works with Jeff Grandfield now and, let me tell you, they are one of the most respected teams out there. Dale Willerton and Jeff Grandfield have been helping people get their desired location at a good price for years and they are also the co-authors of the book Negotiating Commercial Leases and Renewals For Dummies. So, automatically I thought of them to help you find the right location for your franchise, and give you tips about lease negotiation tactics. Cause honestly, you aren t going to find two better guys who can find and negotiate a great deal for you. Name: Dale Willerton and Jeff Grandfield Position: Co-Authors of the book Negotiating Commercial Leases & Renewals For Dummies Company: The Lease Coach DaleWillerton@TheLeaseCoach.com Location, Location, Location. Secrets to Successful Site Selection for Franchise Tenants The number one reason for business failure or poor performance is due to a poor location. A poor location ultimately results from poor site selection. How else can you explain that identical stores from the same chain or franchise system will vary as much as 200% in sales volumes? Of course you will need to factor in store size, marketing budgets, management and so on; however, these are all secondary to the importance of location, in our opinion.

33 Essentially, there are three types of business model results: profitable, break-even and go-broke. A truly profitable location will make money and the business will appreciate in value. A break-even location will pay the owner a small salary and pay the rent but not much more. The go-broke location that comes to my mind lasted less than three months from opening to closing for one unfortunate tenant. Despite my warnings that this was a go-broke location, the business owners poured $80,000 into their store setup and couldn t pay their rent by the second month of operation. Usually, a go-broke location will not only steal your capital, but also put you into personal bankruptcy after you have maxxed out your credit. If you thought that site selection was all about location, location, location, you re right intellectually. However, when tenants are involved in the site selection process, good old common sense often goes out the window. Consider for a moment that site selection is not strictly a science; it s an art part research, part luck and part timing. In our new book, Negotiating Commercial Leases & Renewals For Dummies (Wiley, 2013), we devote a great deal of attention to site selection. Here are just a few relevant tips from the experts: 1. Allow enough time so that you re not making decisions under pressure. Typically, for a new business or franchise, you should start the site selection process six months or more in advance of when you want to open. If you find a prime location, usually the landlord will hold it for you for a few months. However, if the process takes longer, you may need several months to finalize the Offer to Lease, review the formal lease documents and/or build out the store.

34 2. Don t let one agent show you space all over town. Tenants often fail to realize that agents/brokers typically work for landlords who pay them a commission on lease deals signed and closed. When one agent shows you another agent s listings, this will effectively create commission-splitting between the property s listing agent and the leasing agent. This will also undermine your negotiating power since the real estate agent will know how you feel about every location. An agent may be very helpful in pointing out a location you were unaware of, but remember who they are working for. While their advice may be sincere, it may be sincerely wrong. 3. Make your leasing inquiry by calling the For Lease number on the property sign. This way, you will meet and negotiate with the listing agent directly. Tour prospective sites all at once, but in order from worst to best. This way, you will become more confident, ask better questions and be more in control of the leasing process by the time you react to your favourite site. 4. Don t telegraph your intentions by giving buying signals. Ask the leasing representative to you preliminary information before you agree to view the space. When viewing, stifle the urge to think out loud; subtle comments to a partner/spouse and overheard by the leasing representative can work against you. If you re asked how much you have budgeted for rental payments, remain vague. Not every question asked deserves an answer not yet, anyway. If you find yourself weighing a better location at a higher rent versus a lesser location at a lower rent, our general advice is to often go for the first option when the choices are close. When consulting to tenants and doing site selection, our job isn t to find the cheapest location; it is to select a site that will help the tenant maximize his/her sales volume.

35 Also remember that landlords sometimes prefer to lease their worst space(s) first and save the best space(s) for last. Sometimes, the individual unit or location you lease within a shopping centre or strip mall is more important that the mall itself or at least equally important. Know that lease rates within a building can vary two to three times depending on unit desirability, walk or drive-by traffic flow, space shape, quality of neighbouring tenants, anchor tenants and your operating status as an independent or a national chain name. While you don t always get what you pay for in leasing commercial space, you normally don t get more than you pay for either. Note that if you are an office or industrial-type tenant, location is not as critical. Therefore, you should have the upper hand with negotiations. Also note, if you already own a business or franchise but are considering relocating when your current lease expires, start your site selection at least nine months ahead. If you cannot get a satisfactory lease renewal, you will need this time to select alternative sites and negotiate a new lease elsewhere.

36 Marketing Your New Franchise Patti Hone is my go-to gal for anything and everything when it comes to marketing. Her out-of-the-box thinking and spirited personality trumps anyone in the industry, hence why I asked her to contribute her knowledge and expertise on what you should be thinking about after buying a franchise; marketing. Patti Hone has over 20 years of marketing and communication experience, specifically in the franchising industry. In this chapter, she goes over ways to market your franchise, methods and networks to use to get your message out there in the local community, and methods used to discover more about your customer market segmentation. Name: Patti Hone Position: President & Creative Director Company: As You Like It Marketing & Communications phone@asyoulikeitmarketing.com I Bought a Franchise, Now What? Realizing that your franchise is the most powerful marketing tool that you have, you should never miss an opportunity to tell your customers what makes your business special. Marketing locally needs to begin just there, locally, at your store, restaurant or office. Your marketing message needs to appear wherever appropriate.menus, tent cards, posters, store windows, waiting areas and counters. Anywhere your customer comes in contact with your business you need to ensure that the message you want to send is being read loud and clear.

37 Loyal customers are the best marketing tools your business can have. They spread the good word about your business because you have on some level been able to touch them. If you look at your existing customer base and their spending habits, you ll find that typically loyal customers outspend other customers by approximately 10 to 1 therefore a small increase in customer loyalty could increase your bottom line substantially. Get them talking word of mouth or personal referrals is one of the most powerful advertising tools available. It costs nothing and is the most well-received or believable forms of marketing. You can encourage word of mouth referrals through the use of discount vouchers and coupons, bring-your-family-and-friends events and any other way to encourage customers to spread the word on your behalf. Get to Know Your Neighbors visible, tangible involvement with your community is more than good PR. It is also very effective advertising especially for small businesses. Think about joining forces with other businesses to increase your advertising power and marketing reach. Find a business in your neighborhood that if paired together could create a great synergy. Not only will your combined marketing efforts make a bigger splash than on your own, you are also adding to each other s customer base and just as importantly are supporting each other... a true community outreach program. Networking and Clubs networking contacts and introductions are an especially cost effective marketing method for any consumer or business to business service or product. A variety of networking opportunities exist in all regions and neighborhoods including trade associations, chambers of commerce, clubs, breakfast/lunch and dinner events for business owners or anywhere that potential customers would gather to communicate and socialize. Use your imagination be enthusiastic about your business and that will translate to your next customer.

38 Frequency your local marketing efforts need to permeate your community on many levels. You want to keep your message fresh, exciting, frequent and strong. Put together an internal marketing calendar and work with your staff on generating a new reason to talk to your customers every week. It could be as simple as promoting a new menu item, or that your patio is now open, or you ve been open for six years and you re celebrating. If the event is newsworthy, contact your local paper and city official. Find out who runs your local Business Improvement Area (BIA) and make sure they are present for support and exposure. PR all newspapers need news to fill their pages especially local papers who are constantly looking for community news. Contact your local editor, get to know them and try to establish yourself as a source or an expert to be contacted for comments or quotes on subjects the journalists may be writing about. Submit press releases when you have news to share. Include a photograph if possible since photos improve the chance for being published. Remember that press release publicity is free publicity so don t be shy.but be timely. Source: flickr.com Local marketing is about building strong, lasting relationships with people and groups. By being a valuable resource and ensuring that your business objectives support your community s needs, you can create a win-win situation for everyone. When you support your community growing your business and marketing locally, you will garner loyal customers, an enhanced reputation, a strengthened awareness and ultimately increased sales. Local marketing is a big component in the success of your franchise. As a franchise owner you don t work for yourself you work for your customers. It doesn t matter what you re selling be it food, equipment or a consulting service; the best products aren t sold.they re bought. So who s buying your product or service.how did they hear about you.why do they buy from you and how can you reach more people like them?

39 A critical factor in discovering more about your customer is market segmentation; defining the who s who of your clientele. What do they have in common with each other and how can you attract more like them? Customer profiles can be broken down into the following areas: Geographics Profiling customers based on where they re coming from.city, province, country or as targeted as a neighborhood or street. Demographics How old are your customers, are they male or female, do they fall into a certain income bracket, are they married, single, etc. Psychographics What kind of behavioral patterns or lifestyle characteristics do they share. What are their beliefs, values and attitudes towards themselves and society. Geodemographics Also known as cluster marketing, combines all the above. Its basic premise is that people who have similar backgrounds or live in the same area tend to have the same buying habits and patterns birds of a feather flock together. By knowing your customer geographics you know where to reach your customers. Knowing their demographics you know who to reach, and using psychographics you ll know how to reach them. Once you know who you re trying to reach and where to reach them, you need to know what to say or offer them in order to make them buy from you. How do you motivate, inspire and attract them to buy?

40 When consumers gravitate to a business, their decisions are rarely based on marketing messages alone. Consumers rely on their own experiences. They choose to stay loyal based on what they have personally seen, sensed and experienced. As a result, you should devote the bulk of your marketing efforts to the steps that lead up to the sale. Target your customers, ensure that your product line meets your customer s wants and needs and communicate your offering in a way your customer can relate to. If you accomplish this, then when your customer is ready to buy, all you have to do is facilitate the exchange and they won t feel like you ve sold them anything. Never underestimate the power of the relationship. Your customers may choose to buy from your business over another simply because you make them feel better when they walk through your door. Without customers a business is out of business. The best customer you can have is the one that just opened their wallet.

41 A Franchisors Perspective Ken LeBlanc has his franchisees best interests at heart. He goes above and beyond the call of duty as a franchisor to ensure his franchisees are successful. Ken is a down-to-earth, high-energy yet no-nonsense kind of guy who has stayed very grounded given the success he has had. Because of this, I knew he was the perfect person to contribute to this ebook. His perspective as a Franchisor is valuable to you since his franchise is one of the most rapidly expanding franchises in the country, so take a look at what his franchise winners know. Name: Ken LeBlanc Position: President & CEO Company: PropertyGuys.com kleblanc@propertyguys.com What Our Franchise Winners Know Whether you are a chess player, professional athlete, or a business owner, the number one rule in winning has always been the same: surround yourself with people who are wiser, more accomplished, and just plain smarter than you are! I ve tried to do that constantly over and over again with my life and I have been richly rewarded for it. I feel that I work with some of the best coaches, trainers, business partners, mentors, and franchise owners in the world. Personally, I always try to bring people on board who are smarter than I am. So, as we build our national network of PropertyGuys.com franchise operators, we take some time to reflect. We study the best of our best and ask, what makes our top performing franchisees tick? Here are what we believe to be the top seven Secrets of Winning we have uncovered from this elite group.

42 #1. Winners Know What They Don t Know This might sound like a contradiction, but if you know what you don t know, you can go out and learn it, or find someone who can guide you through it. Real ignorance is not a lack of knowledge or education, but a lack of curiosity. The moment you think you know everything... you re done. #2. Winners Know To Avoid Cynics There are no successful cynics. Think about it: real success, in any way society measures it money, fame happiness, family cannot be achieved in the presence of a cynic. Why? Because cynics and skeptics love to place the finger of blame on the disease before figuring out how to get healthy. The blame game is the easy way out. You will never hear a winner say, I got screwed, That should ve been mine, I never catch a break. These are ALL deadend answers. Winners understand the world owes them NOTHING. They go out and find what they need without asking for permission. Winners are driven, talented, and work through negatives by focusing ONLY on the positives. And that s why they avoid the quicksand that cynics represent. Just as faith and fear cannot co-exist, cynicism cannot reside in the same residence as belief. Cynicism is not disbelief, but unbelief, a refusal. That is why cynicism is so dangerous to the average person. If you lose that sincere belief in yourself, in your relationship, as a child, parent, friend, or of your business, you become worthless to that being no matter how talented you are. Winners run as fast as they can from cynics. And fire them from their lives!

43 #3. Winners Know How To Dive In Winners don t care too much or dwell on failures. Business is not a marathon; it s a series of sprints. And most sprints are won at the moment the gun goes off. Many of us spend our time worrying about failure. Real winners don t give a shit about failure because they know that in no time they ll be diving into their next chance for success. #4. Winners Don t Wait For Perfect I have shared this concept with a number of our franchisees over the years. And it still holds true today. Winners focus on what they have not on what they don t have. Winners trust that version 1.0 out of the box is what it is and run with it. Even if they know that an updated stronger, better, cheaper, and faster version is coming soon, they still run with 1.0. Winners make the best of what they have in front of them and don t give a rat s ass about what they are missing or what s in their competitor s tool box. #5. Winners Are Married To Their Profession This is something I ve always known that was important and agreed with, but never realized how important it was until I heard Kevin O Leary speak at the Atlantic Dream Festival back in October of Kevin is the guy who some think is a complete jerk on Dragon s Den, but keep in mind he is the same jerk who sold his software business to Mattel for $4.2 billion dollars. Here is what Kevin O Leary has to say on this subject: People say to me that life has to have balance. I disagree, when you create or start a business you become its slave, there is nothing else, there is no balance. It s just you and the business. If you are a real entrepreneur and what you strive for is ultimate success, you become myopically focused on it. There is no Saturday or Sunday anymore, just you and the business. If you doubt that you won t become a slave to your business you will not become successful. There is no balance, no family time, no wife, no kids, just the business.

44 I often get criticized for this a lot. BUT IT IS THE TRUTH. The reason you create partnerships and a family is so they can have your back while you create wealth. The whole reason to become an entrepreneur is to pursue the ultimate goal of freedom. It doesn t matter if people don t like you. It doesn t matter what they think about you. It just doesn t matter. The goal should be to make that business successful. To most people, O Leary s statements might seem a bit extreme, but it s tough to argue with him. He has 4.2 billion reasons why he is right. One thing is for sure all successful business owners never stop thinking of their business. They are obsessed. It s embedded into their lives. They live, breath, and eat the business. They are in business mode 24/7/365. Winners are married to their business. #6. Winners Are Committed Winners look into the mirror every single day and peek at the ONLY person responsible for their success. They don t blame their financial or family situation. They don t blame the market. They don t blame competition. They don t blame employees or co-workers, the government or the man. True winners look in that mirror every single day and know they are the ONLY person that can make or break their business. True winners become accountable to themselves first, which by default makes them accountable to their business and their ultimate success!

45 #7. Winners Expect To Win Since 1977, the International Ice Hockey Federation has been organizing the World Junior Hockey Championship. And every year only one team truly EXPECTS to win that tournament. This one team EXPECTS to win so much so, that anything less than a gold is cause for national disgrace and witch hunts over what went wrong. While other teams might jump for joy over a silver medal, the very idea of silver is sickening and repulsive to this one team. Since 1977, this team has won no fewer than 15 of the 33 gold medals up for grabs. They have also captured a dozen silvers and bronzes finishing out of the medals on just 6 occasions. The Canadian World Junior Team is a classic example of a team that EXPECTS to win; just like the Pittsburgh Steelers, the New York Yankees, Los Angeles Lakers and as much as I hate to say it, decades and decades of the Montreal Canadiens. You ask any one of the players or coaches who have been inside great organizations like these and they will tell you that the very idea of losing is disgusting. The parallels from the worlds of the Steelers, Yankees and Canada s World Junior Team to the big winners in business like Apple, Nike and McDonald s are unmistakable. These are all great examples of teams that fully EXPECT to win when they step out to do battle! If you take just one lesson from this list, I would hope you honor yourself, your families, your teammates at work by refusing to lose and EXPECTING to Win! I know I EXPECT nothing less from our franchisees. I EXPECT to WIN!

46 Get to Know Someone Like You I was driving home one afternoon and came to a red light. While stopped I glanced over at a shopping plaza only to see each unit occupied with a franchise brand. Once the light turned green I knew what was needed to complete the entire process of buying a franchise in Canada getting a real franchisee s perspective after they bought a franchise. Trust me, there is absolutely no shortage of franchisees to talk to about their success, and after doing some research I decided to ask Troy Martin. Troy is a successful Quiznos Franchisee and he describes his journey to selecting a franchise, his experience as a Quiznos franchisee, and some key things he learned along the way. Name: Troy Martin Position: Quiznos Fracnhisee Company: Quiznos Canada Website: My Journey to Selecting a Franchise It was beautiful winter day in January 2002 when my wife (Paula) and I made a decision that would change our life During our few years of successfully trading stocks from home, my wife and I continuously discussed the idea of opening a business together. We had worked together before and had often wished we could spend more time together while building a business and our equity for the future. Although we both had experience in the restaurant industry, and in business management, we knew that a franchise would give us the best chance of success. We also knew that we wanted to pursue this venture with an organization that was recognizable and trusted for its amazing food. That served a product that had lasting appeal and was not something that was merely a passing fad.

47 We had heard from a few friends and family that they had recently enjoyed the best sandwich they had ever had, a Quiznos sandwich. After a lot of driving, multiple conversations, numerous visits to Quiznos restaurants, and tasting the best sandwich ever, we knew we had found what we were looking for. So we quickly contacted Quiznos Canada to learn more and signed up to attend a local Quiznos franchise seminar. The seminar provided us with a lot of information that answered some of our questions, but rose even more. After meeting the Quiznos team in a more personal setting, we were encouraged. Quiznos was very helpful in giving us contact information for current franchisees, answered all of our questions involving why we should invest with Quiznos, and what we could expect to see in terms of our start-up costs. Quiznos could not answer questions relating to expected profit levels, or similar topics. However, speaking with other franchise owners, we were able to accurately put together pro-forma statements which assisted us in the decision-making process. As our interest continued to grow, we knew that we wanted to be the ones to bring Quiznos to London, ON. We had researched and collected all the information we could. Ultimately, we knew that at some point we had to make our decision and take that leap of faith. We signed for our first Quiznos franchise on January 19th, 2002, and the hard work began. Once the agreement was signed, we were then very anxious to get to work on our first store opening. We had tremendous support securing our first location, with lease negotiations and with every element involved in setting up the business. While we were very involved in many decisions, we had someone at Quiznos to assist us every step of the way. They made sure all our questions were answered and kept us updated with the progress of the store.

48 Financing With the assistance of Quiznos, who provided us with some tools to assist with business plan preparation, we were able to put a package together to present to the bank for financing. Though it can be challenging to obtain financing for a restaurant venture in these tough economic times, we were always able to obtain the funds we needed to develop our business. Training In store training was a great experience and fully prepared us for the challenges of opening our own store. The owners of the training store were great at running their business. They taught us everything from how to successfully market your business, to how to clean your mop head properly to extend its life! Once we finished in store training, we went to Quiznos University in Denver, CO. Training was in a classroom setting at the Corporate Office and was a rewarding experience. Although it got off to a rough start with me getting a pair of tongs stuck in the oven and almost burning the motor out on my first test sandwich, things quickly improved and I graduated top of my Quiznos class with 100%. Real Estate As we carried out our search, various opportunities were presented to us. With the assistance of Quiznos real estate, we eliminated a handful of sites before settling on what turned out to be excellent choices. Professional Advice From the first moment we saw the Disclosure document, through signing our lease and setting up our accounting, we relied on professional advice from my brother, who is a lawyer. He was so excited that, by the time we had decided to move forward, he had decided to join us as a partner in the venture!

49 Although it seemed like forever, before we knew it we were fully trained and ready to open! I still remember working on financial projections leading up to our opening, wondering how many people might come through our doors and where they would all come from. On opening day I had to wonder no more, as almost 500 people came to our Quiznos that first day! There have been a lot of great moments since becoming a Quiznos franchisee. My favourite would be the relationships we built, that still prosper today. While working side by side with your spouse for up to 100 hours per week may not be for every couple, we enjoy succeeding together. Not to say there were not some trying moments during very hectic times, but we are still together to this day! Another proud moment was when we decided to give away free sandwiches for a day to raise money for our local hospital. We produced the busiest day in Quiznos Canada history and raised over $5,000! I was also very proud to be chosen as the site for the first Quiznos test market project, and to receive training store certification for two of my stores. However, our relationship with our employees was an element of the business that we could not have predicted would have been so rewarding. Seeing employees start with us as high school students, go to university and work with us during their summers off, to getting their first jobs, will always give us a tremendous feeling. I can truly say that as employers we have been able to make a difference in dozens of young people s lives, and know that we had a positive influence on so many. Of course, the relationships would have been strained had the restaurants not performed well. Any financial targets we set for ourselves going into the venture were quickly surpassed, and our early successes allowed us to open our next stores. After seeing some tremendous results right away and witnessing the enthusiasm customers had for the Quiznos brand, we knew we wanted to secure the other locations available in our area. With close consultation from Quiznos, we determined the areas we were interested in and set out to find the best locations in those areas. During our development there were a few occasions where Quiznos came to us with thoughts of opening stores in our trade area. Quiznos was open to discussion and in the end did not approve any new locations that had any real impact on our current business.

50 Over the next three years we opened two more Quiznos and enjoyed similar successes at all of them. Being an owner/operator with Quiznos achieved all the goals I had set prior to making the decision of getting into business for ourselves. The Quiznos franchise system set us up for success, yet allowed us to still use our own business sense and creativity to build the business into what we wanted it to become. Although owning your own business can present many challenges, and hard work and determination are certainly required, making the decision to be our own boss, and to partner with Quiznos Canada is a decision I am 100% happy we made! For those thinking of becoming franchisees, here are some business tips I learned: Marketing Although we have tried almost every type of advertising/ marketing you can think of, we find nothing works better than simply getting out in your community and letting people know you are there. A handful of coupons and a few hours introducing yourself to area businesses etc. goes a long way. Community Similar to marketing, working to become valued members of our local community allowed us to make many important and rewarding relationships. Local junior hockey players who have gone on to win Olympic and World Junior medals, local Radio DJs who were always willing to give us a few free plugs on air, were a few of many we built relationships with over the years. Catering Operating a successful catering business is critical to taking your Quiznos to the next level. Starting your day with a few hundred dollars in catering sales in your drawer helps to make any day more profitable. Focusing on catering and working the program properly can easily boost your sales by 20% or more!

51 In Closing Thank you for taking the time to read through this ebook. I hope you found the knowledge and experience from this key group of franchise professionals useful. I also hope you feel that it has helped you make a well-informed decision as to whether franchising is right for you or not, and has given you some helpful tips and expert knowledge on how to succeed with franchising. I would like to take this opportunity to personally thank each and every one of the contributors to this ebook for sharing their knowledge and expertise. In no specific order: Gary Prenevost, Marietta Snetsinger, Bill Hamam, Charley Scrivener, Chad Finkelstein, Ned Levitt, Dale Willerton, Jeff Grandfield, Patti Hone, Ken LeBlanc and Troy Martin. Thank you for your support and dedication to the Canadian Franchise Industry and for spending the time and sharing your knowledge with those that are considering exploring business ownership through franchising. If you feel inspired and encouraged to venture into business ownership through franchising, I hope this ebook has enabled you to see that franchising is quite simple and a much safer alternative to business ownership. For those of you that may have questions, I strongly encourage you to contact our contributors; all of their contact information is in the following section. And now for the shameless plug: if you are considering starting a business in franchising sign up and receive all the necessary information from our hundreds of franchisors on BeTheBoss.ca today! I hope this ebook was everything you were looking for and I wish you much success in your future endeavors. And again keep in mind.when you find something you truly enjoy doing, you will never work another day in your life! Rob Lancit President, BeTheBoss.ca

52 About Rob Lancit Rob worked with several top US Franchise systems, learning the ropes and discovering, as the only Canadian in these organizations, the pitfalls American franchise systems invariably stumbled into while attempting to develop Canadian versions of their US models. In 2000, Rob launched CANAM with the express intention of assisting US franchisors expanding into the Canadian markets. As time went on, however, the business branched out to Canadian franchisors requiring assistance. Then, in 2002, Rob perceived a need in the marketplace for a web portal geared towards franchising opportunities in Canada BeTheBoss ( was the result. Name: Rob Lancit Position: President Company: FranTech Media Phone: Website: rob@frantechmedia.com

53 About Gary Prenevost Gary Prenevost has been an entrepreneur for over 25 years and is one of Canada s leading franchise experts. He has been involved in a number of successful self-employed businesses, both franchised and non-franchised. He helps mid- and senior-level executives to objectively consider business ownership in franchising as a positive and viable career choice, exploring the best options that fit the individuals strengths and desires. This ensures greater success and quality of life, with less stress and more fun after all, franchising is way more than just food and retail! Name: Gary Prenevost Position: Franchise Consultant Company: FranNet of Southern Ontario Phone: Website: gprenevost@frannet.com

54 About Marietta Snetsinger As the Chief Solutions Officer of Ascend Franchise Solutions, Marietta Snetsinger assumes project management responsibilities for all consulting projects and long-term engagements. With over 20 years of business experience, Ms. Snetsinger is passionate about establishing solid operational systems and supports within franchise organizations. She played a pivotal role in developing and implementing tools to assist franchisees with their success during her tenure with M&M Meat Shops. She has also been involved in franchise sales and development with both M&M Meat Shops and Dunkin Brands Inc. (Baskin-Robbins Canada). Her thorough knowledge of franchise operating systems and her strong commitment to the success of her clients is an asset to any emerging or established franchisor. Name: Marietta Snetsinger Position: Chief Solutions Officer Company: Ascend Franchise Solutions Phone: Website: marietta@ascendfranchise.com

55 About Bill Hamam Bill Hamam has been the general manager of the MTY Group, Toronto Office since 2008, and is in charge of the operations for several of the MTY brands in addition to franchisee recruitment and system growth for most of the MTY brands for Ontario and Western Canada. He started his career in engineering and later opened his first food service business in From 1988 to 2008, he was a partner and a vice president of operations at Canadian Industrial Services Limited. Over the years his involvement included all aspects of the franchising business: systems development, real estate selection and lease negotiations, operations, marketing and franchising. Name: Bill Hamam Position: General Manager Company: MTY Group bill@mtygroup.com Website:

56 About Charley Scrivener Charley Scrivener is President of Charley Scrivener & Associates Limited, a full service franchise consulting firm. The firm supports clients with a personal, hands-on approach to franchising, providing decades of experience. Charley was with CIBC for 33 years. For 25 years he managed the bank s franchise finance business. He served as Treasurer and Director of the Canadian Franchise Association and, on the international front, served as chair of the Supplier Forum and was a director of the International Franchise Association. The firm, in association with Farber Financial Group, specializes in providing financing to franchisees of small to medium sized franchise systems. Name: Charley Scrivener Position: President Company: Charley Scrivener & Associates Limited Phone: Website: charley@scrivener.com

57 About Chad Finkelstein Chad practices in the Corporate Commercial group with a focus on Franchise & Distribution Law and Trademark Law. He assists domestic and foreign franchisors with all issues in the establishment and development of their franchise systems in Canada, including all matters relating to acquisitions of franchised businesses, as well as licensing and distribution. Chad represents franchisors and franchisees in connection with all issues pertaining to the franchisor-franchisee relationship, and drafts and reviews franchise agreements, master franchise agreements, area development agreements and disclosure documents. Name: Chad Finkelstein Position: Partner & Registered Trademark Agent Company: Dale & Lessmann LLP Phone: Website: cfinkelstein@dalelessmann.com

58 About Ned Levitt Edward (Ned) Levitt is a Certified Franchise Executive, a partner at Dickinson Wright LLP, Toronto, Canada, and provides legal services to Canadian and international clients on all aspects of Canadian franchise law. He was General Counsel to the Canadian Franchise Association ( ) and is a member of the American Bar Association Forum on Franchising, the International Bar Association and the International Franchise Association. As a member of the Ontario Franchise Sector Working Team, Ned was instrumental in the creation of Ontario s franchise legislation. Among his many publications is the leading text Canadian Franchise Legislation (2001, LexisNexis/Butterworths). Name: Ned Levitt Position: Senior Partner Company: Dickinson Wright LLP Phone: Website: nlevitt@dickinsonwright.com

59 About Dale Willerton and Jeff Grandfield The Lease Coach is North America s #1 Authority on Commercial, Retail and Office Leasing for Tenants. The Lease Coach has been exclusively working for tenants since Dale Willerton and Jeff Grandfield have spoken at expos, universities and franchise shows throughout North America. Willerton and Grandfield are co-authors of the book, Negotiating Commercial Leases & Renewals For Dummies (Wiley, 2013). Name: Dale Willerton and Jeff Grandfield Position: Co-Authors of the book Negotiating Commercial Leases & Renewals For Dummies Company: The Lease Coach Phone: Website: DaleWillerton@TheLeaseCoach.com

60 About Patti Hone Patti Hone, President & Creative Director, As You Like It Marketing & Communications. With over 20 years of advertising experience and a proven track record, Patti provides As You Like It s clients with complete marketing and communications services. Patti began her career as a copywriter before undertaking the position of Marketing Director for a national chain of drug stores. On the agency side, Patti specializes in retail and franchise accounts, where her creative campaigns have won 80 international advertising and marketing awards for her clients. In addition to managing and directing all agency projects, Patti served on the Board of Directors of the Canadian Franchise Association for seven years and is past chair of the Franchise Support Service committee. Patti is a popular writer and speaker and has been retained by companies across North America to bring their brands to life. Patti is proud to celebrate As You Like It s 15th year in business. Name: Patti Hone Position: President & Creative Director Company: As You Like It Marketing & Communications Website: phone@asyoulikeitmarketing.com

61 About Ken LeBlanc Ken LeBlanc has successfully challenged an established industry, and selflessly shares his passion for helping others build a business through his activities with organizations such as the Canadian Youth Business Foundation. The President and CEO of PropertyGuys.com has been in the business of building his own business since his student days. Now, 14 years later, he has leveraged his drive and vision into the largest real estate marketing franchising network in Canada. It started in 1998 when two young classmates identified the opportunity to help home owners who wanted to sell their homes privately by leveraging the power of the Internet. With this big idea and less than a hundred bucks to invest, the PropertyGuys. com real estate marketing program and brand were born. The company has continued to be on the cutting edge of industry change and technological innovation. Today there are operations in 10 provinces and territories, and over 100 franchise locations serving home sellers in 600 communities from coast to coast. Name: Ken LeBlanc Position: President & CEO Company: PropertyGuys.com Website: kleblanc@properguys.com

62 About Troy Martin Troy and Paula Martin have been successful franchise owners in the Quiznos system for over a decade, owning as many as five locations in the London, Ontario area. They were the first to bring the Quiznos concept to the region back in 2002, opening a very busy location on Wellington Road. Troy and Paula s family has grown along with their Quiznos business, as they are proud parents of two young boys, ages eight and 10. The Martins are looking forward to the future when their two boys can look to the family Quiznos for their first part time job. Martin has always played an active role within the Quiznos organization, sitting on the Franchise Advisory Council for four years, as well as operating two regional training stores. Martin credits their success to serving the best food on the market, combined with attentive customer service and being active in their community. Name: Troy Martin Position: Quiznos Canada Franchisee Company: Quiznos Canada Website: