Those interested in starting a small business should consider smaller, service-based franchises
While franchising may seem to be an attractive option for those interested in starting a small business, entrepreneurs should be aware that it comes with a unique set of costs and risks, especially with larger franchise chains.
Potential franchisees should remember that they are not buying a franchise, they are renting it - and this could come with serious costs passed down from the corporate end in the form of brand renovations, among other required updates, reported the Financial Post.
"This is an open-ended obligation to do a renovation at the end of your contract," Tony Wilson, a franchising lawyer with Boughton Law Corp, told the newspaper. "You are renting [and] you've got to appreciate there's going to be some costs."
To avoid these kinds of obligations, potential franchisees may be better served by investing in smaller franchise chains, such as those in the service industries, the article advised.
Franchising has emerged as a popular option for those interested in running a small business - there are more than 78,000 franchises across Canada, accounting for 40 percent of all retail sales, reports the Canadian Franchise Association.
