When looking to start your own business, one of the options that you can consider is buying a franchise. Although purchasing a franchise will likely cost more than putting up a business from scratch, in general, franchises have a higher success rate than start-ups. This is because you are actually paying for the product’s proven track record, as well as the franchisor’s training, marketing, and business support. Before you consider signing a franchise agreement, it is a good idea to consult with experienced Canadian Franchise Lawyer who is a specialist in the field and is knowledgeable in all aspects of the franchising business.

A franchise is actually a legal agreement between a franchisor (seller) and a franchisee (buyer). Through this agreement, the franchisee is granted rights by the franchisor to distribute certain goods or services developed by the latter, in a specific way, a particular location, and a specified period of time. When you enter a franchise agreement, you are not actually purchasing a business, but only the rights to operate the business under the said agreement for a limited, pre-specified period of time. This agreement may also have the option for renewal.

Buying a franchise has its advantages. First, the franchisor will provide the training necessary for you to run the business successfully. This training encompasses all stages of the business - from establishment, to running, and even expansion. The franchisor will also provide regular supervision and ongoing advice on business operations. In addition, most franchisors also have the buying power to fund regional and national advertising campaigns, as well as provide financing options when needed. Franchise attorneys will be able to assist you by drafting, negotiating, and reviewing the franchise agreement to ensure that these terms are all specified, and will be duly enforced.

Aside from having to pay for the franchise itself, the franchisee also has to pay for ongoing fees and royalties based on sales. Because of this, franchising can be rather costly; this is clearly one of its disadvantages.Other disadvantages of franchising include limited possibilites for expansion, and restrictive guidelines and regulations which can confine the business decisions you can make as the franchisee. Your  Canadian Franchise Lawyer can help explain your rights as a franchisee, as well as help you understand any legal restrictions laid out in the franchise agreement.

Before you decide to sign that franchise agreement, do your research and study the pros and cons thoroughly. As with putting up any kind of business, there are several risks involved. Know that franchising is not an entirely risk-free investment. Although in comparison, more independent businesses are prone to fail, one study published in the Wall Street Journal showed a 35% failure rate among franchises.