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Is Canadian Franchise Financing A Do It Yourself Project? Franchising In Canada With Success

Guest post by: Stan Prokop

Article Overview: Information on Canadian franchise financing . Canada franchising opportunities can be financed on your own , with the right strategy and advice.

Is Canadian Franchise Financing A Do It Yourself Project? Franchising In Canada With Success

There seems to be a lot of ' DYI ' out there today, that being the acronym for Do It Yourself of course. So we were thinking, is it possible that Canadian franchise financing for the purchase of your chose franchising endeavor in Canada is a ' DYI ' project?



Let's talk about a lot you can do on your own, (as part of that ' dyi ‘) and we'll also focus in on some key areas where expert assistance is highly recommended!



Our focus is of course on financing that franchise; we're assuming you have already picked your business of choice. A solid first start is to have a realistic discussion with your franchisor around their knowledge and assistance in the area of helping your franchising project in Canada. It's the policy of some franchisors, certainly not all by the way, to develop financing guidelines for their units. This might be in conjunction with a preferred program via a financial institution, or, as importantly, their own experience in levels of investment, capital, and working capital to acquire, run, and of course grow the business.



If there is one caveat here we simply say to clients that you should not infer any sort of guarantees that your financing loan or package will be approved simply because a program exists that you might potentially fit into. Our own experience though is that certain financial institutions target many successfully larger franchise chains and will go out of their way in ways we can't mention to get a transaction completed on your behalf. (Think hockey/donuts as an example! enough said!)



Getting back to DYI though, a business plan, either prepared by yourself or with input from you is critical. This can easily be accomplished with help from the franchisor, your accountant, or an experienced Canadian business financing expert in the area of franchising in Canada. We forgive clients for thinking they are out of their league in prepared a business plan and cash flow, but it's not as hard as you think.



The reality is that if you can help prepare and understand and present a plan your chances of financing approval increase significantly.



DYI also can be taken in the context of looking at your own personal investment in the business. Your choices are of course 100% outright cash purchase (not recommended by us), 100% borrowed funds (not recommended, and oh by the way, impossible!), and the real world solution, an investment by yourself with some real world franchise financing for the balance of your purchase.



DYI with respect to your owner equity is anywhere from 10- 50% per cent in Canada. Franchisees should spend part of their DYI time in assessing their personal net worth, their liquidity, and how they will raise and contribute their portion to the franchise investment.



We've shown that a good part of your Canadian franchise financing journey can in fact be a DYI process. Where you win big time is by using, where necessary the services of a good accountant, franchising lawyer, and an experienced credible and expert Canadian business financing advisor to complete your purchase successfully, under terms that make sense for your situation.

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Article Tags: canadian franchise financing, franchising canada



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Re: Info for would be franchisers... - [quote="Sebastien":1d29sdv1]Like Franchise Times, Franchise Update is a very practical magazine. There is no blah blah, just straight facts that anyone in the franchise community can relate to. I just want to mention that all these magazines are NOT franchisee oriented. I mean these magazines are for franchise professionals. If you're looking to buy a franchise, you won't find much information in there. To answer your question, getting published in Franchise Times was fairly easy. I don't want to brag too much but I think I am known in the franchise industry. I was the marketing guy at Franchise.com for a few years before joining my new company, the World Franchising Network. So people know me and I have a very good relationship with Nancy Weingartner, the Managing Editor at Franchise Times. I was talking with her at the last Franchise Expo South in Miami and she mentioned she'd like me to be profiled. I was like "ok, sure!". I like this franchise executive profile thing in Franchise Times as it is rarely BS. People are usually really natural in there.[/quote:1d29sdv1] Thanks for the follow up Sebastien! And I can't say that I'm surprised that networking with the right people and managing your relationships with them properly are the keys to being published. I guess the old adage holds true of "it's not who you know, but who knows you" that's important.
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