How About a Franchise?

Types of Franchises Product Distribution Arrangements Business Format Franchises Single-unit franchise Area franchise Master franchise

The Top 10 Franchise Organizations 1.Yogun Früz Worldwide 2.McDonald’s 3.Subway 4.Wendy’s International Inc. 5.Jackson Hewitt Tax Service 6.KFC 7.Mail Boxes Inc. 8.TCBY Treats 9.Taco Bell Corp. 10.Jani-King

Articles in a Typical Franchise Agreement The full initial costs and what they cover Use of the franchisor’s trademarks by the franchisee Licensing fees Land purchase or lease requirements Building construction or renovation requirements Equipment needs Initial training provided Starting inventory requirements Promotional fees or allowances Use of operations manual Royalties payable Continued

Other payments that must be made to the franchisor Ongoing training requirements Cooperative advertising fees Insurance requirements Interest charges on financing Requirements regarding purchasing supplies from the franchisor and prices Restrictions that apply to competition with other franchisees Terms covering termination, renewal rights, sale of the franchise and similar topics Articles in a Typical Franchise Agreement (Continued)

A Sampling of Canadian Franchisors Boston Pizza1100$45,0007%2.5%$ ,000 Dollar Rent-a-Car--46$15-59,00072 $90-150,000 Great Canadian Dollar Store--42$15,0004--$65,000 Molly Maid--160$14,0006--$18,000 Dairy Queen Canada--504$35, $450-1,200,000 We Care Home Health Services--43$25,00052$50,000 McDonald’s Restaurants of Canada335727$45,00017%--$ ,000 (including rent, service fees and advertising) Midas Muffler20230$25,00055$225,000 Yogen Fruz $15-25,00062$ ,000 Second Cup Coffee Co.11360$20,0009--$ ,000 Tim Hortons251500$50,0003--$ ,000 Kwik-Kopy Printing--76$25,00063$200,000 Shred-It1233$45,000US51.5$500,000 NumberNumber ofApproximate of OwnedFranchiseesInvestment Units/DealersInitial FeeRoyaltyAdvertisingRequired Source: Adapted from The 1999 Franchise Annual, Info Franchise News Inc., 1999.

Future Trends in Franchising Conversion franchising Increase in the number of women involved in franchising Growth in non-food retail stores Impact of computer technology Growth of franchised medical services Continuing importance of restaurants Growth of auto repair franchises Growth in such areas as automobile leasing, packaging and rapid delivery of parcels, home building, medical centres, temporary help services, business brokers and financial planners Increased number of convenience stores Growth of franchised educational services

What the Franchisee Receives Brand name recognition Support from the corporation during start-up Training of management and employees Access to financial support A proven business plan and strategy Purchasing power Corporate monitoring and assistance Less risk of failure National/regional promotion Access to additional units

What the Franchisor Gets A high degree of control over their franchisees An initial franchise fee as well as periodic royalty payments and advertising contributions A mark-up on the supplies and equipment franchisees are required to buy from them, thereby increasing their operating costs Volume rebates or other benefits from suppliers which are not typically passed on to the franchisees A way to expand their business quickly with limited capital from the original owners Continued