Every aspiring entrepreneur knows that buying a franchise is a great business opportunity. Joining a franchise offers benefits like increased brand recognition, franchise assistance, and the opportunity to be your boss. While these facts are well known, a question that often gets overlooked is: When is the best time to buy a franchise?
While situations will differ between franchises and the individuals themselves, here’s a list of some of the most common signs you should be looking out for when deciding when to buy a franchise. And, although this information applies to any point in time, we’d be remiss to mention that many of these can be found during the time of this article’s publishing!
These are the 5 signs that will tell you the time is right to buy a franchise:
- Low interest rates
- Favourable real estate conditions
- Off-season with time to grow
- Mature franchise with a strong customer base
- Personal readiness
Ready to find out? Here we go:
1. Low interest rates
There is no better time to borrow money than when interest rates are low. Take advantage of an opportunity that can help you find the financing required when starting a franchise. What’s more, by taking out a loan at this time, you’ll be doing yourself a favour by saving money now as opposed to later.
Among all this opportunity, be sure to play it safe. With costs liable to exceed preliminary expectations, be sure that you have secured enough capital that can last you all the way through startup and well into your first year. Your franchise will eventually start turning a profit, but you’ll need to secure enough funds to last you until then.
2. Favourable real estate conditions
The pandemic has been very unkind to many businesses, resulting in closures for numerous stores and restaurants. But where one door closes, another opens, revealing this to be a great opportunity for aspiring franchise owners looking to find their very own location.
With so many commercial storefronts emptied out, you may be able to find a landlord willing to offer you a heavily discounted rental rate in order to maintain a paying tenant instead of a vacant space.
Before you sign on the dotted line, be sure to find out why the previous tenant had to leave. If they suffered from decreased foot traffic and lethargic sales, it could be that you’ll inherit the same problems they had.
3. Off-season with time to grow
Starting your own franchise takes time. You need to make plans, do consultations, and start building your business. And since this initial growth stage will take a long time, one of the best times to buy a franchise is during the unbusy off-season to give yourself the time you need.
When making your plans, try to time your franchise opening well ahead of a busy season to take advantage of customer swells. Use the time during the off-season to prepare as well as you can to help ease into a successful opening!
4. Mature franchise with a strong customer base
So far, all of the questions with timing have had to do with the economy or the time of year. And yet, one of the most important “when” questions has to do with the franchise itself, namely: “Am I joining this franchise at the right time in its history?”
Canada has about 1,300 franchisors operating approximately 76,000 franchised outlets throughout the country. And as franchising is a popular business, you’ll often hear about “hot new franchises” that are making a buzz in the industry. Although it’s not certain how successful they will be, what is for certain is that new franchises don’t have the brand recognition of more mature franchises that have built a strong following of loyal customers.
When it comes to choosing franchises, older franchises usually offer more security and stability. Be sure to look into franchise ages when doing your research.
5. Personal readiness
The most important timing of all has to do with yourself: Are you ready? Joining a franchise is a life-altering commitment, and you’ll need to be completely prepared in order to give yourself the best chance at success.
When applying to become a franchises, make sure you have all of these things on this checklist:
- Enough funds to secure the franchise in addition to your own living expenses
- A personal support network of family and friends
- A franchise you’ve picked out that fulfills all your needs
- Thorough, proper research including the procedure on how to buy a franchise
- Legal service to help you navigate through a franchise disclosure document
- A solid business plan on how to successfully run a franchise business
Once your personal business has all been taken care of, you’ll be all ready to start running your own franchise location.
To recap, you will know it’s a great time to buy a franchise when:
- Interest rates are low
- You can find an inexpensive location for your franchise
- It’s the off-season, and way ahead of the next busy season
- The franchise you’re joining has a lot of history
- You’re personally ready to take on this challenge
Canada has so many franchise opportunities available right now. By recognizing these signs and hard work, you can buy your own franchise at the best time to ensure success!
Want to learn more about franchising? Read our blog about learning how to avoid franchise failure, or this blog about how to retain online customers after your business pivots back to in-store operations. Find out the best questions to ask when buying a franchise in Canada, and discover why a franchise pays dividends all year long.
Do you want to run your own restaurant? St. Louis Bar & Grill is looking to expand, and we’re looking for people-oriented, responsible people to lead our new franchise locations.
St. Louis Bar and Grill is a 100% Canadian-owned and operated franchise that first opened its doors in Toronto in 1992. We’re famous among our loyal customers for our signature wings, garlic dill sauce, and our local neighborhood establishments that offer exceptionally friendly service. In over 18 years of franchising, we’ve expanded to over 70 locations across Canada, with an aggressive national expansion now underway.
Are you interested? Find out about available opportunities on our website! Contact us today!
