Youth
awards

THE Soroptimist
Club of North and
West Vancouver
sponsors a Youth
Citizenship
Awards program.
Left to right (rear)
at Cheers

‘Restaurant are

‘Arlene Wright,

president of the
; North Shore chap-

ter, and Women’s

Opportunity Award

winners Keily

Mullin, Virginia

Cardon and
1. Jennifer Upper.

“1 Front left to right
are citizenship
award recipients
Zaman Valii-

-| Hashan, Soraya --

‘Jamal and Miles ,

Walker. :

NEWS photo Paul McGrath

great way to
Start business

Janice Mucalov, LL.B.
Contributing Columnist

MCDONALD’S;
Midas Muffler; Boston
Pizza; Japan Camera:
over 60,090 fast food
eateries, fitness facili-
ties, auto shops, conve-
sience stores and other
franchised outlets com-
pete for our attention
in Canada.

Half of ali our retail and
service dollars are spent at
franchises.

Franchising is a booming
phenomenon. Ifyou start a
new business as a franchise,
you have an 80% chance of
success, but an 80% chance
of failure within five years if
you start a business on your
own, Should you jump on
the franchise bandwagon
too?

Franchising is simply a
way to distribute products
and services.

Typically, the franchisee
pays a fee and ongoing royal-
ties to the franchisor who.
sclis a complete package for
starting and running the
business.

The package might
include the business name
{McDonaid’s), business man-
uals, trademarks and logos
(*McDanald’s Arch Deluxe”
hamburgers}, employee uni-
forms, trade secrets, tech-
niques and procedures (how
many slices of tomato to put
in your bun), accounting sys-
tems, etc.

Running a business as a
franchised outlet appeals
Most to More conservative
business entrepreneurs.

If you're the creative or
innovative type, you might
find a franchise imposes too

. many restrictions on the way

you must conduct business.

For example, the fran-
chisor of a “Schnitzel Baron
restaurant in Matsqui got a
court order preventing the
franchisee, who was trying to
improve profitabi from
selling “Deep Fried ‘crogies
with Sourcream & Union,”
“Octobertest Sausage on a
Buttered Pun” and other
menu items that weren’t
authorized by the franchisor.

Still, the benefits may
outweigh the disadvantages,
for both parties.

‘The franchisee gets the

"

Operating systems.

The franchisor gets to.
rapidly expand his business
without investing too much .
capital. His downside is that :
he can’t fire the franchisee as °
readily as he can an employ:
ce, because the franchisee is
an independent business per-~:
son, °

If you're the franchisee,
check carefully the expected
profitability of the proposed

ler. Speak with any exis
franchisees or. visit their

Is there real goodwill or
recognition associated with
the franchise name? A hit
product in Ontario may be
unknown in B.C.

The franchise agreement
is the legal contract that
details your. rights and oblig-
ations.

Usually, it covers the:
length of time the franchise
will continue, the franchise
territory (c.g., all of
Vancouver or just tive blocks
on Robson Street), any train-
ing the franchisor is to pro-
vide, the hours and days of
operation of the business, :
the product or service, pay-
ment of advertising fees and_
other such matters. :

Your fawyer will review
with you the commitments
you have to make. Do you
have to buy all your burger
buns from ‘the franchisor?

If so, you may nor get the”
best deal in town. Standard
franchise agreements are
generally very one-sided and
favor the franchisor. :

Rut your lawyer may be
able to negotiate specific. .
changes that suit you better.

A franchise can be a great”

way fo start a business. But: ~

it’s critical you know exactly -
what you're getting before
you start slinging those
burgers.

— This column is written ..;

with the assistance of the

North Vancouver law firm of
Ratcliff & Company, Suite +
500, 221 West Esplanade,
988-5201. The column pro-

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