RBC Panel of Experts June 17, 2015

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RBC Royal Bank Advice Event in Partnership with FranNet

10 Questions to Ask Before Buying a Franchise

June 17, 2015

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Agenda - What we’ll cover today

Franchise “Panel of Experts” introductions:

John Nieuwenburg Moderator W5 Coaching

Shaurya Chhikara Royal Bank of Canada

Richard Sehmer Woodsons Law

Doug Anderson DA Top Talent

Chuck Prenevost FranNet Western Canada

Address the Panel:

“10 Questions to ask Before Buying a Franchise

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22 BC Liquor StoresBC Liquor Stores

44 When Not CoachingWhen Not Coaching

33 Tip Top TailorsTip Top Tailors

Business CoachBusiness Coach

Where asking you better questions, gets you better results!

4 Most Important Things About John Nieuwenburg

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John Nieuwenburg W5 Coaching

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John Nieuwenburg W5 Coaching

www.w5coaching.comwww.w5coaching.comTestimonialsTestimonials

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Shaurya Chhikara RBC Small Business

Insert your Bio details here

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Shaurya Chhikara RBC Small Business

Insert your Bio details here

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Richard J. Sehmer Law Corporation

Who am I? Richard J. Sehmer Law Corporation

• BFA, MA, LLB• Entrepreneur • General business lawyer • Only act for people buying franchises, not franchisors

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Initial Legal Thoughts1. Incorporate a Company

• Potential tax benefits • Huge liability benefits

2. Franchise Disclosure Document• Ontario, Manitoba, PEI all require FDD laws. Not in BC. • Therefore we must be extra vigilant about doing our own due diligence by:

• If franchise does business in other provinces, they’ll have an FDD which you should be able to review

• Go through FDD and record ALL start up costs

• Find existing franchisees and pick their brains

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3 MAIN CONTRACTS!!• Franchise Agreement –

• What is the Initial Franchise Fee?• What are my royalty obligations to franchisor? Net or Gross?• 6-8% of Gross is standard. Often 1% - 2% advertising royalty.• Any other financial obligations to franchisor? • How long is the Term? Option to renew? Asset Purchase Agreement – • If you’re buying existing franchise. • Look at financials of previous business. Lease or Sublease – • Make sure lease Term lines up with Franchise Term. • What is Minimum Rent and Additional Rent. Option to Renew?• Make your corporation the tenant. • Get all consents early.

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DA Background

• Born in Edmonton and lived all over

• U. Vic. grad where “DA” came to be

• Married to Val for 35 years and have 20 yr old son Dalton

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How do you make your decisions?

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Why do I do what I do?

• Started my own company at 18 to finance University, I love small business

• Spent over 30 years working with small business owners (Apple, Mits)

• >20 years experience in franchising

• Found the two most common problems of business owners, read the E-Myth, and wanted to help other business owners

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Why do people want to work with me?

• Get a different perspective on their business (like a sounding board)

• Strategy, plans, and structure• Learn how to work “on” the business• Knowledge and insights into the good and bad on

franchising• Access 1st Class small business specialists

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About Chuck & FranNet

Reverse Engineer How to Find the Right Franchise

• Franchisee – Franchisor MATCHMAKERS• Understand you & your critical criteria• Define your Ideal Business Model• Match only those franchises that meet your goals• Coach you through our proven research process• 70 Quality Franchisors – Only 2 food concepts• Offer services to our clients at No Cost

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Why Own Your Own Business?

Control Financial Security

No More Layoffs Money

Fulfillment Flexibility Independence

SUCCESS

What Is It For You?

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Defining Your Business Model

Clarify Your Destination• Without clarity, most folks won’t realize their dreams

• Because they don’t know where to start.

• How to approach & research

• Let assumptions & preconceived notions rule

• Decisions making based on facts not emotions

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Now over to our Franchise Panel of Experts

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1. How do I know where to start my research?

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2. What total investment will this franchise require?

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3. What is the Franchise Disclosure Document (FDD)

and why is it important?

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4. How do I conduct proper research?

Avoiding the Pitfalls

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5. What finance options are available through

the Bank?

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6. Why should I have a legal review?

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7. How much can I afford? Understanding

your Net worth position

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8. What will the Bank need should I require financing?

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9. How are conflicts resolved between Franchisor &

Franchisees?

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10. What support does the Franchisor offer beyond initial training?

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Everyone’s situation is different

Disclosures:

The strategies, advice and technical content in this presentation are provided only for general guidance to benefit our clients. This presentation is not intended to provide specific financial, investment, tax, legal, accounting or other advice for you and should not be relied upon in that regard. Readers should consult their own professional advisor when planning to implement a strategy to ensure that individual circumstances have been considered properly and it is based on the latest available information.

® / ™ Trademark(s) of Royal Bank of Canada. RBC and Royal Bank are registered

trademarks of Royal Bank of Canada. © 2011 Royal Bank of Canada.

36398 (11/2011)

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Additional Questions?

• For our “Franchise Panel of Experts”

• In attendance, two FranNet clients who conducted proper research and bought a franchise in 2014

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Thank you from your Hosts

For Further Information:

Chuck Prenevost

FranNet Western Canada

Tel: 604-849-0278

Email: [email protected]

Website: www.frannet.com/chuckprenevost

Shaurya Chhikara, Senior Account Manager

Business/Personal, RBC Royal Bank

Tel: 604-665-0986

Email: [email protected]

Documents

RBC Panel of Experts June 17, 2015