Your Personal Finances

Employment Issues

There are a lot of Canadians who have found themselves with substantial severance packages in the recent past. Auto supply companies have closed up shop by the dozens and that doesn't even take into account the layoffs at the automakers themselves. If you have been laid off and have been at your company for a long time you could be entitled to severance of several thousand dollars - the largest lump sum of cash you may have ever had. You have a huge decision in front of you...what to do with that money.

After many years of punching a clock, many Canadians long to be our own bosses. Buying a franchise is one way to do just that, and, with your lump sum in hand, it may even be a possibility now.

Buying a franchise allows you to benefit from an already established brand and reduces the trial and error involved in starting your own business from scratch. Statistics show that 40% of all independent start-ups are out of business within one year. Meanwhile, over 85% of franchisees are still in their businesses after five years.

However, if you are going to invest in a franchise with the hopes of becoming a successful entrepreneur it is absolutely essential that you properly investigate the franchise you are considering. And, you must get professional advice before you lock into any agreements. Realize that running your own business is a lot of hard work and the initial investment is not the end of the money you need to invest. There could also be franchise fees, royalty fees and other capital needed to keep your business going.

If this is a possibility for you, how do you find a franchise to buy? There are several sources including a number of websites that list franchise opportunities. For example, www.betheboss.ca and The Canadian Franchise Association at www.cfa.ca list franchise opportunities by industry and by investment amount required. They also provide information and resources to help you make the right decision. In addition many cities host Franchise trade shows where you can go and talk to the franchisor directly.

As in any decision involving your money, be sure to include your financial advisor in your planning process. Your advisor can help you work out the dollars and cents when it comes to investing your severance in a franchise.