Never mind that it was a dark January morning in Winnipeg and that their feet, encased in steel-toe boots, were frozen numb. Cameron Neufeld and Ben Hopper -- cousins, best friends and business partners -- put on their curly blue wigs, whipped out the company banner and began doing the 1-800-GOT-JUNK "wave" on the side of a busy road.
"It's a fun way to market outside the box," said Mr. Hopper who, together with Mr. Neufeld, bought a franchise two years ago from 1-800-GOT-JUNK, a Vancouver-based company that makes money by hauling away people's junk and charging them for the service. "You go out on a street where there's heavy traffic, put on a big blue wig and then you run around and wave at the passing cars."
Mr. Hopper and Mr. Neufeld are among tens of thousands of Canadians who have chosen to "get into business for yourself but not by yourself" by becoming franchisees -- owners of business units that operate as part of a system set by a franchisor, the company that owns the system.
There are about 76,000 franchisees and 1,200 franchisors in Canada, according to the Canadian Franchise Association in Toronto. About 20 cents of every dollar spent on goods and services in Canada is spent at a franchise business, the association says.
"The reason people buy a franchise is they're buying a safety factor -- they're buying a learning curve," says Lloyd Shears, president of FranNet, a franchise consulting firm in Vancouver. "Someone has already figured out how to do everything, right down to choosing the colour of the walls."
While joining a tried-and-tested system may give franchisees an edge over lone-wolf entrepreneurs, it doesn't guarantee success, Mr. Shears says. Factors such as location, the availability of workers and the franchisee's business skills can spell the difference between a healthy or limp operation.
The strength and history of the franchisor are also good predictors of a franchisee's success, Mr. Shears says. He generally recommends staying away from new and unproven franchise systems.
How much support and training a franchisor will provide are also important considerations, says Robert Arthurs, chief executive officer and president of Robert A. Arthurs International Inc., a Vancouver business consulting firm. Most franchisors provide training but some charge an additional fee for this. Others provide the training for free but may require franchisees to travel to another city, at their own expense, for the training.
Also, an unexpected shift in the marketplace can weaken a franchise, says Tim Shaw, president of MSA Consulting, a Toronto business consulting firm. "You might suddenly be facing a strong competitor coming in, or consumers' tastes could simply change."
By the summer of 2004, when Mr. Hopper and Mr. Neufeld began thinking about buying a franchise, 1-800-GOT-JUNK had about 140 franchises across Canada and the United States. But in Winnipeg, where the cousins were looking to set up shop, not very many had heard of the company, recalls Mr. Neufeld, a former golf course manager.
"There was no market presence at all in Winnipeg," he says. "Anybody who's not been out of the city would never even have heard about (1-800-GOT-JUNK), so that really presented a challenge."
Their family and friends weren't much help, either. Both men's parents were convinced the business would flop in Winnipeg. The more encouraging friends thought a junk removal franchise was a "neat concept" but one unlikely to provide the men with a good income.
Undaunted, the men researched the junk removal industry in Winnipeg and found that it barely existed.
"No one else in Winnipeg was doing what 1-800-GOT-JUNK was doing," Mr. Neufeld says. "We felt the city really needed this type of service."
The pair travelled to the "Junktion" -- 1-800-GOT-JUNK's head office in Vancouver -- where they met with the company's CEO and management team and asked and answered dozens of questions.
