Interested in a franchise

Q – I have about $100,000. in RRSPs,  receive a company pension, and considering work for 8-10 more years till 65.  Would an investment in a well-known franchise, with only a small profit but with higher potential, be worthwhile if I have to re-mortgage my home to provide the required equity investment?   I don’t wish to cash my RRSPs. – G.G.

A – My advice is to proceed with great caution. You are looking at significant risk. You must consider the worst-case scenario – what if the business doesn’t make it? Your home will be mortgaged, plus you may have debts arising from the enterprise. Could you handle that, or would you risk losing the home?

Since you are relatively close to retirement, you should not place yourself in a position in which you could be left in deep financial trouble. So before you may a decision, find out as much as you can about the franchise. The Web site of the Canadian Franchise Association at may be helpful and provides tips on questions to ask before buying a franchise.

Once you have as much information as possible, consult some trusted advisors – accountt, lawyer, etc. Get their professional input. Also, talk to owners of similar franchises and see what they have to say.

This is a big decision. It requires very careful consideration. – G.P.