Fact: Target didn't feel that the business was worthwhile owning directly, so ask yourself (and them?) how and why they came to that conclusion.
I think the deal would be best if you were a struggling/treadingwater independent near a Target: you could move your business there and build on your existing clientele.
In Ontario, I think the independents are at a big disadvantage as I feel the big players have some way to get better pricing/opportunities that the independents won't have available to them, but then again, I'm a very cynical person. Independents can do various specialty services to survive, but it might be hard to many of those things at Target.
The Target pharmacies will certainly be losing money on opening day, since their main cost will be a pharmacist with no RXs to fill. I doubt you can lose too much hard-cash by going with Target if you go in with a partner to cover the hours, other than the loss of your own time (which is definitely valuable). I can't imagine you having more than one assistant at opening, and if you need one, that's a good problem to have. Be prepared to hustle for transfers though. Inventory is usually on credit, and cheap to carry if it isn't, how much you can get back in refunds if it goes unsold is the bigger question.
Definitely bargain Target to waive monthly fees for the first X months, they can afford the hit more than you can, or better yet, only accept if the fees are ironcladly based on a %age of sales or $x/RX, then you can't lose. They shouldn't have a problem with this, after all, their advertising and other work will pay for itself in increased RX volumes, right?
The biggest risk is: can they later de-franchise your location, or otherwise cut you out, if it ends up successful? Or arbitrarily raise your fees? You're taking risk, do you get enough of an upside if you end up being successful, or will they just move the pegs that much further away?
Overall, if the contract is half-decent (get a franchise lawyer to determine this, not me or you) and you want to get into some form of pharmacy ownership/management, and can afford to be lean for a while, go for it. It could work out very well, but make sure you can easily transition out and back into something else if it doesn't work out, just as you would if you were to start your own independent.
I'd suspect Target will largely franchise them to the former Zellers franchisees, but doesn't want to just give them away. Target wants to extract as much as they can, and wants to see what some others would bring to the table to bargain down the ex-Zellers people. Some of the ex-Zellers people might not be so great though.
It all comes down to location and how well Target executes in my opinion. I still prefer the US Walmarts' pricing+selection over Canadian Walmarts', but maybe that's because Canadian Walmarts have minimal competition other than Costco. I'm the cheapskate that tries to do all of his shopping in the US and online, so what do I know other than my love for US Target
Don't take any of this as professional advice, come to your own conclusions. Consult a lawyer/accountant/real professionals before committing to anything, don't blindly follow random someguys on the intarwebs.
