14 July 2014
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Buy A Franchise in Canada

Canadians seeking to enter the world of franchising would be wise to heed some friendly advice.  While many franchises brands do offer Canadian availability and may indicate long track records of success , US based successes may not translate in the Canadian marketplace.

Buying a franchise in CanadaOur respective countries are two distinct markets with different laws, societal mindsets,  economies and very different weather patterns. Will a frozen yogurt franchise fare equally well in Nunavut as in Orlando?

A decision to buy a franchise in Canada will be easier if other Canucks have invested before you. If there are several operational franchises in Canada with strong histories of success it is more likely that success will be replicated. But not always guaranteed.

Franchises that have little to no Canadian presence may appear to be a great opportunity by being first to market, and that may be so, but while upside could be great so could the downside.
We often see Franchisors eager to break into the Canadian market glossing over essential territory analysis – leaving the poor Canadian franchise buyer to use their investment as a test case. Not fun.

While there  have been many success stories from being the first new kid on the Canadian block it is important that several key points be explored.

Demographics. How does your Canadian proposed territory compare with current operating franchises in the USA? A quick comparative analysis of the population, economy, annual incomes and other demographic data can indicate differences and similarities.

Laws and regulations. Are there Canadian laws or regulations that may restrict or impede any existing business processes used by the Franchisor? Don’t make the mistake of assuming the franchisor has checked all regulations and laws and be sure to ask many questions in this area both of the franchisor and your local government official. Contact agencies who oversee these matters and confirm that the proposed initiatives are feasible in Canada.  Franchise segments such as senior care, home nursing or food services often have complex models that require specific Federal or Provincial licensing. Once you establish the approvals can be obtained how long will it take and are you in a financial position to wait weeks or months with no franchise  income waiting for those approvals?

Societal Differences. It may not be politically correct but Canadians are very different from Americans. That may be a stereotype but if a stereotype saves you from making a disastrous franchise buying decision so be it!   A franchise brand that does well in L.A California may not necessarily translate to a Toronto or Vancouver market. Intensive market research is critical at this stage including the exploration of comparable existing Canadian franchise models if applicable, and possibly investing in a market survey or SWOT analysis.

Geography. Can this franchise brand be supported in large areas with Canada sized driving distances which spread over rural areas? How far are your customers typically willing to drive to get to your store, or if you are mobile and not retail how far will you have to drive to get business. Canada has less cities than the USA, with much smaller population bases and generally spread out over more land mass.

Weather. Sun Tanning franchises, Ethnic food franchises, Gym franchises, Yogurt franchises will all be affected by seasonality and weather patterns. Obviously a Lansing MI  based franchise will likely fare similarly in a Windsor Ont. Canada environment but L.A to Winnipeg? Different Story altogether.

If you would like to speak with a franchise broker to discuss your Canadian Franchise Options we are under contract with over 500 Brands and can help you through the franchise research and selection process. Contact us to arrange your free consultation.

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