Canadian Opportunities For U.S. Franchisors

January 30, 2018

GTA_Burlington_25Jan18_Online_Franchising_679x220.jpg

Finding new franchisees is an integral part of the growth and expansion of every franchisor’s brand and operations. But like all businesses, franchisors sometimes need to look beyond their borders for new opportunities. Perhaps the local market is saturated with your concept or similar businesses. Maybe you cannot find the qualified franchisees to successfully execute the franchise concept, Whatever the case, expanding across international borders can often help ensure the long-term success and profitability of your franchise system.  

While U.S. franchisors will see Canada’s geographic proximity as its obvious strength, they would do well to note several other market advantages in their neighbour to the north.

Business environment and culture

The Canadian economy is one of the most resilient in the world. It has the third-best business environment globally and expects continued improvement in the coming years, according to The Economist Intelligence Unit. Positive indicators include Canada’s low levels of foreign trade and exchange controls, political stability, good infrastructure and attractive policies towards private enterprise and competition.

Among G7 countries, Canada is the easiest place to start a new business — regulations around forming a new business are considerably more flexible, and procedures required to establish a business, such as government approvals and lawyer consults, are the fewest. As a result, it takes less time to establish a new business in Canada than in any other G7 country.

The warm business climate continues long after the initial expansion. With the highest concentration of entrepreneurs in the G7, Canada has a business culture that supports the success of small businesses. Canada also has very competitive corporate tax rates.

Franchise industry in Canada

Canada is home to a robust franchising industry, generating approximately $68 billion every year. Many American brands, such as ServiceMaster and Subway, have had long and successful histories in Canada, and continue to thrive in the Canadian marketplace. About one in every 14 working Canadians are directly or indirectly employed by the franchise industry, and there are over 78,000 franchise units across Canada.

There is a diverse appetite for franchises in Canada that goes beyond the food industry. Prospective franchisees are looking for home-based, retail and service-related franchise opportunities. In addition, 55 percent of Canada’s adult population has completed post-secondary education, creating a highly educated pool of candidates to execute on your concept.

Local associations, such as the Canadian Franchise Association, act as an advocacy group for franchisors in Canada, and offer a community to help connect opportunities. They also provide support and development to strengthen a franchisor’s brand, and the franchising industry in Canada as a whole.

Local expertise

One of the most critical aspects of any successful international expansion is the ability to source local expertise. With a thriving franchise industry and a history of U.S. franchises successfully expanding into and operating in Canada, there is an extensive network of industry experts with experience advising businesses throughout the cross-border process. Having key local advisors that understand all of the challenges and considerations that brands may face in their expansion will allow for a smoother entrance into the new market, setting your franchise system up for early success.

To learn more about the franchising industry in Canada or to find out how we can help with your Canadian expansion, please get in touch with our National Franchise Industry Group Leaders:

rc.jpg

Rick Chittley-Young
Partner

ll.jpg

Lyn Little
Senior Manager