Fast Facts:
By investing in a franchise you are buying a proven business system with the right
to sell a franchisor’s products and/or services, and to use the franchisor's
trade name and trademark in a particular location for a specified period of time.
So in essence, it's not just the name you are buying, but a complete
business system and philosophy.
Canada has the 2nd largest franchise industry in the world, led only by the U.S.A.
One franchise operation exists for every 450 Canadians
Franchises represent over $100 billion in annual sales
Approximately $1 of every $5 are spent on goods and services at a franchise
A Canadian franchise opens every 2 hours
Average franchise fee: $25,000
Total franchise’s operating: 76,000
Of all franchises opened in Canada over the last 5 years, 86% are under the same ownership and 97% are still in business
Franchising is the preferred Canadian small business expansion model
Franchises are active in over 30 business, retail and service sectors
Hospitality represents 40% of all franchises with home-based and mobile type franchises enjoying the greatest growth
All Canadian banks have established national franchise departments
Tips:
1.
Although there is less inherent risk when buying a franchise then when going into business independently, like everything else in life, there are no guarantees.
2.
Success begins with a thorough investigation of all business opportunities.
3.
Given the long-term investment of both time and money, it is crucial to identify multiple opportunities before making any commitments.
4.
Take your time to find the best location before committing yourself.
5.
Choose the best location over cheaper rent.
6.
Study the locations of interest, the demographics, and spend a few hours each day at the locations of interest.
7.
Be sure to analyze yoursef and your motivations to understand which franchise opportunity is the best fit for you.
8.
Business failures relating to franchise investments often occur if the business is not managed properly, so if you have little management experience, consider enlisting in a business management course.
9.
Contact and interview franchisees to determine if they are satisfied with the business and the assistance provided by the Franchisor.
10.
Consult an attorney and accountant to help evaluate the business opportunity.
Checklist:
Questions to ask a Franchisor when researching a franchise opportunity:
How long has the company been Franchising?
How many franchise locations does the Franchisor have?
Have any failed in the past? What was the cause of failure?
What type of training and on-going support will I get? What is the duration of training?
How long is the term of the franchise agreement?
How much liquid capital do I need to invest?
What type of finance options are available and is there any financing assistance?
Questions to ask yourself before buying a franchise:
Can I afford the franchise?
What are my goals, both short and long term?
Am I ready to take on the responsibilities of running my own business?
What industry sector interests me? And why?
Would I be happy focusing on the business in the industry sector of interest for the next 5, 10, or 20 years?
Will my family or spouse accept my choice of business and support me?
Do I like dealing with people considering I will have to interact with customers, employees, and the franchisor?
Franchise Regulation:
The offer and sale of franchises in Canada is regulated only at the provincial level
and only in the provinces of Alberta, Ontario, Prince Edward Island and New Brunswick.
Alberta
The Province of Alberta was the first to adopt provincial wide franchise regulation.
Alberta’s Franchises Act sets the rules and specifies the amount of disclosure
franchise companies must provide a prospective franchisee or buyer.
To learn more, click on one of the following links:
Alberta Franchises Act
Alberta Franchise Regulation
Alberta Franchise Act Exemption
Ontario
The Province of Ontario adopted similar legislation and franchise regulations called the Arthur
Wishart Act (Franchise Disclosure Regulation, Ontario Bill 33). As of 2001, a franchisor
company must provide a prospective franchisee or buyer with a franchise disclosure
document before signing any agreement or receiving any payments.
Learn more. (English)
Learn more. (Français)
Prince Edward Island
PEI became the third Canadian province to enact franchise-specific legislation.
While similar to the legislation in Ontario and Alberta, there are noteworthy differences.
Learn more.
New Brunswick
In 2007, New Brunswick became the fourth province to pass a Franchises Act.
Learn more.
Franchise listings on CANADIAN FRANCHISE DIRECTORY™ are advertisements and
do not constitute a disclosure. CANADIAN FRANCHISE DIRECTORY provides no warranties,
endorsement or representation of any kind regarding the accuracy of content and
business opportunities provided by companies listed on CANADIAN FRANCHISE DIRECTORY.
Before making any investment decisions the prospective franchisee or buyer is solely
responsible in making further thorough investigative research on any company representing
any business or investment opportunity listed on CANADIAN FRANCHISE DIRECTORY.
* For provinces without franchise legislation and regulation, be sure to consult
an experienced franchise lawyer and accountant.
We at CANADIAN FRANCHISE DIRECTORY strongly advise prospective franchisees or users
of our website to perform a thorough investigation of a variety of franchise opportunities
and of the companies representing such opportunities. Request, obtain and review
the appropriate disclosure on any company of interest before making any investment
decisions.
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