Investing in a franchise can be a lucrative opportunity when done with the right business. As a new franchisee, you become the latest expansion of a well-known brand name that has a proven track record with its customers. It’s a “win-win” situation where you and the franchiser can achieve your respective goals.

As great as the potentials are, certain complications arise if this franchise is located in Canada—something especially true if you are a non-Canadian.

To ensure you make the best decision, be sure you consider the following questions when buying a franchise in Canada.

 

What’s the Canadian market like for this franchise?

The Canadian market presents a worthy opportunity in the form of franchising, but does present its own challenges. Not only is this market smaller than the U.S.A., but is also more fragmented. Except for big cities like Toronto and Montreal, Canadian towns tend to be spread out throughout the country.

This fragmentation brings its own unique challenges. Canadian customers are big on brands, but can also be fussy with their preferences. Ask yourself: Is there a demand for this franchise’s products and services in Canada? What are the major brands and franchises in this category? Do Canadians prefer to buy locally, nationally, or internationally in this category?

Because brands are able to project their messaging from their own perspective, it’s important to look at the market from the customer’s point of view. As well, Canada can make up for its small market share through the strong loyalty of its customers. If they feel a brand understands and meets their needs, Canadians are prone to becoming loyal customers that provide repeat business.

 

What’s the story behind this franchise? How do they fit into Canada?

The company story often serves as the backbone for a successful franchise. It provides the background upon which the franchise can build a relationship of trust with their clients. In Canada, franchises often associate their identity with Canadian culture as a way to distinguish them from U.S. competitors.

The company story isn’t always a necessary step, but it’s an important detail to consider. What is the background to this franchise? How have they contributed to Canadian culture? Does this identity help them in the Canadian market? How do Canadians perceive them? Does an appeal to Canadian pride help local franchises and businesses?

If you’re looking to open a franchise in Canada, it will definitely help your cause to learn more about its local culture.

 

Is this franchise reputable in Canada?

Canadian consumers love shopping at franchises. There are some 75,000 franchise units in the country, and that number does not appear to be slowing down. While these names may be well known to local shoppers, investors unfamiliar with the Canadian market may not know which franchises are worthy of their trust.

Fortunately, there is a direct solution to this problem. The Canadian Franchise Association (CFA) is an organization of franchises in Canada. It hosts a directory that offers information on all its members, allowing users to make informed decisions of their own.

 

What type of laws and regulations govern Canadian franchises?

Opening a Canada franchise seems like a natural step for US business people. However, Americans need to be aware that for all the similarities between the two countries, franchises are governed differently in Canada.

Unlike the U.S., there is no federal legislation governing franchises in Canada. Instead, franchise rules and regulations are controlled by the respective provinces in which they are located. This is especially true with Quebec where franchise agreements are generally considered “contracts of adhesion,” thereby requiring a different legal process than other provincial jurisdictions.

Make sure you are aware of the local laws before opening a local franchise in Canada.

 

Is this a strong franchise? Will it be profitable?

When you buy a franchise, you’re buying into a reputation that has established itself as a trusted brand. But you still need to ask: How strong is this franchise… really? Is it profitable?

When looking at potential franchises, be sure to find evidence that proves it will be a quality investment. Look for franchises with registered trademarks. See what customers think of the franchise through customer reviews and complaints. Find out how long the franchise has been in business, and what kind of history it has had. 

Any franchise owner will tell prospective investors that they are buying into a profit-making vehicle. But before you sign the dotted line, do your due diligence and find out if this franchise actually has a good reputation.

Are you interested in a franchise opportunity? Contact St. Louis Bar & Grill to find out if a franchise is right for you!