SPOTLIGHTON:CANADA
North of the border
Ned Levitt discusses the potential the Canadian franchise market holds for foreign brands
franchising is rapidly penetrating a wide variety of industries in Canada and the business-to- business sector. At the beginning of 2013, the Canadian Franchise Association identified six sectors of franchising that have grown significantly over the past five years*. Over that period, business consultants / services / training saw an increase in franchise listings of 211 per cent, followed by hair and nail salons / spas at 188 per cent, seniors / home care and services: 121 per cent, food / restaurants: 88 per cent, home-based businesses: 83 per cent, and health and fitness 82 per cent. According to the Canadian Franchise Association’s website: • The Canadian franchise industry generates
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www.franchisornews.co.uk
ranchising continues to grow as a significant factor in the Canadian economy. Previously utilised almost exclusively in business-to-consumer enterprises, mostly in the retail sector and restaurant industry,
approximately $68billion every year • Over 1 million Canadians (approximately 1 out of every 14 working Canadians) are directly or indirectly employed by the franchise industry
• There are over 78,000 franchise units across Canada
• Over 60 per cent of franchises can be found in non-food sectors and industries
• There are an estimated 1,300 franchise brands operating in Canada
Franchised brands and services are part of our daily lives in Canada, from the coffee we drink in the morning to where we go on holiday, who takes care of our elderly, how we complete our taxes, and which fitness centers we attend.
What makes Canada unique in the franchise world is its proximity to the massive US franchise market directly on its southern
border. Canada is the leading, and often first, foreign destination for expanding US franchise systems. This has been the case for decades. Canada’s proximity to the US, combined with its stable and reliable economy, high per capita personal incomes, vibrant franchise marketplace and sophisticated consumer culture, has also made Canada a leading destination for franchise systems looking to expand into North America. Canada is the franchise gateway to North America and for many good reasons. Firstly, we are more like Americans than any people on earth. On the other hand, we have a less complicated franchise regulatory regime, are generally less litigious, and less likely to simply copy a business to become a competitor. Expanding into Canada first, then, allows a non-North American franchisor the opportunity to ‘acclimatise’ to the North American market, with less risk and less cost, before taking on
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