The Facts About Franchising
Canada has the second largest franchise industry in the world, led only by the U.S.
Franchising represents over $100 billion in sales annually and continues to grow.
Franchising employs over 1.5 million people in Canada.
A Canadian franchise opens every 2 hours 365 days a year.
Total franchise units: 75,809
Average franchise fee: $25,000
Average franchisee investment: $166,600
Of all the franchises opened in Canada within the last 5 years, 86% are under the same ownership and 97% are still in business.
This is the best period ever to begin Franchising due to a permanent economic shift.
Franchising vs. Licensing
2 very different forms of law
Franchising is based on securities law
Licensing is based on contract law
2 Types of Franchises
Intentional – someone wants to expand and decides to use franchising as the mechanism to expand
Unintentional – spawned from poorly advised and drawn up agreements and other marketing formats.
BUSINESS OPPORTUNITY LICENSING IS EXTREMELY RISKY and will more than likely end up costing a great deal more in the long run. Chances are it will slip into an unintentional franchise format. This is BAD.
Franchising is SAFER and Simpler because:
1) It is uniform
2) Disclosures provide and afford protection
3) Licensing does not allow for control over what is being operated in other areas
4) Prospects are looking for franchises in your respective category – not licenses
We believe that over 95% of aspiring franchisors never get past 6-10 units. WHY? - Inexperience
The Main Challenges Involved with Franchising a Business
1) Under capitalization for Typical Expenses
2) Belief that all Lawyers are experts on Franchising
3) Concept is not ready
4) Under educated in terms of legalities
5) Lack of Experience
6) A concept that should NOT be franchised
More than 50% of franchised units today are a part of franchisors that have fewer than 50 franchises
CANADIAN FRANCHISE STATISTICS
• Canada has the second largest franchise industry in the world, led only by the U.S.
• Franchising represents over $100 billion in sales annually and continues to grow.
• Franchising employs over 1.5 million people in Canada.
• A Canadian franchise opens every 2 hours 365 days a year.
• Total franchise units: 75,809
• Average franchise fee: $25,000
• Average franchisee investment: $166,600
• Of all the franchises opened in Canada within the last 5 years, 86% are under the same
ownership and 97% are still in business.