Following on from a breakdown on the financial benefits of the Canadian market yesterday, we have happened upon more evidence that states that more American franchises are looking to Canada.
“A trend appears to be emerging among U.S.-based franchisors to target the Canadian market first for international expansion. A slow-to-recover U.S. economy, combined with Canada’s relative strength during the recession, seems to be luring franchise operators to Canada,” writes Derek Sankey in the Financial Post.
The article restates many of the same points we have been making for a long time. But there is some interesting analysis from a Canadian franchise lawyer.
“I think the word is getting out that Canada is a good place to do business,” said franchise lawyer Larry Weinberg.
It’s more than an issue of proximity. The Canadian economy emerged relatively unscathed from the recent recession. The story talks to the CEO of Top 100 Global Franchise Puroclean who says, “Canada is absolutely the place we need to focus our growth and efforts,” says Keith Gerson, chief executive of Puroclean, which recently hired a Canadian expert to oversee its expansion plans in the country.
That strategy helped push Puroclean into the Top 100 and it seems like it will be a strategy that many other franchises will use in the near future.
You’ll find the best Canadian franchises with Franchise Direct Canada.
Back in late May, Franchise Direct launched its sixth international franchise portal, Franchise Direct Canada. A few months in and we’re delighted to be playing a role in matching Canadian entrepreneurs with top business opportunities.
There is no questioning the value of the Canadian franchise market. As we found through many interviews with the franchises represented on the Top 100 Global Franchise list, Canada is often the first destination for franchises considering international expansion. The cultural and business similarities make it quite easy to seamlessly transfer a thriving franchise business to the Great White North.
Interestingly, Paul Segreto has provided some really interesting information on the state of the Canadian franchise market via the Canadian Franchise Association on his FranchisEssentials blog. Here’s a breakdown:
- The Franchise industry in Canada represents over $100 billion in sales annually
- Franchised businesses account for 40% of all retail sales
- There are over 78,000 franchises across Canada
Canadian Franchise Association membership grows at a rate of 10% per year
- Franchising directly employs over 1,000,000 people
- Every year, thousands of Canadians are improving their lives by becoming franchisees
- Franchising accounts for $90 billion per year in sales nationally or 10% of Canada’s Gross Domestic Product (GDP)
- Franchising has been reported to account for one out of every five consumer dollars spent in Canada in goods and services
We’ve seen the huge push towards international franchising in America in the last six months. As if you needed any more encouragement, these facts make the Canadian market even more mouth-watering. Learn more about the Canadian franchise industry from the CFA and Canadian readers can find the franchise for them with Franchise Direct Canada.
“As McDonald’s goes, so to does franchising.” This might be an extreme overstatement, but nonetheless, the Golden Arches has had such a defining role in the evolution of franchising that many entrepreneurs and analysts will use it as a bellwether for how the industry is faring as a whole.
Those insiders will be have taken positive news from the McDonald’s recent gathering for analysts and journalists at its corporate headquarters in Illinois last week. According to the Wall Street Journal, the attitude of the McDonald’s corporate executive was typically bullish, with the company extremely optimistic about the way it has positioned itself for the time beyond the recession.
“This is also as much about changing the perception of our brand in the consumer’s mind that allows us to stretch both the price and products you can serve in a re-imaged restaurant,” McDonald’s Chief Financial Officer Peter Bensen said.
The confidence is a direct result of the investment in new stores and technology, as well as the unveiling of popular new products.
Restaurant profits are down in the last year across the industry, but McDonald’s market share has remained steady. The WSJ reports that some of the products coming down the pipeline are new wraps, smoothies and frappes and possibly a $1 breakfast menu. Clearly the challenge for McDonald’s, and indeed everyone in the QSR sector, is balancing the surge in consumer frugality brought on by the recession with the constant demand for a high-quality product.
As the year goes on, McDonald’s seem like they’re in a great position to retain the top ranking in Franchise Direct second Top 100 Global Franchises.
How does a local hamburger restaurant become the most popular restaurant on earth? Franchising, of course. But there is one subtle, yet critically important step in the process of franchising that can decide whether a franchise explodes into the popular consciousness or is simply left behind: the drafting of your franchise agreement and FDD’s.
To some, these papers might seem like a legal burden. But in reality, the more engaging these documents are, the more likely it is that your franchise will prosper. That’s certainly the feeling of franchise lawyer and blogger Charles N. Internicola, who has written extensively on the subject of franchise agreements.
In a recent post on his New York Franchise Law blog, Charles urges business owners considering expansion to view the FDD and franchise agreement as “a collaborative process focused on the development of a critical “asset” that uniquely reflects, identifies and protects the components of your business…franchise and franchise system.”
When starting a franchise keep in mind that all agreements are not the same and and that your input will be critical to insuring that your agreements and disclosure documensts reflect the unique nature of your business. This is no easy task and is not one that is not simply delegated - an in-depth working relationship with your franchise lawyer is required.
This is valuable advice for anyone expanding into franchising. Stick with Charles’ blog for more insight on the particulars of franchise law.
It’s been a good month or two for Matt Shay.
Many IFA presidents have influenced the national debate on small business, but Mr Shay came through in a big way for small business owners and those in the franchise industry last month when President Obama announced the details of his small business recovery plan.
The hard work of Mr Shay and others at the IFA was rewarded that day. But how did Matt ascend to the position he is in? The cover story of the newest issue of Franchise Times explains how, as well as providing some of Mr Shay’s insight on how the IFA is changing.
The story features a dramatic story about how Shay overcame a serious car accident where he went through a windshield, breaking every bone in his face and fracturing his two legs. Shay eventually recovered and began his work with the IFA, working in state capitals. He gradually climbed the ladder and found himself as IFA president at a time of critical economic importance.
I thought this paragraph in Nancy Weingartner’s story was very insightful into what makes Shay successful.
No one will ever admit this—at least not on the record—but it can’t be easy to lead a bunch of strong-willed, self-made entrepreneurs. In essence, Shay not only has a different “boss” every year, as the new chairperson moves into the top volunteer spot, but he’s accountable to an entire board of directors, plus membership.
It’s a very tough job. But Shay has guided the IFA to a position where it is now ‘punching above its weight’. “Five years ago board members didn’t realize how much ability we had to improve our regard,” Shay says in the story.
Shay has mobilized the IFA in recent years. If you’d like to watch more about Matt, here is below in an interview recorded at this year’s IFA convention.
Produced by Franchise Direct
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