Introducing a US franshise to a Canadian market

[Kevin Lee]

Hi Everyone,

If there was a franchise you liked and located exclusively in the U.S., how likely would you be able to introduce the first one in a new market like Canada? How open are franchisors to this sort of idea?

Has anyone heard how this was done in the past?

[RussellWebb]

Hi Kevin,

After doing a bit of research, I would suggest calling the franchisor and ask a few questions. Are they planning to offer franchises in Canada? If not, what would it take for them to change their tune?

You never know, you just might be the catalyst for action on getting a rollout, esp. if they have a number of requests from other Canadians. This could open up the necessary channels of communication.

The hurdles that I can see for any franchisor are:

1. The franchisor will be required to present most elements of the packaging and labeling of its products in both official languages, namely French and English.

2. Issues with the Immigration Act and NAFTA

3. Unique demands from the different provinces - Quebec has a 'charter of the French language' that needs to be dealt with.

4. An Understanding of the Judicial System

5. Intellectual property rights - franchisors need to make extra efforts to supervise and control their Trademarks.


There's more info available at the referenced link below (pdf file).
http://www.lapointerosenstein.com/fichier/listelibrary/12/Franchisingincanada.pdf

[franchisebrief.com]

Hi Everyone,

If there was a franchise you liked and located exclusively in the U.S., how likely would you be able to introduce the first one in a new market like Canada? How open are franchisors to this sort of idea?

Has anyone heard how this was done in the past?

US franchisors are really open to "export" their concept to Canada for 2 main reasons: the proximity and the culture: Canada is just a few hours away from any US city and both cultures are very similar.

I am actually reading stats on this subject as I write and about 80% of american franchises tat go international go to Canada first.

[Kevin Lee]

I am actually reading stats on this subject as I write and about 80% of american franchises tat go international go to Canada first.

Thanks for the key points Russell and franchisebrief.com!

If 80% of American franchises expand to Canada first, then I wonder what the average success rate is and how it varies depending on the industry?

[jpower]

When franchisors begin to expand outside of the United States, Canada is one of the first areas they consider because:
1. Similar culture
2. Same language in most of country
3. Some provinces require registration, but it is not considered too difficult.
4. An economy that generally mirrors that of the United States (may be different currently)

The main cost for a franchisor would be contracting a Canadian franchise attorney to convert their legal documents to meet Canadian law, then reprinting their marketing material.

If a person sees a franchise they like, that is not currently in Canada, they might approach the franchisor and ask about becoming an area developer for the franchisor. I don't think that most franchisors would not sell a master franchise in Canada, in which the franchisee takes over the entire country, because Canada is such an opportune areaa, but by becoming an area developer the new franchisee could have the right to develop/sell several franchises in a given area.

[JBunion]

I can say that a lot of internet brands that are NOT in Canada have been slowly expanding there. NewEgg.ca (prominent computer retailer) has recently setup in Canada. Their US site never shipped internationally. They will see continued success because while they only operated in the United States, we got to awe at the prices you guys got away with. Similarily, ThinkGeek.com should really make the move north as well. Right now, your shipping costs outweigh any product costs if you order from them and ship to Canada. It is integral (in my opinion) to have the trans-American market at your fingertips. We are so deeply connected through media, culture, sports, arts, politics, etc.