Increasing number of newcomers are considering franchising as a career option

Credit to Author: Canadian Immigrant| Date: Thu, 29 Aug 2024 13:46:02 +0000

The Canadian Franchise Association (CFA) has shared compelling insights about the growing trend of newcomers in Canada exploring franchising as a career option. The association, a national, not-for-profit representing over 40,000 franchise business owners, finds that franchising has emerged as a vital sector in Canada, providing robust opportunities for immigrants seeking to establish themselves and contribute to their new communities.

Franchising is a business model where a company (the franchisor) allows individuals or other businesses (franchisees) to operate their own businesses using the franchisor’s brand, trademarks, system and methods. In exchange for this, franchisees typically pay an initial franchise fee and ongoing royalties based on their sales.

One in four businesses owned by immigrants

Canada’s welcoming environment and strong economic framework make it an ideal destination for immigrants, with about one in four businesses (23.7 per cent) owned by newcomers to Canada, showcasing their entrepreneurial inclination.

Profile of a newcomer Canadian franchisee

The percentage of immigrant owners who are science, technology, engineering or mathematics (STEM) graduates is considerably higher among newcomers than those business owners from the second and third plus generations, suggesting that the immigrant entrepreneurs have undergone higher levels of education than their Canadian counterparts.

A perfect fit for immigrant entrepreneurs

Franchising offers a structured and supportive business model, which is particularly appealing to immigrant entrepreneurs. Franchising is about being in business for yourself but not by yourself. The support that franchisors provide — including systems, training, guidance, and ongoing support — helps franchisees successfully open and operate their local small businesses, making it an ideal pathway for immigrants looking to start their entrepreneurial journey with a strong foundation and support network in place.

Canada, a top destination for franchise investment

Since the introduction of the International Franchise Attractiveness Index in 2020, Canada has consistently ranked among the top six countries with attractive franchise markets for balanced growth. The country’s political and economic stability further enhances its appeal, ranking second among G7 countries for political stability and third globally for economic stability.

Regional opportunities

According to the CFA, Ontario leads in franchise units, accounting for 48 per cent of all operating franchises. However, there is significant potential for growth in other regions, such as the Prairies, the Atlantic, and West Coast markets. Newfoundland and Labrador and P.E.I. are expected to see the largest percentage growth in franchise locations through 2025.

Economic impact

The franchising industry is a cornerstone of the Canadian economy, being the 12th largest industry in the country and the 2nd largest franchise industry in the world. Income from franchising is projected to contribute $120 billion to Canada’s GDP by 2025, with one in 10 Canadians employed directly or indirectly in a franchise system. The average Canadian interacts with three to five franchise locations daily, underscoring the pervasive presence and influence of franchises.

Popular franchise categories

Franchise categories poised for growth include health and wellness, education, and B2B services. Canadians’ increasing health consciousness and the demand for supplemental education, especially in STEM/STEAM (science, technology, engineering, arts, math) fields, are driving these sectors. B2B franchises, offering digital marketing, IT support, business coaching, and property maintenance, continue to flourish, catering to ongoing business needs.

Becoming a successful franchisee

The CFA offers the following recommendations for those starting their journey in franchising.

• Navigating the franchise business model and finding the right franchise. The key is to begin with thorough research and self-assessment to identify a franchise that matches an individual’s skills, interests, and budget.
• Leverage resources such as educational programs, mentorship opportunities, and networking events for insights and advice. Understanding the franchise agreement, support system, and operational requirements is crucial.

By evaluating these factors, newcomers can make informed decisions and set themselves up for long-term success.

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