You've probably heard more than once that franchise...
There are many US brands operating successfully in Canada today across several industries. If a US franchise has caught your eye, however, you need to do some homework beyond the typical research. There are some specific areas that can cause you trouble down the road as a Canadian operating a US franchise in your home country, so check out the commonly overlooked areas below before sealing your deal.
The legal side
American and Canadian laws do differ, and these differences extend to legal requirements in businesses in general and franchises. The way you are going to market, set up, operate and hire workers won’t be the same as it would for a US franchisee. The same applies to your infrastructure, supply chains and even how you find and acquire real estate. Speak to your franchisor about all these variances, and find out about any customizations that need to be made to properly accommodate the business in Canada.
The franchise agreement
Everything in a US franchise agreement, from the legal sections to suppliers, terms and logistics were written with the US market in mind. These are all dependent on the business being in America, which won’t work for you. Have a franchise attorney in your area review the agreement to make sure it won’t create obstacles for you in Canada. Some US franchisors have special franchise agreements tailored for Canadian franchisees, and that’s generally the better option.
The experiences of current franchisees
In general, you should always talk to franchisees about the brand you’re interested in, and this can be especially valuable when you’re a Canadian considering a US brand. Don’t just talk to US franchisees; learn about the experiences of fellow Canadian franchisees operating under the same brand if possible. Ask about any problems they’ve encountered that related to operating a US brand in Canada and what steps the franchisor took to resolve the situation.
The master franchisee
When franchises cross borders, having a master franchisee in place to oversee the area is important. This person will act as an intermediary between the franchisees and the franchisor. In your region, they can help navigate some of the legal waters and the franchisor’s supplies and systems. While a master franchisor is not required, having one in your region will make your road to success far smoother.
Operating a US franchise in Canada can be a great experience, especially if you’re bringing a relatively new concept to the market, but it does present some unique challenges. Keep the four areas covered above in mind as you weigh your US options.