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Entering New Canadian Markets: What to Consider
Franchising is still big business in Canada, with the Canadian Franchise Association reporting that there are now around 1,300 brands operating across the $68 billion dollar industry (http://www.cfa.ca/tools_resources/franchise-research-facts/). That leaves you with many brands to choose from as a prospective franchisee, and you will also have to decide if you want to be a trailblazer and enter a new Canadian market.
If you decide to become a franchisee who is going to help with brand expansion into a new area, you need to ensure the franchisor can meet its potential. Without local brand recognition or a regional record, you will have to honestly assess whether the concept will triumph in a market where the franchisor lacks tangible experience.
Franchisors enter new markets for many reasons, including existing market saturation, qualified lead influx or a simple desire to expand its current customer base. Regardless of the reason, you must determine whether the franchisor has the support systems and practices in place that are necessary to develop an untapped market and lead you on a road to success.
The sensible strategy
A franchisor that is primed for success will have a designed plan that was built on research regarding expansion options, existing competition levels and geo-targeted opportunities. Many franchisors start out in newer markets that are close to home, as this makes it easier and less costly when it comes to training and supporting the new market franchisees. This doesn't mean you should ignore an opportunity in a more remote market, however, as the franchisor might just be waiting for the right franchisee to come along for its first foray into that area.
Do be more careful with franchisors who seem too eager to have you sign on, as they should assess you thoroughly. An unsuccessful franchisee can damage the entire system, particularly in a newer market.
Ask the right questions
Go as deep as possible in your research and ask about things that are sometimes beyond the typical franchise questions. For example, in a new market, supply and delivery logistics is a concern. Find out who will handle local marketing initiatives, as you will really need to get the brand out there because it is new to the area.
The life of a trailblazer
In most franchises, your success will largely depend on your own efforts, and this is especially true when you are in a new market. Perform your own due diligence, and be honest with yourself about your weaknesses and strengths. If you're not a fan of marketing and promotion, being in a new area may not be the ideal choice for you as that is going to be something you will have to do a lot of.While there is increased risk when entering into a new area as a franchisee, it can also bring wonderful rewards. You might be able to get a prime territory because you're coming in on the ground floor, and you will have access to tremendous franchisor support.