Small business is big in Canada, with 1.14 million small businesses in the country in 2015, up from 1.08 million in 2012. In fact, the majority of Canadian businesses are small businesses, with 97.9 per cent of all Canadian employer businesses classified as small businesses (with one to 99 paid employees). (Government of Canada, Key Small Business Statistics – June 2016.)
Many of those Canadian small businesses are owned by franchisees, and if it’s your New Year’s resolution to own and operate your own business, you may want to consider starting down the path to franchising in 2018. As a franchise owner, you have the opportunity to be your own boss, with the support of a successful franchise system behind you, to ensure your path leads to success. So, while you handle the day-to-day operation of your business and participate in your community as a small business owner, you’re also able to rely on the proven methods and system put in place by your franchisor, which also includes training and ongoing support.
Kim Guay owns a The Lunch Lady franchise in St. Albert, Alberta, and knew she always wanted to own her own business. When she came across the Lunch Lady franchise, which provides healthy meals to children, two of her passions, she saw the perfect business model to help make her dreams come true.
“One thing I recognize is that I could not have developed this kind of business on my own. There are so many intricate details, and I know I would not have done this if some of the ‘wheel’ was not already created for me,” says Guay.
“While the franchisor did develop the system – the website, the brand, the marketing tools available for advertising – in terms of the business, it is all mine. The countless hours, the customer service, providing the highest standard of quality food, finding the right team, monitoring food safety, purchasing the right equipment, marketing to parents, schools, and the community.”
The new “mom and pop”
Franchising is the new “mom and pop,” and franchisees like Guay are small business owners who make valuable contributions to their communities. These franchisees operate in their local communities, hiring employees from the neighbourhoods surrounding the franchise location, making contributions to help the community thrive and grow, and supporting local causes to help those in need.
While franchising is the new mom and pop, franchising itself is far from new. Franchising has been providing entrepreneurial Canadians with a viable path to small business ownership for more than a century. Canadian-American businesswoman Martha Mathilda Harper established the first franchise system in 1891, when she created a network of hair salons with services and products that were replicated from location to location. Harper trained franchisees on the “Harper Method,” but the franchisees owned their own salons. The oldest franchise system operating in Canada is Canadian Tire, which has been franchising since 1934.
Franchising is also an established business model: the majority (62 per cent) of franchises are established brands that have been operating in Canada for at least 11 years, and 30 per cent of franchises have been operating for more than 25 years. Franchisees also have a record of success, with 50 per cent of franchisees having a tenure of more than 10 years with the same franchise brand. The model is very strong in Canada; almost 80 per cent of franchise brands operating in Canada originated in the country. (Based on CFA member responses to the Canadian Franchise Association’s Advocacy Survey, 2017.)
A world of opportunity
Over the years that franchising has grown, so too has the number and range of franchise opportunities available. While many think of fast food when they think of franchising, the reality is that franchises now exist in a wide variety of different sectors. To get a full idea of the range of franchise categories available, you can consult the FranchiseCanada Directory, which provides listings of franchise systems in Canada by category. You can also head to the Canadian Franchise Association’s (CFA) online directory at www.LookforaFranchise.ca, where you can also search franchises by category.
There are many large and well-known franchises operating in Canada, like Subway and McDonald’s, for example, but there’s also a whole host of franchise opportunities that require a less significant franchise investment. Once you know how much you’re looking to invest in a franchise, you can search for franchises that meet those requirements, with a franchise available at any investment level, starting with as low of an investment as $10K.
Franchising is a viable investment option for all Canadians, with entrepreneurism not only limited to middle-aged male investors. In fact, over the past five years, there’s been an increase in the number of female and young Canadians between the ages of 18 and 35 (millennials) looking to invest in a franchise.
Looking ahead to 2018
With franchise opportunities available to anyone with a business mindset, in a wide range of categories and investment levels, it can be overwhelming to try to pinpoint the right franchise fit to suit your own particular skill set, interests, and needs.
To help provide some New Year’s resolution planning inspiration, we’ve outlined some of the growing franchise categories in Canada, along with new and emerging categories to keep an eye on.
Franchise consultant Gary Prenevost, President of FranNet of Southern Ontario and Eastern Canada, says the growth in these five categories points to an overarching trend that is often overlooked and misunderstood: the trend of convenience.
“We’re only getting busier – we’re working more hours, corporations are expecting more, and there’s the umbilical cord to the smartphone. People are looking at, how can I get something faster and easier, and even how can I get it to my home?” he explains.
Service-focused franchises fit this bill, while also providing stability, Prenevost notes. “People who are attracted to franchising as a whole are looking for things that can’t be provided offshore, that are less risky, and services are probably the least risky of the different categories, when you’re thinking product and retail versus service.”
5 Franchise Categories Experiencing the Most Growth
(Based on increases in FranchiseCanada Directory category listings between 2013 and 2018)
1. Home – Maid/Cleaning Services
Wayne Maillet, franchise consultant and President of Franchise Specialists, says that economic factors have played a role in the upswing of home cleaning services in Canada. “With the rising cost of living, the general population is working more. It’s rare today that one spouse is able to stay home and take care of the household while the other spouse works to support the family unit. Home cleaning is a growing trend that prospective franchisees can capitalize on.”
Prenevost agrees that cleaning services provides franchisees with the stability to find success in franchising. “We’ve maintained for years that cleaning services has been one of the most stable, most predictable businesses. It’s not an easy business to get up and running, but once you’ve got it up and running, it can be a very, very strong business,” he says, adding that the industry will be paying close attention to what happens with the minimum wage increase in Ontario, which will have an impact on its staffing model.
As more Canadians look to outsource the cleaning of their homes, MOLLY MAID franchisees are stepping up to provide these residential cleaning services.
MOLLY MAID is a residential cleaning company that provides maid services to Canadians across the country, from British Columbia to Newfoundland, and as far north as the Northwest Territories. Founded in Mississauga in 1979 by nurse Adrienne Stringer and her husband Chris, the company was designed to allow busy families and homeowners to spend their valuable time on the most important things in life.
Since 1979, MOLLY MAID has expanded across Canada and the United States, and also has locations in the United Kingdom, Japan, and Portugal. MOLLY MAID franchises perform more than two million home cleanings a year, and also offer specialized cleaning services, such as summer cleaning, spring cleaning, moving cleaning, cleaning for seniors, condo cleaning, and apartment cleaning.
MOLLY MAID is the largest Canadian-based cleaning company in the world, with the motto that “Businesses aren’t successful, people are.” MOLLY MAID franchisees have the benefits of investing in a stable market, the ability to start with low overhead and invest over time, and a dependable and a straightforward business model. Franchisees also have access to a comprehensive training program, and ongoing support, including annual seminars and bi-annual Conventions.
“The residential cleaning industry in Canada is worth approximately $4 billion annually; demand for residential cleaning service has never been higher. A study conducted earlier this year by the University of British Columbia and Harvard Business School, published in the journal Proceedings of the National Academy of Sciences, found buying time makes people happier than buying material items. As such, it’s easy to see why timesaving services, such as residential cleaning, will continue to grow at a phenomenal rate,” says Aaron Abrams, President & CEO, MOLLY MAID Canada Inc.
“Franchisees are drawn to the maid service industry because it is a low-risk investment opportunity within a high-growth industry. When consumers think of a high-quality cleaning service, MOLLY MAID is top of mind. In fact, since 1979, MOLLY MAID has been the number one cleaning company in Canada, providing Canadians across the nation with an unparalleled cleaning experience. Our proven business systems, proprietary business management software and our highly recognized blue and pink brand colours, gives MOLLY MAID a competitive edge. But what truly makes us successful, are our MOLLY MAID Franchise Owners and their wonderful teams, because without them, our accomplishments would never be possible.”
2. Employment/Personnel Services
“I love the employment and personnel services category. What’s driving this business is also driving why more and more people are looking at franchising: the broken career ladder in corporate Canada,” says Prenevost. “There are more contract jobs, people are spending more time looking for jobs, and the contracts are shorter and for lower pay, and sometimes the employment services are the fastest way to get re-employed, because they have more options.”
According to Maillet, technology is influencing the increased need for employment/personnel services.
“This is a growing, needed industry. Industries have substantially changed due to technology. Certain industries have slowed down, and new technology has allowed the manufacturing, clerical, and retail industries to do more with fewer employees. As a result, there is an increasing number of people looking for new employment – more than there has been in the past,” he says.
With this economic climate in mind, franchises like Express Employment Professionals are providing employment services to connect those in need of jobs with the right employers.
Express Employment Professionals is a staffing franchise that started in 1983, and has now grown to nearly 800 franchises worldwide, including in Canada, the United States, and South Africa. Ranked as the number one staffing franchise on the Entrepreneur Franchise 500 list, Express Employment Professionals provides workers with jobs, flexibility, training, and in many cases, a bridge to permanent employment, and provides companies with the qualified workers they need, when they need them.
The staffing industry is thriving, on track to generate $142 billion in North America per year, and has added more jobs in the last three years than any other industry. Franchisees also have the opportunity to control their schedules in a professional business, with a strong rate of return: from an investment of $165K, first-year offices at Express averaged $1 million in sales.
Express Employment Professionals provides franchisees with multi-step marketing campaigns, sales training, and public relations assistance, and also offers annual regional and international training events, as well as continuing education for staff and owners through Express University online.
There are two ownership models, based on the franchisee’s investment level and market. The traditional model sees franchisees taking an active sales role, with a total staff of three. In the professional market model, the franchisee oversees the development of the business, working with a total staff of five and in coordination with sales reps.
Bob Funk, CEO and Founder of Express Employment Professionals, says economic growth has fostered corresponding growth in staffing franchising. “The staffing industry tends to mirror the economy, which is currently doing very well. Companies are also increasingly realizing the value in staffing through an evaluation hire period, where they can find out if a candidate is a fit for their business before committing to hiring them full time. Additionally, with unemployment low, companies are scrambling to fill positions, which is why a staffing service can be extremely helpful.”
“Who wouldn’t enjoy this business? You get to help people find the right place to work. It has tremendous purpose. And, at the end of the day, you’re helping people provide for their families and provide companies with human resources that will make them successful,” adds Funk. “Franchising with Express Employment Professionals is a great opportunity for those with an entrepreneurial spirit, who also appreciate the support of a proven model. With nearly 800 franchises and sales of $3.05 billion in 2016, becoming an Express franchisee is more like joining a family who are committed to helping each other succeed.”
3. Real Estate
Real estate remains a hot market across the country, with many Canadians not only buying and selling homes, but also looking to different options for how to do so.
“We believe that the real estate category is experiencing growth, especially in innovative models like PropertyGuys.com, because it’s primed with a ton of disruption opportunities,” says Ken LeBlanc, President and CEO of PropertyGuys.com.
“There are many other industries in which the shift has already happened, whether that’s shopping (Amazon), accommodations (Airbnb), transportation (Uber), and perhaps most notably, entertainment (Netflix). The real estate category is the last real giant that is still dominated by a 100-year-old traditional model, but that clock is quickly ticking.”
There are a number of franchises in Canada that are working to help connect Canucks with the right properties, and PropertyGuys.com has taken its own unique approach to the real estate market.
PropertyGuys.com is Canada’s fastest-growing private sale franchise network, and is working to change the Canadian real estate industry. In 1998, a simple idea of connecting private sellers with buyers via the internet was born. PropertyGuys.com started franchising in 2002, and now has more than 110 franchise locations serving more than 700 communities across Canada, and has expanded into Australia, with plans to enter the United States in 2018.
PropertyGuys.com is the only national private sale franchise network in Canada, with a goal of providing a safe and practical way for buyers and sellers to connect and avoid the high cost of commissions. This means that franchisees aren’t brokers or agents, so a real estate licence isn’t required to own and operate a franchise.
The franchise offers training through PropertyGuys.com University (PGU), located in Moncton, New Brunswick, which provides new franchise operators with the knowledge, training, and support they need to succeed in the system. PropertyGuys.com also assists franchisees when it comes to finance, IT, marketing, operations, business development, and peer mentorship – with Home Office support just a call or click away when a question arises.
President and CEO Ken LeBlanc says there’s no shortage of interest in real estate in general, and in the PropertyGuys.com franchise in particular. “The real estate industry has a lot of mass appeal, largely popularized by home renovation shows. It’s a broad and exciting industry with many avenues that a person might gravitate to. Whether that’s selling, buying, renovating, flipping, investing, you name it.”
“Many potential franchisees who are interested in joining PropertyGuys.com are looking for something totally different from the 9-5 corporate grind – which really means that they want to be in control of their success, how much they can make, and how they spend their time,” he adds. “Regardless of their background, we attract leaders who see the opportunity to disrupt the outdated real estate model, and replace it with one that is much more cost effective and value-driven for buyers and sellers.”
4. Educational Products & Services
As the post-secondary and employment landscapes become increasingly competitive, more and more Canadians are turning to supplementary education and tutoring franchises for help in ensuring their children have the tools they need to succeed.
“Educational services is a really, really strong category,” says Prenevost. “Our future generations are being employed in a global economy, which means that parents want their kids to do better than they did, and they’re prepared to invest a lot in their kids’ education. And it’s not just for kids who are underperforming, it’s also for the kids who are performing and want to get sharper. This is a category that isn’t going to go away.”
In response to this demand, Oxford Learning Centres has developed its proprietary Dynamic Diagnostic Assessment to help tailor programs specifically to a child’s needs, to ensure that child can thrive.
Founder Nick Whitehead opened the first Oxford Learning Centre in London, Ontario in the mid-1980s, offering remedial and enrichment programs for elementary and secondary students. This led to the development of the franchise’s Dynamic Diagnostic Assessment, a proprietary evaluation tool that identifies a child’s cognitive strengths and weaknesses as they pertain to learning. With this tool in place, Oxford Learning began franchising in 1994, with a broader curriculum and now including pre-schoolers and prep for SAT/ACT tests.
Today, Oxford Learning is providing supplemental education through its more than 150 centres across Canada, the United States, and in the Bahamas, Bermuda, and the Middle East, reaching more than one million students with its different educational programs.
Oxford Learning franchisees deliver supplemental and enrichment education to school-aged students, using a comprehensive Dynamic Diagnostic Assessment to pinpoint their learning strengths and weaknesses. Using this information, franchisees create completely individualized programs to maximize success for each student.
Oxford Learning franchise owners receive in-depth training in all aspects of the business, along with ongoing support. Franchisees have access to custom software, proprietary systems, marketing tools, and best practices to operate the business.
Successful Oxford Learning franchise owners are seeking financial security and personal fulfillment, and have a strong business background and gregarious personality. They don’t need to have an MBA or teaching degree to find success, but need to have a passion for learning.
5. Food – Quick Service Restaurants
There’s a reason why people think of quick service restaurants (QSR) when they think of franchising: there are so many different opportunities available in this category, with a wide variety of new concepts entering the franchising fray each year to meet the diverse tastes of time-strapped, yet quality-conscious Canadians.
“We’re seeing more unique flavours, and more unique service offerings. It ties back to the convenience trend, but it’s also about simple, very well-prepared, good-quality food. I think one of the things that consumers are no longer tolerating is average-quality food, and they’re voting with their wallets,” explains Prenevost.
MTY Group has honed in on this QSR market, with more than 40 different QSR brands in its food service family.
The MTY Group got its start in 1979, when Founder Stanley Ma opened his first restaurant in Quebec. Since then, the franchise has shifted focus to quick service restaurants (QSR), adding more and more brands to its fold over the past three-and-a-half decades.
The franchise’s three principles – excellence, dedication, innovation – have helped MTY Group become one of the largest franchisors in Canada’s restaurant industry. For more than 35 years, MTY Group has been increasing its presence by delivering new QSR franchise concepts, and making acquisitions and building strategic alliances that have helped MTY Group grow year after year.
MTY Group combines new trends with its strong operational focus, and its brands now reach millions of people every year through its more than 2,700 locations. As consumer tastes change, MTY responds in kind, looking to meet these needs with the right QSR concept.
MTY Group franchisees receive expert guidance and support when it comes to finding the right location, which is often in a food court, commercial artery, or shopping mall, and when it comes to the location design, including creating floor plans, choosing equipment, planning and supervising construction, and preparing for the opening.
The franchise also provides operational training, supervision, and guidance, along with marketing activities to help generate traffic and boost brand visibility.
Emerging & Growing: The Children’s Sports/Recreation/Entertainment Category
As parents look to find outlets to help their children get out and play, and develop important life skills, new franchises have been emerging to meet these needs in increasingly unique ways.
“Children’s sports/recreation/entertainment franchises are growing due to a need. Too many gizmos and gadgets lead to a very sedentary lifestyle (obesity, unhealthy eating habits/sleeping habits). This, coupled with kids being overscheduled with tutors, homework, and other school activities, has resulted in kids needing a safe and constructive place where they can just be kids, where there are opportunities to exercise their imaginations and creativity, and where they can become physically active,” notes Maillet.
Take, for example, Ctrl V, a virtual reality arcade franchise that provides children (and adults!) with an immersive experience unlike any other.
Ctrl V is the world’s fastest-growing and largest virtual reality arcade. Virtual reality (VR) replicates an environment that simulates a physical presence in places in the real world or an imagined world, allowing the user to interact in that world.
At Ctrl V, visitors book their VR session online, make their payment, and show up at their location to start gaming. With a large and growing game selection, visitors can have full control over their experience, and are assisted by professional and knowledgeable staff, with access to top-of-the-line hardware in a welcoming and entertaining atmosphere.
Ryan Brooks (CEO), Robert Bruski (CFO), and James Elligson (COO) decided to build a business around virtual reality technology after the newest iteration of virtual reality hardware became available to the general public for consumer purchase in April 2016.
Ctrl V is actively seeking franchisees in a variety of markets, focused on Canada and the United States. Ideal franchisees are qualified individuals with business experience and acumen, along with an avid interest in emerging and advancing technology.
Ctrl V franchisees have the opportunity for growth, have access to a tested model, and have the opportunity to be a technology pioneer, helping to bring VR to the masses. The franchise also provides an outstanding support system, including marketing and service staff and qualified software developers.
“Ctrl V is an experience that caters to the entire market in every demographic. It doesn’t matter what age, gender, or skillset that people have, they come to Ctrl V for a great time,” explains Robert Bruski. “This trend of location-based entertainment (LBE) has been recently experiencing growth because people are looking for a reason to get out of the house and away from the computer, be social, and move on from the drone-like lifestyle that took a hold with the tech revolution. The allure of being social only online is fading, and the population is seeking out these LBEs. As a result, more are opening and accounting for the large growth of the market.”
“This is where Ctrl V attracts prospective franchisees, because it is an offering that caters to the social demand, but is also so compellingly different, and a staple of the future, that the population is drawn to trying it. Ctrl V specifically represents an experience that is refined and entertaining to a degree that our competitors aren’t able to reach, and this is what differentiates our brand, in particular, in the world of LBEs,” he adds.
Maillet notes one other factor that will be impacting Canadian franchising in 2018.
“One of the biggest trends that will be significant is an entire new category of franchise opportunities as it relates to the legalization of cannabis. The government has announced the legalization will take effect July 1, 2018. It should be noted that this date could be delayed, as there are many issues to be addressed. It is also unknown as to how each province will set its policies regarding distribution. In the meantime, there are companies getting ready to franchise to take advantage of this new industry,” he says.
Don’t forget to do your due diligence!
It’s important to remember that just because a category may be popular or experiencing growth, it doesn’t mean it will necessarily be the right fit for you. It’s essential to conduct the proper due diligence, to ensure that you’re investing in the franchise with which you can prosper. This starts with taking the time to thoroughly research the different franchise options that best suit your interests, passions, and skillset.
You should also consult franchise professionals during this process, including a consultant, who can help you hone in on the best options for you; an accountant, who can help in determining the franchises that best suit your financial capacity; a franchise banker, who can help you pinpoint the right financing options; and a franchise lawyer, who plays a critical role in reviewing the franchise disclosure document before you sign on the dotted line.
To learn more about how to do your proper due diligence, check out the Franchise Due Diligence article, along with other valuable resource articles.
We wish you the best of luck as you set out to make the New Year’s resolution to own your own business a reality through franchising. Cheers to a prosperous 2018 (and beyond)!
Resources for Small Business Owners
There are many resources and programs across the country that are available to Canadians to help them along the path to small business ownership, particularly when it comes to financing and mentorship. Some of these many resources include:
Federal and Regional Economic Development Organizations: