Should I Franchise My Business?
23 April 2019
The franchise industry is an integral part of Quebec’s economy. Christian Champagne, executive director of the Conseil québécois de la franchise (CQF), answered our questions about one of the most promising business models.
France is a leading country in franchising. Where does Quebec rank?
Canada counts 1200 active networks, with 457 of them located in Quebec. New franchises appear, some leave, and some merge, but the growth is constant. Franchising is responsible for 405,390 jobs and 10% of the workforce in Quebec.
While France counts 2000 franchise networks, for a much higher population. The French are very active in certain sectors such as fashion, which, conversely, is ruled by corporations here. In Canada, the restaurant industry (fast food, take-out, sit-down restaurants) takes the lead.
Can you name a few success stories?
Evidently there are the renowned restaurant franchises like McDonald’s and Tim Hortons. Among the larger networks, there is the Canadian Tire Corporation, which includes Sports Experts, a popular one in Quebec. For automobile services there is Uniban Canada and affiliates, VitroPlus being one of the successful ones. Car dealerships and pharmacies have the highest numbers in terms of annual revenue and jobs.
Are you seeing any new trends in franchising? What are they?
Certain sectors have become more prominent over the last few years, for example, residences for seniors, and everything that encompasses cleaning or domestic services for that particular clientele. Other networks of franchises are thriving because of their business models. Cardio Plein Air, for instance, is doing things differently. Instead of having to pay overhead costs, they use outdoor locations everywhere in Quebec. Franchisees are also facing challenges because of the popularity of online shopping, so they’ve had to adapt, with billing services or online courses. Therefore, we are seeing a transformation of certain franchises, or the creation of new ones in e-commerce.
At least 80% of entrepreneurs that are part of a franchise network are still in business after the 5-year mark. With independent business owners, it’s the opposite: only 20% of them are still operating after 5 years.
Are young entrepreneurs interested in franchising?
I’ve noticed that the younger generation has a strong sense of entrepreneurship. Every year, we give seminars on how to franchise a business and we meet entrepreneurs at a crossroads asking themselves if it’s the right path to take. Investing in a business always has risks, and franchising remains one of the more promising options with higher success rates.
Which of the franchise networks currently stand out?
Copper Branch is a new Quebec-based franchise that has recently seen success, and is currently spreading across Europe. The president, Rio Infantino, won the emerging franchisor prize at the CFQ’s 2019 Maillon d’or. In addition, Idolem, a small hot yoga franchise is doing something different, and is attempting to democratize the practice. Lastly, Daoust Forget, in the field of traditional dry cleaning, is the only one in the world to use a new eco-friendly technology.
What types of entrepreneurs make the best franchisees/fransichors?
A good franchisor must be able to support its franchisees and help them succeed.
The franchisees are entrepreneurs who share their time, passion, expertise, and knowledge with a network. They are buying a recipe, a way of doing things that a franchisor has perfected over a number of years. So, it’s best if the franchisee’s entrepreneurial spirit isn’t too developed, because there will be rules to follow. Just like the perfect soup recipe should never be altered with a dash of this, and a pinch of that.
Is there room to innovate with franchises?
Each sector has their own way of operating. Certain networks leave more room for creativity, while others require a little more structure. That said, all respectable franchisors have a system in place; a committee of franchisees tasked with helping the concept evolve and become more innovative.
*the points of sale numbers according to the Indicia database (updated: 2017)