Did you know that every day, Canadians interact with three to five franchise businesses, often without even knowing it?
When you stop to take a closer look, you realize that franchises are all around us, in every industry and in every community. But do you really know to franchise? When you hear the word franchising, you may think of well-known, established brands and large-scale corporations, and you’d be correct. But franchising is much more than that. Franchisees are small business owners from all backgrounds who are actively involved in their communities.
There has been a recent spike in budding entrepreneurs exploring franchise ownership as a way to be their own boss (especially throughout the pandemic). Before making an investment decision, it’s important to do your research and conduct the proper due diligence to ensure you’re making the most informed decision possible. The Canadian Franchise Association (CFA) can help by offering a glimpse into what franchise ownership is really like, and by dispelling the biggest myths and misconceptions. This will help those interested in exploring the world of franchising better understand the industry so they can determine whether it’s the right fit.
Here are some of the most common franchise myths explained for anyone looking to pursue franchise opportunities.
Myth: Franchises are very expensive
Fact: This isn’t entirely true. There are options out there at every price point, some starting as low as $10,000. It’s important to explore all available opportunities, as you may be surprised by the diversity of sectors and the range of start-up costs. Plus, there are several funding options, institutional grants, and other programs available to help with financing your franchise.
Myth: Franchises consist of mostly big chains and food businesses
Fact: Although that isn’t necessarily false, franchising is so much more than large food service brands. It’s a very diverse landscape made up of small businesses, creative entrepreneurs, and a broad range of people, products, and services. While the franchise landscape does include many food franchises, from quick service restaurants (QSRs) to full-service dining, food only makes up 40% of the overall industry, paving the way for a wide variety of other sectors, including real estate, health & fitness, retail, education, and everything in between.
Myth: Franchise ownership is risky
Fact: While there’s always some level of risk associated with owning a business, even a franchise, the pandemic showed that the franchise model was uniquely positioned to withstand some of the stresses of lockdowns and economic challenges. Unlike going into business on your own, new franchisees receive training and extensive education and have access to a large support system that’s with them every step of the way. Despite the endless challenges faced over last few years, the strength of franchise businesses was one of the few success stories that came out of the pandemic.
Myth: There’s no creative freedom, as the franchisor is always in charge
Fact: Franchisors provide the framework of a successful business concept and practical policies to support franchisee growth. In many cases, franchisors also support by providing marketing, lead generation direction, and more, all to ensure their franchisees’ success. It’s this type of structured support that exists within the franchise landscape that gives franchisees the confidence and ability to run their locations with ease. And while brand standards are always a top priority to ensure franchise consistency, most franchise concepts value the expertise and insight their franchisees bring to each location. Franchisees have the local knowledge of understanding the communities they serve, and as the ones with boots on the ground, maintain control over day-to-day management of their location, including hiring, staffing, and marketing.
Myth: It’s better to pick a franchise that matches your interests
Fact: It’s important to research all available options and to ask questions to make sure that you not only align with a franchise concept but that it also fits into your lifestyle. While having an interest in a franchise will only add to your success, don’t be afraid to explore industries outside of your comfort zone, as training and support will be there to guide you every step of the way.
Understanding what kind of business owner you want to be and finding a model that you have confidence in are key in your decision-making process.
While there are a lot of factors that go into selecting a franchise, those looking to explore this channel of business ownership aren’t alone on the journey. Part of the process includes connecting with other franchisees who have found success in the industry or similar concepts, discussing realities and asking the big questions.
After all, franchising is about growing together and being in business for yourself, but not by yourself. According to the CFA, entrepreneurs interested in owning their own business can look to franchising as a viable and well-supported option. Franchising is a community, and potential entrepreneurs should take every opportunity to explore, learn, and connect.
Despite economic uncertainties, you’ll find that entrepreneurs are choosing franchising over starting a business from scratch due to the industry’s many inherent strengths. In fact, even throughout the pandemic and looking ahead, the economic forecast of franchise growth only continues to climb steadily.
With more than 71,000 franchise locations already operating and a national average growth rate of 2.1%, franchising is an economic and social powerhouse and has an enormous impact on the Canadian economy.
Canadian franchising is the 12th largest industry in the country, bringing in more than $120 CAD billion annually and creating jobs for nearly two million workers, according to David Druker, Chair of the CFA Board of Directors and President and CEO of THE UPS STORE, Canada.
Franchising is an ever-evolving industry that continues to grow and innovate, maintaining its relevance and strong positioning nationally and at the local level. And it’s only expected to grow going forward.
For more information about franchising, the Canadian Franchise Association provides education and a range of resources to the franchise community for both franchisors and franchisees. The CFA aims to help everyday Canadians realize the dream of building their own business through franchising.
Meena writes on behalf of the Canadian Franchise Association.
The Canadian Franchise Association (CFA) helps everyday Canadians realize the dream of building their own business through the power of franchising. CFA advocates on issues that impact this dream on behalf of more than 700 corporate members and over 40,000 franchisees from many of Canada’s best-known and emerging franchise brands. Beyond its role as the voice of the franchise industry, CFA strengthens and develops franchising by delivering best-practice education and creating rewarding connections between Canadians and the opportunities in franchising. Canadian franchises contribute over $100 billion per year to the Canadian economy and create jobs for more than 2 million Canadians.
Learn more at www.cfa.ca or www.FranchiseCanada.online.