In an exclusive interview with CanadianSME Small Business Magazine, Sherry McNeil, President & CEO of the Canadian Franchise Association (CFA), shares her insights on the thriving franchise industry in Canada. With franchising set to contribute over $120 billion to the national GDP in 2024, McNeil discusses the key trends driving this growth, the role of technology and AI in enhancing franchise operations, and the emerging categories poised for success in 2025. As a leader in the franchise sector with over 20 years of experience, McNeil provides invaluable guidance for small business owners and aspiring franchisees looking to leverage the power of franchising for long-term success.
As President and CEO, Sherry McNeil is responsible for the management of the Association, the leadership of its staff, and providing strategic advice to the Board of the Directors. A veteran of the industry with over 20 years’ experience helping franchisors and franchisees grow and thrive, Ms. McNeil has been regularly ranked among the world’s 100 Most Influential Women in Franchising and serves as the Vice-Secretariat for Communications on the executive leadership team of the World Franchise Council, an organization of international franchise associations. She also serves on the Board of Directors of the Ontario Chamber of Commerce and holds a position at Diversified Royalty Corp., which has a portfolio that includes Mr. Lube Canada and Oxford Learning Centres. Throughout her career, she has worked with a wide range of franchise systems in a variety of categories, from new and emerging concepts to iconic Canadian franchise brands like Dairy Queen, Boston Pizza, Little Caesars, and Yum! Brands as both a consultant and in executive leadership roles. Learn more about the CFA at www.cfa.ca.
The CFA’s 2024 Franchise Forecast Report projects that Canadian franchising will contribute over $120 billion to the national GDP. What key factors are driving this growth, and how can small businesses leverage these trends?
There are several factors driving the growth of franchising in Canada:
- Canada as a top destination: Canada consistently ranks among the top six countries with attractive franchise markets for balanced growth, according to the International Franchise Attractiveness Index introduced in 2020. The country’s political and economic stability further enhances its appeal: it ranks second among G7 countries for political stability and third globally for economic stability, making Canada a top destination for franchise investment.
- Opportunities for all: Franchising is a popular pathway for newcomers to Canada, with immigrants owning 25% of private sector businesses. Younger generations are also embracing franchising for its potential to offer work-life balance, financial independence, and fulfilling careers.
- Supportive framework: Franchising provides a proven, structured model that allows entrepreneurs to be in business for themselves, but not by themselves. With established systems, training, and ongoing support, franchisees can reduce the risks typically associated with starting a business.
To leverage these trends, franchisees should:
- Utilize the resources and systems provided by franchisors to streamline operations and drive growth.
- Choose franchise opportunities that align with their skills and meet market demands.
With franchising being the 12th largest industry in Canada and employing nearly two million Canadians, how does the CFA support both established franchises and emerging entrepreneurs in this dynamic landscape?
The Canadian Franchise Association represents over 600 corporate members, including franchisors, franchisees, and industry suppliers. Our mission is to empower Canadians to achieve their entrepreneurial dreams through franchising—offering the support of a proven system while enabling business ownership.
We work to raise awareness of the franchise model, advocate for policies that support franchise business owners, and educate Canadians about the opportunities franchising offers.
Through resources like educational webinars, workshops, and our annual convention, we foster innovation and growth within the industry. Our Franchise Canada magazine, tradeshows, and platforms like the Franchise Canada Directory and LookforaFranchise.ca help those looking to start their own business learn more about franchising and the available opportunities. We encourage prospective franchisees to look for the CFA logo when evaluating opportunities, as all CFA members adhere to our code of ethics and are committed to franchise excellence.
You’ve mentioned the “wow factor” of franchising when franchisors and franchisees collaborate successfully. Can you share a specific example that illustrates this synergy and its impact on a local community?
Every time a new franchise location opens, I love it. I think about all the people who are impacted: the franchisor, the franchisee, the franchisee’s friends and family, the newly hired employees, and those in the community where the franchisee lives and operates.
The franchisor and the franchisee working together created and opened this new location that will touch so many lives. Wow! This truly showcases the power of franchising, where you’re in business for yourself, but not by yourself.
As technology and AI continue to evolve, how are franchisees adapting these tools to enhance their operations and customer experiences? What innovative applications have you observed? Can you share tips for franchisees looking to adopt AI?
As technology and AI advance, franchisees across Canada are using these tools to streamline operations, enhance customer satisfaction, and deliver exceptional experiences.
In 2024, franchises embraced innovative solutions. Mr. Lube + Tires adopted AI-driven customer engagement, which improved service personalization while reducing redundant notifications. Fibrenew introduced the Hive intranet platform to centralize training and communication, boosting franchisee efficiency.
Franchisees value the efficiency offered through the use of AI tools, knowing the importance of streamlining processes as small business owners. Some take advantage of AI tools to manage calendars or customer feedback. Fitness franchise Studio Pilates International even leveraged video-guided exercises to provide group classes with personalized training experiences.
For franchisees looking to adopt AI, the Canadian Franchise Association advises:
- Identify pain points: Use employee and customer feedback to uncover challenges and prioritize impactful tech solutions.
- Invest in training: Provide consistent guidance to integrate new tools effectively.
- Stay flexible: Working with the franchisor, embrace experimentation and adapt to changing market needs for long-term success.
Looking ahead to 2025, what emerging franchise categories do you believe have the highest growth potential?
Looking ahead to 2025, while foodservice remains a popular choice for franchise ownership, several franchise categories are also showing great promise for growth:
- Affordable service-based businesses: Franchises that focus on home and mobile services—like residential cleaning, home improvement, senior care, and B2B services—are set to expand rapidly. Their low startup costs and steady demand make them a reliable choice, even in uncertain economic times.
- Senior care services: As Canada’s population ages, there’s a growing need for both medical and non-medical in-home care. Beyond traditional caregiving, businesses offering relocation support and yard maintenance for seniors are also expected to flourish.
- Home renovations: With many Canadians choosing to renovate instead of relocating, the home improvement industry remains resilient and profitable. Franchises in this space are well-positioned to benefit from the increasing demand for renovation services.
