What is a Franchise?

BBI1O1

What is a Franchise?• Franchising is a business relationship

between a franchisor and a franchisee • Franchisor: a company or individual who

owns the franchise system• Franchisee: a company or person who

contracts to use the franchise system provided by the franchisor

• The franchisor grants a license to a franchisee, the right to use the franchisor's trademark, brand, operating system and ongoing support for a fee. (a share of the profit made)

How Many Franchises in Canada?

• The Canadian Franchise Association (CFA) has over 350 franchise systems in membership, representing more than 400 of Canada's best-known brands

• Eg. McDonald's, Tim Horton's, Shoppers Drug Mart and Canadian Tire.

• There are approximately 1,100 franchise systems operating in Canada, and approximately 78,000 franchise units across Canada.

Benefits of a Franchise

• When you invest in a franchise, your brand name is already known across the country and even worldwide.

• provides you with the security of a proven business system that works. If you follow that system, you can reduce the risk of business failure and increase your likelihood of success (compared to sole proprietor business owners).

• You also do not have to invent the business from scratch. Someone has already done the hard work.

Benefits of a Franchise

• you can have a leadership role in your business, while still having the support of a head office.

• You will enjoy instant brand recognition. • Franchisors supply a manual that fully

explains the operating system. • There is usually an established supply chain

and supplier relationships in place. • A network of fellow franchise owners are only

an e-mail or phone call away. You always have someone to talk to who can help you run your daily operations.

Types of FranchisesFranchise business opportunities are

available in • car/truck rentals• dry cleaning • maid cleaning services • food – bakery, coffee, donuts, fast-food

restaurants• home repairs; landscaping; gardening • Business and computer services• travel agency• beauty and cosmetics

Difference in Franchise Fees

When comparing two similar franchises, the difference in startup costs could be due to:• The type and length of training provided

(one company may require you to take two weeks of training compared to six with a competitor)

• The size and differences in building out the actual store (every business has their "look" and that look can be expensive in some cases), opening cost (decorations, advertising specials, etc.).

Business and Personal Goals

• For some people, franchising is a career alternative. For others, it is a retirement investment and an opportunity to stay active in the business community. And for some, franchising allows them to run their own business with the strong support system that franchisors provide

• If you are looking for more work-life balance, you may find that home-based franchises are the answer. Perhaps your aspiration is to work with animals. If this is the case, a franchise in the pet sector might be your ticket to achieving your goal.