Opening a franchise in Canada involves researching options, visiting proposed sites, considering weather patterns and population data, and registering the business with the Canadian Customs and Revenue Agency. Community involvement may also be required.
To open a franchise in Canada, there are a number of important steps that must be completed. A franchise is a business arrangement in which the franchisee pays the parent company for its trademarked image, products or techniques. In return, the parent company provides business support, training, service enhancements, and access to support resources and staff.
The first step in opening a franchise in Canada is to research the different options. The main reason for franchise failure is location. Take the time to physically visit the proposed sites and walk around. Look for the anchor company that will draw people to the location on a regular basis and determine if those people would be interested in the goods or services offered by your company.
Remember that weather patterns have a huge impact on consumer activity and affect the success of a franchise in Canada. For example, a restaurant location that is a 15-20 minute walk from a busy office tower is a great spot to trade business lunches in the summer, but is unlikely to attract a lot of business in the winter unless there is an underpass. Look at parking availability and determine if customers will have to pass through garage competition to get to the proposed location.
Determine whether the proposed site is in a rural or city center by reviewing population data from Statistics Canada. This government agency provides free access to a wide range of information about the population, such as median income, household distribution, household structure, and local industry. This is especially important when looking at the size of a community and assessing its ability to support local businesses.
The size of cities and communities in Canada is not comparable to the United States due to the difference in overall population size and density. Nearly 85% of Canada’s population lives in medium-sized cities. Canada’s largest city is Toronto, Ontario, and it is comparable in size and industry to Detroit, Michigan.
Some franchise operations have a community engagement component. In general, most businesses require owners to live in or near the proposed business location. The purpose of this clause is to encourage community involvement and active participation in the commercial operation.
To open a franchise in Canada, you will need to register the business with the Canadian Customs and Revenue Agency (CCRA). As part of this process, a business number will be issued to you, in the name of the registered business, as well as taxation numbers and payroll deduction numbers. There are two main sales taxes in Canada, the Goods and Services Tax (GST) and the Provincial Sales Tax (PST). Some provinces have combined these two taxes into one, called a harmonized sales tax (HST).
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