Canadians have a lot in common with our neighbors south of the border. We have a diverse population. We enjoy the same television shows and movies. And, we mostly speak the same language.
We also have a lot of differences. Although most differences are slight, differences in currency, laws, and access to suppliers are concerning when it comes to starting a cross-border franchise.
Here are a few things to take into consideration before you start an American franchise in Canada.
Legal Requirements
American owned franchises have different legal requirements than Canadian owned franchises. The way you set up your business, operate, hire, and market your franchise will vary. Supply chains and infrastructure will vary. Even finding real estate for your new franchise will differ.
Talk to the franchisor about these differences and ask about any special customizations that may need to be made in order to accommodate the business in Canada.
The Franchise Agreement
The franchise agreement for the franchise you’re considering was written with the American market in mind. This means provisions, suppliers, and logistics in the agreement are all dependent on your business being in the United States.
If you’re in Canada, you’ll need to get the Franchise Disclosure Document (FDD). Some franchises have different FDDs for Canada than they do for America so be sure to distinguish which country you need the document for. It doesn’t hurt to get both copies so you can compare.
Talk to Canadian Franchisors
It’s always a good idea to talk to current franchisors before buying a franchise.
If the franchise you’re considering already has a few locations in Canada, talk to the other franchisors in the country rather than American franchisors. This will prove beneficial as you try to understand how owning this specific franchise in Canada will be different than owning it in the United States.
A Master Franchisee for Various Territories
For cross-border franchises, it’s important to have a master franchisee to oversee the area. This person works as an intermediary between yourself (the franchisee) and the franchisor. They’re important to have on board in your region because they can navigate between the franchisor’s systems and supplies, and the International legal and language requirements. You usually do not have to pay extra for this person, but rather they’re assigned to you.
Talk to the franchisor to see if this option is available in the franchise you’re considering. It will make your path to ownership significantly easier.
Ready to Start?
Opening an American franchise in Canada is possible, but it requires you to go through a few extra steps. Get clear on the legalities and logistics up front. Talk to other franchisors in Canada, if that’s an option. And, whenever possible, take advantage of having a master franchisee in your back pocket. This will make your cross-border franchise ownership easier and more profitable.
Susan Payton is the President of Egg Marketing & Communications, a marketing firm specializing in content writing and social media management. She’s written three business books, including How to Get More Customers With Press Releases, and frequently blogs about small business and marketing on sites including Forbes, AllBusiness, The Marketing Eggspert Blog, and Tweak Your Biz. Follow her on Twitter @eggmarketing.