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BuyThatFranchise.ca - Franchise News

Canadian Franchise Statistics


Disproportionate Market Share
Most people don’t understand the impact that franchising has on an economy and would be surprised to learn that around 45% of all retail sales in Canada are generated by franchised businesses. This is comparable to the United States where approximately 50% of retail and service revenue is generated by franchised businesses.

The Growth of Franchising in Canada
There are between 1,200 and 1,300 franchise companies operating approximately 76,000 franchised outlets in Canada. The Canadian Franchise Association has almost 500 corporate members nation-wide. It is estimated that a new franchise opens in Canada every 2 hours 365 days a year. The hospitality industry is the largest single sector, accounting for almost 40% of franchised brand names. Approximately 500 of the largest U.S. franchisors have introduced their franchise systems to Canada.

The franchise business in Canada represents over $100 billion in sales annually and continues to grow. Franchising employs over 1.5 million people in Canada or expressed in a different way 1 out of every 22 people is employed in a franchised business. Ontario leads the rest of the country in franchising with 56% of franchises headquartered in Ontario (primarily in the Greater Toronto Area), and 65 per cent of all franchise outlets operating in Ontario.

The typical Canadian franchisor has:
  • 12 corporate units and 63 franchised units for a total of 75 units
  • An average franchise fee of $25,000
  • Been in business over 17 years
  • An annual growth of 4.4 units per year?
The average initial franchise fee is $25,000 and the average total initial investment required by a franchisee is $160,000. Of all the franchises opened in Canada within the last 5 years, 86% are under the same ownership and 97% are still in business.


Franchising in Canada

Franchise Regulations in Canada
Although there are several federal and provincial laws that apply to franchising, only three provinces have introduced laws that specifically apply to franchising.

12 Criteria of Franchisability
While it is impossible to determine the franchisability of a business concept without a significant amount of analysis, there are a series of 12 predictive criteria that assess the readiness of a company for franchising and the likelihood that it will achieve success as a franchisor.

Definitions of Commonly Used Terms
Several terms are commonly used in association with the concept of franchising. A person interested in purchasing a franchise needs to be familiar with these terms.

Questions that need to be asked
The questions that need to be asked will vary from franchise to franchise.


Which is the Best Franchise?
People interested in acquiring a franchise often ask the question “Which is the best franchise?”