What is Franchise?

Franchising is a way of distributing products and services. The franchiser (original business owner) grants a licence for the use of his trademark or trade name for a fee. The franchisee (person who buys the franchise) is allowed to use the franchiser’s business name and operating system to set up the business.

As a franchisee, you pay the franchiser a certain amount (royalties) from your franchise’s profits. The average or typical royalty percentage in a franchise is 5 to 6 percent of volume, but these fees can range from a small fraction of 1 to 50 percent or more of revenue, depending on the franchise.

Normally, the franchiser would draft a franchise agreement with you that includes details about how the franchise will be run.

Franchising owning

Starting your own business from scratch can sometimes be overwhelming for first time entrepreneurs. Instead, investing in an already successful franchise concept may be a great choice for your new business venture.

Advantages of owning a Franchise:

  • You don’t have to come up with an idea for a new business.
  • You get help with business start-up (equipment, suppliers, training).
  • You can buy your supplies in bulk.
  • Your business benefits from existing brand name recognition.
  • An established supply chain and customers are already in place.
  • Buying into a successful franchise can be very profitable.
  • Franchises have a lower failure rate.

Statistics show that franchisees stand a much better chance of success than people who start independent businesses; independent businesses stand a 70 to 80 percent chance of NOT surviving the first few critical years while franchisees have an 80 percent chance of surviving (Michael M. Colt-man, Franchising in Canada: Pros and Cons, Self-Counsel Press).

Disadvantages of owning a Franchise:

  • Franchises are all run the same way, so you have less flexibility to run the business the way you would like. This can sometimes be frustrating if you have your own ideas on how the business should operate.
  • The more successful the franchise, the more expensive it usually is to buy.
  • There are ongoing costs, such as royalties and advertising.
  • Some franchisers may not provide a lot of support, such as training or mentoring.
  • franchise agreements generally favor the franchiser, so be sure to have your own lawyer review the agreement carefully before signing.
  • The location of the franchise is at the discretion of the franchiser.
  • Not a lot of legal protection is available for the franchisee

Facts about franchising in Canada:

The Franchise industry in Canada represents over $100 billion in sales annually

Franchised businesses account for 40% of all retail sales

There are over 78,000 franchises across Canada

  • Franchising directly employs over 1,000,000 people
  • Every year, thousands of Canadians are improving their lives by becoming franchisees
  • Franchising has been reported to account for one out of every five consumer dollars spent in Canada in goods and services

If you are thinking about to start your own business in Canada then begin your Canadian visa application process today

As Canadian immigration specialists, ICS is committed to ensuring that you obtain the best Canadian visa or immigration service for your requirements. You can set your application in motion today by submitting our Initial Consultation Form  to schedule your consultation with one of our immigration attorneys.After we assess your qualifications, you will be informed if you qualify.

If you would qualify to apply for a permanent resident visa as a Business Immigrant, we open your file and proceed with the processing of your application for permanent resident visa.

Please note that ICS will not share your personal information with any other third party, any information submitted to us will only be used to assess your visa eligibility.

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