2017-04-05 00:00:00FranchisingEnglishExpanding a franchise to another country opens up a wealth of benefits, including increased profit and market share and greater recognition.https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2017/06/Employee-at-franchise-business-processes-orders-for-customers-holding-menu.jpghttps://quickbooks.intuit.com/ca/resources/franchising/should-you-expand/Should You Expand Your Canadian-Based Franchise?

Should You Expand Your Canadian-Based Franchise?

2 min read

Franchising is one of the most popular methods of gaining market shares and expanding the size of a company. Going one step further, global expansion takes your franchise into foreign markets to explore new regions. While there are some inherent risks in expanding a base franchise to other countries, there are also many benefits to be had if you are trying to decide whether to expand your Canadian-based business.

Reaching a New Customer Base

Large franchise companies often find it nearly impossible to tap into new markets within their own country. This is why you may see a particular franchise store located within just a few miles of another, which fully saturates the market. By taking the franchise to another country, a company can open up a whole new customer base.In 2014, popular Tim Horton’s merged in the United States with Burger King. While many speculated foreign ownership would hurt Horton’s, the company followed the marketing and financial plans successfully laid out by the burger giant to increase growth and profit. By cutting costs, re-evaluating menu items, and relying on franchisee ownership, it managed to increase its market presence and expand its customer base successfully.

Considering Government Incentives

By choosing to expand your franchise globally, you open up a wealth of government incentives and funding programs. Both Global Affairs Canada and the Government of Canada provide funding programs for businesses. Other funding opportunities include Export Development Canada (EDC) and the Business Development Bank of Canada (BDC). The type of funding and support varies, so it’s a good idea to do your research. For example, the Global Opportunities Association (GOA) provides nonrepayable contributions of up to $200,000.

Increased Business Recognition

If your franchise has already made a name for itself in Canada, it is much easier to gain customers in another part of the world. Boston Pizza started in Canada with over 350 franchises. The company has since expanded to include over 40 locations across Mexico and the United States. One way the company achieved success and increased business recognition was through local and national charities where the franchise gave money back to its host communities.

Considering What It Takes

To franchise your business to another country, there are many things to consider. It’s much easier to correct problems with a franchise when it’s located within your home country than when it’s across borders or on the other side of the globe. These considerations include:

  • Achieve at least 50 franchise locations before going international. This indicates a solid level of experience with a successful franchise plan in place.
  • Make sure all training materials and operations manuals are up-to-date and easy-to-follow.
  • Analyze the market of target countries to determine competitors and see if you have a viable business for the location.
  • Rely on an international franchising and licencing advisor, and be prepared to make several trips to the desired country.
  • Employ a competent franchiser staff who knows the rules and regulations of the host country. This staff should also be able to train, implement, and support the new foreign licence.

Expanding your Canadian-based franchise can offer you new levels of success if you keep these tips and strategies in mind as you plan your expansion and follow through with implementation.

References & Resources

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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