Starting a business in Canada can be one of the best ways to immigrate to Canada, but starting a new business from scratch is very difficult. This is where franchises come in. Buyiny a franchise in Canada, instead of starting a completely new business, will be an easier way to enter the Canadian job market and immigrate to this country as a business owner.
Conditions for buying a franchise in Canada
Buying a franchise in Canada involves obtaining a license to start and operate the franchisor’s business system and use its trademark based on its standards. The franchise term is between 5 and ten years, depending on the agreement and lease. In exchange for the right to operate the business under the franchisor’s system and brand name, the franchisee must pay an initial fee to obtain these rights (usually between 15,000 and 100,000 Canadian dollars) and a royalty on its gross sales (usually between 5 and 8 percent of gross sales).
The franchisee usually has to share in the franchisor’s regional or national advertising costs (between 1 and 4 percent of gross sales). Franchisors generally sell three things: the value of a well-known brand or trademark, knowledge of the franchisor’s business system, and the lower unit costs that come with the purchasing power of a large group of buyers.
Buying a franchise in Canada is like renting the franchisor’s business system and brand for a period of time, which ends when the contract term ends. At the end of the term of the contract, the rights revert to the franchisor, who can sell them to someone else.
In almost all franchise agreements in Canada, the right to renew the contract for at least one period is reserved. Of course, renewal and reallocation of rights have conditions and fees. Renewal of the agreement will be subject to meeting these conditions and fees.
Benefits of Buying a Franchise in Canada
New entrepreneurs who want to start a business in Canada often look to buy a franchise. Many like franchise opportunities in Canada because they are aware of the benefits of buying a franchise. They can be their boss and do not have to bear the high risk of starting a new business from scratch.
The franchisor teaches the franchise buyer the rules and regulations of work, marketing, and business management. By buying a franchise in Canada, the entrepreneur is actually buying a well-known brand, which makes entering the business attractive to many. Below, we will explain the benefits of buying a franchise in Canada.
1. Independence:
Buying a franchise in Canada gives the entrepreneur the independence of owning a small business while being supported by a wider network of people and resources. By buying a franchise, you are operating under the banner of a brand that has already established itself and found its place in the market. The entire work system, from setup to daily operations, has already been tried and tested and is ready to be used in another franchise unit. The market recognizes and trusts the brand, so you will have your customers.
2. No prior experience required:
You do not need prior experience in the industry sector related to the business you plan to franchise. This advantage applies to 95% of franchises in Canada, and only some franchises require a specific degree or license, such as accounting. You do not need work experience; the franchisor will provide all the necessary training.
3. Gaining more success:
Franchise success in Canada is usually higher than independent startups because it has a more secure investment. Therefore, buying a franchise in Canada is considered a safer investment because it has the support and backing of a larger and established company. The business model of these companies has already been tested in different markets in the country and has been proven effective.
4. Easier to secure funding:
Since franchises have a history of success, it will be easier to get loans. From banks’ perspective, franchises are also less risky businesses to secure funding due to their proven success history. Investors are also more inclined to invest in companies with an established network, a well-known brand, and financial and operational support.
5. Collective purchasing power:
When you buy a franchise in Canada, you become part of a group of buyers created by the franchisor. The franchisor builds relationships with suppliers, resulting in lower costs for the franchisee. This way, you will save on inventory costs due to the franchisor’s collective buying power.
6. Brand recognition:
The hardest part of a new business is building customers. That’s why buying a franchise in Canada benefits from the recognition and awareness that the franchisor has created for its brand. When you buy a franchise, you bypass many marketing and branding tasks of a new and unknown business. By buying a franchise in Canada, you will have loyal customers for an established brand; thus, you can make money faster and profit from day one.
7. Franchisor support:
Most franchisors in Canada support their franchisees, especially when they are just starting out. These include assistance with pre-opening operations such as selection, design, construction, financing, training and opening day programs, lending, and other financial aid.
8. You will be your boss:
By buying a franchise in Canada, you can be your own boss, have control over your work, and even enjoy a higher quality of life.
Obtaining residency through purchasing a franchise in Canada
It is possible to obtain Canadian permanent residency by buying a business in Canada. However, it depends on the province where you will launch the franchise because different provinces have different investment conditions. Essential points for buying a franchise in Canada
- Prepare a strong business plan for buying a franchise in Canada
- Show your investors that there is a market for your products and services.
- Show your abilities and your management team.
- Prove that you have adequate financial and physical resources.
- Identify potential obstacles and tell how you will overcome them.
- Create a plan for your franchise and set a general timeline.
- Use clear and concise language when writing your business plan. Avoid using technical language.
Now that we have come to the end of the talk, it is time to get down to business and apply for immigration by purchasing a franchise in Canada. Arnika Visa, an immigration law firm and official immigration consultant, offers several services for clients looking to buy a business in Canada for PR (Permanent residence). The company provides comprehensive support and a detailed assessment of client’s eligibility for business immigration programs to Canada.
