Small businesses have grown into commercial empires and countless independent business people have found success due to utilizing franchising as a part of their business model.
On Feb. 23 and 24 The Franchise Show is opening its doors to the public at the Toronto Congress Centre and is hosted by the Canadian Franchise Association (CFA).
The CFA has been operating since 1967 and now has more than 550 members, which represent approximately 40,000 franchise locations in Canada.
At the heart of the CFA is Lorraine McLachlan, President and CEO. Toronto Business Times had the opportunity to sit down with her and chat about the significance of franchising in Toronto.
Q: Tell us about the Canadian Franchise Association and what it does?
A: The Canadian Franchise Association represents many of Canada’s best-known brands and is the national voice of franchising in Canada. We work with governments to develop industry-made solutions, we promote excellence in franchising and we educate Canadians about franchising, specific franchise opportunities and proper due diligence.
Q: As president and CEO, what does your role entail on a daily basis?
A: It is a very diverse role. I deal with the leadership and management of our association, working with our board of directors and on any given day I could be dealing with a government about advocacy matters, I could be working on some of the programs we offer like the Franchise Canada magazine or preparing for a franchise trade show. I could also be developing educational programs for our members.
Q: If I had a business that I wanted to franchise, what role could the CFA play?
A: When a business wants to start using the franchise business model for expansion, the Canadian Franchise Association, through our various programs and services and through the services provided by our other members, can help a new franchisor understand best practices in franchising. They can learn from the experience of others and by becoming a CFA member and agreeing to our code of ethics they are moving towards stronger credibility as a franchise owner because they have put a line in the sand that says they want to be an excellent franchise owner and they are doing everything they can.
Q: Are there any particular legal requirements for a business to start franchising or can any business owner reach a point where they want to become a franchisor?
A: We are not a law firm and can’t offer legal advice but the franchise business model can be open to any business that can be exactly replicated. For a business owner to start to franchise their business it is strongly recommended they get appropriate consulting advice because they need to develop things like operations manuals and a number of things along that line. They also need to get a good franchise-experienced lawyer to help them develop their disclosure documents and their franchise agreements, which are very specific to the franchise business model.
Q: If I wanted to become a franchisee, what steps should I take to begin to get involved?
A: For someone who is interested in becoming a franchisee, the first thing they should do is check out CFA’s website at www.cfa.ca. There is a wealth of information there about franchising and about the due diligence process. We strongly recommend they read our bi-monthly magazine, Franchise Canada, which carries a wealth of information and lots of stories about franchising.
Also, they should attend The Franchise Show, which is in Toronto in February and October, in Montreal at the end of January and in Vancouver in the late fall. That is an opportunity, once they start to do research, to talk face-to-face with franchisors. Somebody wanting to become a franchisee needs to really acquaint themselves with a range of opportunities that are available and then strongly recommend reading the due diligence process on our website at www.cfa.ca and they should follow those steps.
Q: Can you quickly explain the difference between a franchisee and a franchisor?
A: The franchisor is the person or entity that owns the right to the brand and the operating system. They are the originator of the brand. The franchisee is the operator who is going to run a local location.
Q: Can you give me a brief overview of The Franchise Show that is happening in Toronto on February 23 and 24?
A: It is the largest franchise-only show in Canada. There will be approximately 100 exhibitors representing a wide range of opportunities. People often assume that franchises are all about fast food but the reality is that of all our members, only about 40 per cent are in the food category, which means that 60 per cent of the opportunities are outside of food services. By coming to The Franchise Show you can explore the range of opportunities that are available. There are a wealth of free seminars that are available that cover an incredible range of topics and range from legal advice to banks to franchise owners talking about what they are looking for. It’s a wonderful opportunity to really start to understand how a franchise might fit into your future plans.
Q: There are shows in Toronto, Montreal and Vancouver. What is unique about having a show in Toronto?
A: In Toronto we do two shows because it is the largest market in Canada. One might think that with all the businesses that are already in place within the GTA that there is no more room but the reality is that the GTA keeps expanding and there is lots of opportunity.
Q: What are the qualities of a business that indicate it has good potential to become a franchise?
A: In order to use the franchise business model the operations of the business must be able to be exactly replicated. The hallmark of a franchise is that the consumer experience is consistent, regardless of whether a consumer visits a location in St. Johns, in Timmins or in Victoria, B.C. You have to, as a franchisor, be able to train your franchisee in how to deliver a consistent customer experience. If you have a business where you can do that then the franchise model is something you can consider.
Q: In your experience, how has franchising evolved recent years or has it essentially remained the same since the CFA began?
A: Well I wasn’t here in 1967 but I would say the fundamentals of franchising have remained consistent over time because the consistency of the customer experience is at the heart of franchising. What is changing, and I think this is true for all business, is how businesses communicate with one another; how franchisors are able to communicate with their franchisees. Training, at one point in time, had to be delivered in person. There are ways now to deliver training and updates via webinars. The use of technology is morphing how businesses operate internally and I think franchises have kept up with that and are utilizing advancements that are available and it is to the betterment of the entire franchise system.
In Conversation is a monthly feature in the Toronto Business Times.