Buying a franchise gives restauranteurs an enormous advantage in a famously competitive industry. If you’re passionate about business but don’t want to start from scratch, it could be the best path for you.
As Canada’s most populous province, Ontario is a great place to open up shop. That being said, there are a few ongoing economic and social factors that are currently impacting small business owners – including franchisees.
Here’s what you need to know about buying a franchise in Ontario in 2022.
Considering the franchise model for your first business? Start with our introductory guide to opening a franchise here.
Branded Benefits
When you buy a franchise you’re not typically buying a portion of an existing business. Rather, your purchase grants you permission to use an existing brand and the resources, structure, and systems that come with it. As a franchisee, you’ll have access to training, marketing supplies, corporate support and pre-established relationships with local suppliers.
As an extension of buying the brand rights, your franchise location will come with a built-in base of loyal customers. This benefit is unique to the franchise model. When your franchise opens its doors, you can focus on everyday business operations rather than scrambling to attract new customers.
Strength in Numbers
As Canada’s largest province by population, Ontario is overflowing with potential customers for your business. With brand awareness and loyalty already working for you, tapping into Ontario’s immense customer pool should be fairly easy. Whether you buy a franchise in a major metropolitan area like Toronto or a smaller city like Peterborough, there will be no shortage of consumers to attract.
Searching for helpful resources about day-to-day restaurant operations? Explore these posts from our blog.
- Pricing and Inflation in the Restaurant Industry
- How to Retain Restaurant Staff
- Finding the Next Great Neighbourhood Spot
Financing & Loans
While you will receive a variety of support from the franchisor to help your business get started, securing the financial resources to launch the franchise will be your responsibility. In Canada, entrepreneurs looking for small business financing will have options.
Term loans work best for larger business start-up costs such as real estate, furnishings and industry-specific equipment. Lines of credit work best for covering the smaller, everyday expenses of a franchise.
While certain government initiatives like the Canada Small Business Financing Program have made it easier for franchisees to receive funding for their restaurants, new economic trends within Canada have made the process more expensive overall. Since the Bank of Canada began increasing interest rates earlier this year, small business loans are coming with a higher price tag.
To best determine your budget for buying a franchise, talk to a financial planner. They can assess your personal finances and recommend the best lending route for you.
Labour Shortages
With some of the highest costs of living in North America, Ontario has struggled with a shortage of available labour in recent years. While this trend is impacting a wide array of employers, the service, hospitality, and restaurant industries have been hit particularly hard. Despite the shortage seemingly reaching a head during the COVID-19 pandemic, many employers across the province are still struggling to find team members.
When you buy a franchise in Ontario it’s your responsibility to recruit, hire and train staff. While you will receive some support and resources from your franchisor, franchisees should anticipate challenges in this process. Depending on the franchise you may also be able to incorporate labour-saving technology to partially alleviate this burden.
Ready to enter the world of franchising? Check out these helpful resources first.
- The Essential Restaurant Start-up Checklist
- 5 Things to Know About Opening a Franchise
- The Case for Converting an Existing Restaurant Rather Than Building Your Own
Talk to an Expert
Regardless of where you are in your restaurant ownership journey, seeking help from an expert always makes sense. If you’re ready to begin your search for a franchise or aren’t sure the model is right for you, ask a restaurant real estate agent. As an expert in commercial real estate, your agent can offer you industry-specific advice based on your unique goals. They can also connect you with a financial planner or broker that specializes in supporting franchisees to ensure you have the right tools to get started.
Looking for franchise advice from seasoned professionals? Drop us a line, we’re happy to help. Reach out.
