Buying an International Franchise? Here's What to Know

There are plenty of successful franchises operating in Canada today that are not based in Canada. However, they do come with their own unique set of considerations. If you are interested in an international franchise, keep the following firmly in mind before you sign that agreement.

An American franchise is still international

In your franchise search, you may have come across the term "international light." Some franchises use this term to describe a US-to-Canada move because the two counties share many of the same business laws and lifestyles.

While it may seem like a "light" move to buy an American franchise in Canada, you still need to treat the entire process as if you were buying from a foreign country. There are going to be differences and unique hurdles to cross, and you don't want to be caught off guard by any of them.

Research is paramount

Research is critical in any franchise selection process, but it's exceptionally crucial when you are buying an international franchise. There are going to be details, nuances and many intricacies for you to consider before you buy, and it's proper research that will bring all that to light before you invest.

Prepare for product differentiation

If your international franchise sells products, you need to check into the supply chain logistics. Food products, for example, will need entirely different product labels in Canada than they have in other countries, and this could add to your cost and time. If the brand is known for using specific elements or ingredients in a product, you and the franchisor will need to find vendors that have the element or ingredient at a similar price point in Canada.

Unique details of a product can be expensive. If you are going to be the first franchisor with this brand in Canada, expect supply chain wrinkles. If the franchisor is already in Canada, you still may have to deal with higher costs because the franchisor needs to adjust the liquid capital requirements to account for known operational hurdles. This is not necessarily bad, but it's still something you will need to consider ahead of time.

Keep across-border branding in mind

Whether a person visits your franchise in Canada or another location that is in the franchise's home country, their experience needs to be the same. If, for example, your franchise is from America and steeped in US tradition, you'll have to maintain that branding. You will not have as much flexibility when it comes to adapting the brand to a Canadian market. While the US branding will likely appeal to some demographics, it's important to keep this in mind as you consider your target audience and how you will reach them.

An international brand may very well be the right franchise fit for you. However, it's important to keep in mind everything that is involved with owning an international franchise in Canada before you make your final decision.

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