How to terminate a franchise agreement
Although a franchisor will give you the tools,...
Out of my Montreal, QC office I serve a clientele that is 85% of province. When I suggested to a successful Ontario franchisor that she expand here she replied-That's like going to Mars!" Quebec is a 'distinct' society, but Mars? The brands that have come have seen higher ticket averages, outstanding consumer loyalty, and more business from referrals. With Quebec’s population being a whopping 1/3rd of the entire Canadian population, the price of entry pales in comparison to the rewards.
The first and most important decision is to interview and select local representation in the form of a permanent corporate employee, consultant, or broker. They all provide a different level of services for different fee structures. If your trade-name is ™ you don’t need a French version though having one is perceived as a sign of goodwill. You will have to translate all franchise, employee and customer facing material, including signage if needed. Hiring a QC based translator is essential as the French in Quebec has its own dialect. This cost is recuperated over time in the Initial Franchise Fee. However, if you sell a Master, you avoid this fee altogether. Your local representative may be able to assist you with this.
Franchisors that have used otherwise successful marketing strategies found that they just did not resonate with Quebecers and were not producing results. The majority of franchisors have to have their pitch revised for it to resonate with the Quebec market. There is nothing wrong with doing that, you are just emphasizing another benefit of the business. In the very early stage being able to work at home was the ultimate benefit. However, in Quebec, that message had to be modified as Quebecers are very social and telling them they would be home alone all day was not the right message, it seemed isolating. They had to be shown the advantages!
Additionally, and it’s a big one, we do not have any franchise legislation. The Civil Code of Quebec provides that every contract has an implicit “duty of good faith and fair dealings”. However, if you do have a Disclosure Document, I recommend giving it to Quebec prospects but do not sign it, it is given as additional information only, and should be labeled as such. There is no need to create additional legal obligations.
The ideal way to develop the market is via a Master Franchise or Area Developer Agreement. This takes the pressure off the franchisor after the first 3-5 units because these franchisees will have built their own training teams. Unlike the Developer, the Master steps into the same shoes and has the same responsibilities towards the (Quebec) franchisees. He can and is supposed to sell franchises all over the Province. An Area Developer is required to develop a given number of units over a certain period.
In any of these cases, I always recommend that an out of Province franchisor have one corporate store in Quebec to experience doing business here and use as a training center, unless the province has been sold as a Master.
The best reason to expand here is for the joie de vivre, you will not find this anywhere else in Canada. They don’t call it La Belle Province for nothing!