In 2023, we saw fluctuating economic conditions, with inflation, rising interest rates and labour shortages. Despite these challenges, Canada’s dynamic franchise industry continues to thrive. In fact, franchising is the 12th largest industry in Canada—the country with the second largest franchising industry in the world, behind the U.S. In 2023, the franchise industry income accounted for $120 billion of Canada’s GDP, according to the Canadian Franchise Association. But how should you go about finding the right location for your franchise?
The phrase “location, location, location” still stands.
Location is key to the success of a business, as it establishes the volume of traffic it can bring in, as well as the quality of that traffic. The density of target customers around a location determines how likely they are to enter your business. Let’s consider an example from the Canadian Franchise Association: If your franchise is located at a busy intersection where 30,000 cars go by every day, and 20% of these are target customers, you have 6,000 potential customers daily. This number of potential customers may be reduced depending on the competitors around you. If you have nine competitors near your location, you’ll be sharing these potential customers with them, which means you’ll have access to 600 potential customers daily and fight for the remaining 5,400 with the other businesses. That’s why choosing the right location for your franchise is crucial.
“It’s better to be first in a village than 10th in a city.”
The answer to where you should set up shop may very well be a rural area. Xavier Chambon, President and CEO of the Conseil québécois de la franchise, says as much: “There’s huge potential for certain franchises to stand out in rural areas. As my grandmother used to say, it’s better to be first in a village than 10th in a city.”
In Canada, Ontario dominates the franchise economy when it comes to the number of locations, representing about 65% of all operating franchise units. In that province, eight out of ten businesses are franchises, proving there’s plenty of room for growth in other places such as the Prairies, the Atlantic and the West Coast markets. In terms of percentage, the largest growth is expected in British Columbia, where the number of franchise locations is set to grow by 1.16%, according to the Canadian Franchise Association.
A win-win situation
Rural franchise locations come with unique advantages such as typically lower real estate costs, potentially less competition, and local communities that tend to support new businesses. In other words, franchises can benefit from an environment conducive to expansion, all while contributing to local economic development.
This kind of decentralization can open up opportunities otherwise unavailable in larger urban centres. A franchise’s future depends largely on its ability to adapt and develop in rural areas. This strategy not only diversifies geographic locations, but also strengthens the local economy, creating a win-win situation for franchisors, franchisees and the communities they serve.
SOURCES
https://www.octanner.com/fr-ca/articles/10-ways-to-ensure-all-your-employees-feel-valued-and-appreciated-at-work
https://www.octanner.com/fr-ca/global-culture-report/2019-appreciation
https://cfa.ca/franchisecanada/canadian-franchising-an-industry-overview/