CFA Guidebook Series: Expand Your Brand Into Canada

CFA Guidebook Series

EXPAND YOUR BRAND INTO CANADA

Premium Sponsor:

Published by the Canadian Franchise Association

CFA Board of Directors

BOARD CHAIR

Todd Wylie*, Master Mechanic

PRESIDENT & CEO

Sherry McNeil*, CFE, Canadian Franchise Association

1ST VICE CHAIR

Nathan Oxford, Jani-King Canada

TREASURER

ABOUT THE CANADIAN FRANCHISE ASSOCIATION (CFA)

The Canadian Franchise Association (CFA) helps everyday Canadians realize the dream of building their own business through the power of franchising. The CFA advocates on issues that impact this dream on behalf of more than 600 members and over 40,000 franchisees from many of Canada’s bestknown and emerging franchise brands. Beyond its role as the voice of the franchise industry, The CFA strengthens and develops franchising by delivering best-practice education and creating rewarding connections between Canadians and the opportunities in franchising. Canadian franchises contribute over $133 billion per year to the Canadian economy and create jobs for almost two million Canadians. Learn more at www.cfa.ca or FranchiseCanada.Online.

CANADIAN FRANCHISE ASSOCIATION

5399 Eglinton Avenue West, Suite 116 Toronto, Ontario M9C 5K6

Ph: 416-695-2896 or 800-665-4232

F: 416-695-1950

W: www.cfa.ca / E: info@cfa.ca

© 2026, Canadian Franchise Association (CFA). All rights reserved. Contents of this publication may not be reproduced either wholly or in part, without the consent of the CFA.

Legal Disclaimer: The opinions or viewpoints expressed herein do not necessarily reflect those of the Canadian Franchise Association (CFA). Where materials and content were prepared by persons and/ or entities other than the CFA, the said other persons and/or entities are solely responsible for their content. The information provided herein is intended only as general information that may or may not reflect the most current developments. The mention of particular companies or individuals does not represent an endorsement by the CFA. Information on legal matters should not be construed as legal advice. Although professionals may prepare these materials or be quoted in them, this information should not be used as a substitute for professional services. If legal or other professional advice is required, the services of a professional should be sought.

Brodie Sheahan*, MNP LLP

SECRETARY & GENERAL COUNSEL

Darrell Jarvis*, Fasken Martineau DuMoulin LLP

PAST CHAIR

Ryan Picklyk*, CFE, A&W Food Services of Canada

CHAIR, LEGAL & LEGISLATIVE COMMITTEE

Andraya Frith*, Osler, Hoskin & Harcourt LLP

CHAIR, FRANCHISE SUPPORT SERVICES

Paul daSilva*, Royal Bank of Canada (RBC)

DIRECTORS

Andrew Arminen, Metal Supermarkets

Cliff Campbell**, CFE, A Buyer’s Choice

Home Inspections

Jon Domanko, Restaurant Brands

International

Chuck Farrell, Pizza Pizza

Dixie Ho, Mr. Lube + Tires

Arno Krug Jr., CEFA Early Learning

Scott McCannell, Foodtastic

John Prittie, Koala Insulation

Angela Rollins**, Great Clips

Fiona Styant, CFE, MOLLY MAID Canada

Cailin White, Boston Pizza International Inc.

Thomas Wong, CFE, Kevito Group

*Executive Committee member

**Franchisee Representative

OH,

CANADA!

Thinking of expanding your brand internationally? Here’s why you should look to Canada

Canada is known for a lot of things, from the politeness of our population to the rugged natural landscapes that travellers love to explore. But there’s another reason Canada shines on the world stage, when it comes to business—it’s a country where franchising thrives.

“One in 10 Canadians are employed— directly or indirectly—in a franchise system”

Canada provides opportunities to many different groups of people—and for entrepreneurs, it provides a destination for success. Between the highly educated base of potential franchisees and customers alike, and the growth of industries with space for new leadership, Canada offers exciting business opportunities in a diverse market, especially when it comes to franchising. Boasting franchises across all sectors, a young base of prospective franchisees looking for their next opportunity, and an easy-to-navigate legal framework, there are many reasons why franchising is so strong in the Great White North.

Strong and stable

Franchising is the twelfth-largest industry in Canada and the second-largest franchise industry in the world. In 2019, the income from franchising represented $96 billion of Canada’s GDP. Since then, the franchise industry income has grown to a projected worth of nearly $150 billion by the end of 2026. Even through a once-in-a-generation public health crisis, Canadian franchising proved to be a stronghold of wealth generation and a shining example that this industry is resilient and poised to expand even further with the potential for long-term, sustainable growth.

Franchising is also present in the lives of everyday Canadians, with one in 10 Canadians being employed—directly or indirectly— in a franchise system. Every day, the average Canadian interacts with three to five franchise locations. They stop at their local franchised cafe for a morning coffee and drop their kids off for daycare, after-school extracurriculars, or even swimming lessons. After work, they

pick up groceries or pull over at a drive-thru for a quick bite throughout the day. That’s why franchising in Canada is an essential industry. It has a presence in every facet of life and is part of the reason why the Canadian franchise industry is so well represented on a global stage.

Since the introduction of the International Franchise Attractiveness Index in 2020, Canada has consistently ranked among the top five countries with attractive franchise markets for balanced growth. This means international franchises, from the U.S. and further afield, have a strong chance of maintaining growth in Canadian sectors.

Furthermore, an investment in Canadian franchising is a low-cost, low-risk option for expansion into an international market: it ranks first among G7 countries for political stability. The marginal effective tax rate has also been trending downward since 2000 and is now the lowest of all G7 countries.

Seeking new partners or master franchisees? Look no further than Canadian young adults—one of the most highly-skilled talent market in the world. More than 55 per cent of Canadians aged 25-54 graduated from post-secondary institutions. This figure becomes even higher (73 per cent) when limited to young adults (25-34) looking to take their first steps into the workforce. Since 2018, Canadian Millennials have developed an increased interest in franchising, seeing the possibility of ownership and work-life balance, while providing more control over their future and utilizing skills and values earned through the first decade of their careers.*

Canada has consistently ranked among the top five countries with attractive franchise markets

Regional opportunities

Although Ontario dominates the franchise economy with the sheer number of locations, representing about 65 per cent of all operating franchise units, that simply means there’s room to grow in the Prairies, the Atlantic and West Coast markets. On a percentage basis,

CANADA

HAS

CONSISTENTLY RANKED AMONG THE TOP FIVE COUNTRIES WITH ATTRACTIVE FRANCHISE MARKETS

the largest growth is estimated to occur in British Columbia, where the number of franchise locations is expected to grow by 1.16 per cent. Slower growth in Atlantic Canada, (estimated to increase by 0.46 per cent) means there’s more space for international franchises to initiate expansion and develop an audience in this market.

Solid foundation

Franchise law in Canada is distinct from similar regions, namely the U.S., due to federal and provincial legislation. Corporate tax rates vary, depending on the industry and type of corporation. The Canadian Franchise Association (CFA) offers a myriad of educational modules, ensuring new systems in Canadian franchising are operating with a wealth of information and according to the country’s franchising best practices.

Furthermore, industry support from financial institutions and government organizations is available for new franchisors and systems along the way.

All the major Canadian banks have established head office franchise departments, providing customized programs and financial solutions to assist franchise systems with all their funding needs.**

The Business Development Bank of Canada (BDC) promotes entrepreneurship by providing highly tailored financing, venture capital and consulting services, including loans and grants, to entrepreneurs.

The Canadian Small Business Financing Program (CSBFP) is a government program that increases the availability of loans for small businesses by encouraging banks to

lend to small businesses by co-owning the risk with the banks. The maximum loan amount available through this program is $500,000.

Furthermore, all the major banks have established relationships with the Canadian Franchise Association. The CFA network is essential for providing insight and understanding of the nuances and particularities of business ownership in Canada.

Help for international investors

While expansion into Canada has the potential to be successful, there are legal and cultural adaptations that must be considered before making the leap. Canada is very diverse, with an array of visible minorities across its major cities and welcoming 250,000 newcomers per year, so prospective franchisors must adjust their rollouts to appeal to a wider audience.

With franchising being regulated at the provincial level in seven provinces, foreign franchisors should ensure that their franchise agreements have been adapted to Canadian laws. Each of these provinces—Alberta, British Columbia, Manitoba, New Brunswick, Ontario, Prince Edward Island, and Saskatchewan (as of June 2026)—has specialized legislation for franchise operation.

Between withholding taxes, language requirements and disclosure legislation, foreign franchisors will undoubtedly need a helping hand when making an introduction in Canadian markets. The CFA has a wealth of resources to introduce new members to its network of entrepreneurs, investors and established franchisees. Incoming franchisors can learn the particulars of these differences and connect with franchise experts and suppliers who can prime their system for the Canadian market. The mix of diversity and cultures creates a rich and varied customer market for foreign franchise brands, as long as you can speak their language … no pun intended.

This is a perfect encapsulation of the CFA’s goal. As the national not-for-profit representing the franchise industry, its aim is

to enhance, grow, and protect franchising in Canada, and shine a light on the members who make the Canadian industry valuable and represent the country so well on the global stage. The CFA does this through:

• Community: by connecting its members with opportunities and the sharing of best practices;

• Education: providing learning opportunities that make franchising stronger across the country and allow CFA members to improve their systems;

• Advocacy: evoking the benefits of franchising in the halls of power across Canada and bringing national attention to the issues that impact franchised businesses, and fighting for franchisees on their behalf;

• and Brand Awareness: creating new connections and greater visibility for franchisors and franchisees, and promoting awareness of the franchise industry.

So, what’s not to love about Canadian franchising? With seemingly limitless opportunities, a diverse audience hungry for new options, and strategic partnerships available with key partners, continued growth is on the horizon, and the CFA invites you to become a part of it.

Canadian Franchise Association Growing Together

The Canadian Franchise Association (CFA) helps everyday Canadians realize the dream of building their own business through the power of franchising. The CFA advocates on issues that impact this dream on behalf of more than 600 members and over 40,000 franchisees from many of Canada’s best-known and emerging franchise brands. Beyond its role as the voice of the franchise industry, The CFA strengthens and develops franchising by delivering best-practice education and creating rewarding connections between Canadians and the opportunities in franchising.

*Youth and education in Canada study: FranNet

** World Franchise Council Country Report, Canada

FAST FACTS ON FRANCHISING IN CANADA

A SNAPSHOT OF CANADA

(March 2026) as of January 31, 2020

ECONOMIC FORECAST FOR FRANCHISING IN CANADA

Canada’s franchising sector is strong and continues to grow across Canada

Franchising is the 12th largest industry in Canada, estimated to have more than 1,100 brands and more than 70,000 franchise locations across more than 60 industry categories.

Franchising is projected to contribute $148.6 billion to the GDP and employ nearly 2 million Canadians nationwide by 2027.

Alberta, BC, Newfoundland & Labrador, and PEI are the provinces expected to see the most franchise growth in 2026.

To learn more, read the CFA’s Franchise Forecast economic outlook report, produced in partnership with the Canadian Centre for Economic Analysis (CANCEA): issuu.com/franchisecanada/docs/franchise_forecast_2026

Connect Directly with the Experts

Join the Expand Your Brand into Canada webinar series to learn more about how to bring your brand to Canada, and speak directly with industry experts to help you along the way. Register here: https://cfa.ca/expanding-into-canada-2/

EXPANDING YOUR FRANCHISE SYSTEM TO CANADA

BY LARRY WEINBERG, PARTNER, CASSELS BROCK & BLACKWELL LLP (TORONTO)

Canada ranks among the most attractive international markets for franchise expansion. Its mature economy, sophisticated consumer base with demand for new concepts, and established franchise sector, provide a strong foundation for scalable growth. Yet successful entry requires more than proximity and brand recognition. Therefore, understanding Canada’s multilayered regulatory environment, provincial franchise laws and structural considerations is critical to building a sustainable and compliant Canadian franchise system.

Why Canada?

According to the U.S. Department of Commerce, Canada is the leading destination for U.S. franchisors expanding internationally. Canada offers economic stability, a highly skilled workforce, and consumer preferences closely aligned with the U.S. and other West-

ern countries. Combined with a welcoming investment climate and similar commercial practices, these factors make Canada an attractive market for American or other foreign franchisors seeking sustainable international growth. And because of its smaller size, it can often be seen as a first step on the path to U.S. expansion by franchisors from Europe, Asia and Australasia.

Federal Jurisdiction

While franchise relationships in Canada are not directly governed by a single federal franchise statute, various federal laws of general application significantly impact franchising activities, including competition law, intellectual property laws, and income tax. Accordingly, foreign franchisors must comply not only with provincial franchise laws but also with these overarching federal requirements.

SUCCESSFUL ENTRY [TO CANADA] REQUIRES MORE THAN

PROXIMITY AND BRAND RECOGNITION.

Provincial Jurisdiction

Franchise law in Canada is primarily governed at the provincial level. As of mid 2026, Alberta, British Columbia, Manitoba, New Brunswick, Ontario, Prince Edward Island (“PEI”) and Saskatchewan have enacted franchise specific legislation imposing disclosure obligations and statutory duties governing the franchisor-franchisee relationship. Ontario, Manitoba, PEI and New Brunswick legislation apply to any franchise operating wholly or partly within the province. In Alberta, application of the statute in addition requires a defined nexus to the province, such as residency or business presence. Saskatchewan enacted the Franchise Disclosure Act, scheduled to come into force on June 30, 2026.

The other Canadian provinces, namely Quebec, Nova Scotia and Newfoundland and Labrador do not currently have franchise specific statutes. However, franchisors should not assume the absence of regulations. Quebec’s Bill 96 (Charter of French Language amendments) have impacted contractual drafting, business communications, and operational compliance requirements by increasing requirements for the conduct of business in French. Further, Newfoundland and Labrador is in the process of modernizing its business laws. These evolving frameworks underscore the importance of jurisdiction specific analysis prior to market entry.

Franchisors should also recognize that, excluding Quebec, Canadian provinces operate under a common law system, like the U.S. Quebec follows a civil law regime governed by the Civil Code of Quebec, which applies broadly to contractual relationships.

Protecting Intellectual Property

Franchisors must take proactive steps to safeguard their core assets, including brand identity, proprietary systems, and business materials. Key considerations include:

• Trademarks: Franchisors should seek Canadian trademark registration early to prevent third parties from asserting competing claims. Applications may be filed based on proposed use or existing registration and use in another country. Securing trademark protection in Canada is generally cost effective and critical to preserving brand integrity.

• Passing Off: Even in the absence of registration, Canadian law recognizes the tort of passing off, which protects goodwill associated with unregistered trademarks. This remedy prevents third parties from misrepresenting their goods or services in a manner that causes consumer confusion or damages the franchisors reputation.

• Copyright: C opyright protection applies to original works, including operations manuals, marketing materials, training content and other creative works without formal registration. Protection extends to qualifying works created in the U.S. and used in Canada.

• Patents: While patents are less common in franchising, they may be relevant where a franchisor utilizes proprietary inventions specialized equipment or unique processes integral to the system.

• Trade Secrets: Franchisors are encouraged to ensure that techniques, formulars, recipes, processes and complications of technical information are not revealed to competitors. Trade secrets in Canada can be protected through contract.

• Registering Domain Names: “.ca” domain names must be registered through the Canadian Internet Registration Authority on a first come first served basis. Early registration is essential to securing and maintaining a franchisor’s Canadian online presence. That being said use of “.com” and other domain names is common.

Franchise Structures

Franchises to be offered can be structured in a number of ways, including singled unit franchises, multi-unit or area development, a master franchise, or even a combination of the above. A unit franchise grants a franchisee the right to operate a single location, with the franchisor maintaining direct oversight and significant brand control. This structure is no longer common in cross-border international expansion, except as between the U.S. and Canada, because success often depends on the franchisor having trusted employees in the target market to support the brand’s launch. Most (but not all) franchisors do not today want to incur the time and cost of international expansion unless they are able to find a more sophisticated multi-unit franchisee or master franchisee.

An area development agreement grants one party the often exclusive right to develop multiple franchise units within a defined territory and timeframe. The developer owns

and operates the units, allowing the franchisor to retain overall control while delegating certain responsibilities in exchange for a share of royalties. This model is popular for international expansion due to its balance of control and operational efficiency.

A master franchise agreement provides often exclusive territorial rights along with the authority to sub-franchise. It is commonly only used when entering unfamiliar or international markets. Although this structure may reduce direct control and require sharing profits and royalties, it allows the franchisor to rely on a local operator to manage recruitment, site selection, construction, and operational support.

Many contracts that are concluded end up being a hybrid of an area development and master franchise agreement.

Joint venture franchising involves shared ownership of franchise locations, between franchisor and franchisee. However, this approach is less commonly used.

With proper tax and corporate structuring advice, a foreign franchisor expanding to Canada may choose to use a Canadian subsidiary or affiliate as the franchisor. This more likely means the franchisor will have staff on the ground, increasing the chances of success in local operations. So, professional tax and legal advice are essential to determine the most efficient structure.

PROFESSIONAL TAX AND LEGAL ADVICE ARE ESSENTIAL TO DETERMINE THE MOST EFFICIENT STRUCTURE.

Franchisor-Franchisee Relationships

Franchise relationships in Canada are contractual, but provincial legislation may broaden the definition of a franchise to include certain distribution or licensing arrangements. Key considerations include:

• Good Faith: All franchise statutes impose a duty of good faith and fair dealing and, except for Alberta, explicitly state that the duty includes a duty to act in good faith and in accordance with reasonable commercial standards.

• Employment Relationship: Canadian employment laws are protective, and so if a franchisor chooses to stray beyond the norms, excessive franchisor control may result in franchisees being deemed employees.

• Quebec: Civil law and French language requirements affect contracts and operations.

• Disclosure Requirements: In provinces with franchise legislation, franchisors must provide a Franchise Disclosure Document (“ FDD”) to prospective franchisees at least 14 days before signing or payment. Canadian disclosure standards differ from those in other regulated markets, and so only an FDD prepared in compliance with Canadian franchise laws will be compliant. The failure to comply can expose the franchisor and others associated with the franchisor to significant legal risk.

• Leasing and Security: Leasing structures increasingly favour direct franchisee leases with franchisor protections. Import considerations and security interests in franchisee assets must comply with Canadian priority rules.

Conclusion

Canada presents a strong expansion opportunity for non-Canadian franchisors, offering market acceptance, familiarity and economic stability. However, like any international expansion, and with provincial franchise laws, disclosure obligations, tax structuring and regulatory differences, it requires careful planning. With proper legal and tax guidance, franchisors can establish a compliant and sustainable presence in the Canadian market.

FOR MORE INFORMATION ABOUT CASSELS BROCK & BLACKWELL LLP, CONTACT:

Larry Weinberg Partner (416) 860-2987

lweinberg@cassels.com

TOP 10 THINGS TO UNDERSTAND BEFORE EXPANDING YOUR BRAND INTO CANADA

Expanding into Canada presents a significant opportunity for international franchise brands. However, successful market entry requires more than simply replicating an existing model. Brands that perform well in Canada take the time to adapt their strategy, operations, and customer experience to the realities of the Canadian market.

Here are ten key considerations for franchisors to understand before launching in Canada.

1. Canada is not one market Canada operates more like a collection of regional markets than a single unified one. Consumer expectations, economic conditions, and regulatory frameworks can vary significantly across provinces and cities.

For instance, Western Canada often behaves very differently from Central Canada economically. What works in one province may not work the same way in another province!

Real estate dynamics also vary widely between major metropolitan areas and smaller markets. As a large country with relatively few major cities, population density can vary distinctly between different areas of Canada.

When considering operations in Quebec, franchisors also need to familiarize themselves with French language laws and differing cultural norms. (See number three.)

Successful franchisors typically plan their market entry regionally rather than attempting a national rollout at the outset.

Top 10 Things to Understand Before Expanding Your

2. Your brand will need to be “Canadianized”

One of the most common challenges international brands face is assuming their existing model can simply be replicated in Canada.

In reality, to succeed in Canada, brands must adapt elements of their concept to better align with Canadian consumers and operating conditions.

Areas that frequently require adjustment include:

• product offerings and/or menu mix

• packaging, measurement systems, and labelling

• Canadian spelling and language conventions

• bilingual requirements in certain markets

• marketing tone and imagery

Even small adjustments can significantly improve how a brand resonates with Canadian customers. Some brands distinguish their Canadian offerings with a different logo incorporating a maple leaf or other Canadian imagery, while others create entirely new products that resonate with their new local audience.

3. Quebec requires a distinct approach Quebec represents one of Canada’s largest and most unique markets. It operates with distinct language requirements, cultural expectations, and regulatory considerations.

For many international franchisors, Quebec is treated as a dedicated expansion phase rather than part of an initial national rollout.

Time should be taken to consider French language requirements in signage, packaging, and marketing; cultural preferences in branding and messaging; and legal frameworks that differ from other provinces. Franchisors hoping to expand to Quebec should engage the services of suppliers with specialized knowledge in this area.

Developing a thoughtful strategy for Quebec can unlock significant long-term growth opportunities.

4. Franchise laws differ by province Canada does not have a single national franchise law. Instead, several provinces have enacted franchise disclosure legislation. Currently regulated provinces include:

• British Columbia

• Alberta

• Saskatchewan (in effect June 30, 2026)

• Manitoba

• Ontario

• New Brunswick

• Prince Edward Island

Each jurisdiction has specific requirements regarding disclosure documents, timelines, and franchisee rights. Ensuring compliance with provincial legislation is a critical early step in market entry.

5. Supply chains often need to be rebuilt

Supply chains that work well in the United States do not always translate directly into the Canadian market.

Franchisors should assess:

• Canadian food and product standards;

• import regulations and potential tariffs;

• availability of domestic suppliers; and

• distribution logistics across large geographic distances.

Establishing a reliable Canadian supply chain is essential before launching new units.

6. Labour markets and HR practices vary by province

Employment standards in Canada differ from those in the United States, and are not always regulated on the federal level. That means a franchisor’s policies may need to be adjusted depending on which provinces the brand is operating in.

Minimum wage varies by province and territory, with Nunavut representing the highest minimum wage in Canada ($19.75 per hour in 2026), to reflect the high cost of living in the north. Yukon, Ontario, and British Columbia also mandate a higher minimum

Expanding Your Brand Readiness Checklist

Before launching in Canada, franchisors should be able to answer the following questions:

 Have we adapted our product or service offering for Canadian consumers?

 Do we understand the franchise disclosure requirements in the provinces we plan to enter?

 Do we have a Canadian supply chain strategy?

 Are our franchise economics viable in Canadian dollars?

 Have we engaged Canadian legal and franchise advisors?

 Do we have a localized marketing and brand positioning strategy?

 Have our operations manuals and documentation been adapted for Canada?

 Do we understand Canadian HR and employment requirements?

 Do we have a real estate strategy for our initial markets?

 Do we have a clear regional rollout plan?

wage than the federal minimum ($17.30 per hour in 2026).

Labour standards, scheduling and overtime rules, expectations of benefits, worker classification, and even workplace safety regulations can also vary by jurisdiction. Franchisors should adapt their HR policies and training frameworks to reflect these differences.

7. Real estate works differently

Canada has its own patterns of retail development. Franchisors expanding from the U.S. may find that Canadian real estate differs in a few key areas.

For one, Canada has fewer large suburban retail corridors, and shopping centres are often owned by a smaller number of major landlords.

Franchisors should prepare for higher urban real estate costs in major cities such as Toronto or Vancouver, and longer lease negotiation timelines than in the U.S.

Working with Canadian real estate advisors can help franchisors navigate these dynamics effectively.

8. Canadian consumers value authenticity

Canadian consumers often respond differently to marketing tactics that may work in other markets. According to a report by Asendia, 79 per cent of Canadians said that authenticity made them more loyal to brands, and 69 per cent of Canadians shoppers spend more with brands they perceive as authentic.

Brands that perform best in Canada emphasize authenticity and local community connection, focus on brand storytelling in their promotional materials, and prioritize transparency, whether around supply chains, delivery expectations, or pricing.

Going into 2026, Canadians continue to respond to trade conflicts and economic uncertainty by prioritizing locally made goods, Canadian-owned brands, and cost-conscious options. Researcher Angus

Top 10 Things to Understand Before Expanding Your

Reid reports that 83 per cent of Canadians have changed their shopping habits in light of the current political and economic climate.

However, this is a benefit for franchise brands, as the franchise business model means that each location of a brand will be owned by a local small business owner who lives locally and contributes to his or her community. Thoughtful brand positioning can help international concepts feel locally relevant, and many brands have made changes to their marketing materials and positioning statements to emphasize local ownership and community connection.

9. Currency and financial planning is important

When expanding across a border, franchise systems must pay close attention to the adjustments that will need to be made when operating with a different currency. Exchange rates and market-specific costs can influence franchise economics.

Franchisors should consider how to adapt pricing models to Canadian dollars and what changes may need to be made to royalty and fee structures. Research into local equipment and construction costs as well as potential import costs for any products or supplies that will need to be sourced internationally is also a must. Financial models should be designed specifically for Canadian operating conditions.

10. Start with a focused market entry strategy

Some brands assume they should launch across Canada immediately. In practice, successful franchisors often begin with a targeted regional approach.

Common strategies include:

• master franchise or area developer agreements

• strategic regional rollouts

• pilot locations in major urban markets

• focused franchise recruitment in priority regions

A disciplined entry strategy is necessary to help establish brand strength in a new country, before expanding nationally. In Canada, new brands must also consider the country’s size and the different demographics and population density of each province and territory when determining where to first set up shop.

This content was produced in collaboration with the Canadian Franchise Association’s Educational Advisory Committee.

WHAT GLOBAL FRANCHISE BRANDS NEED TO KNOW ABOUT MARKETING IN CANADA

Expanding into Canada presents a major opportunity for franchise brands looking to grow in a stable, high-income, and business-friendly market. But success here requires more than simply replicating what works in other countries. Canada has its own regulatory environment, regional nuances, bilingual considerations, and highly competitive digital landscape. For international franchise systems entering the market, having the right marketing partner can make the difference between slow traction and rapid, scalable growth.

That’s where Reshift Media stands apart. Recognized globally for its leadership in franchise marketing, Reshift Media has been voted the World’s Best Franchise Marketing Firm at the Global Franchise Awards for four consecutive years. The company has also been ranked as a Top Franchise Supplier by Entrepreneur for four years running, is a two-time recipient of the Canadian Franchise Association’s Distinguished Franchise Supplier award, and was named Marketing Disruptor of the Year in both 2024 and 2025

by the International Business Awards. These accolades reflect not just creative excellence, but deep, proven expertise in helping franchise systems grow across borders.

For international brands entering Canada, that expertise is critical.

Canada is not a single, uniform market. It is a collection of diverse regions, each with its own consumer behaviour, media habits, and regulatory considerations. Quebec, for example, requires French-language marketing and has distinct cultural expectations. Western Canada often behaves differently from Ontario in terms of media consumption and franchise development dynamics. National campaigns that ignore these nuances often underperform.

Reshift Media has spent more than 13 years immersed in this landscape. The company supports over 200 franchise brands across 22 countries, with a strong concentration of experience within Canada. This gives its team a unique ability to localize global brand strategies for Canadian audiences while maintaining brand consistency across markets.

CANADA IS NOT A SINGLE, UNIFORM MARKET. IT IS A COLLECTION OF DIVERSE REGIONS, EACH WITH ITS OWN CONSUMER BEHAVIOUR, MEDIA HABITS, AND REGULATORY CONSIDERATIONS.

What truly differentiates Reshift is its specialization. Unlike generalist agencies, Reshift focuses exclusively on franchise systems. That means every strategy, campaign, and technology solution is designed with the complexities of franchising in mind, balancing the needs of corporate teams with those of local operators, and aligning customer acquisition with franchise development.

For brands entering Canada, this dual focus is essential. It’s not just about generating consumer demand; it’s about building a sustainable pipeline of qualified franchise candidates while supporting local marketing execution at scale.

Reshift delivers this through a fully integrated approach that combines strategy, execution, and proprietary technology. Its in-house team provides expertise across digital channels, including search, social media, influencer marketing, and web and mobile development. More importantly, the company has developed proven processes that ensure campaigns can be deployed consistently across locations while still allowing for local customization.

At the center of this ecosystem is Franify, Reshift‘s powerful digital marketing platform built specifically for franchise organizations. Franify enables brands to manage, scale, and optimize their marketing efforts across multiple locations with precision, giving international franchisors the infrastructure they need to enter Canada with confidence and control.

For franchise companies expanding into a new country, speed to market is critical, but so is getting it right. Missteps in positioning, targeting, or compliance can slow momen -

tum and increase costs. Working with a partner that understands both the franchise model and the Canadian market reduces that risk significantly.

Reshift Media has built its reputation by helping franchise brands not only enter markets, but thrive in them. With a deep understanding of Canada’s unique landscape, a track record of global success, and technology purpose-built for franchising, the company is uniquely positioned to support international brands looking to establish and scale their presence in Canada.

For those ready to expand, the opportunity is clear. The question is whether you have the right partner to unlock it.

FOR MORE INFORMATION ABOUT RESHIFT MEDIA, CONTACT:

Kirk Allen COO and Co-Founder kirk@reshiftmedia.com (416) 616-3046

LEGAL FUNDAMENTALS

What to know about franchise law in Canada

In Canada, there is no federal legislation that covers franchising. Instead, franchising is regulated at the provincial level.

Seven provinces out of the country’s ten provinces and three territories have enacted franchise legislation: Alberta, British Columbia, Ontario, Manitoba, New Brunswick, Prince Edward Island, and Saskatchewan.*

The provinces and territories in Canada that do not currently have franchise legislation are Quebec, Newfoundland and Labrador, Nova Scotia, Nunavut, the NorthWest Territories, and the Yukon. Franchises operating in Quebec must adhere to the province’s Civil Code, which governs some aspects of the franchisor-franchisee relationship, but does not directly address Franchise Agreements.

Delivering Disclosure

In provinces with franchise legislation, franchisors are required to provide prospective franchisees with a Franchise Disclosure Document (FDD) that meets the standards of the provincial legislation, at least 14 days prior to the franchisor receiving any payment or signing of any agreement related to the franchise.

FDDs are required to include all “material facts” relating to the business. Legally, these “material facts” are broadly defined as “any information about the business, operations, capital, or control of the franchisor, or about the franchise, that would reasonably be expected to have a significant effect on a prospective franchisee’s decision to acquire the franchise.”**

While each regulated province has created a minimum list of items that are to be disclosed in all FDDs (see page 20 for a list of typical elements included in an FDD), this broad definition means that additional “material facts” that may impact or be relevant to a specific franchisee must also be included, requiring a degree of customization to ensure compliance. Franchisors must also be aware of changes in their system, as these material facts can arise or change at any time, and must be incorporated into FDDs in a timely manner. In any event, due to the nature of what needs to be disclosed in the FDD, it will require an update at least once every franchisor’s fiscal year.

Once an FDD is delivered to a prospective franchisee and up until the moment a franchise agreement is signed, franchisors also have an obligation to disclose any “material (adverse) changes” that take place—any change to the system’s operations, ownership, or business that may materially impact the prospect’s decision to acquire the franchise. Examples of a “material change” might be a change in ownership, a significant change in supply chain, the loss of a major vendor, or litigation involving the franchisor.

If a franchisor fails to meet disclosure requirements, franchisees may have a time limited right to rescind the franchise agreement or sue for damages.

In Good Faith

Each provincial franchise law mandates that every party to a franchise agreement owes the other parties a duty of fair dealing and/or a duty of good faith in the enforcement and performance of a Franchise Agreement. These duties apply equally to the franchisor and franchisee that enter into the franchise relationship.

Essentially, these duties require both franchisee and franchisor to act “in good faith,” that is, in accordance with reasonable commercial standards: not withholding information, misleading the other party, or knowingly omitting relevant information.

AN FDD WILL REQUIRE AN UPDATE AT LEAST ONCE EVERY FISCAL YEAR.

The duty of good faith is set out in each provincial franchise law, but is also part of the common law of contract in Canada. And so it applies to all contracts. Unlike a higher fiduciary duty, it does not require parties to put the other contracted party’s interests above their own. While an honest disagreement about how a Franchise Agreement should be interpreted may be a breach of contract, it would not necessarily be a breach of good faith.

The relationship between a franchisor and franchisee, like any business relationship, has the potential for disputes. To reduce the likelihood of such a dispute escalating, the Canadian Franchise Association (CFA) offers franchisors and franchisees the services of a confidential, neutral third-party dispute resolution through its Ombudsman Program.

Any franchisee or franchisor operating in Canada can contact the Ombudsman at no charge to discuss an issue or concern regarding a franchise relationship. Visit cfa.ca/ombudsman-program/ to learn more.

This content was produced by the CFA with the aid of background from Cassels Brock & Blackwell LLP

*Saskatchewan’s Franchise Disclosure Ac t was passed in 2024, but comes into effect June 30, 2026.

** Franchises Act , RSA 2000, c F-23, s 1(1)(n); Franchises Act , SBC 2015, c 35, s 1(1); Arthur Wishart Act (Franchise Disclosure), 2000, SO 2000, c 3, s 1(1); The Franchises Act , CCSM c F156, s 5(5); Franchises Act , RSNB 2014, c 111, s 1(1); Franchises Act, RSPEI 1988, c F-14.1, s 1(1)(k); and The Franchise Disclosure Act , SS 2024, c 13, s 2(1).

THE BASICS OF FRANCHISE AGREEMENTS AND FRANCHISE DISCLOSURE DOCUMENTSS

What you need to know about franchise documentation in Canada

Franchise Agreements are legally binding, comprehensive contracts that establish the terms and conditions of the relationship between a franchisor and a franchisee— the legal rights and obligations that the two parties grant to one another. A Franchise Agreement will specify the details of the most fundamental aspects of the relationship, such as royalties, fees and payments, territory, training obligations, reporting requirements, and duration of the agreement.

Though there are some common features found in franchise agreements, these can vary from franchise system to franchise system, and from franchisee to franchisee. And often these vary greatly based on the industry. Here are some issues typically addressed in a Canadian Franchise Agreement:

• The length of the term of the agreement, and renewal rights (if any)

• Initial franchise fees, and ongoing payment obligations, including royalties,

advertising and other applicable fees

• Territorial boundaries and protected areas (if any)

• The franchisor’s obligations for training and support

• The brand’s operational standards

• Brand guidelines

• Reporting and audit rights

• Termination, transfer, and exit conditions

The discussion above deals with single unit Franchise Agreements, which are most common. But there are other structures, and ones that often contemplate the opening and operation of a multiple number of units, often called Master Franchise Agreements and/or Area Development Agreements.

Canadian Agreements

At its most basic level, a Franchise Agreement is the licence granted by the franchisor to the franchisee to use its trademarks and

intellectual property within the rules prescribed by the franchisor.

For franchisors expanding to Canada, it’s important to work closely with a trusted local legal team to ensure Franchise Agreements meet local laws and conventions, including franchise laws and other applicable regulatory standards for the country your brand will be expanding to.

For instance, there are any number of business and legal issues dealt with differently in Canada than in your home country where you started to franchise. The legal issues can include those relating to currency, conversion of funds, local taxes, and business issues such as supply chain, leasing of premises and the state of the market for exclusive territories. Determining the size and boundaries of protected territories will involve weighing many factors, such as population density and demographics.

Compliance with provincial franchise legislation involves a Franchise Disclosure Document (FDD), a document disclosing all material fact to a potential franchisee. Read on to learn more about what is involved in an FDD.

The 411 on FDDs

A Franchise Disclosure Document is provided by a franchisor to a prospective franchisee, to help them better understand the franchise concept and make a fully informed business decision. These documents contain a factual summary of information on the franchisor, its executive team, and the franchise agreement.

Subject to some very limited exemptions, you are legally required to provide a Franchise Disclosure Document to all prospective franchisees in any of the seven provinces of Canada that today have a franchise law, at least 14 days before you enter into a franchise agreement with them, or take payment of any money. But, franchisors typically provide them only to candidates who they have pre-qualified after showing a serious interest in their opportunity.

What’s

included in a Disclosure Document?

A Franchise Disclosure Document must disclose all material facts, including the mandatory minimum list of items dictated by the relevant provincial legislation. Here’s what you can expect to find in a typical Disclosure Document:

• Corporate name and other details about the franchisor and its parent company

• Nature of the business

• Business experience of the directors and officers of the franchisor

• Previous convictions, civil actions, administrative proceedings, bankruptcies or liabilities of the franchisor, its directors, officers and associates

• Initial investment required by the franchisee

• Fees payable under the franchise agreement

• Training provided

• Financing arrangements

• Estimates of working capital required

• Assistance provided by the franchisor

• Obligations of the franchisee

• Use of marketing fund

• Restrictions on what and to whom franchisees may sell

• Special licenses required

• Volume rebates and discount policies

• Obligations to participate in the actual operations of the franchised business

• Trademarks, patent and copyright information

• Available territories

• Term, renewal, termination and transfer of the franchise

• Policies regarding dispute resolution

Additionally, while it is not mandatory, an FDD will often include information about the following, called a “financial performance representation” (an FPR), which can only be included in the FDD if it is reasonable to include:

• Estimates on annual operating costs

• Projected earnings

The Basics of Franchise Agreements and

But in the process of offering franchises, an FPR of any kind can only be provided to a prospect if included in the FDD.

Additional attachments to the FDD will include:

• List of existing franchisees with contact information

• List of terminated, not renewed, or cancelled franchisees with contact information

• Financial Statements of the franchisor

• Franchise Agreement

• Table of Contents of the Operations Manual

• Certificate of Franchisor signed by an officer of the company stating all material facts have been provided and all information is true

• Receipt to be signed and dated by the franchisee acknowledging receipt of the Disclosure Document

Are Disclosure Documents required by law?

In Canada, franchisors are required by law to supply Disclosure Documents only in provinces where franchise legislation has been enacted. Currently, seven of 10 provinces have a franchise law, namely Alberta, British Columbia, Ontario, Manitoba, New Brunswick, PEI, and Saskatchewan (from June 30, 2026 onward). That being said, most prospective franchisees in the unregulated provinces will also ask for a copy of your FDD.

Failing to provide proper disclosure when it is legally required may grant a franchisee the ability to rescind the franchise agreement for up to two years from when the franchise was granted. A knowledgeable Canadian franchise lawyer can help set your brand up for success by preparing your Canadian Franchise Disclosure Document.

The Canadian Franchise Association (CFA) requires all its members to provide a Disclosure Document as part of the CFA Code of Ethics.

This content was produced by the CFA with the aid of background from Cassels Brock & Blackwell LLP

YOUR FIRST STEP INTO CANADIAN FRANCHISING

Why a CFA membership is an essential item for your Canadian franchising journey

What is the Canadian Franchise Association?

Back in 1967, as Canada’s centennial was being celebrated, a group of franchise business owners recognized a need for a national umbrella organization committed to the growth, enhancement, promotion, and development of ethical franchising across the country. The Canadian Franchise Association (CFA) was founded with this mission and these principles and is now the only national trade association serving the franchise industry and the needs of franchisors, franchisees, and anyone considering opportunities in the franchise sector. The CFA is now the recognized authority on franchising in Canada and represents members and iconic Canadian brands across the country.

Our purpose: To help everyday Canadians realize the dream of building their own business through the power of franchising

The CFA’s mission is to amplify the understanding and power of franchising in Canada by advocating on the issues that impact this dream, connecting people with opportunities in franchising, and delivering learning opportunities that make the industry stronger. The CFA produces the annual Franchise Canada Directory, and Franchise Canada magazine, considered the country’s most trusted franchise resources. The bi-monthly magazine is a digital publication, with each issue available as a flipbook on FranchiseCanada.Online. The annual directory is a print publication that’s available on news -

stands and in bookstores throughout the country. A digital version is also available for purchase at FranchiseCanada.Online.

Prospective franchisees can also learn more about franchising through Franchise Canada E-News, a bi-monthly digital newsletter; the Franchise Canada Chats podcast, embarking on its tenth season in 2026; Franchise Canada TV, which features interviews and educational videos; and more resources that can be found at FranchiseCanada. Online.

The Association also offers Canada’s only tradeshows that exclusively feature CFA member franchise systems. Taking place in key markets like Toronto and Vancouver, these shows provide Canadians with the opportunity to meet face to face with franchisors and learn about their proven business opportunities.

The CFA’s wealth of knowledge flows, in part, from its prominent role in the nation’s business community. CFA members represent thousands of business outlets across the country. As a whole, the Canadian franchise industry employs almost two million people. About half of these employees work under the banners of hundreds of CFA member franchise systems.

What can the CFA do for you?

The CFA is the voice of franchising in Canada. Our membership is made up of more than 600 corporate members, representing more than 40,000 individual franchisees. Our members also represent more than 60 different industry segments, from foodservice to retail, pet care, automotive services, and beyond!

With such a large and diverse membership, it’s important for us to look forward in a strategic way, so that we can achieve our purpose of helping everyday Canadians make their dreams of business ownership a reality through the power of franchising.

That is why, through our strategic planning process at the CFA, we identified four pillars that are at the heart of everything we do:

Community - We provide our members with credibility and a full range of programs and services to help them grow through the support of the franchise community.

Regular networking events, peer-to-peer learning, and mentorship programs offer our members the opportunity to connect with one another and build a stronger community, together.

Education - We deliver learning and networking opportunities for everyone in the franchise community to make franchising stronger.

Whether you’re an established brand or an emerging franchisor, the CFA offers educational programming and development programs for everyone on your team. Weekly Learn & Grow webinars keep our members on the cutting edge of industry best practices, while our flagship annual events (like Franchise Law Day, Marketing & Operations Day, and Franchise Development Day) offer the chance for in-depth learning. The CFA also administers the Certified Franchise Executive (CFE) Certificate Program, the gold standard in franchising professional development.

Advocacy - We amplify the understanding and power of franchising in Canada by advocating on issues that impact the dream of building a business through franchising.

As the only organization advocating on behalf of the franchise industry in Canada, the CFA works with all levels of government to protect and strengthen the franchise business model and industry. Our advocacy outreach includes budget consultations, policy submissions, and our annual Franchise Awareness Day meetings with key governmental decision makers.

Brand Awareness - We help everyday Canadians realize the dream of building their own businesses and connect people with opportunities in franchising.

Through our public-facing multi-media brand, Franchise Canada, the CFA connects an engaged audience of prospective franchisees with franchising opportunities.

Members benefit from exclusive access to editorial features, advertising opportunities, and public relations initiatives. The CFA also works to increase awareness of the franchise business model through initiatives like Franchisee Appreciation Month, Franchise Awareness Month, and World Franchise Day.

To learn more about member benefits, visit CFA.ca.

Look for the Logo

CFA members represent a diverse cross-section of franchise systems in Canada, ranging from very large, established operations to smaller regional concepts. One thing they all have in common: a commitment to excellence in franchising and a high standard of franchise ethics.

Franchisors can become members only after they undergo a review pro¬cess performed by a committee of their peers. All CFA members must sign on to the Association’s Code of Ethics, and produce a valid Franchise Disclosure Document.

These standards lend CFA member brands a greater degree of visibility and credibility in the national marketplace. In a time when the desire for entrepreneurship is high, fraud and other unethical practices are on the rise, too. The CFA’s “Look for the Logo” campaign, launched in 2025, encourages prospective franchisees to identify CFA member brands through the CFA member logo. This logo is a simple boost for prospective business owners’ due diligence process: a CFA member logo signifies a brand that has stated its ethical commitment in franchising.

Proudly display your CFA member logo on your website, tradeshow materials, and online platforms, to show this commitment! We fulfill our mission by providing leadership, trust, credibility, and opportunity. Working under the motto of “Growing Together ®,” we embrace the concept of growing your business with the support of the greater franchise community through CFA membership. This holds true to the concept of franchising—that a franchisee and franchisor can grow their businesses through partnership. Together, we all grow our businesses, our expertise, and our ability to advocate for a thriving future.

LOGO LOOK FORTHE

FRANCHISING HAS RISKS

Did you know Personal Liability for franchising has its own unique obligations and exposures?

Whether you’re starting to consider franchising your business idea, or you’re already involved in franchising, you may not realize that there are financial consequences by not meeting your obligations to your franchisees.

We had first heard of such cases depicted by franchise lawyers as they had many clients who needed to defend and settle recission claims. One case involved a husband and wife having been forced to sell their beloved home to meet the financial demands of the franchisee.

So, what position does this put franchisors in? And how do they navigate this? Can I buy an insurance policy that covers these kinds of claims, and reduces financial hardship either personally or corporately? Yes, but not in the same way you’ve bought insurance in the past.

Imagine having access to your own legal counsel, having your defense costs and settlement paid out by a top-rated insurance company.

After working with dozens of franchisors to-date, we are pleased to reintroduce our Franchisor Liability Solution with AIG Insurance Company. Specialized underwriting and wordings covering recission, misrepresentation claims under the Arthur Wishart Act, and other similar Canadian Provincial franchise disclosure statutes are included.

Since its founding year in 1926, Insurance Portfolio Inc., has been a family owned and operated property & casualty insurance brokerage, proudly serving thousands of Canadians. We are also proud to announce that Insurance Portfolio has been a Supplier Service member of the Canadian Franchise Association for almost 20 years.

IMAGINE HAVING ACCESS TO YOUR OWN LEGAL COUNSEL,

We are proud to offer an exclusive franchisor rescission program with AIG Insurance, a product shaped around franchise specific statutes such as the Arthur Wishart Act. Our exclusive franchisor liability product specifically to address franchisee lawsuits and rescission related exposure directly targets one of the highest risk areas in Canadian Franchising. This coverage has been built around franchise disclosure statutes, and positions us as a specialized resource for franchisors looking to professionalize risk management alongside legal compliance. Along with this specialized rescission product, Insurance Portfolio Inc. offers brokering of more traditional coverage business insurance related insurance products such as commercial general liability, directors and offers and Cyber Insurance.

CONTACT ME FOR MORE INFORMATION, AND FOR A NO-OBLIGATION QUOTE.

Jennifer Tyrwhitt President

jennifert@ insuranceportfolio.com (416) 754-3910 ext 222 Toll free: 1-800-773-8638

Policy and limits subject to AIG Insurance Company’s underwriting approval.

HAVING YOUR DEFENSE COSTS AND SETTLEMENT PAID OUT BY A TOP-RATED INSURANCE COMPANY. Learn & Grow sessions provide:

insights grounded in real experience Interactive discussions and collaborative problem-solving Timely topics reflecting today’s franchise challenges Opportunities to earn CFE credits for attendees Register today! https://cfa.ca/education/learn-and-grow/

MSA WORLDWIDE HELPS BRANDS EXPAND INTO CANADA , THE U.S., AND BEYOND

Whether you’re a Canadian brand eyeing expansion into the United States or an international concept ready to plant roots in Canada, one thing is certain: franchising across borders is one of the most powerful and potentially complex growth opportunities available to modern businesses. Getting it right requires more than ambition. It requires expertise.

That’s where MSA Worldwide comes in.

For decades, MSA Worldwide has been one of North America’s most trusted franchise consulting firms, guiding emerging and established brands through every stage of franchise development. With deep experience on both sides of the 49th parallel, MSA brings an unmatched understanding of what it takes to build a franchise system that performs for the long haul.

Built for the Canadian Market. Fluent in Global Growth.

As a member of the Canadian Franchise Association, you understand the unique dynamics of franchising in Canada. Consumer expectations, regulatory frameworks, regional nuances — these aren’t details to figure out along the way. They’re foundational to your success.

MSA Worldwide works with international and U.S.-based brands that are serious about entering the Canadian marketplace, helping them adapt their systems, documentation, and support structures to meet Canadian standards and resonate with Canadian franchisees. Equally, MSA is a go-to partner for Canadian brands ready to take the leap into the United States and international markets, providing the roadmap, resources, and stra -

tegic guidance to make that expansion sustainable and scalable.

What MSA Worldwide Does

Franchise Program Design and Development

For emerging brands considering franchising for the first time, MSA builds franchise programs from the ground up. From fee structures and territory design to franchise agreement frameworks and brand standards, MSA creates systems that are operationally sound and appeal to your target class of franchisee.

Franchise Support Structures, Manuals, and Training A franchise system is only as strong as the support behind it. MSA develops state-of-the-art franchise support infrastructures for brands at every stage, including comprehensive operations manuals, training curricula, and onboarding programs that set franchisees up for success from day one. Whether you’re launching your first location or streamlining a mature network, MSA builds the backbone that keeps your brand consistent coast to coast and beyond.

Franchisee Recruitment Strategy and Support Finding the right franchisees is both an art and a science. MSA works with franchisors to develop targeted recruitment strategies that attract qualified, aligned candidates from the appropriate franchisee classes for your brand. Our work helps support your recruitment process through discovery, validation, and award. The result is a franchisee network built on fit, not just volume.

Exit Strategy for Franchisors Building a franchise system is a long game, but every franchisor eventually looks toward transition. MSA helps franchisors plan and execute thoughtful exit strategies that fit your short and long term goals. Whether that means positioning the brand for acquisition, preparing for leadership succession, or maximizing enterprise value ahead of a sale, we help set your brand up for the future you want.

Litigation Support When franchise disputes arise, having an experienced consulting team in your corner matters. MSA provides litigation support services, offering industry expertise and authoritative opinion to help franchisors and their legal counsel navigate legal challenges with confidence.

Your Partner on Both Sides of the Border

The Canadian Franchise Association represents some of the most dynamic brands in the country and across the world. Whether you’re looking to bring a proven concept to new markets or strengthen the foundation of an existing system, MSA Worldwide has the experience, the tools, and the cross-border fluency to help you grow with intention.

Ready to take the next step?

Visit www.msaworldwide.com to learn more or connect with the MSA team to discuss your franchise growth goals.

FINANCIAL FAQ

If have a successful, growing franchise, and you’re looking to expand beyond your borders, Canada is a great place to go. But you may have questions about what steps to take to ensure financial compliance and success.

Here are some common questions franchisors may have about financing and taxation in Canada.

What are the tax rates in Canada?

Canada is a country of 40 million people, with a $2.3 trillion GDP. The country ranks 13th on the International Tax Competitiveness Index.

Canada is also considered highly business-friendly for new investments. Of all G7 countries, Canada has the lowest Marginal Effective Tax Rate (METR) at 13.2 per cent. It also provides one of the most generous research and development tax incentives among G7 countries, covering up to 15 per cent of R&D costs.

The federal corporate tax rate for small businesses is 9 per cent on the first $500,000 of income (after which it raises to 15 per cent).

What is a withholding tax?

Canadian tax law may influence whether you decide to operate and grant franchise rights in Canada, or continue to operate from abroad.

Fees that franchisees pay to an out-ofcountry franchisor are typically subjected to a 10 per cent non-resident withholding tax.

Opening a Canadian branch of operations can be a more attractive path for franchisors, as franchisees will not be subject to withholding tax. It can also be easier to meet provincial regulations around Canadian ownership (for example, Ontario requires at least 25 per cent of a corporation’s directors be resident Canadians).

What kind of expansion is most cost effective?

There are many models that can be used to expand your brand into Canada. While the right fit may be different for different franchisors, cost should be a key consideration when deciding how best to proceed.

Single-unit expansion, particularly from the US, has become less common in Canada in recent years, as a multi-unit expansion strategy can be more effective due to the costs of expanding into a new country. Master franchisees or multi-unit franchisees may assume some of the functions typically taken on by the franchisor, including training, site selection, or construction. However, franchisors should consider that these agreements may translate into decreased control.

It is also important to consider what corporate tax structure will be most efficient for your brand. Considerations include: capitalization strategies, repatriation of funds, and whether your industry is subject to any additional Canadian tax laws.

Franchisors should work with Canadian legal and finance teams to ensure they are finding the best structure and fit for their specific business and industry.

What is the economic outlook for franchising in Canada?

The future is bright for franchising in Canada. Franchising remains the country’s 12th largest industry, contributing almost $150 billion annually to the GDP.

Despite economic turbulence, franchising has proved to be a highly resilient business model. In 2019, the industry was estimated to be worth $96 billion, meaning franchising has grown by 55 per cent even through an unprecedented global pandemic and years of economic uncertainty.

Franchising also employs almost 2 million Canadians, and the average person in Canada interacts with a franchised business 3-5 times per day. Franchising is woven into the fabric of Canadian life, and it’s clear why Canada’s is the second-largest franchising community in the world.

How can the Canadian Franchise Association (CFA) help?

The CFA community is all about Growing Together, so if you’re looking to enter the Canadian market, joining the CFA is the best first step you can take.

Our Supplier Directory connects you with CFA member brands that can help with all manner of financial questions. The CFA has a relationship with all of Canada’s major banks, and many supplier and support services members to help you along your financial journey.

CFA members are also able to participate in the CFA’s Member Savings Program, taking advantage of member-exclusive discounts.

Finally, our best-in-class educational programs offer resources for franchisors of all levels. Join the next Expand Your Brand webinar to learn more about bringing your brand to Canada, or browse the full range of educational events and resources at cfa.ca.

DRIVING HIGH PERFORMANCE IN FRANCHISE ORGANIZATIONS

Practices and policies for financial excellence in multi-unit operations

BY BILL FUESZ, SENIOR GROWTH MANAGER, SAGE

For franchise owners and finance leaders, the challenge is increasingly familiar: managing growth amid tight margins, fragmented data, and rising operational complexity. As franchise organizations expand across locations, brands, and geographies, scalable financial systems are no longer optional. Cloud-based financial management has become essential for maintaining visibility, consistency, and control. Let’s explore how franchise organizations can modernize their financial operations to reduce complexity, improve performance, and support sustainable growth.

The State of the Franchise Industry

Franchise organizations across industries are experiencing rapid transformation. Expansion through new unit development, acquisitions, and private equity-backed rollups is increasing the number of legal entities finance teams must manage. Multi-brand ownership is becoming more common, adding layers of complexity to reporting, consolidation, and compliance. At the same time,

franchise operators face persistent cost pressures (particularly labor, occupancy, and supplier expenses) which continue to compress margins.

Regulatory and compliance demands are also increasing as franchise systems operate across multiple jurisdictions, each with its own reporting and audit requirements. Many franchise organizations still rely on fragmented systems and manual processes, leading to slow financial closes, limited visibility, and delayed decision-making. Data is often spread across operational systems such as point-of-sale, billing, payroll, inventory, and customer platforms, making it difficult to produce timely, accurate insights. As organizations scale, the lack of standardized processes and controls heightens risk and strains finance teams.

Technology as a Strategic Lever

Modern financial technology plays a critical role in helping franchise organizations manage complexity and scale efficiently. Cloud-based financial management plat-

MODERN FINANCIAL TECHNOLOGY PLAYS A CRITICAL ROLE IN HELPING FRANCHISE ORGANIZATIONS MANAGE COMPLEXITY

AND SCALE EFFICIENTLY.

forms provide real-time visibility across all locations and brands while reducing reliance on spreadsheets and manual work. By unifying data from disparate systems into a single source of truth, franchise leaders gain the clarity needed to monitor performance and respond quickly to emerging issues.

Automation is central to improving both efficiency and accuracy. Routine tasks such as consolidations, intercompany transactions, and recurring reports can be automated, shortening close cycles and reducing errors. Standardized charts of accounts and reporting templates ensure consistency across units, enabling meaningful comparisons and proactive management. Secure, role-based access supports collaboration while strengthening internal controls, auditability, and compliance.

Strategic Recommendations and Best Practices

High-performing franchise organizations adopt a disciplined, technology-enabled approach to financial management. Automating routine financial processes improves reliability and frees teams to focus on analysis rather than data entry. Standardized dashboards and reports help leadership monitor key performance indicators consistently across locations and brands.

Strong governance is essential as franchise systems grow. Segregation of duties, enforced through role-based permissions, reduces risk by ensuring that no single individual can initiate, approve, and complete financial transactions. Regular budget-versus-actual reviews, supported by documented variance analysis and action plans, reinforce accountability and financial discipline.

Audit readiness should be embedded into daily operations. Automated approval workflows, audit trails, and controls simplify compliance and reduce disruption during audits or lender reviews. Periodic internal audits and process reviews help identify risks early and support continuous improvement.

A cloud-first approach also enhances scalability and resilience. Centralized reporting, standardized entity structures, and automated reconciliations reduce complexity as new locations are added. Ongoing employee training ensures teams can fully leverage financial systems, while disaster recovery and business continuity planning protect operations against unexpected disruptions.

Conclusion and Next Steps

Digital transformation is no longer optional for franchise organizations. As growth accelerates and operating environments become more complex, cloud-based financial management delivers the automation, integration, and real-time insight needed to maintain control and drive performance. By modernizing their financial infrastructure, franchise leaders can improve visibility, strengthen governance, and position their organizations to scale confidently and profitably.

Learn more about how Sage can help your brand transform at sage.com/en-ca

STARTING STRONG: ADAPTING YOUR BRAND FOR THE CANADIAN MARKET

Expanding a successful franchise concept into Canada begins long before the first unit opens. The brands that succeed here do something specific: they take the time to clarify their positioning for the Canadian market, using that clarity to guide everything that follows.

This is the work Ray Strategic Marketing leads.

We collaborate with franchisors who have strong brands and proven systems. Our goal is to help you answer a crucial question: “What does our brand need to stand for in Canada to create real, sustainable momentum from day one?”

Start with Positioning, Not Promotion

Before launching plans or local marketing, we focus on defining and refining your positioning for Canada. We evaluate what makes your concept successful and determine how that promise should be expressed to Canadian consumers, franchisees, and communities.

Through qualitative research, interviews, and competitive analysis in Canada, we validate your assumptions, revealing how your story resonates with people here. The objective is not to reinvent your brand, but to translate a winning concept into a clear, compelling Canadian narrative that everyone can rally around.

Translate a Strong Brand into Canadian Reality

With a solid positioning established, we work with you to identify the practical shifts required to make your brand come alive in Canada. This may involve adjusting how you communicate value, framing the guest experience, highlighting key proof points, and differentiating within the competitive landscape you will encounter.

We emphasize what should remain consistent across borders and what should flex. The outcome is a Canadian positioning platform that safeguards your brand’s core while making it feel native rather than imported.

THE OBJECTIVE IS NOT TO REINVENT YOUR BRAND, BUT TO TRANSLATE A WINNING CONCEPT INTO A CLEAR, COMPELLING CANADIAN NARRATIVE.

Strategic Guidance on Market Launch

Ray provides strategic guidance on entering and scaling in Canada to build belief and momentum. Together, we determine where to start, the sequence of efforts, and how brand, development, operations, and local marketing can work in harmony.

Our focus is on providing a clear, practical path that your team and franchisees can easily understand and execute, with the brand positioning at the center of every decision.

Build Tools that People Actually Use

Once the strategy is established, we assist you in building local marketing toolkits that franchisees will use. Because the positioning work comes first, these tools feel coherent and purposeful rather than ad hoc. They are crafted for the realities of busy operators and field teams, balancing structure to protect the brand with flexibility for different Canadian markets.

At this stage, we often provide coaching and guidance to internal teams, enabling them to continue evolving Canadian marketing confidently as the network grows.

What Ray Does for Franchisors Entering Canada

For franchisors expanding into Canada, Ray typically:

• Clarifies and validates the brand’s Canadian positioning through research and competitive analysis.

• Identifies the essential shifts needed to convey a strong concept in the Canadian context.

• Provides strategic guidance on market entry and launch sequencing.

• Supports the creation of local marketing tools for franchisees.

• Works alongside your team as an embedded senior marketing and brand partner.

If you are planning Canadian expansion and want to ensure your brand has the strongest possible start, now is the time to solidify your positioning and launch strategy. Invite Ray Strategic Marketing into your conversation about expanding to Canada. Together, we can shape a clear Canadian story, design a launch that creates genuine momentum, and equip your franchisees with tools that bring that story to life in every local market.

Learn more about how to craft a strategic marketing plan at www.raystrategicmarketing.com

EXPANDING YOUR BRAND?

Why Construction Should Be a Strategic Decision and Not a Final Step

BY ALINA BADRAN, FDA CONSTRUCTION

Canada continues to be one of the most attractive destinations for international franchise expansion. With a stable economy, a sophisticated consumer base, and a mature franchise ecosystem, the opportunity is clear. Yet many franchisors underestimate one critical factor when entering the Canadian market: construction is not simply an execution phase, it is a strategic decision that can directly impact speed, cost, and long-term scalability.

Too often, international brands arrive with a fully developed concept, design standards created for another market, and budgets that do not fully reflect Canadian realities. While the brand vision may be strong, local execution quickly becomes complex. Regulatory requirements, climate conditions, labour structures, permitting processes, and municipal approvals vary significantly across Canada and differ from many other markets.

When construction is approached too late in the process, franchisors often face unexpected delays, budget adjustments, and design revisions—all of which slow momentum and increase risk.

The challenge is not the concept itself. It is the timing and integration of construction expertise.

Construction as a Strategic Lever for Franchise Growth

In the Canadian context, construction plays a critical role in protecting brand consistency while enabling scalable growth. Engaging a construction partner early allows franchisors to make informed decisions before committing to sites, finalizing designs, or locking in expansion schedules.

Early construction involvement helps franchisors:

• Validate budgets and timelines based on Canadian market conditions;

• Adapt international design standards to local regulations without compromising brand identity;

• Anticipate permitting, zoning, and compliance requirements at the municipal level;

• Establish repeatable construction frameworks for multi-unit rollouts;

• Reduce financial and operational risk across multiple locations.

When construction expertise is integrated upstream—alongside site selection, design, and strategic planning—it becomes a powerful tool for supporting sustainable expansion.

A Structured, Collaborative Approach

FDA Construction supports franchisors by approaching construction as a strategic partnership, not a transactional service.

With over 20 years of experience in commercial construction, FDA works closely with franchisors, architects, engineers, and professional advisors to align vision, feasibility, and execution from the outset.

Our role extends beyond building spaces. We help franchisors navigate Canadian construction realities, structure realistic rollout strategies, and maintain consistency across locations, all while respecting brand standards and long-term growth objectives.

By fostering collaboration early in the process, FDA Construction helps brands avoid costly course corrections later and move forward with clarity and confidence.

Who We Support

FDA Construction works with:

• International franchisors entering the Canadian market

• Emerging and growth-stage franchise systems planning multi-unit expansion

• Brands seeking a long-term construction partner with both strategic insight and execution expertise

Start the Conversation Early

Successful franchise expansion is rarely about moving faster, it is about making better decisions earlier.

Engaging a construction partner early in the Canadian expansion process allows franchisors to reduce uncertainty, control costs, and create a stronger foundation for longterm success.

ABOUT THE AUTHOR

Alina Badran is VicePresident of FDA Construction and holds a bachelor’s degree in building engineering. With over 20 years of experience across real estate, finance, and commercial construction, she supports franchisors and growing brands with strategic construction planning to facilitate successful expansion projects.

CHECKLIST FOR EXPANDING YOUR BRAND INTO CANADA

The steps you need to take to bring your brand to

Canada

 Assess whether your brand will ‘fit’ the Canadian market

• Market research is an important step to make sure your product or service will connect with Canadians

 Register your trademarks and intellectual property

• Before entering a new market, make sure to protect your intellectual property by securing any Canadian trademarks for your brand name, logo, and other brand assets.

• Trademarks in Canada are regulated federally, so one trademark registration is effective across the whole country.

 Secure a Canadian domain for your brand

• Protect your brand online as well, by setting up a .ca web domain. Typically this requires a registered Canadian trademark or a Canadian subsidiary.

 Determine how you will structure your expansion

• Single unit, multi-unit, area developer, and master franchisee models are all options for brands looking to establish a franchise presence in Canada. Do your due diligence to determine which method is best for your system.

• A key consideration is how your model will interact with Canadian tax law. Franchisees who pay fees to a foreign corporation are generally subject to a 10 per cent withholding tax.

• Consider whether you will set up a Canadian subsidiary or branch of your corporate office, and whether you will incorporate federally or provincially.

 Find experts to help you along your way

• There are many aspects to bringing a brand to a new country, and local experts are invaluable in making sure your brand

complies with legal and financial regulations and avoids common pitfalls. Here are some of the experts you should work with as you expand your brand. Visit cfa.ca/supplier-directory to find franchise support services brands to help with everything from local marketing to construction.

• A membership in the Canadian Franchise Association (CFA) is an indispensable resource for building your brand’s reputation in Canada, accessing educational resources, and networking with the Canadian franchise community.

 Understand your legal obligations

• Canada has unique franchise legislation that is regulated on the provincial level, and may involve different disclosure obligations than your home country. See page 18 for more information on Canadian franchise agreements.

 “Canadianize” your system

• As you adapt your operations for Canada, you’ll need to make sure your business complies with Canadian labour and employment laws. Work with your legal team to ensure your brand meets federal and provincial standards.

• Update your operations manual to incorporate any system changes you’ve introduced.

• Adapt your products and services to Canadian tastes. Canada is a large and uniquely diverse country. What’s popular in British Columbia may be completely different from Atlantic Canada! Make sure to invest in market research as you move into different areas of Canada.

• You’ll also need to adjust your products and services to comply with Canada’s packaging laws, which require labels to be in both English and French, and use the metric system for measurements. If you are looking to expand into Quebec, additional compliance with provincial language laws will also be required.

 Build supply chains and relationships with Canadian vendors

• Establishing Canadian supply chains will help your brand avoid import fees and high shipping costs.

 Location scouting

• Establish your territories in local markets and develop processes and vendor relationships for construction and build-out.

 Open for business!

CASSELS BROCK & BLACKWELL LLP

Cassels is a full-service, business law firm with offices in Toronto, Vancouver and Calgary� Our lawyers provide knowledgeable advice on all legal and practical aspects of franchising including franchise agreements, disclosure law compliance, dispute resolution and litigation � The Chair of our group, Larry Weinberg, is past Chair of the Ontario Bar Association’s Franchise Law Section and received Who’s Who Legal’s worldwide award for ‘Franchise Lawyer of the Year’ multiple years in a row�

3200-40 Temperance St

Toronto, ON M5H 0B4

Phone: (416) 860-2987

Web: www�cassels �com/franchise

Email: lweinberg@cassels com

Contact: Larry Weinberg / Geoff Shaw, Partners, Franchise Law Group

CFA member since: 1997

FDA CONSTRUCTION INC.

Making possible the impossible

FDA Construction is one of the greater Montreal’s area most versatile commercial construction, construction planning, construction management and turnkey construction specialists At the core of FDA Construction expertise is a small cadre of experienced engineers and contractors with a broad range of commercial construction experience� This team is supported by a proven and loyal troupe of local trades groups �

555-500 boul Saint Martin O Laval, QC H7M 3Y2

Phone: (514) 833-7027

Web: www fdaconstruction com

Email: a�badran@fdaconstruction�com

Contact: Alina Badran, Vice President In business since: 2006

CFA member since: 2024

INSURANCE PORTFOLIO INC.

Franchising’s Insurance Broker

Offering an EXCLUSIVE Franchisor Liability Product for Franchisors! Coverage against rescission claims and Canadian franchise disclosure statutes � For over 95 years, Insurance Portfolio Inc has been trusted by Canadians to provide INDEPENDENT broker services for all lines of commercial insurance and program insurance, professional liability, cyber liability, and personal lines products To learn more about us, visit our website� We take the Confusion out of insurance

800-10 Milner Business Crt

Toronto, ON M1B 3C6

Phone: (800) 773-8638

Web: www insuranceportfolio com

Email: info@insuranceportfolio com

Contact: Jennifer Tyrwhitt, B � Mus �

Ed , CAIB, President

In business since: 1926

CFA member since: 2007

MSA WORLDWIDE

MSA Worldwide has established an unparalleled reputation as the leading strategic and tactical advisors in franchising We work with companies at all stages of their franchise journey to develop franchise systems, franchisee support structures, and maximize franchisee recruitment � Our decades of experience and innovative strategies enable us to design and develop unique solutions for our clients

1753 Federal St Philadelphia, PA 19146 USA

Phone: (860) 523-4257

Web: www msaworldwide com

Email: aseid@msaworldwide com

Contact: Andrew Seid, Senior Consultant

In business since: 1987

CFA member since: 2024

RAY STRATEGIC MARKETING

Ray Strategic Marketing specializes in growing franchise businesses through research and data-driven brand positioning, marketing strategy, and tailored execution � We are your fractional senior marketing leader without the fulltime cost � Most agencies are led by creative directors or individuals who have honed their expertise on the agency side� Ray Strategic Marketing is led by a marketer and strategist who is highly experienced in providing senior-level marketing direction and support within a company, including having worked with five different Canadian franchises We intimately know the intricacies of competing demands for time, resources, money, and the ultimate KPI—revenue and profitability We are passionate about helping companies make the bold moves needed to grow Our approach is collaborative, and we have a proven track record of success If you are ready to grow— let’s talk!

Phone: (403) 860-6603

Web: www�raystrategicmarketing�com

Email: wendy@raystrategicmarketing com

Contact: Wendy Winder, Founder and Chief Strategist

CFA member since: 2024

RESHIFT MEDIA

Voted the World’s Best Franchise Marketing Firm at the Global Franchise Awards four years in a row, ranked as a Top Franchise Supplier by Entrepreneur for four consecutive years, a two-time recipient of the Canadian Franchise Association’s Distinguished Franchise Supplier award, and named Marketing Disruptor of the Year (2024 and 2025) by the International Business Awards, Reshift Media is a globally recognized leader in franchise marketing � Reshift Media is an awardwinning digital marketing firm that develops strategies, processes, and technology to help franchise brands attract new customers and grow their franchise networks Its in-house team supports more than 200 franchise clients across 22 countries, delivering expertise in software development, social media, influencer marketing, search, and web and mobile development

The company is also the creator of Franify, the world’s most powerful franchise digital marketing platform designed specifically for franchise businesses � 200-140 Yonge St Toronto, ON M5C 1X6

Contact: Kirk Allen Co-Founder & COO (844) 802-8471

kallen@reshiftmedia�com

Website: www reshiftmedia com CFA member since: 2013

SAGE

Sage is the market leader in AI-powered financial management solutions that streamline operations and provide realtime visibility across finance, HR, payroll, and payments, helping organizations make faster, datadriven decisions � Trusted by millions worldwide, Sage delivers innovative solutions that empower organizations to work smarter, stay competitive, and thrive� Finance solutions for every stage of business � Accounting, payroll, HR and insights that scale with you, from startup to CFO

6200-40 King St W Toronto, ON M5H 3Y2

Contact: Bill Fuesz, Senior Growth Manager, Hospitality (800) 370-0176

bill�fuesz@sage�com

Website: www sage com/en-ca/sagebusiness-cloud/intacct/ CFA member since: 2026

The Canadian Franchise Association (CFA) has been advancing and supporting the franchise community since 1967, and acts as the voice of the franchise industry across Canada.

CFA Guidebooks are a resource to help readers dive deep into a franchising related topic, drawing from the expertise of franchisors, franchise support services / suppliers, and industry experts.

Find more entries in the CFA Guidebook series at www.cfa.ca/franchisecanada/fcguidebooks