Canadian Franchise Industry Trends for 2014

What to Expect From the Canadian Franchise Industry in 2014

Quick — name the first three businesses that pop in your head when you hear the word "franchise." Did you think of Tim Hortons, Canadian Tire and Boston Pizza? If so, congratulations, you think like a normal human being. You thought "food, retail, food." If I had asked for five names, you might have thought of "food, food, retail, food, food." That's because food and retail franchises occupy prime real estate and do the most advertising.

But they're not growing the fastest.


Where the Growth is Happening

The Canadian franchise industry encompassed 80 industries, and includes many successful businesses that are focused on selling services rather than products. Service franchises offer successful business models that usually require much lower investments, generate larger product margins, and can sometimes be run from home.

The six categories with the greatest growth over a five year period were identified through the increase of listings in categories in the 2013 edition of the FranchiseCanada directory compared the number of listings in different industry categories from 2008 to 2013, and identified some big growth trends.

Five of the six fastest-growing franchise industries were service-oriented.

They are:

  • Business Consultants / Services / Training: 211% increase
  • Hair & Nail Salons / Spas: 188% increase
  • Seniors / Home Care & Services: 121% increase
  • Food - Restaurants / Dining Rooms: 88% increase
  • Home Based Businesses: 83% increase
  • Health & Fitness / Nutrition: 82% increase

What to expect in 2014

Service franchises will stay very hot, both those focused on business-to-business sales and business-to-consumer. There are a lot of reasons. Service businesses can often be run from the home of a small office, so you don’t have the huge commercial real estate expenses that come with a retail business, and there tends to be much lower overhead. There also tend to be higher profits and a quicker break-even point. That makes these businesses much easier to start for people who aren't already wealthy. Service businesses can also have hours that are much more in-line with typical work hours, making work/life balance easier to achieve.

The flip side is that you need to be ready to market yourself, because nobody is going to be walking through the front door.

In terms of specific industries, here are a few I expect to grow quickly:

Home services: Anything related to homes is very big. Baby Boomers are beautifying their homes, either with plans to sell and downsize, or so they will be able to enjoy their homes more in retirement.

Senior care: Baby Boomers, and their parents, are driving this trend. People are looking for ways to maintain their independence and stay out of assisted living facilities and nursing homes, and senior care businesses that provide in-home care and aid are flourishing, but be aware that this is now a very competitive industry. Mobility franchises are finding a hungry market — knees may be getting creaky for many older Canadians, but they still want to be active.

Marketing support: Small businesses and even some larger ones need a lot of help marketing themselves online. Advertising and marketing has shifted to the Web, which allows businesses to engage customers more deeply at a fraction of what they’d pay for television and newspaper advertising — assuming the business is actually visible online. The challenge is getting your business to stand out amid the billions of web pages already online. Several franchises have developed tools and training that allow franchisees to offer expert guidance for online and digital marketing. Hundreds of thousands of businesses need the help.

Sep 3, 2013