‘Roller-coaster’: The ups and downs of becoming a franchisee

MONTREAL – Before she owned one, Sarah Evans had no experience in hair-removal clinics — other than the personal kind.
She began searching for a new spot for treatments after moving to Toronto from the U.K. in 2013 and found a suitable service.
“It wasn’t terrible, but there were some things where it was a little bit dodgy and suspect,” said Evans, whose professional background lies in optometry and journalism. “They were using soft wax, which isn’t the most comfortable experience.”
Then she spotted Waxon, a hair removal service just starting to franchise.
“It looks very clean, it looks very inviting … so the next time I needed a wax, I went in. And that was kind of the beginning of the story.”
Fast-forward a decade, and Evans runs three Waxon locations in the Greater Toronto Area, part of a franchised brand with 18 locations and eight more slated to open before 2026.
“It’s like being on a roller-coaster … the wheels just started turning,” Evans said. “I always had this bug in me to own my own business.”
Many Canadians feel likewise. More than 40,000 franchisees run operations that employ two million people across 600-plus brands in sectors ranging from painting to event planning, home health care, construction and — of course — food retail, according to the Canadian Franchise Association.
Compared with launching a new enterprise, opening a franchise typically comes with head office support, brand recognition and lower financial risk, as well as a connection with the local community and colleagues. But it can also mean tight corporate restrictions, heavy workloads and a big up-front investment — among other challenges of small business ownership, from rising costs to rude customers.
Head office assistance — from site renovation to software, signage equipment and furniture — is among the selling points for those considering a move into the world of franchising.
“It’s turnkey. They provide you with a fully operational bakery that’s open and running,” said Tait Mitchell, who launched a Cobs Bread bakery in Barrie, Ont., with his wife Lisa in 2021.
Franchisees receive 16 weeks of training — much of it spent baking at another location — as well as recipes and menus. All food items are ordered through Cobs distributors.
In the case of College Pro window cleaners, franchisees often draw on an existing client list that they then build out, relying on corporate staff to handle payroll and taxes.
Ambrose Obe trained part-time for two months before jumping into the business he took over in Winnipeg after coming to Canada from Nigeria last year to study management.
“This was going to be an opportunity for me to learn how businesses work here in Canada and to get some business experience,” said Obe, who ran a trucking outfit in his home country.
A closer bond with the surrounding community can also be a surprising bonus for some new franchisees.
“We have people that come in once, twice, sometimes three times a week … they know my front staff, and my front staff knows their order as soon as they walk in the door,” said Lisa Mitchell of Cobs. “That means a lot.”
Though familiarity with spreadsheets and balance sheets is a plus, franchising is open to people from all walks of life, said Waxon founder Lexi Miles Corrin.
“We have widows, we have women who are just coming out of mat leave, corporate jobs, lawyers … they really wanted to do their own thing and be their own boss but were maybe too scared to make the leap alone,” she said, adding that some franchises can feel like a “boys’ club.”
Even with that hand-holding — or because of it — the financial side of franchising can be tough to swallow.
Opening a location often costs hundreds of thousands of dollars, on top of royalties that typically hover between five and 10 per cent of sales as well as fees for marketing and advertising.
At Waxon, the investment is between $500,000 and $600,000, with $150,000 in liquid capital up front, Miles Corrin said. There’s also a one-time $50,000 “franchise fee,” plus a six per cent royalty on sales and 1.5 per cent for marketing.
Tim Hortons, which has about 3,500 restaurants across the country, requires at least $100,000 in cash up front and minimum net worth of $500,000 — the investment may be up to four times that amount, however. Operators must also kick between 4.5 to six per cent of sales upstairs and another four per cent for advertising and marketing.
Franchises are not insulated from the hurdles that confront many small businesses these days, from employee retention to inflation to abrasive clientele.
“One of the greatest challenges is finding good workers,” said Tait of Cobs.
Costs for some items have also soared.
“Cocoa went up by about 75 per cent,” he said. “The war in Ukraine caused canola and oil issues.”
Many owners may also learn the hard way that not all Canadians live up to the nation’s reputation for niceness.
“Sometimes somebody will not even listen to you at the door, just tell you, ‘Go away.’ I was like, wow, so rude,” said Obe, recalling his porch pitches.
Meanwhile, the corporate structure and guidance that some see as a life-jacket will be felt by others as a straitjacket.
“Our franchisees can’t go out and design their own wonderful glitter ad and take our brand mark and make it pink,” said David Druker, CEO of the UPS Store Canada and past chairman of the Canadian Franchise Association board of directors.
“If you’re a lone wolf personality, if you don’t like taking advice from others, if you don’t like the concept of team, then chances are franchising is not for you.”
While small franchises can offer more leeway and closer relationships with executives, larger companies tend to have stricter rules and impersonal ties to head office.
Either way, hard work is part of the package, along with ground-floor involvement in the business.
“Food service is Monday to Sunday, every day of the week, early morning to late nights, weekend nights when your family’s celebrating and you can’t because somebody called in sick,” said Domenic Primucci, president of Pizza Nova.
Franchisors and franchisees alike recommend speaking with others in the business and thinking it through before jumping in.
“Be truly prepared for the amount of effort that you have to invest in it,” said Lisa Mitchell.
“It’s a marathon.”
This report by The Canadian Press was first published Oct. 24, 2024.