Restaurant franchises in Canada are among the fastest-growing segments in the Canadian foodservice industry. Franchise businesses tend to appeal to more entrepreneurs because of its turnkey concept. The business model is ready to use, many of the operational and marketing aspects of the brand have been tried and tested for many years and much of the basic details of running the business are already established.
While franchising is generally considered to be a less risky route to opening a restaurant business from scratch, the reality is, there are still risks involved and it’s still going to be a lot of work. That’s why it’s so important to still do due diligence and give enough thought to all the important factors that measure whether a particular Canadian franchise is good for you.
Here are several key factors to consider when selecting a franchise restaurant.
What restaurant franchise model is right for you
First, get to know yourself and decide which franchise style best suits your lifestyle and budget. Will you open a fast food restaurant from scratch or open a franchise? Will you open a fast-food or full-service restaurant?
There three main franchises in the Canadian restaurant industry:
- Quick Service Restaurants (QSRs) – Commonly known as fast food restaurants. QSR franchises are the most common type of restaurants in Canada. The concept typically includes: a limited menu, counter service and/or drive-thru service.
- Full Service Restaurants (FSRs) – FSR franchises cover a wide price range, from casual family restaurants to fine dining. They tend to offer classic menu items, comfort foods in large portions and are characterised by providing table service to their customers – the wait staff seats the customer, takes their order, delivers their food, and cleans up after the diner has left.
- Fast Casual Restaurants (FCRs) – A hybrid of QSRs and FSRs, the fast casual concept features build-your-own menus with healthier, less processed food options such as sandwiches, wraps, or burritos that are prepared fresh to order. Counter service is performed for ordering, payment, and food pickup. Self-serve drinks and coffee stations are common. Standard table service is limited to bringing food out to customers’ tables.
There are unique differences between operating a Full Service Restaurant versus a Quick Service restaurant. The demands for each are different. The amount of work and hours you spend on each are different. The regulations are different for each. Which one is the right fit for you?
Where is the restaurant location
This is the number one factor to consider if you want your restaurant to succeed in the competitive landscape. A good location will determine how visible your business will be to your target audience. Ultimately, your restaurant needs to be easy to find and access.
Some questions to ask to determine good locations in Canada:
- Are there existing restaurants nearby that will be similar to your franchise?
- Can the population sustain your restaurant franchise at that location?
- How visible will your restaurant be from major roads and highways?
- Will it get walk-in traffic?
- Is the surrounding area residential or more commercial or industrial?
- Are there office buildings nearby?
- Are there any conversion opportunities in the area (from businesses that have closed or relocated)?
Who is your target audience
Who are you aiming to attract or sell to? What are the demographic characteristics of the surrounding area? What are their spending habits? Are there competing franchise units in the area and are they doing well? Do you want to set up your restaurant franchise for millennials and gen-z’s? Then you would need to consider a QSR model a better fit. If you’re going for those with extended family and young children, a full service restaurant would work well. You’ll want to consider demographic trends so you know how to play to the right crowd.
How popular is the brand?
It’s crucial to know how popular that particular restaurant is among local consumers. Any restaurant becomes popular because of consumer demand. Keep this in mind when choosing restaurant franchises in Canada, don’t rule out the lesser known brands. You can have a global brand like Macdonald’s enjoying massive brand recognition and customer loyalty in the area, and you can also have a smaller franchise brand that’s equally or maybe even more popular with locals in the community.
Many studies show that while larger chains may continue to dominate the Canadian restaurant landscape because they create a sense of familiarity and trust, more and more customers are willing to ditch the conventional cuisine of big brands to explore new and more authentic flavours that the smaller franchises have to offer.
The trick is to find a quality franchise opportunity that’s a good fit for your local area and allows room for innovation and growth.
How flexible can the franchise be?
While restaurant franchises in Canada provide a proven business model for success, this can often mean overly-rigid systems that prevent franchise partners from adjusting the concept to establish themselves as part of the community or meet local market demand. If you’re not willing to sacrifice some of your business autonomy in decision-making, choose a flexible restaurant franchise model that gives you the best of both worlds – a tried-and-true model for success that also lets you maintain a greater degree of independence.
Today’s consumers want to order their food fast, wherever they are, whenever they feel like it. You’ll need to be able to innovate and grow to give a seamless and connected customer experience which means providing multiple ways for your customers to order, pay, and get their meals.
Are you able to set up the franchise for omni-channel? Can you offer online ordering and offline options? Can customers order in person, over the phone, online, with a QR code, in third-party food delivery apps, from click & collect stores, or at a kiosk in your restaurant? Are you able to send notifications about special offers and discounts?
With a flexible restaurant franchise model, you can operate and market your business to fit the needs of your community, particularly with respect to local demand and customer experience so you can reach both new and different customers and seamlessly create additional revenue streams.
It’s important to ask the right questions and do thorough research when choosing restaurant franchises in Canada to be able to decide which option is best suited for your budget and skill. All it takes is the right strategy in order to minimize risk and bring in a handsome profit for your future business and investment.
Iron Skillet offers a growing franchise opportunity with low start-up costs. If you’d like to find out if it’s a franchise that fits your needs, contact us today.