March 18th, 2024 at 01:13 am

How to immigrate to Canada by buying a franchise

Today we will look at the statistics, current trends, and key elements that contribute to the strength and success of Canada’s franchising sector, as well as how you might take advantage of them to apply for Canadian PR.

Franchising is Canada’s 12th largest industry and the world’s second-largest franchise industry. In 2019, franchising contributed $100 billion to Canada’s GDP, and it has since grown to $120 billion. Despite the hurdles provided by a unique public health crisis, Canada’s franchise industry has shown resiliency, acting as a reliable source of income growth. This resilience prepares Canadian franchising for additional expansion, creating the possibility of long-term growth.

While Ontario now dominates the franchise economy, accounting for over 65% of all operating units, the Prairies, Atlantic, and West Coast sectors offer considerable growth opportunities. The most significant percentage-wise expansion is expected in British Columbia, with a 1.16% increase in franchise sites. In contrast, the slower growth predicted in Atlantic Canada (0.46% increase) provides chances for foreign brands to develop and establish a presence in the region.

Should I purchase an existing or new franchise for Canadian Immigration?

The decision to purchase an existing or new franchise is influenced by a variety of factors, including personal preferences. Here are some essential factors to help you make an informed decision:

Benefits of Buying An Existing Franchise for Canadian Immigration

1. Established clientele: Access an established and dedicated consumer base, leveraging the benefits of a well-known brand to generate repeat business and customer loyalty.
2. Proven Track Record: Gain access to a successful business and analyse current sales, profitability, and operational trends.
3. Negotiation Opportunities: Unlike new franchises with predetermined price structures, purchasing an existing franchise allows for direct discussions with the seller.
4. Standard Operating protocols (SOP); These protocols include different parts of franchise management, such as daily operations, customer service, staff training, marketing, and so on.
5. Opportunity to visit the franchise location; The “opportunity to visit the franchise location” when purchasing an existing franchise enables prospective purchasers to inspect the actual premises, witness daily operations, and interact with employees and consumers.

Disadvantages of Buying an Existing Franchise for Canadian Immigration:

• Uncertain motivations and liabilities. Unravelling the seller’s motivations and potential liabilities can be difficult, making it difficult to determine the genuine reasons for selling.
• High Due Diligence Costs: Conducting a full corporate audit can be costly, and there is a danger of competing with other potential purchasers.
• Franchisor Approval Process: The franchisor has the ability to accept or deny the buyer, which could lead to a lengthy and costly orientation process.

Benefits of Choosing a New Franchise for Canadian Immigration:

• Lower Initial Cost: New franchisees typically require less funding, since they do not need to buy current cash flow or pay for established goodwill.
• Cutting-Edge Equipment and Design: Enjoy the benefits of cutting-edge technology and equipment, which is especially important in industries such as food service, where outmoded gear can cause problems.

Challenges in choosing a New Franchise for Canadian Immigration:

1. Variable Startup Expenses Despite the franchisor’s forecasts, unexpected costs may arise during the setup of the new business.
2. Funding Difficulties: Obtaining funding can be difficult for both new and established franchisees, since lenders frequently scrutinize the performance of an operational site.

Considerations for buying a franchise in the Canadian immigration.

Sector

You must verify the industry in which you intend to purchase the franchise. The sector is critical for its profitability and whether it is approved by immigration officials. Some business sectors may be barred from buying for immigration reasons.

Investment Amount

It is critical to determine which immigration program you intend to pursue and apply for. For example, if you apply for entrepreneurship programs in specific areas, you must be prepared to invest a minimum sum determined by that province.

Employee Count

The potential job possibilities your company can provide for Canadians are a crucial consideration that immigration authorities take very seriously. As a result, prioritize franchises that require at least two to three staff members to run properly.

We are focusing on this section because most immigration streams have specified criteria regarding the business industry, the number of employees, and the minimum investment.

What are the best Canadian immigration programs to apply for while buying a franchise?

1) BC PNP (BCPNP)

To be eligible for franchise investment in this province, the applicant must demonstrate that the desired franchise has a strong and established presence with the potential for expansion, a solid financial history, and a minimum operational period of 60 months (five years). The BC PNP considers the acquisition of an existing franchise site to be an eligible business only if it is backed by an expansion or enhancement plan that meets the franchisor’s requirements. All extra criteria must also be met.

2) Saskatchewan PNP (SINP)

New and existing franchise purchases are permitted.

The SINP will assess acceptable operational expenses and start-up costs for the first six (6) months for new enterprises and the first three (3) months for existing firms or new franchise locations.

3. New Brunswick PNP (NBPNP)

New and existing franchises are permitted in this province, although with stricter inspection and eligibility requirements than in other jurisdictions.

4) Manitoba PNP (MPNP)

New and existing franchises are permitted in this province. However, constraints apply to the goodwill value of an established franchise. With a correct valuation assessment, one-third of the goodwill investment value can be claimed as eligible.

5. Alberta PNP (AAIP)

New and existing franchises are permitted in this province.

6. Newfoundland and Labrador PNP (NLPNP)

New and existing franchises are permitted in this province.

7. Prince Edward Island (PNP)

New and existing franchises are permitted in this province.

That concludes our look at the Canadian franchising sector and its implications on your path to Permanent Residency!

Your selection could be a game changer in your immigration case. Investing in the proper area, understanding the immigration rules, and selecting the best Canadian immigration program are critical steps toward success.

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