Canada Franchising Market

Franchising is the 12th largest industry in Canada and the sector ranks fifth in the world in terms of attractiveness according to the Rosenberg International Franchise Center. The sector contributed US$85.9 billion to the Canada’s GDP and US$21.47 billion in the federal and provincial tax take in 2024. Roughly 65% of all operating franchise units are in Ontario and the province dominates the franchise economy. There is also space for expansion in the Prairies, Atlantic, and West Coast areas. According to the Canadian Franchise Association, British Columbia is predicted to experience the biggest growth, with the number of franchise locations increasing by 1.16% whereas Atlantic Canada is expected to grow more slowly than the rest of Canada at 0.46%.

The hospitality industry is the largest sector within Canada’s franchising landscape, accounting for nearly 40% of all franchised brand names. The wellness industry is experiencing significant growth as well. In 2023, 70% of Canadians reported increased health consciousness, a notable rise from 56% in 2021. These trends underscore the dynamic nature of Canada’s franchising sector, with hospitality maintaining a strong foothold and wellness emerging as a rapidly expanding market. There is also demand for supplemental education franchises particularly in STEM programs, as they equip children with essential skills for a technology-driven future. Simultaneously, franchises offering services like digital marketing, IT support, business coaching, senior care, and home/office renovations are also expanding due to their lower overhead costs and the increasing demand for specialized services.

Due to federal and provincial legislation, franchise law in Canada differs from that in the United States. There are different corporate tax rates depending on the sector and type of corporation. However, there are a number of financial support tools available to burgeoning entrepreneurs. Canadian financial institutions have developed specialized capital and lending programs tailored to the unique needs of franchisees. These programs provide essential financial resources, enabling entrepreneurs to start, expand, or enhance their franchise operations. Additionally, the Canadian Small Business Financing Program (CSBFP) further expands lending opportunities by sharing risk with banks, allowing total borrowing up to US$823,338.50. These programs align with growing entrepreneurial interest among millennials, with the Canadian Franchise Association reporting that 30% of millennials express interest in franchise investments. 

For more information about opportunities for U.S. companies in the franchising industry in Canada, and how the U.S. Commercial Service in Canada assists U.S. franchisors, visit www.trade.gov/canada.

For further information, contact Commercial Specialist Abedin Kader