Franchising in Canada

The Canadian Franchise sector is now the 12th largest segment of the Canadian economy, and is on track to reach $100 billion this year. In its 2019 report, the Canadian Franchise Association (“CFA”) has provided an economic forecast of the franchise sector in Canada.

Outlined below are several key takeaways from the CFA report:

  • Franchising across Canada is estimated to grow by 2.59% or $2.5 billion in 2019, increasing the total franchise-related GDP contribution to $100.63 billion.
  • The direct GDP of Canadian franchises for 2019 is estimated at $67.2 billion or 67% of the estimated total franchise-related GDP.
  • In 2019, the franchise sector is expected to employ 1.9 million Canadians, representing an increase of 11,000 net new jobs (over 2018), 8,700 of which will be directly hired by franchise systems.
  • Unsurprisingly, Ontario is estimated to continue supporting the largest number of franchised establishments in Canada, with upwards of 264 new establishments predicted for 2019.
  • British Columbia is predicted to experience the highest percentage growth in franchised establishments, with an increase of 1.16%.
  • Across Canada, 597 net new franchised establishments are expected to be added during 2019.
  • The accommodation services sector is expected to outperform others in 2019, with a franchise-related GDP increase of $163 million, representing growth of 3.77% (over 2018). Other sectors anticipated to grow are food services (386 million increase, representing 3.65%), retail (296 million increase, representing 2.66%), and commercial and residential services (350 million increase, representing 2.64%). Franchise systems operating in the health and fitness sector are also experiencing tremendous growth.
  • The number of franchise units in Canada by the end of 2019 is estimated to be over 76,000, representing almost 1,200 brands.
    According to the report, Canada continues to experience a period of sustained and rapid growth in the franchising sector. This bodes well for new market entrants and those who wish to invest in, or acquire existing, franchise systems in Canada.

Download the Franchise Forecast 2019: Canadian Franchise Industry Economic Outlook prepared by the Canadian Franchise Association

To receive further information or resources on franchising in Canada, please email me. Stay tuned for our next post in the Franchising in Canada series.

This post is published to inform clients and contacts of important developments in the field of franchise and distribution law. The content is informational only and does not constitute legal or professional advice. We encourage you to consult a McMillan lawyer if you have specific questions or concerns relating to any of the topics covered here.