While sharing many similarities, it would be remiss for American franchisors to expect that their concept will be quickly and easily replicated and adopted in Canada
For American franchisors, international franchising is a tactical way to build and develop our brands around the world. Operating outside of the U.S. not only allows brands to expand their products and services to consumers across the globe, but it helps create additional profit outside of their home market. When franchisors based in the U.S. make the strategic decision to begin franchising internationally, the most common country to begin those efforts in is Canada due to obvious similarities between the two countries in terms of geography and language.
While Gold’s Gym began in 1965 with the opening of our iconic location in Venice Beach, California, it wasn’t until 1980 that we began our international franchising efforts. Naturally, we started in Canada, at first assuming we’d find success by simply replicating exactly what we’d mastered in the U.S.
We quickly learned through this first attempt at international expansion that the Canadian consumer is not just a carbon copy of the American consumer, as there were in fact cultural differences beyond the surface-level commonalities. We had to build from the ground up, starting with a clean slate instead of just making Canada an extension of our proven U.S. system.
“We quickly learned through this first attempt at international expansion that the Canadian consumer is not just a carbon copy of the American consumer”
If your brand is considering expanding its franchise presence into Canada, be sure to keep in mind the following tips to help ensure a smooth transition that will lead to future international success:
Recognize and respect cultural differences
Despite the obvious similarities between Canada and the U.S., you must be careful not to oversimplify these parallels. Canadian consumers do not want U.S. brands to take their business and loyalty for granted, so it’s important for you as the franchisor to respect Canadian culture just like you would for any other country.
In Gold’s Gym’s case, we came into Canada wanting to maintain a uniform system as much as possible, but we soon realized it would compromise the success of our business in the country had we been unwilling to adjust to its different cultural norms. For instance, we found over time that our Canadian consumers desired more flexibility than what our standard big box model offered. To accommodate this regional trend, we developed a smaller concept within the big box model that is open 24 hours a day. The risk of straying from what we knew best paid off, as we now have two of these facilities operating in Canada where they’re a bit hit with members still to this day.
Partner with people who know the country
When Gold’s Gym first expanded into Canada, we would have been totally lost were it not for our franchisees there who helped us realize that British Columbia is different from Calgary which is different from Montreal and so on. They taught us about how Gold’s Gym Calgary members prefer heavy strength training, whereas our members in British Columbia prefer a wide variety of training areas for a membership that reflects more fitness-style diversity.
Getting the “inside scoop” from our franchisees with local knowledge really informed our Canadian development decisions, as we otherwise would have never known the demands of each Canadian province. This reinforces that Canada is no exception to the fact that cultural differences go beyond one country to the next, but even extend to individual regions and communities.
Understand the law
Of course, having the right people on your team will be pointless if your brand won’t be conducive to Canada’s legal environment. Just as geographic proximity does not guarantee cultural uniformity, the same can be said for government regulations.
The franchise disclosure document (FDD) is one of the most important legal documents in franchising. Both the U.S. and Canada require a franchisor to have an FDD in place, but Canada’s specific expectations for everything an FDD must address is not entirely the same as in the U.S. Because of this, you need to make sure to update your brand’s FDD in order to comply with Canadian law if you want to begin franchising in the country.
“We found over time that our Canadian consumers desired more flexibility than what our standard big box model offered”
Aside from making sure your brand’s FDD is compliant with Canadian law, you also need to make sure you’ll have the law’s protection when it comes to your intellectual property. Just because your brand is trademarked in the U.S., that does not mean it is in Canada. Your brand’s licensing team will need to look into taking the appropriate steps to ensure the integrity of your brand image can be maintained to the level you expect.
International expansion, whether it’s just north of the border or overseas, is not something to pursue without full and complete confidence in your brand’s ability to continue thriving in one country while simultaneously starting from square one in another. Canada should not be a simple reproduction of the system you have in the U.S., so keep these tips in mind when the time comes for your franchise brand to make its presence known in the “Great White North.”
THE AUTHOR
Craig Sherwood is chief development officer of Gold’s Gym
