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Can I Open a Franchise in Canada if the Operation is Based Overseas?
Posted on November 10, 2010 by My Franchise Law

If you are considering opening new units of your overseas-based franchise in Canada, there are several steps you will need to take to get started. Here is a rundown of the basic plan of action:

  1. Get registered: The first thing you will need to do is register all of your existing trademarks with the Canadian Intellectual Property Office.  This will protect your business identity from being compromised by outside parties. You will have to fill out the application and send it in by mail, along with the required fees (which are several hundred Canadian dollars). The process should only take a few weeks, and then you will be ready for the next step.
  2. Create a base: You may wish to have a base location in Canada, out of which you will manage your local business dealings, but this is not entirely necessary. Canadian law does allow for franchises to be operated from overseas locations, so figure out if you will benefit from having a local base, or if you can properly run your organization from outside the country.
  3.  Write up your master franchise agreement: Consult with an experienced franchise lawyer and have them assist you in creating the franchise agreement you will present to future investors. The franchise agreement needs to clearly spell out the rights and responsibilities of both parties involved, and include confidentiality verbiage that will protect any trade secrets or other franchise information from being divulged without your consent.
  4. Find franchisees: Your next step is to seek out potential franchise investors who will successfully promote your product or service in the Canadian market. You may wish to hire a franchise consultant to help you locate potential matches for your organization, and you can also contact the Canadian Franchise Association to get your company listed as a potential investment opportunity.
  5. Sign the contract: Once you have found an investor you are willing to work with, sign the legal contracts necessary to formalize your business partnership.  You will want to be familiar with the provincial disclosure regulations of your particular territory to ensure that you meet all the requirements before moving forward.  Once these items have been identified and addressed, your franchise lawyer can negotiate the best contract for both you and your investor.

External Resources

Small Business Administration

A government resource for finding information on planning, mentoring, and strategies for franchises and small businesses.
SBA Small Business Planner Business Gateway

Resources for every step in planning your business or non-profit, from getting your EIN to handling wages. Business Gateway

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