Some businesspeople will tell you it’s always better to go state-side if you can. Others, however – especially if you’re looking to import a single franchise of a relatively obscure company – aren’t so sure.
Take the case of David Peate (photo). He owns and operates a franchise location of Cuts Fitness for Men in Gloucester, part of a chain of men-only fitness centres based in New Jersey. It’s been around a year since he 1st brought the franchise north. Since then, he’s noticed a slew of issues surrounding the company’s U.S.-centric approach. His was the 1st Cuts Franchise in Canada and, at present, still the only one in Ontario. ‘They’re return is kind of low (in Canada), so they’re going to focus on places where the return is higher,’ Mr. Peate says of the franchisor. Each state and province has separate legislation concerning franchising operating rules, and locations have to be tailored to each.
‘They take their model of New Jersey, and replace New Jersey with Texas, and 98% of their legalities are still there,’ he says. ‘To do it to Canada, they’ve got to do about 5 times as much effort, so it’s lower on their priority’ That’s despite the fact that in December 2004 Cuts announced it was expanding into Ontario with 40 franchises in 3 years, facilitated by Burnett Management as the master franchisor. But things didn’t pan out as planned…
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