Franchising in Canada: assessing the leadership team’s experience

A well-known brand is no guarantee that its leadership team can support its growth. Before joining a franchise network in Canada, examine the experience of the people making the decisions. The aim is not to collect impressive biographies, but to check whether the skills claimed match the actual needs of the network and your future business.

1. Identify who really makes the decisions

The founder often features prominently in the sales pitch. Yet they do not necessarily oversee day-to-day operations. Your checks should distinguish between the public face of the brand, its owners and its operational managers.

Ask for an up-to-date organisational chart, then identify who leads operations, finance, development and franchisee relations. Also establish who can authorise an exception or resolve a problem beyond your usual contact’s authority.

For each key role, note:

• the person’s name and how long they have been with the network;
• their current responsibilities and decision-making authority;
• their directly relevant experience;
• whether the function is handled in-house or outsourced;
• who covers for them in their absence.

A small team is not necessarily a poor choice. However, an organisation where one person makes all the decisions warrants questions about continuity. In particular, ask what would happen if that person left the company while you were opening your business.

2. Distinguish relevant experience from an impressive CV

Building a brand, running a business and leading a franchise network are different kinds of experience. Success with company-owned outlets does not, on its own, demonstrate an ability to work with independent business owners.

Assess people’s backgrounds against the challenges the brand is asking you to take on. If it plans to expand rapidly, look for experience in managing growth sustainably. If it is entering a new province, ask who understands the local requirements and how that knowledge informs decisions.

Prepare specific questions rather than simply asking whether the team is ‘experienced’:

• What exactly was your role in your previous network?
• Which decisions could you make personally?
• Have you managed outlets comparable to the model being offered?
• What mistake during expansion led you to change your approach?
• How do you balance network growth with your capacity to support franchisees?

A useful answer explains the context, a decision and its consequences. An account based solely on the reputation of previous employers does not allow you to assess a leader’s actual contribution.

3. Cross-check the information against provincial requirements

In Canada, franchise-specific obligations are governed at provincial level. You therefore need to check the rules that apply to your proposed business rather than assume that one framework covers the whole country.

In Alberta, the Franchises Act and its regulation govern pre-contractual disclosure. Among other things, the disclosure document must name the people responsible for the day-to-day management of the franchise and state how long the franchisor has operated a business of the type being offered. It must also contain material facts relating to the franchise.

Subject to applicable exemptions, this document must be provided at least 14 days before you sign an agreement relating to the franchise or make a payment connected with it, whichever happens first. Ask your lawyer to confirm how these rules apply.

This information is a starting point, not a certification of competence. Compare the names and roles disclosed with the organisational chart and presentations you have received. If someone described as essential is no longer in their role, ask for clarification and have the significance of that discrepancy assessed.

In Quebec, there is no specific legislation imposing a general franchise disclosure regime. The general provisions of the Civil Code of Québec, particularly those concerning good faith and consent, apply. Nevertheless, request the information you need for these checks, without assuming that you are automatically entitled to a document identical to one required elsewhere.

4. Turn your findings into a buying decision

Bring your findings together in a table: role, stated experience, supporting evidence and unresolved question. Cross-check career histories against professional biographies, appointment announcements and, where possible, references obtained with permission.

Do not turn a lack of information into an accusation. Ask for an explanation. A recent appointment may strengthen the team; several departures in quick succession may, however, justify a closer look at management continuity.

Before committing, distinguish between satisfactory answers, points that still need clarification and uncertainties you are unwilling to accept. Ask your lawyer to review significant discrepancies and your business adviser to assess their operational implications.

Key takeaway: buy into a business model backed by an identifiable team. Before signing, make sure you know who makes the decisions, what experience they draw on and how the network would operate without them.