Franchising across Canada

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Courtney Symons
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Moving boxes entrepreneur eyes cross-country expansion

As a 10-year veteran of the moving industry, Jamie Kingsbury realized how difficult it was becoming to find moving boxes. Restaurants and stores such as the LCBO that used to hand them out for free now recycle them for money, and Mr. Kingsbury’s clients didn’t know where to turn.

Jamie Kingsbury, founder of Movingboxes.ca.

That’s why in 2005 he founded Movingboxes.ca, a website telling individuals on the move what supplies they need based on the size of their home that also ships those supplies right to their door.

The eco-friendly cardboard boxes are better for the environment than plastic and belong to the user upon shipment.

After initial success in Ottawa, the company decided to expand its shipping boundaries to Toronto, Montreal and everything in between. Very shortly after, Mr. Kingsbury discovered that both cities were generating higher volumes of business than Ottawa, but the shipping costs were cutting into profit margins.

The solution? Franchise the company across the country.

“(The business) has been proven solid for the past five years in Ottawa,” Mr. Kingsbury said. “We have the numbers to back it up right now.”

Expansion plans include franchises in Toronto, Calgary and Vancouver in 2013, with the hopes of spreading into the United States within the next two to five years.

OBJ asked two franchising experts to examine Movingboxes.ca’s business model and share their thoughts on how to grow the business. Here are their edited responses:

 

EARN PROVINCIAL FRANCHISING LAWS

Harry Gregoropoulos, partner at Low Murchison Radnoff LLP, specializing in franchise law

There is franchise legislation in Ontario, Manitoba, P.E.I., Alberta and New Brunswick. Primarily, what the legislation does is regulate the relationship between the franchisor and franchisee.

There are certain disclosure requirements provided in various provinces. It’s typically very similar between provinces, with some exceptions. The requirements are so great that if it’s not done (properly), then there are provisions under the legislation that can have the agreement rescinded. (The franchisees) can seek damages. It’s very critical that it’s done right.

Typically what you would find (in disclosure requirements) include financial statements, copies of all proposed franchise agreements and collateral documents.

For provinces without franchising legislation, there’s less risk. There’s no real disclosure requirements.

The other thing we would want to look at is … Movingboxes.ca could grant a licence to a company in Alberta, and the company in Alberta would have a certain number of years to open a number of locations in the province and certain requirements to fulfil. In return for a fee, they would manage and operate the franchise. They would be the franchisor, so to speak, under licence in the province of Alberta.

 

BUILD A BOARD OF ADVISERS

Jonathan Martin, vice-president of franchise development at Retire-At-Home Services (an Ottawa-based senior’s home-care business with 24 franchised locations across Canada)

What they need to do is look at franchising as a completely different business than selling and shipping boxes. You’re no longer in the business of selling boxes – you’re in the business of selling and supporting franchises.

We built a board of advisers to guide and shape our franchise. We looked at what we called “knowledge centres” that we needed to tap into … In our case, seniors in health care, human resources and franchising itself. We send out a report to them and they meet with us quarterly. We pay them a little bit, but for the most part these are people that have a desire to give back.

(Movingboxes.ca franchisors) have to think, how often are they going to get out to Vancouver to visit? How often will they support them with phone calls (about) development challenges, inventory challenges? What are the issues you’re going to be facing, and how do you find the budget and time to take care of it?

At the end of the day, if your franchisees aren’t successful, you won’t be successful. You need to spend time and energy on your support. You should roll out a separate team that just focuses on that, and it might be hard to do that with $250,000 in revenues (Movingboxes.ca’s forecast for 2012).

Looking for expert advice on taking your business to the next level? E-mail editor@obj.ca and tell us your story.

Organizations: Low Murchison Radnoff, Home Services

Geographic location: Ottawa, Canada, Toronto Alberta Vancouver Montreal Calgary United States Ontario Manitoba New Brunswick

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