Franchising in Canada: An Accessible Pathway for Foreign Entrepreneurs
START UPS ENTREPRENEURS & INVESTORS
5/7/20254 min read
Canada has become one of the most attractive destinations for entrepreneurs from around the world. Its strong economy, multicultural environment, and business-friendly policies make the country fertile ground for investment. Among the different options available, the franchise model stands out as a structured and lower-risk pathway with high potential for success for foreign entrepreneurs.
But is it possible to immigrate to Canada through a franchise?
The short answer is yes - with some nuances. While there is no immigration program dedicated exclusively to franchising, foreigners can settle in Canada and obtain permanent residency through various business immigration programs, as long as they meet certain requirements.
Entrepreneurship as a way to immigrate.
Canada offers a variety of provincial and federal programs that make immigration easier for those who wish to start or acquire a business in the country. Through these channels, entrepreneurs can establish a franchise as an investment vehicle, as long as they demonstrate business experience, financial capacity and a viable business plan.
1. Québec Entrepreneur Program (QEP)
This provincial program allows individuals with entrepreneurial experience to establish themselves in Québec as business owners. They can choose to start a new business or buy an existing one, such as a franchise.
Key points of the QEP:
Experience as an entrepreneur or manager is required.
A detailed business plan needs to be submitted.
Minimal investment and, in some cases, local job creation is required.
It is an excellent option for those who want to start a business in a French-speaking province with a growing business ecosystem.
2. Federal Programs for entrepreneurs
At the federal level, programs such as the Skilled Worker program (through the Express Entry system) can be an alternative for entrepreneurs with experience in administrative or commercial areas related to franchising. Although these programs are not specifically designed for entrepreneurs, they can be useful for those with managerial skills with a good score in the selection system (experience and languages).
3. Start-Up Visa Program
This program is aimed at innovative and technological companies with growth potential at a global level. Although it is not the most common path for traditional franchises, it could be an option if the franchise project has a disruptive or technological focus.
How can you apply as an immigrant entrepreneur?
Incorporating the business is only the first step—these additional elements are also critical for a business immigration application:
But... why a franchise?
The franchise model offers many advantages for immigrants:
Proven business: the model is already established and supported by a recognized brand.
Ongoing support: the franchisor provides training, operational support, and marketing strategies.
Risk reduction: lower margin of error compared to an independent business.
Differences in incorporing a franchise in Québec and the rest of Canada
Before operating a franchise in Canada or Québec, it is necessary to legally incorporate the company and comply with a series of administrative, tax and commercial requirements. Below are the steps to be taken into account and specific by jurisdiction.
A. Incorporation of a franchise at the Federal Level (Canada)
Incorporating a company at the federal level allows you to operate throughout the Canadian territory under the same name. This can be useful if the franchisee has plans to expand beyond a single province.
Key steps:
Choose a legal structure: The most common is a limited liability corporation, however there are other legal forms.
Search and register the business name.
Register the company with Corporations Canada.
Obtain a Company Number (BN): For tax purposes and tax registrations with the CRA (Canada Revenue Agency).
Register for GST/HST: Required if income exceeds $30,000 CAD annually.
Sign the franchise agreement: This contract sets out the rights and obligations to the franchisor.
Get the local licenses and permits: Depending on the type of business (food, health, education, etc.).
B. Incorporation in Québec
If the franchise is to be established only in Québec, it is recommended to do the provincial incorporation through the Registraire des entreprises du Québec (REQ).
Key steps:
Choose the type of company - Generally, a Société Par Actions (SPA) is recommended.
Name registration - it is required by law that the business name have a French version.
Incorporate with the Registre des Entreprises du Québec (REQ).
Obtain a NEQ (Numéro d'entreprise du Québec) - that is the legal identifier of the company in Québec.
Register for TPS/TVQ (GST/QST) to collect the federal and provincial sales tax.
Municipal and industry-specific permits: Particularly important for businesses in regulated food or service sectors.
Compliance with the Franchise Law - although Québec does not have a specific law on franchising, it is important that the agreement is clear, translated into French, and complies with the Québec Civil Code.
How to start your franchise, step by step:
Step 1 – Create a Business Plan
Develop a detailed business plan aligned with the selected franchise model.
Include financial projections, management structure, operational strategy, and job creation potential.
Highlight how the franchise will benefit the Canadian economy.
Step 2 – Research the franchise opportunity
Identify and evaluate potential franchise brands operating in Canada.
Ensure the franchise is registered and recognized under Canadian franchise laws.
Assess compatibility with your experience, goals, and investment capacity.
Step 3 – Obtain the Franchise Disclosure Document (FDD) and Perform Due Diligence
Request the Franchise Disclosure Package from the franchisor, as legally required.
Review financials, litigation history, fees, territorial rights, and franchisor obligations.
Consult with a lawyer or franchise consultant to validate all details before proceeding.
Step 4 – Sign the franchise agreement
Finalize and sign the agreement once due diligence is complete.
Ensure compliance with provincial franchise regulations (e.g., in Ontario, Québec, etc.).
Step 5 – Apply for the Relevant Immigration Program
Use a program like Owner-Operator LMIA, Start-up Visa, or Provincial Nominee Program (PNP) if applicable.
Submit the business plan and signed franchise agreement as supporting documents.
Apply for a work permit or permanent residence, depending on the chosen pathway.
At Wexcan, we offer expert advice to find the best immigration pathway according to your profile. Our team works with business specialists who will accompany you, and help you choose the best investment option.
🔍References
Registre des Entreprises du Québec
Canadian Franchise Association
None of our posts on this blog constitute legal advice. For legal advice, we invite you to schedule a meeting here.
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