How to buy a franchise in Canada — a step-by-step guide

Buying a franchise in Canada is one of the most popular paths to business ownership — but the process is more involved than most first-time buyers expect. Beyond choosing a brand, you'll need to qualify with the franchisor, secure financing, find the right site, negotiate a commercial lease, and complete training before opening day. This guide walks you through what to expect at each step.

Step 1: Decide what kind of franchise fits you

Start with honest self-assessment. Do you want a full-service restaurant where you'll be on-site every day, or a service business where you can grow a team and step back? Are you willing to put in $100,000 of capital, or $1,500,000? Your answer narrows the list of brands you should be looking at.

Industry verticals to consider: quick-service restaurants (QSR), coffee shops, fitness and wellness, retail, automotive services, home services, child education, senior care. Each has different working capital requirements, operating hours, and labour profiles.

Step 2: Research brands and request information

Once you've narrowed your industry, look at 3–5 brands within it. Visit their corporate websites, look at units in your area, and submit a request for information form. The franchisor will respond with introductory materials and may schedule a discovery call.

Don't skip this stage — talking to existing franchisees in the brand will give you a more honest picture than the franchisor's marketing materials.

Step 3: Review the Franchise Disclosure Document (FDD)

In Canada, most provinces (Ontario, Alberta, PEI, New Brunswick, Manitoba, BC) require franchisors to provide an FDD before signing. The FDD covers fees, the franchise system, litigation history, financial statements, and the franchise agreement itself.

Read it slowly — and ideally with a franchise lawyer. The disclosure period is at least 14 days in most provinces; use the time.

Step 4: Secure financing

Most franchise buyers finance 50–70% of the total investment. The major sources in Canada:

• Major banks — RBC, BMO, TD, Scotiabank, and CIBC all have dedicated franchise lending programs for established brands.
• BDC (Business Development Bank of Canada) — government-backed lending for franchise purchases, including in industries banks find harder to underwrite.
• Canada Small Business Financing Program (CSBFP) — covers up to $1,000,000 of build-out, equipment, and leasehold improvements with a federal guarantee.
• Vendor financing or franchisor financing — some brands offer in-house loans or deferred franchise fees.

Step 5: Site selection and lease negotiation

Site selection is where many franchise deals win or lose. The wrong location can sink a strong brand; the right location can lift a mediocre one. Some franchisors choose sites for you (Tim Hortons, McDonald's); others give you guidelines and you find your own (Mary Brown's, Pita Pit).

If you're choosing your own site, work with a commercial real estate broker who has franchise experience. The lease itself is a long-term commitment (often 10 years) with rent escalations, percentage rent clauses, and CAM (Common Area Maintenance) charges that can dramatically affect your operating costs.

Step 6: Build-out, training, and grand opening

Once your lease is signed and financing is in place, you'll move into the build-out phase — typically 3–6 months for a restaurant. During this time you'll attend franchisor training (often 4–8 weeks). After build-out is complete and you've passed franchisor inspections, you're ready for grand opening.

How long does the whole process take?

From initial brand research to grand opening, plan for 9–18 months. Resales of existing units can close faster — sometimes in 90–120 days from offer to handover.

What to do next

If you're early in the process, start by talking to a franchise specialist who can help you compare brands objectively. Summit REALTORS work with both buyers and franchisors across Canada and can save you months of trial and error.