Franchising has long been a part of the fabric of Canadian business, with its roots going back to the 1930s. Canadian Tire started one of the first franchising opportunities back in 1934.1 By 1967, franchisors recognized the need for an association, and the Canadian Franchise Association was formed.2 Today, that association has more than 600 corporate members offering franchising opportunities for franchisors and franchisees across the country. Franchising offers established and new entrepreneurs a way to join or expand a successful business model, and we have to look no further than our own backyard to see how it’s working here in Saskatchewan.
Stu Rathwell, founder and co-owner at Rock Creek Franchises Inc., began the foray into franchising Rock Creek Tap & Grill in 2011. “We opened our first location in Regina’s east end in 2006, and five years later we opted for a franchise to expand into Saskatoon in July 2011,” says Rathwell. “We took a cautious approach when we moved toward the franchising model.” Rathwell and the Rock Creek management team were approached to franchise their brand, and had to build their system from the ground up. They had to ensure that the Rock Creek dining experience could be replicated from every angle—from the menu to the service and everything in between. “Our concern was ensuring that we could take what we had successfully achieved in the Regina market and duplicate it in another location,” says Rathwell. “And, we had to make sure that not only would the opening go well, but that the new restaurant could maintain what we had created originally.”
It would take 14 months from start to finish to build to the first franchise location in Saskatoon. The company now has eight locations in Saskatchewan and Alberta, with the most recent in the new Mosaic Stadium. They have also started a new restaurant brand, RockWood Urban Grill, with its first location opening in Winnipeg last October. Their expansion over the past six years has been impressive through Rock Creek’s careful planning. “Three years ago, we contemplated a move into the Calgary market,” says Rathwell. “While we could have proceeded with an interested group, we realized it was not the right time for economic reasons. While some franchisors would have pushed ahead anyway, we decided it would not be good for our brand. It’s just not in us to set up when the possibility of failure is very real.”
Rathwell has advice for entrepreneurs considering expanding their business through franchising. First, it’s critical to have your business systems in place and working well. “Your business has to be firing on all cylinders,” says Rathwell. “Your menu, your training procedures, your staff guidelines, your operational tools —everything needs to be ready for your franchisee to pick up and run with.” In addition, the franchisee needs to understand exactly what they are taking on. The level of dedication required to running a business—especially in the hospitality industry—is staggering. “We’re not fans of ‘arms-length’ ownership. We believe franchises are more successful with an owner-operator because of the hands-on management required,” says Rathwell. “Anyone buying your franchise should be well aware that being an entrepreneur is not an 8 to 5, Monday to Friday job.” Lastly, Rathwell advises that franchisors maintain an open-door policy for franchisees. “We encourage all of our franchisees to come to us about any concerns or ideas they have about the business,” says Rathwell. “We all do better working together.”
Darcy Furber is on the other side of the franchising coin. He owns Regina’s Cora Breakfast and Lunch location in the city’s Harbour Landing neighbourhood. Furber was looking for a business opportunity after leaving politics and explored many options before settling on a Cora franchise. “I explored a few different businesses, including a local gravel company, an A&W franchise and I even applied to Fuddruckers,” says Furber. “I was looking for something that I could own and operate myself because I wasn’t interested in being in a consortium.” Furber was approved by Fuddruckers, but stopped the process because he wasn’t prepared to take on five locations as was the requirement at the time. “Building five locations was too much for me, and I decided to pass. I had happened upon a Cora in Calgary during my search, was impressed with what I saw, and I called them the next day,” says Furber.
As luck would have it, Cora was looking to grow into Regina. It took about 14 months from the first call until the opening day in Regina. “The longest part of the process was finding the right location,” says Furber. “We found it in Grasslands.” Furber echoes the same advice as Stu Rathwell about hands-on management and knowing what the day-to-day operation of a business takes. He went without a day off for seven months after opening Cora because to him, there is no substitute for having an owner on-site. “I won’t lie about the workload. It’s a serious grind,” says Furber. “Plus, you have to want to manage people. And, you have to manage people well, especially in the hospitality industry.” Creating a positive, welcoming workplace culture is critical for success in the restaurant business. “Hospitality staff are often transient, and they’re young. To keep your restaurant running well, you need well-trained staff that are happy to be there for as long as you have them,” says Furber.
Furber also advises to do your homework before getting into a franchise. You should start with the financials first, knowing exactly what your initial investment will be, plus ongoing franchise fees and the percentage of revenue that goes back to the franchisor. “I tell everyone to talk to other franchisees. Check the references that are provided by the franchisor,” says Furber. “By talking to people already in the business, you will learn a lot about the opportunity and whether or not it’s for you.”
Even though getting Cora open in Regina was a long haul with little time off, Furber is happy with the decision to proceed. He is finalizing the plans for a second location in Regina, and a third won’t be far behind. “The great thing about franchising is that you get to take part in a successful business model that someone else built,” says Furber. “If you choose well, find the right location, and are realistic about your workload, a franchise can be a great way to make your mark in business.”
Lisa MacMurchy contemplates franchising as she grows Brewed Awakening, a Regina-based chain of coffee shops. So far, the company’s growth has been through corporate owned stores but franchising the Brewed Awakening brand is a possibility on the horizon. Brewed Awakening got its start with its first location on Regina’s Woodhams Drive. “We recognized the need for a coffee shop in the area, and we put a spin on what coffee shops have traditionally offered,” says MacMurchy. “We focused our menu on many healthy options, including vegan and gluten free that are prepared in our own kitchen.”
The Brewed Awakening brand took off, and their first expansion came to them from a new hotel being built in Regina’s Harbour Landing. “The hotel approached us, and it was a great way for us to test our growth in a new marketplace,” says MacMurchy. That expansion was successful and has led to several new locations including at Campion College on the University of Regina campus, and the purchase of what Lisa calls the “mother ship.” “We bought the former Orange Boot Bakery in Regina’s south end, and that location prepares all the food we serve at our locations across the city,” says MacMurchy. “That move ensures customers receive the same quality food no matter what Brewed Awakening they visit, and allows us to cater as well.”
At the moment, Brewed Awakening’s growth has happened one store at a time—all owned by MacMurchy, her husband Ken MacMurchy, Stephen McIntosh and Chef Linda Little. “Right now, we’re local to Regina and our model works well here,” says MacMurchy. “However, we have been approached to expand to Saskatoon and Swift Current and even outside the province.” While MacMurchy would love to take the Brewed Awakening experience wherever the market opportunity exists, she is like Stu Rathwell—determined to make sure expansion is cautious and very well-planned. “It’s all down to the right fit, and being able to lift out our model elsewhere successfully,” she adds.
MacMurchy shares the same opinions as Stu Rathwell and Darcy Furber about getting into or expanding a business, especially in the hospitality industry. “I can’t stress enough that you have to know what you’re taking on,” says MacMurchy. “It’s long hours, a significant investment and also, your family has to be on board.” To MacMurchy, starting and growing Brewed Awakening has been like raising a child. “It’s a 24 hour, 7 day a week commitment for years, just like having a baby,” says MacMurchy. “There are days where I wonder if I had to do it all over again, would I? And this comes from someone who had literally years of restaurant and marketing experience before getting into business.”
Despite the warnings about the commitments required for a business in hospitality, Rathwell, Furber and MacMurchy have all come out the other side as successful entrepreneurs doing what they love to do. Each have created a thriving venture in Saskatchewan and all are growing well despite some tougher economic times. It all came down to their ability to plan well, take careful risks and create businesses that others want to be a part of. “There are many, many opportunities in hospitality out there, or waiting to be created,” says Rathwell. “It’s just a matter of knowing whether you have the right stuff to make it work.”