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Franchising: Canada v USA

Franchising: Canada v USA

Vancouver-based Angel Coté demystifies the cultural differences between Canada and the U.S and asks, “Are we really that different?”

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In preparation for sharing my insights into the perceived cultural differences between Canadians and Americans, I decided to a little research. I asked around to a few handfuls of my closest American friends and peers in the franchise community and I kept hearing “I really don’t think Canadians are that different” and the most common response was “Canadians are just nicer”. I think that’s a compliment, but when it comes to doing business, is it really a good thing?

As a franchise growth catalyst who works with franchisors all across North America, I mostly agree that we’re not really that different, but I have to admit, I wasn’t exactly sure what people meant when they said we are “nicer”.

When I dug a little deeper, it seems that in general, Americans see Canadians as more polite, a little more others-centered, and more willing to help others out (pronounced “oot” - our American neighbors who love to laugh at how we say “out” for some reason). On that note, I would be remiss not to mention how much I get a kick out of Americans trying to properly make use of a very important word in the Canadian dictionary, “eh”. Contact me for free lessons.

Regardless of who’s nicer and who correctly pronounces the word “out”, it is probably worthwhile to dig even further on the cultural differences between how Canadians and Americans do business so we can optimize and leverage our relationships and opportunities. For the most part, we perceive Americans as a little more…(um) assertive and self-assured than their polite and slightly more cautious Canadian counterparts.

According to John deHart, a well-respected co-founder of Nurse Next Door and Live Well Exercise Clinics with franchises in both countries, “the adage of ‘Americans are more aggressive than Canadians’ is certainly true when it comes to business on a whole. And I see this in our competition, in our franchisees, and our partners. They are more aggressive when it comes to sales, they are much more likely to go all out to dominate a market. They can also be much more cutthroat in how they do business. There can be a certain “edge ” to the American style versus what we have up here in our polite and ‘everyone wins’ Canada.”

That being said, differences probably come down to being more regional in nature within each country than they are dependent on what side of the 49th parallel you are on. In Canada, the culture varies significantly from Toronto to Halifax, just as it does from Columbus, Ohio to New York City. Travelers might find the Midwest “friendly people” in certain parts of the US to be warmer and more approachable than the polite Canadians they find in a big Canadian city like Toronto.

On that note, Justin Livingston, VP of Global Development for Coyote Ugly Saloons and One Cannabis Franchise Systems, highly recommends taking the time to get to know each individual market and learn the buying habits of consumers as well as the differences in business and franchise law. From there, you can make a strategic and intentional entry to optimize the opportunity for success.

Dan Monaghan, founder of the Clear Summit Group who owns 5 franchise brands with over 1000 franchisees across the globe, shared his thoughts that “The biggest threat might be found in the competitive landscape of the two countries. While the great advantage of the US is the magnitude and potential of the market, in general, conditions are more competitive”. For a Canadian company, opening a corporate location in the US market that is in a market you intend to target is a great way to test how your unit economics will fare south of the border. It’s also a great way to work out some of the kinks in your system and calibrate your business model so that you are prepared to scale quickly when the time is right.

Another interesting observation came forth when I was in a conversation with my franchisor client, David Cutillo, CEO of BeBalanced Hormone Weight Loss Centers, whose mandate is to help women across the US reduce stress, sleep better and lose unwanted weight by helping them balance their hormones with a proven natural approach. David commented that Americans’ stress levels are at an all-time high and that Americans perceive Canadians to have more of a culture of stopping to enjoy life, a little more like what you would expect in Europe.

And keep in mind that while Americans reap the benefits of cross border brand awareness, it doesn’t always work the other way around. What I mean by this, is that probably mostly through media, we Canadians often get exposed to American concepts, so by the time a US franchise enters Canada, there’s a good chance there has already been some brand awareness built up. When a Canadian franchise enters the US, we are often starting more from scratch.

In light of the themes of politeness, market size, respecting market differences and a culture that is a little more ‘chill’, here are six key cultural differences you should know about when doing business with our American neighbors, based on my experience and conversations with various business and franchising peers.

1. Have a Plan vs Just Do It
When doing business in the U.S., hold on to your hats, fellow Canadians! Americans in business are action-oriented. They typically have more tolerance for risk-taking, enabling them to make decisions more quickly. That means that in general, things move a lot faster and require a firm eye on your ethics to keep up.

2. Open for Business
Along with a higher tolerance for risk-taking, Americans are generally more open-minded and accepting of change. They are more willing to spend money on third-party services, like consultants with industry expertise, probably because they are more tolerant risk-takers. However, make sure you get it right because they have high expectations of what they get in return, which leads to my next point.

3. Fail Quickly
Given that Americans typically have a gutsier attitude about risk-taking than us Canadians, you may be able to predict that they also have a greater acceptance of failure and they understand that in order to progress, you often need to fail a few times. Instead of seeing failure as a negative, Americans look at failure as an opportunity to learn. Their attitude is closer to: Try it. Did it work? No? Okay, let’s move on and try something else.

4. Watch Your Back!
Americans are much more litigious than we “nice” Canadians. I’m not sure if it’s because they’ve been burned by too much hot coffee or slipped on too many wet floors, but regardless it is a key difference, especially when it comes to franchising. Canadian franchisors often overlook the significance of this in terms of time, money and overall resources when entering the U.S. market. And it doesn’t stop there. An American unsatisfied franchisee is more likely to take the litigation route than Canadian franchisees when things go awry.

5. Circle of Trust
Once you “get it right” and have proven yourself, you may well have made an American friend for life! Americans are keen on building relationships in business with people that they trust. It can actually prove to be a challenge when it comes to building a referral network. I have met many franchise vendors who already have their go-to people they refer clients to. It takes a lot of effort and relationship nurturing to really get on their radar, but it is worth it because once you do, the referral opportunities are gold.

6. You Never Get a Second Chance to Make a First Impression
According to a local business friend of mine, David Johnson, founder of an innovative technology company called Ecofit, which helps gym owners and managers stay on top of gym equipment repairs, “With Americans, there are no second chances. If you misstep, they will move on to your competition.” Americans may have a higher tolerance for risk-taking and more open minds about investing in services, but they will be less forgiving if you steer them astray.

Overall, the similarities are more apparent than the differences. The cultural vibe in both countries is one of collaboration and fun, and the business exchanges are similar to those I experience here in Canada. However, as a key trading partner with the U.S., it is important to be aware of and respect the differences in the business culture in pursuit of optimizing market opportunity.

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Angela Coté is a franchise growth catalyst at Cultivate Advisors. Angela guides early and established franchisors on where to invest their time, money and energy to make the biggest impact. She also helps franchisors improve franchisee relations and ultimately performance and facilitates impactful collaborative sessions to elevate franchise satisfaction.

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