Canadian Franchise Association - CFA National Convention

Attendees, exhibitors & solutions

Who this event is for

Industry trends

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Frequently asked

Glossary

1

Franchisor

The company that owns a franchise system, licenses its brand and business model, and supports franchisees under a franchise agreement.

2

Franchisee

An independent operator who buys the right to run a franchised business under the franchisor's brand, systems and standards.

3

Franchise Disclosure Document (FDD)

The pre-sale disclosure package required in many jurisdictions, setting out the franchise agreement, fees, territory, litigation history and financial performance information. In Canada, disclosure requirements vary by province; CFA members are expected to follow the association's code of ethics.

4

Franchise Agreement

The contract that sets out the franchisee's rights and obligations, including term, territory, fees, operating standards, renewal and exit provisions.

5

Initial franchise fee

The upfront fee paid to the franchisor for the right to join the system, usually covering initial training, site approval, manuals and launch support.

6

Royalty fee

An ongoing payment, often calculated as a percentage of gross sales, for the continued use of the brand and support systems.

7

Advertising fund contribution

A recurring payment into a pooled fund used for national or regional marketing, campaign production and brand promotion.

8

Territory

The geographic or market area assigned to a franchisee, sometimes protected and sometimes defined by population, radius or postal-code boundaries.

9

Master franchise

A licence giving a company the right to develop and sub-franchise a brand across a country, region or large territory.

10

Area development agreement

A contract granting the right and obligation to open a set number of units in a defined territory within a specified timeframe.

11

Multi-unit franchisee

A franchisee who owns and operates more than one unit, often across several brands or territories.

12

Unit franchise

A single franchised location or territory operated by a franchisee under the franchisor's system.

13

Discovery Day

A structured visit, usually at head office or a flagship location, where a prospective franchisee meets the support team, reviews operations and validates the opportunity.

14

Item 19 financial performance representation

A section in the US-style FDD where a franchisor may provide historical unit-level financial performance data. Canadian disclosure rules differ; ask the franchisor what verified performance data it provides.

15

Franchisee Advisory Council

A group of elected or appointed franchisees that provides feedback to the franchisor on system performance, marketing and operational issues.

16

Franchise broker or consultant

An intermediary who helps prospective franchisees shortlist brands and helps franchisors recruit qualified candidates. Ask how the broker is compensated.

17

Same-store sales

Sales growth from units that were open and operating in both comparable periods, used to track underlying system performance rather than new-unit growth.

18

Franchise transfer

The sale or assignment of a franchised unit from one owner to another, usually subject to franchisor approval and transfer fees.

19

Churning

A practice where a franchisor or broker repeatedly sells or resells territories without regard to franchisee success. CFA membership includes ethical standards intended to discourage this.

20

CFA

The Canadian Franchise Association, the national association representing franchisors, franchisees and suppliers. Its National Convention brings the Canadian franchise community together for education, networking and the Franchise Canada Show.

21

Franchise system

The complete operating model behind a brand, including trademarks, manuals, training, supply chain, technology, marketing and field support.

22

Protected territory

A territory in which the franchisor agrees not to open or license another unit, subject to the terms and exceptions in the franchise agreement.

23

Onboarding and training

The initial and ongoing programmes that teach a franchisee the operating standards, technology, compliance requirements and customer experience of the brand.