How to Start a Franchise in the United States

For most of us, operating a start-up can seem like a daunting task, and it becomes even more challenging doing so in a foreign country. For those who would like to establish a business in the United States, but wish to minimize the risk, franchising may be the best solution.

If you are risk averse, there are several advantages to starting a franchise in a foreign country, such as the United States, where competitive market forces can greatly increase uncertainty of success. The most obvious one is the fact that a new business plan is not required. The business model is already tried and tested in the domestic country. Given the general market similarities and culture of Canada and the United States, this is reassuring. Suppliers, training and equipment are usually provided which eliminates several other variables. Most importantly, depending on which franchise you chose, brand recognition can go a long way in establishing success. It also means a clear target market is mapped out which can make marketing and advertising more effective.

Now, assuming you have decided that the franchise route is for you, let’s talk about the visa you will need. In cases of starting businesses or franchises, an E2 visa is required. For the E2 visa, the applicant must have ownership and control of the enterprise which means at least 51% in the franchise. A substantial, irrevocable investment is also required. There is no explicit number stated by Immigration as to what constitutes substantial, but below $75,000 is not recommended. Also, simply having the money in a US bank account is not acceptable. It must be spent on your business.
Some of the benefits of an E2 are that the applicant’s spouse and dependents can accompany the applicant in the United States. In fact the spouse can work and the dependents can study while they are there. The E2 visa is also indefinitely renewable as long as the franchise is operating.

With all the risk factors to consider in operating a business, coupled with the onus of investing in the US before obtaining a visa, a franchise can mitigate some of the risk factors involved. To learn more and discuss the best action plan for you, contact Toronto Lawyer, Janice Warren.