Preet Pandher was studying in Edmonton in 2016 when he got a job washing dishes on the weekend at A&W.

As someone with an entrepreneurial mindset, he remembers looking at piles of dishes during the breakfast service while calculating in his head the rough cost per meal.

A decade later, Pandher owns nine A&W locations as the CEO of Elmwood Capital Ltd., with six more on the way.

“I think one of the best things about the franchising model is it’s really scalable,” he said.

Pandher, whose mother is a part-owner in the business, said he remembers watching his parents struggle as independent business owners of dry cleaners, liquor stores and gas stations, but never finding those ventures to be “scalable for them.”

Franchising is a large industry in Canada and can be profitable for many, but it offers less flexibility and creative control than other types of small businesses. As a result, some industry players say it is best suited for process-oriented entrepreneurs who want to work within an existing model.

Daryl Ching, owner of Vistance Accounting, which works with franchise clients, said that owning a franchise is a lot like buying a business structure, where the franchisee takes on the financial risks but gains access to brands that are tried, true and tested.

“Instead of building a plane from scratch, imagine that you are able to fly a plane that’s already tested and there are already passengers on board,” he said.

“However, there’s a catch. There are restrictions on your flight paths, and the food you’re allowed to serve is predetermined.”

In running a franchise, Ching said there isn’t a lot of room for changes when it comes to the menu, prices or suppliers.

“If you are very strong in operational efficiencies, if you’re good at managing staff and getting more productivity out of employees, this is an ideal situation because you can take what is a somewhat profitable franchise and turn it into a very profitable franchise and make more from it,” Ching said.

Owning a franchise can often be more work than some think, he said. When employees call in sick or suddenly quit, oftentimes owners have to roll up their sleeves and jump in until they can find a replacement.

There can also be significant costs associated with starting such a venture.

In his industry, Pandher said the cost to buy an existing franchise is typically based on earnings or profit multiples of the location. If it is a new location, he said, the cost is often just the cost of construction.

He said there is often a franchise fee involved, which in his case was a one-time fee of about $55,000 plus tax in 2023 in return for a licence to run that store for 25 years. However, many franchise systems also have ongoing payments like royalties or marketing fees, depending on the agreement.