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100% Canadian Franchises Company Profiles May/June 2021 Previous Issues

Home-Grown and Locally Owned: Little Kids Daycare Center, Mike Holmes Inspections, and Smitty’s Canada Inc

By David Chilton Saggers

One system has been in business for 50 years, two others are new. But they all boast a strong concept, exceptional branding, and a robust entrepreneurial ethic. That’s all on top of great resolve and adaptability during an unprecedented time for business in Canada that demonstrates the strength of the domestic franchise industry.

Little Kids Daycare Center

Little Kids Daycare Center is the story of a successful mother-and-daughter pairing. Dina Pedra began Little Kids Daycare in 2002 in Oakville, Ontario with a single daycare centre. Debbie Cunha, daughter of Dina and president of Little Kids Daycare, bought that centre in 2010, along with another centre in Oakville in 2014. Today, she has plans to open a third Oakville Little Kids Daycare Center in late 2021.

Debbie Cunha says Little Kids Daycare is looking for franchisees anywhere in Ontario, since daycare is provincially regulated. “I really want to open one or two franchises a year,” she says. Ideally, new franchises would be opened in newly built sub-divisions with the new schools they require.

Little Kids Daycare provides care for children aged three months to 10 years, and many are families who live close to a centre, Cunha explains. “I really believe we have a model for every parent.”

It’s mostly women expressing an investment interest in Little Kids Daycare, but Cunha says she’s also beginning to field more enquiries from men. Typical backgrounds of potential investors are inearly childhood education and teaching, but there’s also increasing interest from those in other sectors who are looking for a lifestyle change. As for the qualities Little Kids Daycare seeks among budding investors, Cunha looks for competence, a love of working with people and children, a strong work ethic, and perhaps a business background.

As with many other systems, the COVID-19 pandemic forced Little Kids Daycare to adapt. The first wave of the virus meant far more cleaning and tougher protocols. Cunha explains that in March 2020, her centres were temporarily shut down as the pandemic emerged, then reopened in June. Since then, the province has provided regular updates, policy changes, and constant monitoring. Little Kids Daycare centres are now operating at 40 per cent to 50 per cent capacity.

An investment in a Little Kids Daycare franchise would be approximately $1 million, depending on the location, as rent and labour costs vary by market. “Many people may think smaller communities may seem less ideal, but many lack childcare services. Therefore, we absolutely would welcome franchisees in those markets to provide childcare to support their communities. Our target are the suburbs, with a high concentration of young families,” says Cunha.

A typical Little Kids Daycare centre is approximately 5,500 square feet and accepts about 80 children. Centres can be either new builds or renovations. Training takes three months and covers in-class and online instruction. Post-COVID-19, there will also be job shadowing to help newcomers learn the ropes from experienced franchisees.

As for the benefits of investing in the Little Kids Daycare system, Cunha points to the ease of entry, complete “hands-on support,” and Little Kids Daycare Center’s excellent track record for providing care and education to little minds.

Mike Holmes Inspections

Is there anyone in Canada who hasn’t heard of Mike Holmes? His renovation and construction brand is like no other. And that’s the same brand that’s behind Mike Holmes Inspections, a residential home inspection service that began in 2010 in the Greater Toronto Area, and is now starting to franchise.

Scott Piccolo, president of Mike Holmes Inspections, says that by the end of March 2021, two franchises in Southern Ontario were expected to be under way, with “fairly healthy growth” anticipated for the rest of the year. There are plans to expand from coast to coast, and franchising will give the company a larger footprint in North America. But Piccolo notes that it’s important to first establish high levels of service and quality, and then develop support and monitoring around them.

There will be two types of investors within the Mike Holmes system, explains Piccolo. Most of his inspectors will be owner-operators, while the rest will be owners who hire staff. In either case, they must be good with people, disciplined, proud to represent the brand, and willing to adhere to the system. An inspector who brings some knowledge of the construction or housing industries will be tested on how to use the Mike Holmes method, says Piccolo.

Those without any background must take the industry-standard Carson Dunlop home inspector course that lasts 10 weeks, then participate in a further two to four weeks of training. About 90 per cent of applicants so far are men, Piccolo explains.  

He adds, “We’re very competitive with the industry. We’re not a bricks and mortar operation [either]. An inspector works out of his vehicle 80 per cent of the time.” That vehicle will be wrapped with Mike Holmes Inspections signage. A franchisee’s biggest expense is likely to be a suitable vehicle – fleet vehicles will be available – but the franchise cost does include all the necessary tools. Territories are determined by the number of dwellings in a given area.

The pandemic has affected the system, but as an essential service, it has continued to operate. Piccolo says core Toronto business went down, but it’s coming back – with some big changes. For example, that includes health protocols and more paperwork, with just one person in a house rather than the usual two or three.

Piccolo says there’s one huge benefit to owning a Mike Holmes Inspections franchise. “The most obvious is the brand. There’s great brand recognition and the celebrity of Mike Holmes.” There’s also a “very robust” system that is easy to set up and operate, he adds.

Smitty’s Canada Inc.

Smitty’s Canada Inc., the all-day family restaurant, celebrated its 60th anniversary last year, says Jim Weidinger, the company’s Calgary-based president. A pair of business partners started Smitty’s in Canada in 1960, and the system quickly expanded. Now Smitty’s has 84 locations from coast to coast and Weidinger says he sees further expansion opportunities in Ontario and British Columbia.

A town of 5,000 people can support a Smitty’s franchise, says Weidinger, as long as it can draw from surrounding communities to give it an effective customer base of 18,000 to 20,000. The “sweet spot” for Smitty’s restaurants is 4,500 square feet, whether renovations or new builds – and they must be centrally located. “I prefer something on the main street,” says Weidinger of the favoured store address. Smitty’s target customers are families looking for mid-range prices and value.

As for potential investors’ qualities, Weidinger says he looks for a strong work ethic and a high commitment to guest service, although a background in the restaurant industry is not required. However, most Smitty’s franchisees have a food service background and represent a demographic range. “We have a really good mix of men and women, and those younger and older,” Weidinger explains.

Training takes about four weeks for those with some background in the industry and four-to-six weeks for those without any, and at present, instruction is provided at the company’s headquarters in Calgary. The cost of a new Smitty’s location is $800,000 to $1 million, and $400,000 to $600,000 for a retrofit.

Like every other business in Canada, Smitty’s has had to deal with the COVID-19 pandemic, but the system quickly adapted. Smitty’s reopened last June and has done very well since then. “Our recovery was faster than all the indications for other restaurants,” says Weidinger. “Take-out and delivery customers have been excellent.”

As for the benefits of franchising with Smitty’s, Weidinger highlights the cost of entry, lower costs for buildouts, strong corporate support, and the system’s 50-year track record of excellence.

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