For three years we carried occasional reprints of the
weekly radio commentaries of Elbert van Donkersgoed,
then Strategic Policy Advisor of the Christian Farming
Federation of Ontario (CFFO), Guelph, Ontario. They
appeared under the column title “Letters from
About a year ago, van Donkersgoed became the executive
director of the Greater Toronto Area’s Agricultural
Action Plan. Continuing the tradition of weekly commentaries
from the CFFO is John Clement, the group’s general
manager. With his permission, we will continue occasional
use of the CFFO columns.
October 12, 2006: Franchises are an extremely
popular form of business arrangement in Canada. In fact, our country
is one of the franchise capitals of the world, contributing a whopping
10 percent to our economy. Yet for all its popularity as a business
model in retail and food outlets, franchising has drawn nary a whisper
when it comes to the business of farming.
Over the past 20 years, I’ve heard only two people seriously
market the idea of using franchises in farming. One was an Ontario
university professor who touted the benefits to farmers from exploring
a farmer-owned and controlled franchise system for purchasing and
selling farmland. The other was a businessman who was looking to
set up a company to market organic beef around the world. In this
scheme, farmers would buy a franchise to produce the beef and would
have to adhere to the franchiser’s exacting set of standards
about production. Although I can’t say for certain, I don’t
think there was much uptake for either of their ideas.
On face value, franchises don’t make a lot of sense in a
marketplace that has traditionally rewarded bulk, undifferentiated
products. And with farmers being among the most fiercely independent
people in the world, there has been little motivation amongst them
to explore the concept. But with an increasing part of the market
for farm products requiring value-added approaches, franchises could
conceivably find a foothold someday in farming due to the increased
need for collaboration, coordination, risk sharing and other factors.
They could be considered value chains, with a twist.
Some people say that franchises aren’t much different from
signing a supply contract with a big company, but that overlooks
some of the benefits to franchisees within some of the better arrangements.
The better franchises in other areas of the economy offer extensive
training to the franchisee in areas like operations, technical details,
management and product knowledge. Applied to agriculture, it could
include training of agricultural workers, human resource help, extension
of production and marketing knowledge, branding of products and
Farmers have debated for years ways of gaining collective clout
in the marketplace while achieving maximum independence and profitability.
And there have been a number of models produced to achieve those
goals, including marketing boards and cooperatives. As the marketplace
changes to reflect more value-added opportunities and innovation,
it may be only a matter of time before some entrepreneur figures
out a way to balance the independent nature of farmers within a
franchise arrangement that provides the benefits of a larger corporate
Although franchising will probably never become a big factor within
farming, it could become an interesting model to explore for certain
value-added initiatives, particularly if the model could be massaged
enough to fit farmer aspirations. But one thing’s for sure—it
would have to warrant the franchise fees people pay to enter the
At the end of the day, if it isn’t profitable for everyone,
there’s no way it’s going to happen.