After years in the quick-service restaurant (QSR) franchising space, Mike Nadeau’s next career step was one in a very different direction.
Having settled into semi-retirement, Nadeau was approached by the owners of cannabis retailer ShinyBud, to lead their retail expansion plan and eventual introduction of a franchising model.
Nadeau jumped at the chance to launch the new retail brand. The company has since commenced trading on the TSX Venture Exchange.
He spoke to Canadian Business Franchise about what he liked about the brand, and the challenges faced in the always changing and competitive recreational cannabis industry.
Canadian Business Franchise (CBF): How did you get into the franchising?
Mike Nadeau (MN): Personally, I’ve worked in the franchising space my whole life, pretty much since I was fresh out of school. In the QSR industry, I worked with brands such as Burger King, Arby’s, and Tim Hortons for over 20 years.
CBF: What was its specific appeal to you?
MN: I’ve always loved seeing people succeed in business. When there is a solid business playbook for franchisees to follow, success should follow. The franchising industry is also great for meeting new people—people who get business, are tenacious, and want to succeed. When I semi-retired and doing a lot of consulting, I was approached by the founders of ShinyBud to grow their store and brand. I’ve been with them since the first store. Depending on the age demographic, there is still a stigma about the cannabis business. We’re working hard to move away from that stigma and to especially shed light on the health and wellness benefits of cannabis products and how they have the potential to improve people’s lives. We’re creating stores that are not intimidating and appeal to all types of consumer profiles, whether they’re interested in using cannabis for recreational purposes or as part of a health and wellness solution.
CBF: What key lessons have you learned along the way?
MN: First, you want to engage franchisees who are consumer-friendly and can tap into local market needs. The next biggest lesson is ensuring your franchisees are successful. We are about offering a model that creates successful franchises — the more successful a franchisee is, the more franchise stores they’ll want to buy.
CBF: What have been the highlights and challenges of running the business?
MN: In Ontario, cannabis regulatory requirements are probably the largest challenge today. It should change as the industry evolves, and we continue to lobby as an organization to see those changes. Every couple of months we see new changes. For example, initially cannabis delivery wasn’t allowed, but the pandemic forced the issue so delivery is here to stay. In terms of cannabis retailer oversaturation in the GTA, there is certainly a small impact to the market. Brands like ourselves appreciate the competition, more competition means more people are focused on the commodity. When you are designing the business, you need to take that into take account. In terms of a highlight, we are very fortunate people were knocking at our doors asking about a ShinyBud franchise program.
CBF: What is your system’s competitive edge compared to other Canadian chains?
MN: It starts with the dynamic team we have—we understand franchising and how to be good operators overall. From our board to our operations team, we offer the right foundation with decades of retail operating experience. As we open more locations, we have better pricing on accessories and better offers through our loyalty program. We’ve only been in business for just over 20 months, and we’ve made mistakes, we admit that. We need to make sure the franchisees don’t make those mistakes as well. We want to ensure the franchisees are successful and that they have the right model and playbook.
CBF: What is your strategy for expanding the system?
MN: We expect to have 20 franchised stores by January 31, 2023. We’ll continue leveraging our retail operating expertise to profitably operate and benchmark our cannabis store portfolio and demonstrate what’s possible and how we do business through our results.
CBF: Where are you planning on opening new franchises?
MN: We believe we need to continue building a solid foundation in Ontario, which is the largest cannabis market in Canada. We’re focused on operating stores in markets across the province less saturated with cannabis retailers. Once we feel comfortable, we will take direction from our board on where to expand next.
CBF: What do you look for in new franchisees?
MN: We always look for people who are consumer friendly. Next, we look for people who have worked in the food or hospitality industry. Lastly, we consider whether they have the financial ability to open a business and sustain it for a period of time.
CBF: What other advice do you have for your franchisees?
MN: I always tell them it’s not going to be easy. You must put a lot of hard work into it. Regardless of the type of business, there are good days and bad days. Follow the playbook and, the biggest thing they need to know is, we are here for them. I always told my franchisees to pick up the phone and talk it out with me when they are in need.
CBF: How has COVID-19 impacted your business?
MN: We haven’t lived outside of COVID, so it’s hard to know. ShinyBud has 41 locations under banners that have all opened during COVID.