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An eye on expansion

From Tuesday's Globe and Mail

Dr. Francis Jean

CEO Dr. Francis Jean has spent 20 years challenging regulations that have hindered the expansion of Iris the Visual Group. (John Lehmann/The Globe and Mail)

Daryan Angle remembers the day the College of Optometrists of Ontario stopped returning his phone calls. It was in January, 2007, and the optometrist's new Iris vision centre had just opened for business. Already a fixture in three provinces, the chain of eye care and eyewear stores was taking its first cautious steps into the lucrative Ontario market.

The chain had run into roadblocks in the past: Regulators in both Quebec and B.C. had challenged its business plan, which places optometrists and opticians together under one roof. So Dr. Angle had been working the phones ahead of the Waterloo store opening to make sure the regulating college was on side.

“We had been engaged in open communication right up until we opened,” says Dr. Angle, 31. “And when we opened, it just stopped without warning. It was a total surprise; we really didn't see it coming given the amount of dialogue we'd had. It was clear we had some problems; we had to protect our brand.”

Although his professional licence and the future of Iris's expansion plans were on the line, Dr. Angle took comfort from the company's history of winning previous battles.

Based in Laval, Que., and formally called Iris the Visual Group, it had been fighting legal challenges since 1989. That's when founder Francis Jean, backed by a $10,000 startup loan from his wife, opened the first Iris store in Baie-Comeau. The entrepreneurial optometrist envisaged a chain of outlets where opticians and optometrists worked together – a one-stop shop where consumers could have their eyes examined and buy new lenses.

Dr. Jean had been living in Atlanta while considering becoming an optometrist, and was discouraged to see would-be colleagues working in department stores alongside unregulated sales staff. “I saw the opportunity for me to return to Canada and build a brand where optometrists would group with opticians in a quality way.”

The problems Dr. Jean initially faced in Quebec were the same ones that would confront the company in Ontario 20 years later: rules that prevent optometrists and opticians from working alongside each other. Professional standards associations have tried to distance the two professions to ensure that patients don't feel pressured to buy new eyewear each time they visit their eye doctor for a routine checkup.

Quebec regulations eased over the years after Dr. Jean's stores opened. But when Iris expanded into B.C. with its 2000 purchase of Fort Group of Optical Companies, regulators again threatened to slap it down. Rather than abandon its expansion, the company prepared a challenge in B.C.'s highest court arguing that opticians' rights of association were being hampered by regulators.

“The government in B.C. then asked [the regulators] to sit down with us and our lawyers and fine tune the regulations to make sure they respected the Charter of Rights,” Dr. Jean said.

With the B.C. situation settled and about 160 stores on the roster (split between Quebec, B.C. and Alberta, where Iris faced no challenges), Dr. Jean turned his attention to Ontario. For each new outlet, he needs to persuade optometrists and opticians to give up their current practices and try a new concept. About one-third of Iris stores are co-owned by the optometrists and opticians who work there; another third are franchises. Iris as a corporate entity owns the rest. Each store employs about eight workers.

Which brings us back to Dr. Angle, whose Waterloo store was in danger of closing when the optometrists' college advised him it would challenge not only its existence, but also Iris's plans to open another five Ontario stores by 2009. Work was already under way to find more partners and locations and Dr. Angle, the company's main representative for Ontario, found himself spending more time defending the business model than selling its merits.

“The biggest stress was making sure everyone, from employees to prospective partners, understood that we are committed eye care professionals who have a vision to make our concept work in a way that is beneficial to our patients,” Dr. Angle said. “I'd be having conversations with potential partners, and these questions would just keep coming up.”

While plans to open new Ontario outlets were put on hold, Iris turned again to the lawyers who had worked out the deal with the B.C. regulators. “We were pretty confident, based on our experiences in Quebec and the precedent from British Columbia, but it was something we had to overcome,” Dr. Angle said.

In May, 2008, with Iris's threat of a constitutional challenge again on the table, the Ontario college suggested a compromise: Iris could operate in the province so long as the Charter of Rights challenge was dropped and Iris's executives agreed to work on new regulations with the college.

“You can't imagine the celebration we had when we finally settled with the college,” Dr. Jean said. “We still have work to do – it will take five, 10, 15 years before this is finally resolved and we say, ‘Those rules are good now.'”

Meanwhile, the dream of a national chain of eyewear stores is moving ahead: Four more Ontario stores opened in the past year and there are plans for another 20 by the end of 2010. Within five years, Iris aims to open as many as 150 in Ontario.

“All we needed was to get this change to happen in Ontario,” Dr. Jean said. “I've been supporting this company and brand for 20 years and the goal was always to do this. I've been selling this concept to people, and my passion for this company, and we are making sure that we can do whatever we can to improve the vision of Canadians.”

On the Record

Dr. Daryan Angle joined us to talk about his company's breakthrough. Click here to read the discussion.

Expert Insight

"Once you understand that you need to disclose an issue, do it quickly and disclose everything," says Catherine Samuel, a partner at McCarthy Tétrault. On Wednesday, Ms. Samuel offers tips for staying within regulations while expanding into a new location. Click here to read the full interview.

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