Latest News | Franchise Insitute https://thefranchiseinstitute.com.au Just another WordPress site Wed, 11 Oct 2023 06:00:25 +0000 en-US hourly 1 https://wordpress.org/?v=5.2.21 NOVEMBER 2023 CHANGES TO SMALL BUSINESS CONTRACT LAWS WITH SPRINTLAW https://thefranchiseinstitute.com.au/november-2023-changes-to-small-business-contract-laws-with-sprintlaw https://thefranchiseinstitute.com.au/november-2023-changes-to-small-business-contract-laws-with-sprintlaw#respond Wed, 11 Oct 2023 00:00:58 +0000 https://thefranchiseinstitute.com.au/?p=23087 If you’re a small business, then it’s important to be aware of the new legislation changes happening in November 2023 as these will impact businesses all over Australia. To help you get ahead, we’ve prepared a short summary just for you. Check out the full article here for more information. What Are The Changes Happening ...

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If you’re a small business, then it’s important to be aware of the new legislation changes happening in November 2023 as these will impact businesses all over Australia.

To help you get ahead, we’ve prepared a short summary just for you. Check out the full article here for more information.

What Are The Changes Happening In November 2023?

Here’s a breakdown of the changes happening later this year:

  • From 9th November 2023, new Unfair Contract Term laws will be introduced affecting all small business and consumer standard form contracts, including heavy penalties of up to $50 million for businesses that don’t comply.
  • What’s changed? Unfair Contract Terms (UCT) refer to any clauses in your contracts that could be seen as ‘unfair’ (for example, imposing an obligation on your customers that would seem unfair or imbalanced). Previously, having an UCT meant that if that term was ever challenged, a court could just make it ‘void’. However, the new laws go even further where you may now be charged penalties of up to $50 million for businesses (or $2.5M for individuals). In certain circumstances, this could be even more.
  • Am I affected? In simple terms, you’ll be affected if your standard terms and conditions contain any unfair terms, and if either you or the client accepting the T&Cs are a small business, or if a consumer accepts these terms.
  • What can I do? As a starting point, you should seek legal advice to see if the UCT changes affect you. If it does, you should review and amend your contracts and standard form agreements for any UCT’s before the laws take effect on 9th November 2023.

What’s A Standard Form Contract?

Standard form contracts are pre-prepared written agreements with fixed terms. That means the party signing it has had little to no opportunity to negotiate its terms. Many Employment Contracts and Supply Agreements tend to be standard form contracts.

With the definition of standard form contracts widening, courts will have more leeway in deciding whether an agreement is a standard form contract or not; and if UCT laws and penalties apply.

So, What’s An Unfair Contract Term?

Unfair contract terms are clauses in a contract that:

  • Are not reasonable or necessary in protecting a party’s interests
  • Create a power imbalance between the parties
  • If they were to be enforced, they would cause significant harm

Unfair contract terms are considered to be an illegal practice when used in standard form contracts with small businesses or consumers.

What Does this Mean For My Business?

The recent amendments have also broadened the definition of a small business. From November 2023, a business is considered small if they:

  • Have less than 100 employees
  • Earn an annual turnover of less than $10 million

This definition applies to your business, and the other party signing or accepting the agreement. These changes have been brought around with the aim of protecting small businesses from unfair practices. It will apply to all new standard form contracts and ones modified after 9th November 2023.

What Happens To Unfair Contract Terms From Now On?

Standard form contracts found to be using unfair contract terms will be declared void if the term is central to the contract. If not, then the part deemed unfair will be struck out of the contract.

The new laws also introduce heavier fines and penalties for the use of unfair contract terms in standard form contracts. This includes:

  • Penalties of up to $50 million (or 3 times the value of the breach for companies)
  • The fine can also be calculated by assessing 30% of the companies annual turnover when the breach was taking place
  • $2.5 million for individual companies

What’s Next?

If you’re a small business using standard form contracts, then it’s a good idea to get your Contracts Reviewed by a legal expert to make sure you’re in the clear and to avoid the new heavy penalties.

Disclaimer: All content contained in this publication is intended to provide general information in summary form on legal and other topics, current at the time of first publication. The content does not constitute legal (or other) advice and should not be relied upon as such. You should obtain specific legal or other professional advice before relying on any content contained in this publication.

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STEPPING INTO THE FRANCHISING SPACE IN THE CURRENT LANDSCAPE https://thefranchiseinstitute.com.au/stepping-into-the-franchising-space-in-the-current-landscape https://thefranchiseinstitute.com.au/stepping-into-the-franchising-space-in-the-current-landscape#respond Wed, 20 Jan 2021 07:36:48 +0000 https://thefranchiseinstitute.com.au/?p=21096 Many people are attracted to the franchising model, with good reason. This small business option is comparatively low risk. You get the chance to hit the ground running as opposed to starting from the ground up. Since you are part of an established brand with a set business framework and processes, you don’t have to ...

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Many people are attracted to the franchising model, with good reason. This small business option is comparatively low risk. You get the chance to hit the ground running as opposed to starting from the ground up. Since you are part of an established brand with a set business framework and processes, you don’t have to struggle with aspects like advertising and marketing or training and set up.

The franchisor provides the support you need and a strong foundation so you can focus on running your business profitably. If you have always dreamt of running your own business, but with lower financial risk, franchising is a great option. But the pandemic has made people wary and many have put their business plans on hold.

While it’s important to be prudent, the past few months have shown that the franchising sector has fared much better overall than standalone companies and other similar businesses. Becoming a franchisee can be an excellent pathway to becoming your own boss. You can reap the benefits of a well-established brand with a recognised service or product and a good reputation.

You can streamline your business by using the operation manuals from the network. As mentioned earlier, you will also have support and access with aspects like marketing and advertising. While there are some distinct pros to being part of a franchise network, you must recognise that it gives you less control of where and how you run your business.

Tips To Follow

Like any other business venture, it’s crucial that you consult a franchising lawyer and business advisor so you will be on firm footing while venturing into this space. These are some things to consider before you commit to becoming a franchisee:

  • Learn all the things possible about the franchising business model and how it works.
  • Ask questions, clear any doubts you may have and ensure that you understand how this business model could impact the way you conduct business.
  • Once you have contacted a franchisor, go through the franchise agreement. This is the contract that you would have to sign and agree to for a specific timeframe. It would have all the details related to how you would operate your franchise.

    As stated, you must understand your responsibilities and rights under each clause. At the end of the franchise agreement, the franchisor doesn’t have an obligation to renew it. So, any goodwill and business that you have built can be useful if you want to continue with the liaison.

  • Go through the disclosure statement very carefully. All franchising businesses in Australia have to abide by the Franchising Code of Conduct. So, before you enter a franchising arrangement, you must read through the code of conduct as well as the disclosure statement.
  • It’s important to ask plenty of questions and make sure you understand how the franchise model could affect the way you do business.
  • Identify what your financial risks are, especially with reference to aspects that are out of your control. Things like the local and national economy and competition are some things that can change very quickly. Being aware of these risks is crucial when you are planning to become a franchisee.
  • There could be certain unanticipated costs that crop up during your franchise agreement term and you need to have extra funds to cover them. For instance, the franchisor might alter their branding, the appearance of their stores or even how certain systems function. Typically, you would be responsible for the costs associated with these changes.
  • Know that every geographical location will have very specific consumer demand patterns. One particular location or type of franchise could perform well, while others, not so much.
  • Every franchising network will have a specific supply chain from where you would have to procure the raw materials and products you need.
  • You also need to determine whether you would be able to recover all your upfront costs, while making a decent profit during the franchise agreement term.
  • In addition to all these things, you must understand your territory and be aware of all the outgoing fees. The one way to make a success of your new franchise is to go into it with your eyes open. If you want any more information about setting up a franchise, contact the experts at The Franchise Institute. You can call us on 1300 855 435 or fill-in this contact us form, and one of our experts will contact you as soon as we can.

    Thanks for reading,
    The Franchise Institute Team
    1300 855 435

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    ]]> https://thefranchiseinstitute.com.au/stepping-into-the-franchising-space-in-the-current-landscape/feed 0 Winds of change in the Franchise Industry. By James Corne, CEO The Franchise Institute https://thefranchiseinstitute.com.au/winds-of-change-in-the-franchise-industry https://thefranchiseinstitute.com.au/winds-of-change-in-the-franchise-industry#respond Wed, 29 May 2019 00:01:08 +0000 https://thefranchiseinstitute.com.au/?p=19325 The post Winds of change in the Franchise Industry. By James Corne, CEO The Franchise Institute appeared first on Franchise Insitute.

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    Australia is one of the most highly franchised economies in the world, with a mix of over 80,000 businesses and 1,314 franchise systems, 594,500 employees and revenue of $182 billion, annually. Australian franchising mainly consists of small and medium enterprises, with 90 percent of franchisees accounted for by small businesses. Unfortunately, recent bad behaviour by a handful of well-known, publicly listed franchise systems has tarnished the whole industry. The Government has stepped in with some significant changes – here is a summary

    The Parliamentary Inquiry Into The Franchising Code

    During the 2018 hearings of the parliamentary inquiry into the franchise code, certain issues were raised including poor quality standards and non-compliance among the franchising community. The underlining message in submissions to the inquiry were that better enforcement of the existing regulations is required to ensure make the franchising community a fairer place for all – though I am not convinced the changes will achieve their goal.

    Call For a Taskforce

    The parliamentary inquiry report called on the government to establish a special franchising taskforce to thoroughly examine and implement its different recommendations. This taskforce would be made up of representatives from the Department of Jobs and Small Business and the Treasury.

    Michaelia Cash, the Small Business Minister said the government would analyse the report methodically and consider what types of improvements needed to be brought into effect before proceeding. She said the government is committed to supporting fair and effective reforms, but that they would do so without imposing any unnecessary regulation on the franchising sector.

    Winds of Change

    The parliamentary report recommends a comprehensive suite of changes to the current franchising code such as:

    • The inclusion of various civil pecuniary penalties.
    • Giving the ACCC greater enforcement powers and more responsibilities. The additional powers would help them root out exploitative behaviour and misconduct in the franchising space.
    • Improvements to aspects such as disclosure and transparency.
    • Greater accountability and clarity around marketing funds.
    • The taskforce will keep a hawk’s eye on the system and unfair contract terms in the franchise agreements will be illegal. They will also investigate the options for a public franchise register and will provide franchisors with template franchise agreements and updated disclosure documents annually.
    • Recommends that civil penalties be levied if a franchisor fails to comply.

    The Australian Competition And Consumer Commission (ACCC) announced its determination to target the food sector to ensure it is in line with all the rules and regulations. It aims to protect and promote fair competition and consumer law.

    Mandatory Measures

    #1 A Registry Of Franchise Systems Across The Sector

    Under these substantive franchisee reforms, a registry will be developed, covering all systems across the franchise sector in Australia. It will be backed by the government and be mandatory for all constituents to improve compliance.

    The additional protection available under the registry will be advantageous in a collaborative business model to fix the responsibility for compliance. While the concept of mandatory registration is neither a new nor complete solution to all compliance-related problems, there are certain additional benefits to it because:

    • It makes basic compliance rules obligatory for all franchise systems.
    • It removes the voluntary element to “comply or not to comply” and mandates that every business including those audited by ACCC need to comply.
    • The registry is searchable making it easy for new and prospective businesses to locate the information they want.
    • It has an inbuilt mechanism for early warning that can alert the ACCC to examine any breaches of the law.

     

    #2 Obtaining Business And Legal Advice: A Mandatory Requirement For Prospective Franchisees

    The parliamentary inquiry, in its deliberations, pointed out an important structural theme. This related to large-scale connivance of the clear and strong recommendations in the franchise code of conduct. It also found prospective franchisees ignoring to submit mandatory documents provided by franchisors, to obtain legal and business advice.

    The Australian regulatory and dispute resolution framework for franchising is known to be comprehensive and effective. Yet, some issues need attention. It is in the interests of prospective franchisees to be well-informed about all business details before signing on the dotted line. They must seek business and legal advice to complete their due diligence which is essential for conducting business safely.

    It remains to be seen whether these new regulatory changes will result in a more level playing field.

    If you want to know more, feel free to get in touch with us at The Franchise Institute. You can call us on 1300 855 435 or fill in this contact us form and we’ll reply as soon as we can.

    Thanks for reading,
    The Franchise Institute Team
    1300 855 435

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    The Aussie Farmers Direct Debt https://thefranchiseinstitute.com.au/the-aussie-farmers-direct-debt https://thefranchiseinstitute.com.au/the-aussie-farmers-direct-debt#respond Wed, 13 Jun 2018 01:25:00 +0000 https://thefranchiseinstitute.com.au/?p=18765 The post The Aussie Farmers Direct Debt appeared first on Franchise Insitute.

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    The business world can be unpredictable. Industries change, trends come and go, customer preferences change, and all of these factors can rattle even the most well-established business.

    Some franchises have holding power, so they’re able to withstand the competition and market changes. Others have a weaker foundation and are unable to last long, despite having a reasonable amount of funding. That’s the story of Aussie Farmers Direct, which was forced to close in March 2018.

    What did Aussie Farmers Direct offer?

    This was a subscription delivery service which sent fresh produce and milk from local farmers to customers on a subscription basis. Farmers would deliver their produce to the company, and the company would forward it to subscribers. This allowed people to have fresh ingredients delivered right to their doorstep. There is a market for such a service, especially with people recognising the nutritional value of fresh, unprocessed local ingredients. Unfortunately, even with this advantage, Aussie Farmers Direct failed.

    What is the debt?

    The franchise has a debt of around $86.7 million and most creditors believe they can only recover $3.4 million, which means they will have to pay $69.2 million out of pocket, which is a massive loss. The company succumbed to Administrative Management after they failed to secure a buyer. Aussie Farmers Direct also considered getting funding by making the company public in 2017, but that didn’t work out.

    They spent a substantial $70 million funding in little over 4 years, and have struggled with debt ever since. Eventually, investors removed their support after many attempts to restructure the business, which led to the company losing $500,000 each week. Administrators have found there’s no way to salvage this company and closing it was their only option. This impacts 260 employees, 100,000 customers, and 1,000 franchisees. They weren’t informed until the very last minute so suppliers, customers, as well as the employees got an unexpected, unpleasant surprise.

    Why did the company face problems?

    The company began in 2005 every intention of succeeding in this industry. Unfortunately, their business plan was flawed from the onset as it wasn’t scalable. The way Aussie Farmers Direct want about its expansion wasn’t healthy as it placed unnecessary strain on resources without providing any proper rewards. Experts have cited many reasons for this problem and some of them include:

    • AFD focused more on sales acquisition with expensive IT infrastructure instead of its core model of delivering fresh produce to subscribers. They didn’t check whether their growth was sustainable.
    • People purchased products from AFD to support local farmers. When this company added general groceries and imported items along with local produce, they lost their appeal.
    • AFD couldn’t compete with supermarket chains like Coles, which already dominated this industry. If the company has stuck with fresh produce and milk, they wouldn’t have reached this point.
    • Their pricing wasn’t right to compete with supermarkets. With local produce, they could charge higher rates because people considered it a justified expense. Customers were willing to pay more for it, but when the company entered the grocery market with imported goods, they had to lower costs to compete. That didn’t fit into their business model.

    This shows just how important it is to create a scalable model that doesn’t compromise a company’s appeal. Lack of good planning can easily bring a business down, especially if the expansion isn’t handled well. You can read more about the different reasons why franchises fail here.

    If you want to know anything more about setting up a franchise business or want some sound and professional advice, call The Franchise Institute on 1300 855 435 or fill in this contact us form and we’ll reply as soon as we can.

    Thanks for reading,
    The Franchise Institute Team
    1300 855 435

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    Sydney Franchising and Business Expo https://thefranchiseinstitute.com.au/sydney-franchising-and-business-expo https://thefranchiseinstitute.com.au/sydney-franchising-and-business-expo#respond Tue, 22 Mar 2016 06:03:59 +0000 http://www.thefranchiseinstitute.com.au/?p=1405 The post Sydney Franchising and Business Expo appeared first on Franchise Insitute.

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    Success at The 2016 Franchising Expo

    Wow what a busy weekend we had at the Sydney Franchising and Business Expo. There was certainly a lot to see from flavoured hot chips to drones. Apart from getting the chance to meet lots of people and talk about franchising what was most gratifying was to see so many of our clients exhibiting as successful franchisors. Some have been franchisors for a while like Lava Coffee who are going from strength to strength. With 8 franchisees now in QLD, ACT, VIC and WA they have just sold a majority share to a group who is going to take the brand global. We wish Simon and his team the best of luck.

    For others such as Susana from Created by Hands Acrylic Designs, it’s hard to believe that just 2 years ago she was an independent business owner visiting the show and now she is a franchisor of a successful franchised business with 8 locations in NSW and growing rapidly.

    Similarly two years ago David from MyShuttle came to the show looking around and now he has franchised his business with 2 franchisees sold and 2 in the pipeline. Another great success story, Lawrence Dry Cleaning is another client who has embarked on the franchising path and has a great franchise offering. With 30 locations in NSW the Lawrence Dry Cleaning franchise offers an easy to operate business with high repeat business and a solid 75 year track record.

    You too could join The Franchise Institutes long list of successful clients. All it takes is one phone call 1300 855 435 or a visit to our site The Franchise Institute. Don’t sit on the sideline and watch and wonder, take action and you too could become a successful franchisor.

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    Reasons Why Franchising Could Help Your Business Expand https://thefranchiseinstitute.com.au/7-reasons-why-franchising-could-help-your-business-expand https://thefranchiseinstitute.com.au/7-reasons-why-franchising-could-help-your-business-expand#respond Mon, 07 Mar 2016 08:00:05 +0000 http://www.thefranchiseinstitute.com.au/?p=1388 The post Reasons Why Franchising Could Help Your Business Expand appeared first on Franchise Insitute.

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    Many successful business owners hit a certain point where they need to expand their business. A business that can’t grow runs the risk of imploding.

    Unfortunately, expanding a business can be challenging, and for many business owners it leads to more stress, more work and requires more capital.

    There are a few options for businesses that want to expand. These include hiring more employees, opening new locations, forming partnerships and finding investors.

    Franchising is another option which can be very cost effective and successful. Here are seven reasons why franchising your business could be a good choice for expansion.

    • Reduced capital costs. When you franchise, you don’t have to pay for the cost of new locations and setting up your new stores. Instead, these costs are covered by the franchisee when they join the franchised network.
    • Motivated owner operators. Unlike employees, franchisees are owner operators and so have more incentive to work harder and make the business a success.
    • High returns for minimal risk. Because you have not had to risk as much of your own money, you’ve got less to lose if things go wrong. As long as your business model is sound and your franchisees work hard, you have the potential to make high royalties and big profits, in some cases more than if you were running the outlets by yourself.
    • You are empowering other business owners. By franchising your business, you are contributing to the growth and development of other business owners, and this can be very satisfying. A well-run franchise creates a win/win situation.
    • You can expand rapidly. When you franchise your business you can open multiple new outlets within a very short space of time, or even simultaneously. This is very difficult to do with any other form of expansion unless you’re prepared to shell out a lot of cash upfront.
    • Increase your buying power. When you have a number of locations and more business, this will increase your buying power among vendors. It can mean that you gain a competitive advantage over others, and reduce business overheads for you and your franchisees.
    • Faster market dominance. Having multiple outlets for your business means that you have a greater market presence and customers will more readily become familiar with your brand name. This in turn helps you become more recognisable and gives you the edge over your competitors.

    Not every business can set up a franchise, but if your business does fit the criteria, it can be a low cost and highly effective way to grow your business and expand.

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    Tips on How to Market a New Franchise Using Social Media https://thefranchiseinstitute.com.au/how-to-market-a-new-franchise-using-social-media https://thefranchiseinstitute.com.au/how-to-market-a-new-franchise-using-social-media#respond Mon, 29 Feb 2016 08:00:10 +0000 http://www.thefranchiseinstitute.com.au/?p=1382 The post Tips on How to Market a New Franchise Using Social Media appeared first on Franchise Insitute.

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    Franchising is growing in popularity in Australia, and if you’re one of the many business owners who are starting a franchise, you’ll probably know how important marketing is.

    Even the best franchise in the world isn’t going to be a hit if nobody knows about it. The right marketing can increase awareness of your franchise among your target customers and potential franchisees, build relationships and engagement, and grow your business.

    Social media is a fantastic way to market your business, but if you’ve only ever used social media for personal reasons, there is a definite learning curve involved. When it comes to using social media, whether for personal or business, whatever you do is on public display and can have a big impact on your reputation.

    Here are a few tips to help you market your franchise successfully using social media.

    • Work out a budget ahead of time. While social media is known for being low cost, or even free in some cases, it does take time and consistent hard work to prepare content and interact with followers. This can eat into time you could be spending doing other things. If you are serious about growing your business over social media you might want to consider hiring someone to take care of some of the work on your behalf, or at least set aside some time each week to dedicate to the task on a regular basis.
    • Create a strategy and document it. Just as you plan other aspects of your business, your approach to social media should be just as diligent. Your strategy should define your objectives, what you will do to achieve them, and how you will measure your success.
    • Work on building a community. Great social media marketing takes more than just regular posting. While great content forms one of the pillars of your strategy, to get long-term results, you will need to work on interacting with your followers and building a sense of community on your social media pages. This is what will build relationships and turn your followers into regular customers – it’s all about creating a high level of engagement, not simply posting to a schedule.
    • Listen to what people say. These days, many of your customers, especially those in the younger generations, use social media to offer feedback, ask questions or make complaints. It’s important for your business reputation that you take the time to read through the comments and respond to them on a regular basis. By listening, you can get valuable feedback about your products and service, and demonstrate your excellent customer service skills.
    • Localise content to franchise area. It’s important to build connections in the local communities where your franchise outlets operate. Post, or allow your franchisees to post, content that is of interest to their local customers. This can give your franchise outlets a personal touch and boost your overall business.

    Before you jump into your social media marketing strategy, it’s also essential that you look at whether there are any advertising regulations for your industry.

    Some industries are regulated as to how and who they advertise to, and if this is the case for your industry, you will need to make sure you don’t break the regulations.

    If you are thinking about franchising your business in the future, you can get advice on marketing and a range of other topics to help you set up a franchise from us. Call us to find out how we can help you.

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    Tips on How to be the Ideal Franchisor and Look for Ideal Franchisees https://thefranchiseinstitute.com.au/how-to-be-the-ideal-franchisor-and-look-for-ideal-franchisees https://thefranchiseinstitute.com.au/how-to-be-the-ideal-franchisor-and-look-for-ideal-franchisees#respond Tue, 13 Oct 2015 04:55:12 +0000 http://www.thefranchiseinstitute.com.au/?p=1147 The post Tips on How to be the Ideal Franchisor and Look for Ideal Franchisees appeared first on Franchise Insitute.

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    Anyone can set up a franchise if they want to, but not everyone will experience success. The question is why? What are the criteria that lead to franchise success?

    Let’s face it, some businesses and some people have what it takes to succeed in franchising and this gives them a competitive advantage other the rest. They have the ideal franchise elements and have the ideal characteristics that help them to better navigate there pathway to success.

    The Ideal Franchisor

    In starting a franchise, having the four key elements of a niche product, widespread demand, simple and effective system, and a clear vision and plan are important. Ultimately though it is the person behind the business who will largely determine the franchise’s success or failure. The ideal franchisor must be have excellent people skills, a win/win mindset and the ability to inspire and motivate franchisees.

    As a franchisor, you will no longer be working IN the business doing day to day operations, but instead you will be leading your team of franchisees, mentoring and assisting them along the way. Your focus is on the growth of the business, be it new products, new services, or research and development. You will also focus on building the brand and creating awareness and demand.

    The Ideal Franchisee

    There are also some characteristics that you should be looking for in franchisees. First and foremost you want a franchisee who is going to follow the business system you have created and not chop and change it as they see fit. Franchise success is based on the premise of replication so a franchisee has to be able to replicate your business systems and not reinvent their own. They need to have a ‘can do’ attitude and a willingness to learn. Finally they need to be hard workers. No business system, franchised or non-franchised, succeeds without hard work. There is no ‘overnight success’ and franchisees just like other business owners need to recognise this and manage their expectations. However if you combine a good business model, with strong leadership, hard work and replicable systems than success is just a matter of time.

    The Franchise Institute helps small to medium sized companies franchise their business. Aside from explaining what franchising is and providing information on how to franchise your business, we provide full mentoring and support all throughout the franchise process. Call us to know if your business can be franchised and take the first step in growing your business.

    The post Tips on How to be the Ideal Franchisor and Look for Ideal Franchisees appeared first on Franchise Insitute.

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    What to look for when buying a franchise? https://thefranchiseinstitute.com.au/what-to-look-for-when-buying-a-franchise https://thefranchiseinstitute.com.au/what-to-look-for-when-buying-a-franchise#respond Wed, 16 Sep 2015 06:42:02 +0000 http://www.thefranchiseinstitute.com.au/?p=763 The post What to look for when buying a franchise? appeared first on Franchise Insitute.

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    Many of us have dreams of owning our own business. We opt for a franchise model because rightly so it offers some advantages over starting your own business venture from scratch. But buying a franchise per se is not a guarantee of success. It is after all still a business that you will need to operate and so it’s vital that you have a good understanding of the business you are buying.

    First off, there are several questions you need to answer when confronted with the challenge on how to start a franchise.

    Product or Service
    What are you going to sell? Is there an ongoing demand for it or is it a fad that might rise in popularity while it’s new and then come crashing down? Is the product or service attractive to the people in your franchised territory? Is working in this business something you can see yourself enjoying and really putting in the hours and effort?

    You need to consider all these before you decide to buy a franchise.

    Franchisor
    Aside from the business itself, you also need to know the person behind it and the system they have in place for the entire franchise

    How well do you know the franchisor? What level of support and training are they offering, not just in the beginning but ongoing? What is their vision for the business? Are they just out to sell franchises or are they looking at more measured growth ensuring each franchisee is well established before moving on to the next sale? What are they doing to promote the brand and to market the business to generate sales?

    Franchisees
    If the franchise business is already established, there are also several factors you need to look into. First of all, have you spoken with exiting franchisees? What are they saying about the business, the support, the marketing and the franchisor? Are the comments consistent amongst franchisees? Remember that sometimes a franchised business can have a ‘bad apple’ and their views are not necessarily representative of the whole business system.

    Your Franchise
    Most importantly, you need to know what you will bring to the table and determine right from the start how you will go about running the franchise.

    What are you prepared to bring to the business? Are you willing to learn and to follow the franchisors system or do you think “I know better, I’ll do it my way’? If this is your attitude perhaps you would be better off to start your own business. Franchising as a business model is reliant on franchisees following the franchisors system and not doing things their own way.

    Family also plays a big part in a franchise’s success. Don’t underestimate the time, effort and cash flow required to get the business up and running. Like all new businesses it will take time. Is your family 100% behind your decision? Without family support the challenge of starting any business is that much more difficult.

    Don’t’ despair it’s not all bad news. It’s just important to enter any new business venture, franchised or non-franchised, with your eyes wide open and with realistic expectations. It’s also good to receive sound franchise advice from the experts before you buy a franchise. You can take comfort in the fact that in buying a franchise you are much more likely to succeed over a five year period than in independently running your own businesses.

    The post What to look for when buying a franchise? appeared first on Franchise Insitute.

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    Four key elements for franchising your business https://thefranchiseinstitute.com.au/four-key-elements-for-franchising-your-business https://thefranchiseinstitute.com.au/four-key-elements-for-franchising-your-business#respond Thu, 10 Sep 2015 02:40:46 +0000 http://www.thefranchiseinstitute.com.au/?p=741 The post Four key elements for franchising your business appeared first on Franchise Insitute.

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    Are you thinking about franchising but don’t know where to start?

    Here at The Franchise Institute we can guide you on how to start a franchise whether your business has beenin operation for years or the business is still a concept you’ve yet to realise.

    Both scenarios are viable starting points in starting a franchise and they can both become successful if they have the right elements in place, or at least in mind.

    To give you an idea, here’s a 4 of the key elements a business should have in place if it is to successfully franchise.

    1. Niche products or services
    The world is already crowded with one-stop shops and all-in-one stores. To make your business stand out, it needs to cater to a particular group of people that shares a specific interest. A bar that offers craft beer, a burger joint that serves vegan burgers, and a retail store that sells upcycled bags – these are some examples of niche businesses that can become great franchises.

    2. Widespread demand
    James Corne, Founder and CEO of The Franchise Institute, explains that if you don’t have enough customers, your franchisees are going to have the same issue. Before starting a franchise it’s important to ask yourself ‘Are there enough customers out there?’ “Is there enough demand for my products and services?” You should only proceed if the answer is ‘Yes.’

    3. Simple and effective system
    In the podcast, James Corne also shared that it’s important for businesses to have simple and effective systems to implement. In having this, it’s more likely for the franchise to make the most of the franchise opportunity and achieve success. The simpler the system, the better it will be to franchise the business and the more effective it is for the franchisees to operate it and become successful.

    4. Vision and plan
    For a franchised business to succeed in the long term the franchisor needs to have a vision and a plan to achieve that vision. The plan should include: strategies to grow the business, strategies to develop new product offerings, and plans for innovation to keep up with an ever changing marketplace.

    With these four elements, it will be easier to set up a franchise. These 4 elements should be first on your agenda when thinking about expanding your business or setting into action a business concept you have in mind.

    The Franchise Institute has been helping owners successfully franchise their small to medium sized business. When you find yourself asking ‘How can I franchise my business?’ call us and let our team of franchise experts help you.

    The post Four key elements for franchising your business appeared first on Franchise Insitute.

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