how the pandemic has made the franchising space more attractive for entrepreneurs


Hundreds of countries throughout the world have been forced into full or partial lockdown.

Even after eight to nine months of news of the COVID-19 outbreak, a vast majority of people continue to work from home. Many businesses have had to shut shop entirely, while others are working at minimal capacity, and some franchises have suffered losses during the pandemic as well.

It’s only now that most states in Australia have begun to emerge from their respective lockdowns. But there have been some businesses that managed to survive the pandemic and even thrive during it. The franchising space is one of the very few industries to have experienced a surge during this trying time. Many entrepreneurs that have been waiting to step into the business landscape have begun to look towards franchising.

The Future Boom

The franchising industry is very different from regular businesses. When specific factors are in place, there is always an increase in franchise sales. These drivers include:

  • Higher unemployment levels at the upper end of the salary market
  • Access to business loans at lower interest rates
  • Australia has experienced significant growth in the last decade or so, and many Australians have access to savings in the form of retirement accounts, home equity, and personal savings

The pandemic has put a large number of people out of work within a very short time. Most of these individuals are highly skilled and competent in their specific industries. This has created a pool of prospective franchises or even employees in businesses run by those prospective franchisees.

What the Franchise Model Is Like

An independent company business model is very different from that of a franchise model. The latter is better positioned to weather recessions and other shakeups in the market. Given the current challenging economic environment, now is perhaps the best time to consider stepping into the franchising space for various reasons, such as:

  • Established Brand – Franchisees benefit from an established customer base and a solid existing brand recognition. It gives you an excellent foundation to start and increases your business’s sustainability through trying economic conditions.
  • Lower Risk – When you plan to become part of a franchising network with a proven track record, it increases the chances of you getting the financial backing you need in the form of a bank loan. Stable financial history and successful proven ventures are considered low risk, which puts you in a better position from the get-go. Independent and smaller business operations do not have the stability that franchised businesses do and are more likely to go under within a couple of years of opening.
  • Financial Aid from Franchisors – Many franchise networks offer financial support to new franchisees, either through third parties or directly. This makes the process of starting a new business venture far easier. You will end up spending far less on starting up a franchise compared to an independent business.
  • Collaboration and support – When you become part of a franchise, you can access knowledge and resources from franchise managers and other franchisees in the network. You do not have to worry about handling every aspect of the business setup like marketing and branding, training, and more.

Franchising- A smart Business Decision

When you are starting a new business, all these things are crucial to success. Becoming a franchisee can be a very sound and smart business decision. This industry contributes significantly to the Australian economy, and you get to work within a framework of a proven business model. You can get guidance and support from your franchisor while being able to make your own daily decisions.

Whether you start fresh or buy out another franchisee, your chances of success are much better with a franchise than if you were to go it alone. Franchising contributes greatly to the country’s economy while offering a proven business model. The economic challenges that the current pandemic has posed can make franchising a smart choice for a successful entrepreneurial venture.

If you want any more information, 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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