To Franchise or Not to Franchise in 2015?

Should you franchise your business? This may be a question you’ve asked yourself on occasion, perhaps even many times. It’s not exactly a straightforward one to answer, since there is no one-size solution for every business, and not everyone is cut out for franchising.

Franchising a business is a big commitment, but also one that can reap some awesome rewards if you know how to go about it wisely. According to a recent report from the Asia-Pacific Centre for Franchising, franchising in Australia is definitely growing and expanding. This is not hard to see, since so many of things we purchase – from our cars and petrol to lunch and coffee – come from franchised businesses.

The report’s findings include the following:

  • Franchising currently contributes $144 billion to the Australian economy, representing an increase of almost 10% in the two years from 2012.
  • $79 billion of the above figure comes from fuel and retail outlets – more than 50%.
  • There has been a small dip of around 1.7% in the number of business format franchised systems since 2012, but this may represent a falling away of the less viable franchising models.
  • There are currently around 79,000 franchised businesses in Australia – not including fuel and motor vehicle retail, which represent another 10,000.
  • The number of business units in franchising has grown by 8% in the last two years.
  • The biggest growth area for franchising is in retail. Retail also represents the highest number of new entrants, while more exits tend to come more from the service sector.
  • The biggest challenges franchisors experience include the availability of suitable franchisees and the funding required for the initial purchase.
  • Around one in three actually began franchising during their first year of operation.
  • Of the remaining two thirds most are in businesses for about three years before deciding to set up a franchise.

What does it all mean?

It means basically that franchising in Australia is looking pretty positive and it is growing in popularity as a method of creating growth potential in business.

Not only that, franchising provides opportunities for franchisees to build their own profitable businesses, and their investment into the business model is likely to provide them with extra incentive to work hard and make a good go of it.

So should you franchise?

As mentioned above, this cannot be answered easily or quickly. Setting up a franchise is no mean feat and may not be for everyone. To investigate whether it could be suitable for your business, why not contact us?

We can discuss how franchising works and answer your questions.  And should you decide to go ahead and set up a franchise, we can provide professional guidance on franchising your business, including the documentation, the legalities, finding the most suitable model for your business, and all the other various requirements involved to ensure you have all your bases covered.

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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