Franchising helps you grow your business with other people's capital and effort, while you keep ownership of your brand and system. For the right business, it's the fastest way to expand nationally without borrowing, hiring lots of staff, or trying to be everywhere at once.
Every growing business faces the same challenge. There is demand in the next suburb, city, or state, but reaching it takes money you may not want to borrow and managers you may not fully trust. Franchising changes this. Your franchisee pays for their own site, and because they own it, they care about it more than most employee managers would.
That's the case for franchising in a nutshell. Below, you'll find more details, including the tougher aspects, because it's important to consider both before making a decision.
Each new location is funded by the franchisee, not by you or a bank. You can expand without taking on debt or giving up equity.
A franchisee invests their own money in the business. They open early, handle tough customers, and fix problems late at night because it's their livelihood, not just a job.
Royalties give you an income stream that grows as your network grows, along with initial fees from each new franchisee. This revenue doesn't depend on you personally doing the work.
Opening company-owned sites is limited by your capital and management capacity. With franchising, growth depends on how many good franchisees you can find, which is usually a much higher limit.
A franchisee in Geelong knows their area. They understand the local market, competitors, and networks in ways a head office never could.
A bigger network can buy supplies for less, market more efficiently, and negotiate better deals. Costs that are tough for one site become manageable when spread across many.
Twenty locations with your name build much more awareness than just one. Each site markets locally and helps grow a brand that becomes more valuable over time.
A documented system with a network of franchisees and steady royalty income is much more attractive than a single owner-operated site. It's worth more and is easier to sell.
Instead of running the business every day, you focus on building the system and supporting your network. For owners who want to work on the business, not in it, that's the main benefit.
Franchising is often described as a way to avoid staffing problems, but that's not really true. Your franchisees still hire people, and you now have to manage your relationship with the franchisee. What does change is that you no longer have to recruit, schedule, or manage staff at every location — each franchisee handles that for their own site. That's a real benefit, and it's important to be clear about it instead of overselling.
The figures below are a snapshot of businesses we have helped to franchise.
Franchising copies your business model, but it doesn't fix its problems. If your business isn't profitable, isn't documented, or relies too much on you, franchising will only make those issues bigger.
Franchisees need training, support, compliance checks, and someone to help when problems come up. That work is your responsibility, especially in the first few years.
Franchisees are independent business owners, not employees. You set the standards and enforce the agreement, but you can't direct them the same way you would your staff.
Legal documents, the operations manual, the financial model, and recruitment all cost money before you receive any royalties. Initial franchise fees should cover setting up that franchisee, not your cash flow.
The Franchising Code of Conduct imposes real obligations, and under the new Code nearly all of them carry civil penalties. Disclosure is an annual commitment, not a one-off.
None of this is meant to discourage franchising. It's about making sure you have realistic expectations, which, in our experience, is the biggest factor in whether a new franchisor succeeds.
Franchising works when your business is profitable at each location, can be run by someone other than you, and has enough margin to support both the franchisee's income and your royalty. If any of these are missing, fix them first.
Not every business or every business owner is suited to franchising, and that's okay. In fact, we regularly advise business owners that another growth model may be a better fit.
Our role is to give you an honest, practical assessment of whether franchising makes sense for your business. If it does, we'll show you what the pathway could look like. If it doesn't, we'll tell you why and help point you towards alternatives that may be better suited to your goals.
If you want a clear and unbiased view on whether your business is ready to franchise, our Free Franchise Assessment is the best place to start.
Growth funded and driven by someone else. Each location is paid for by the franchisee, not by you or a lender, removing the capital limits that hold back most growing businesses while putting a motivated owner-operator in each location with a direct stake in its success.
It depends on your capital and what you want. Company-owned sites give you all the profit and control, but each one costs money and takes up your time. Franchising gives up some margin and control in exchange for faster growth and motivated operators.
They earn an initial franchise fee when a franchisee joins, and ongoing royalties, usually a percentage of the franchisee's revenue. Some systems also make money through supply deals or a marketing levy, both of which require disclosure under the Code.
No, but how you control it changes. You set the standards and enforce them through the franchise agreement and your operations manual, instead of giving direct instructions. A strong system often gives you more brand consistency than loosely managed company sites.
Like any business, franchising requires upfront investment before it generates meaningful profit. The advantage is that expansion is largely funded by franchisees rather than by Head Office, making it a more capital-efficient way to scale than opening and operating company-owned locations. Longer-term profitability comes from building a network where ongoing franchise income exceeds the cost of supporting that network.
If you’d like to learn more, take advantage of our free 30 minute consultation with a specialist. Talk to us about your vision and how to franchise your business.
We approached the Franchise Institute and after doing our research found them to offer the best advice at the best price. 10 years on and we are delighted with our decision. LTYB now has 10 studios in Victoria and 3 in QLD. Throughout the establishment of the franchise James and his team were so helpful and knowledgeable. If you want to grow your business and you are committed to its success, there is simply no one better to guide you through this process than The Franchise Institute.
I built up DCS over an 8-year period and then felt it was time to expand the business. I was drawn to the franchise model because it reduced the hassles with staff and provided the added benefits of an owner operator business model. I did my research and came across The Franchise Institute, and James and Shauna were so easy to work with. We signed up 7 franchise partners within 7 months – so we couldn’t be happier. If you want to franchise your business cost effectively and painlessly, I highly recommend The Franchise Institute.
We met with a number of other consultants before we decided to work with James, but what made us choose The Franchise Institute was their openness and honesty. Since then, my business has grown from strength to strength and now we have investors looking to expand it globally. None of this would be possible without The Franchise Institute. James taught me to believe in myself and to persevere, and now I am so proud of what I have achieved and so grateful to James and his team.
We met James at the Franchise Expo and were immediately impressed by his depth of knowledge and his approachability. He definitely stood out as different from the other franchise consultants. After shopping around, we decided to work with James and The Franchise Institute, and it was the best decision! All of his team are knowledgeable, helpful, and a pleasure to work with. Since completing the franchising process, we have sold 9 franchise territories and are now expanding interstate. If you’re thinking of franchising your business, then look no further than The Franchise Institute—they made our dream come true.
From start to finish, both James & Shauna were amazing to deal with! Their knowledge and willingness to help exceeded our expectations, and we truly feel equipped to tackle the world of franchising with their guidance! This was something that seemed very daunting before we came on board with The Franchise Institute. We couldn't recommend their services higher and feel very grateful for everything they have done for us! Thanks so much, guys!!!
I had been running my business for approximately 12 years and decided I wanted to franchise my business model. Having no idea how to make this possible, I contacted The Franchise Institute. James, in particular, was extremely resourceful and patient as he educated me on the steps involved with the process. Thanks to the team, I am now confident and have developed a great franchise business model for my business, with franchisees in Melbourne, Queensland, Canberra, and Perth on its way too.
We could not keep up with the demand. So it was time to expand. We felt that the only way forward was to have owner/operators in our business structure, which led us to franchising. James and the team at The Franchise Institute guided us with excellent knowledge and understanding of where we were heading. We recruited our first franchisee in just under 4 weeks. If we could have changed anything, I would have contacted The Franchise Institute sooner.
I’m so happy I used the Franchise Institute to franchise my business. Their detailed system and professional and personable support made everything possible and allowed me the opportunity to grow my business.
Lawrence Dry Cleaning is the largest chain of dry cleaners in NSW with 30 locations. Franchising as a model of growth interested us because we wanted our stores to be operated by a network of motivated owner-operators. We came across James Corne from The Franchise Institute and were immediately impressed by his experience and depth of knowledge. He took us through the franchising process step by step ensuring we understood what we were doing and, importantly, why. If you want a cost-effective model staffed by owner-operators, then I highly recommend franchising through The Franchise Institute.
Thank you James & Shauna for helping us franchise our cleaning company Mums2Mums. The service was great and was done in steps so I could manage the workload. We felt supported the whole way. We now have 5 locations and look forward to many more.
Thank you very much James and Shauna for your outstanding advice about Franchising. Your wisdom and experience in this sector are absolutely exceptional and greatly appreciated.
Thank you James for your amazing insights and advice around franchising internationally. You were able to answer all my questions and so much more. It's very clear that you not only know your stuff, but have experienced it many times yourself and with your clients. It's been really invaluable and I am looking forward to having your guidance in this exciting process.
Shauna and James have been amazing in setting up our business to franchise. They have been so thorough and worked with us over the 2020 lockdown period interstate and still managed to get everything done perfectly. Cannot recommend highly enough they are both so knowledgeable and have made the entire process so easy and stress-free - this is definitely not a process I would have been able to get done without them! For anyone thinking about starting on this journey I would say go for it!
