Where should you start a franchise?

We take a look at one of the world’s most franchised nations; Australia. If you’re looking to move further afield or have a business that you would like to franchise in a growing and successful market. Australia could be the place for you


The market

A recent survey, Franchising Australia 2012 conducted by Griffith University’s Asia Pacific Centre for Franchising Excellence and sponsored by the Franchise Council of Australia (FCA), found the number of business format franchises in Australia in 2012 was estimated at 1,137. When multiple concepts operating under a single brand name were included, the number of franchise systems grew to approximately 1,180. This, in comparison to the research taken in 2010 where only 977 business format franchises were running, shows the Australian franchise sector is growing and getting even stronger.



Overall, retailing accounts for 44 per cent of franchisors and 51 per cent of franchise units, making retail the biggest franchising sector in Australia. Around 18 per cent are involved in food retail and 27 per cent non-food retail. Outside of the retail industry, the survey saw 16 per cent of franchise systems providing administration and office support services, commercial cleaning and gardening services, with a further 10 per cent are known as ‘classified’ services, which may include pet grooming and automotive repairs.

Overall the sheer scale of different types of franchises and the growth, in particularly retail, shows the franchise sector has responded positively to improving economic conditions and entrepreneurs have seized opportunities in several growth markets

Regulation

Unlike many other countries, the Australian franchise industry has specific legislation imposed on it to help protect both franchise owners and franchisors. All franchise businesses within Australia are required, by law, to comply with the Franchising Code of Conduct, which aims to assist franchise owners and franchisors in making informed decisions before entering into legally binding agreements and to provide a framework for dispute resolutions.

The Franchising Code of Conduct also includes provisions relating to disclosure documents, cooling off periods, marketing fund audits and dispute resolutions.

Many organisations and individuals within the Australian franchise industry are members of the Franchise Council of Australia (FCA), a not-for-profit trade association that was formed in 1983 and represents the interests of the franchise industry.

Membership to the FCA is voluntary and is open to any organisation or individual involved in the franchise industry, including franchise owners, franchisors, lawyers, accountants, banks, consultants, academics and publishers.

Expanding your brand into Australia

Australia has a good record of both importing and exporting franchise concepts. Some of the brands that Australian-based franchisors have expanded internationally include Pack & Send, Hire a Hubby, and Gloria Jean’s Coffee.

Within Australia you will not only find household names, such as McDonald’s, Domino’s Pizza and Subway, successfully franchising across the country, but also smaller brands. Some of these include EmbroidMe, Anytime Fitness and Expense Reduction Analysts.

The type of franchise that does well is not restricted to one specific sector. Instead successful franchises range from a number of industries from pizza takeaways to those that provide financial services.

Franchise expos and events

A local way to finding more about the Australian franchise industry is by attending a franchise exhibition. There are many exhibitions and events held throughout the year. Some of the largest include Franchising Expo & Business Opportunities, which is held in Sydney and Melbourne.

Written by Jenna Leeds