Franchising in Australia is now a $172 billion business – a far cry from what was predicted by the naysayers back in the 1980s!
Once seen as potentially dubious, Franchises are now a popular purchase for those keen to have their own business.
Whilst some Franchises may be better than others, they are mostly affordable – and come with the type of support a new business owner needs.
Franchising was introduced into Australia in the 1970s – and the country now has more franchising outlets per capita than any other country (except NZ).
Franchising Code of Conduct
Encapsulating everything from coffee and bubble tea to gardening and carpet cleaning, Franchising is governed by the ACCC – with comprehensive legislation in place – namely the Franchising Code of Conduct.
A Government review of the Code was carried out in 2023 to ensure it was still fit for purpose.
As we move into 2024, Franchising looks set to further evolve and grow. Lucia Vuong – Head of SEEK Business – has seen a 39% increase in franchise enquiries in 2023.
We are seeing some significant changes in the Franchising world – for example, the demographic is changing, with a steady migration of people from the cities to regional areas since the pandemic.
Higher profit margins
As remote working arrangements became more popular/necessary during lockdown, regional Australia was seen as a desirable location for new franchise businesses – due to the lower cost of living, lower operating costs, and, potentially, higher profit margins.
Another major change is that the once male-dominated franchising industry is now seeing many more women entering the sector.
For those considering a Franchise, it’s important to remember that every business – and every industry – has pros and cons. Buying a Franchise is still buying a business and doing your due diligence is essential.
Making your move
It’s also important to carefully consider whether a Franchise is the right move for you.
The advantages of buying a Franchise are many. For starters, it’s a way of buying your own business without the high risks involved with starting from scratch.
There are generally established proven systems in place to guide you; support and training, and national marketing to give you a leg up from Day 1.
However, for some, those advantages could be disadvantages. For example, you may find those systems too controlling or limiting. And the Franchisor can make changes at any time.
Overall, Franchisees say the pros outweigh the cons – especially when it comes to branding and trademarks, media and marketing, supply agreements, equipment, shop fit-out and more.
Buy a Franchise now
There are also choices in how you acquire your Franchise; you can buy a new Franchise (Territory) from the Franchisor – or you can buy an established Franchise from the previous owner.
In both cases, treat the negotiations as you would any business transaction. Carry out due diligence and consult your solicitor and accountant.
Find out as much as possible about the Franchise, talk to other Franchisees, if possible, study the numbers and the competition.
If you think a Franchise is the right move for you in 2024, check out this issue of Coast to Coast Australia, where you will find some excellent opportunities for sale!