Franchise Australia - Why It's A Growing Industry

Author: Heather Gleeson

Date: OCT 16th, 2017

Topic: Franchise News And Advice

Franchise Australia

In recent years the franchising industry has continued to grow, with statistics showing that people employed in the franchise sector in Australia continued to climb from 461,000 in 2014 to 472,000 in 2016 (the Franchise Centre, Griffith University).  These people have generated a sales income of approximately $146 billion in 2016, compared to $144 billion in 2014.

How and why does this growth continue?

There are 2 main reasons why a franchisee wisely invests their capital:

1)  The Power Of The Brand - 

Where a single business has to find the budget to make a lasting impression on their ideal clients in their local marketplace, a group of franchises has the collective power to market nationally.  At a local level they have the experience and statistics to share with their partners (franchisees) the most efficient and cost effective ways to gain local market share.
Many franchise models have leads that are dispersed daily from head office, taking the onus off the franchisee to generate customers.  This is the $'s producing asset of the 'Power of the Brand'.

TIP * If you are looking at a relatively new brand to the market you need to research into the demand they are receiving for their services, the size and the potential growth of the niche, the competition you could be up against, and how well their first or mother franchise is performing.  Also consider how many clients you will need to generate the income you require.  Many systems have ongoing clients from house and car cleaning to meeting the finance needs of local businesses.  You may not need to service hundreds of clients to make a great living, just a handful really well.

New brands can be a golden egg in that the net worth of business inherently increases as demand for the franchise grows nationally.  (You may be able to get in at a significant discount for being a early adopter).  Either way it is still less risky than going into business by yourself and learning through the school of hard knocks.

2)  The Proven System

This is the golden nugget - where you save oodles of money stepping into a tried and proven system and receiving full training on how to make it work.  Think about the last time you had your carpets cleaned and how quickly they were in and out and the job was completed to your satisfaction.  If you tried to go it alone, set up a carpet cleaning business (for example) and you took 3 times as long to service a customer with possible inconsistencies in the outcome then your business would suffer.  You may not get a repeat client, and you can only service one client in the time the franchisee has serviced 3 with their well refined system.  Now this is only a fictitious example however very valid food for thought, and we know who is making the higher income.  There is also the case that a franchise carpet cleaner (yes lets stick to carpets) would have products to sell to the customer while on the job, for example spot cleaner for the carpet or couch.  Additional income with no added time or costs.

The other upside to adopting a system is the continual support that is packaged in.  Have you ever sat there wondering 'why this is happening?' or 'how do I get out of this situation with a client, keep my reputation, and possibly a repeat customer?'  In a franchise you have someone to call who has been there and probably done that.  They can advise you firstly how to handle the situation, and also what not to do to land in that same situation again.  A time saver, money saver and stress saver, and possibly a brand and reputation saver too!  Yes, you are still in business for yourself building up your own saleable asset, plus with support that has capital and passion in the game too.

So statistics show Franchising in Australia is continuing to grow.  Also our experience in the franchise space supports it.  More and more businesses are franchising their system to enable future growth.  Many franchisors talk of increasing demand and franchising being a way to continue to service their customers with business partners that want to succeed.  Its one huge merry-go-round of advertising to support established franchisees, and then gaining so much enquiry for their services that they need more franchisees to keep up.  Some brands have franchisees working inside and alongside their territories to service demand, until new partners join the team and service those areas.  Too much work - is that not a good problem to have as a new business owner?

We are opening up our doors to the public for a short time only to personally help you find a profitable business in your area.  Get in touch with us to take advantage of this complimentary service and save yourself hours of searching.  Book a time to chat today - use our knowledge and insights into franchising to fast track your search... .