A Glance At the Industry
With approximately 65,000 franchise units, Australia has a prominent franchising market that is popular amongst entrepreneurs, investors and those seeking business ownership.
The franchising business model is underpinned through an ownership concept, whereby the original company (the main franchisor), which owns the brand, offers an ownership license to others (the franchisees) to run the brand across separate outlets, selling the products and services of the brand over a set period.
New franchises come through the Australian states regularly - the franchising sector has been flourishing in Australia since the 1970s.
Some reasons for Australia’s successful franchising economy include a strong love for food amongst locals (a large sector which dominates the franchising market is food and beverage) as well as a thriving heartbeat of innovation. Locals love to support one another, supporting the growth of businesses and their brands through a ‘mateship’ culture.
The franchising market size in Australia is forecast at $155 billion, and other leading industries include non-food retail, groceries, and administration and support services. Recent market successes in the Australian franchising landscape involve local entrepreneurs reaching out to successful international franchises to expand operations into the metropolitan Australian cities.
Australia also has a streamlined legal process when it comes to owning a franchise, through its franchising code of conduct, also known as The Code. This provides a clear framework and guidelines for franchisors and franchisees, making it easier to set-up a franchise.
Find out more: Not sure which franchise you should invest in? Learn how to choose the right franchise.
Some Reasons Franchising Could Be Your Route to Ownership
If you’re looking to invest into one of the fastest growing commercial models, especially in the food and beverage industry, then franchising could be the right fit for you.
A sense of ownership
Franchising gives you the opportunity to have a sovereign sense of ownership. At the same time, you’ll need the ability to work with an established brand, customer base and operational system. A great example of a brand that encourages ownership through resources, established operations and tools is McDonalds.
Personal and professional security
Another advantage of buying a franchise is commercial security. This can manifest in various ways, including a strong and secure support network of business experts who can provide you with clear directional advice.
This can then assist with scaling the business securely as well as clearly operationalising the business resources for products and services to help your franchise get off the ground smoothly.
One type of business which can provide this commercial security is 7-Eleven. With both a local and an international base of successful franchise owners, a high degree of security and longevity is achievable.
Control over decision-making
Some franchises offer control and autonomy over decision making processes, including customising the brand’s communications, schedule, and other elements of the company.
Having the ability to customise your commercial operating model can allow you to best apply your resources in a way that matches your creativity and needs. Gutter-Vac franchise is one such option you can consider if you are looking for an opportunity that adapts to your lifestyle. With three different physical operating models, you are sure to be able to have a degree of autonomy over how the franchise is run.
Financially viable and consistent support
Investing in a small franchise can be kind on the wallet and easier to manage until you understand the cashflow of a franchise business. A smaller initial investment would be about $250k, and there are many brands which require small investments.
One such example is Boost Juice, a well-known Australian brand, which has tons of resources and a strong network of business connections for franchisees to tap into. With these advantages, you can tap into securing financial advice as well as operational advice on running your franchise store.
As one of Australia’s leading Vietnamese fast-food restaurants, Roll’d is a young and growing brand which promises a high level of financial support. With a range of their own lenders, they can support first-time franchise owners with commercial and financial advice.
Most food and beverage stores within the metropolitan areas of Australia are scalable, and bubble tea stores are a favourite for ambitious entrepreneurs looking to scale using the franchising model.
Bubble tea stores are simple and easy to distribute, and resources across each store can be deployed in various franchise locations. As such, these characteristics make it a very viable option for scaling. Scaling across a given geographic location with a set customer profile is also easier and is one that has commonly been applied by many food and beverage businesses.
If you are looking for opportunities, you are likely looking for one with a successful brand, and one that can provide you with loyal customers from the get-go.
A successful brand comes with proven business workflows, as well as a reliable returning consumer base, which will promise cashflow to your starting franchise business. While the barrier of entry may be higher for such brands, you’ll hit the ground running and see a return on your investment.
Many franchise owners have become successful by simply opening a single franchise store of a famous international brand. If you tap into an opportunity with an established network and global brand exposure, you’ll have a lot of the hard work cut out for you.
Useful training and guidance
An important part of buying a franchise and setting it up is understanding how to operationalise it, and franchisors should provide every franchisee with consistent training.
This can help to streamline many processes, which would have otherwise cost a lot more if you wanted to start a business from scratch.
One such brand which offers franchises training is Lord of the Fries. With its specific way of running things that is key to the brand, it provides franchisees with training in different areas, including marketing, social and PR communications.
Franchise development can be a complex goal and having an expert at hand can help with understanding the risks when setting up a franchise. Australia has a rich network of franchisors and franchisees, and franchise networking events will give you the opportunity to seek advice from experts, how to penetrate the market, how to uplift your brand and add value to the franchise.
Opportunities for expansion
Metropolitan cities, as well as popular inner-city suburbs are great areas to start your first franchise store. Thriving food hubs in the major cities are also a good indication of the areas where opening a franchise would likely be successful, as well as within suburban/regional malls.
If you are looking to expand rapidly through a franchise, then consider a brand which can provide you with the resources to meet your investment ambitions, and has the potential to spread its wings, both nationally and internationally. A food and beverage brand which can support you in your high expansion franchisee goals include Gong Cha.
High market penetration
A brand with a high market penetration offers products and services that have claimed a lion’s share in each market. Taking on a franchise with a high market penetration for one or more of its product or services is financially viable idea.
You would want to open the franchise in an area that is being under-served or not served at all, and you would want to work off the successes of the high market penetration to appeal to current and potential customers with localised marketing strategies.
If you are concerned with high turnover rates and managing recruitment, then consider a brand which has strong and well-trained local resources with minimal risk.
Mad Mex is a good example of a brand with lesser recruitment work required for the franchise start-up period. With a great base of operations, it can provide you with the resources you need to start quickly and effectively.
Find out more: Need help pitching yourself to a franchisor? Learn how to stand out from other franchisees.
Start Your Journey Into Franchising
Franchising is a reliable and sustainable option with various advantages that promote steady cashflow. If the franchise is managed well, it can provide an assured return on investment, and some brands allow a greater degree of managerial and creative control.
With these advantages, it is easy to see why many entrepreneurs choose to invest in a franchise.
Of course, we do advise that you do your own research prior to choosing a franchise. You can start to explore the franchise opportunities currently available and open in the market.
We hope that you are more confident in your decision to start a franchise, but if you have other questions or concerns, feel free to contact our team. We’ll be happy to help!