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'Unprecedented' is a word that has been thrown around quite a bit in 2020.
There may be new problems, but new problems call for new solutions and businesses who can find those solutions give themselves an 'unprecedented' chance of success.
Franchises have also noted that there are now many members of the workforce who are seeking flexibility in a way that their pre-existing employment was not supplying them with.
Even though the world may seem like it is in a state of flux, there are still plenty constants that can be applied to business; if you are to be successful, you will have to work hard and be innovative in the face of a challenge.
If your focus is on Australia, then here's some information that's pertinent to that market.
The Australia Franchise Industry
The Franchise Council of Australia estimates that the franchise business segment (which at the time of them putting these figures together, had 1,344 networks and more than 98,000 franchised outlets) employs almost 600,000 people.
There are franchise operators in virtually every facet of business, including the most hi-tech to more manual labour intensive areas.
Legal Requirements to Franchising in Australia
The first port of call for any potential franchisee should be to familiar themselves with the Franchising Code of Conduct. This is the industry code that all franchisors and franchisees in Australia are legally obliged to comply with.
The initial Code, which was introduced in 1998 by the Australian Competition and Consumer Commission, was replaced by a new code in 2015 and it details the regulations that franchising industry participants must abide by
The following are just some of the areas it covers
- Disclosure (further information below)
- Dispute resolutions
- What is a “good faith obligation”
- When does a cooling-off period apply
- The correct procedure for ending a franchise agreement
The Franchising Code of Conduct exists to regulate the industry, with the aim of informing potential franchisees with the information they need before entering a franchise agreement. It also helps provide a cost-effective solution to disputes.
As a franchisor, the Code guides you on;
- What you must do as a franchisor
- The information you must disclose to the franchisee
- What has to be included in a franchise agreement
- Help with dispute resolution and mediation
- What is a minimum standard of conduct within the franchise industry
The Franchising Code of Conduct isn’t intended to replace independent legal, business or other advice before entering into a franchise agreement.
Disclosure Documents
A Franchise Disclosure Document is a document that all franchisors are legally required to provide potential franchisees. It exists to provide potential franchisees with all the information they require of a franchise system, so they can make an educated decision whether they want to enter into a franchise agreement.
All franchisors are required to maintain a disclosure document and it must be provided to a potential franchisee who is considering entering, or renewing a franchise agreement.
- These are some of the details that franchisors are required to disclose;
- Details of certain types of legal proceedings involving either the franchisor or its directors
- Contact details of current and former franchisees (unless a franchisee has made a request that these details are not shared)
- Details of the expenditure involved in starting and operating the franchise business, as well as any other financial payments which are required.
- Details of the arrangements that will be in place when the franchise agreement comes to an end.
What is popular?
The average expectation for investment in the franchise sector in Australia is around $100,000 - $200,000, according to two separate industry sources. Meanwhile, the most popular categories in Australian franchising right now are food & beverage, coffee, fast food, restaurant and cafes and home-based franchises.
That being said, there are examples of excellent franchises in almost every industry, so successfully investing in a different category is still an option for all potential franchisees.
Home Grown & Overseas Opportunity
Of course, some of the success of Australia’s early franchises can be put down to the urge for locals to enjoy goods and services that were only available in North America at the time.
However, that has changed greatly since.
The Franchise Council of Australia states: “(The) great majority of franchise systems operating in Australia are home grown, and increasing numbers of Australian franchise systems are successfully taking their systems overseas.”
Thus, Australians love for franchises has progressed well beyond simply wanting goods and services they haven’t previously tried.
At this stage, it is also an industry full of consumers who are supporting both innovative products and services from abroad and homegrown entrepreneurs who have embraced franchising’s dynamism.
Franchise Direct and You!
With 20 years’ experience, Franchise Direct’s Australian portal is a new element to an already staggering offering provided by the company. Franchise Direct has made its name as experts in the area of connecting potential franchisees with their dream franchise opportunity.
Our website is designed for an excellent user experience, allowing visitors to search for franchises by industry, investment amount and location. This gives franchisors the ideal method for demonstrating all that their entity has to offer. It also provides potential investors with a detailed look into their franchise opportunity.
With 14 international portals, Franchise Direct is the world’s leading website for connecting potential franchisee with the franchise of their dreams, working across North America, Latin America, Europe, Africa and Asia.
We are delighted to add Australia to that list and cannot wait to help you!