Franchising

What is franchising?

Franchising is globally recognised as a successful business growth model and an exciting marketing method, requiring elements of skill, patience, diligence from you the business founder. When adequately applied, it offers mutual benefit and satisfaction for all parties involved, namely you as the franchisor and your network of individual franchisees.

How can franchising benefit your business?

Greater Commitment

Franchisees have invested their own capital in the franchise business and that “skin in the game” arrangement places an added commitment and obligation on their own personal part, pushing them further to ensure the business is successful and performs even better than if you were managing the operations of the business yourself.

Quality Management

The franchisee will be looking to take your training and ongoing operational support to manage the business to your operational system and commercial requirements, i.e. Operations Manual, Commercial Policy and Franchise Agreement compliance.

Faster Expansion

The key formula to a successful franchise network is to implement the fundamental rule of finance: use “other people’s money”. The franchisee has to bear the expenses at their outlets in order to run their franchise business.

Improved Local Market Penetration

Your selected franchisees will have a clear motivation and focus on creating a greater connection to the local community or territory that it is established or granted to work within.

Lower Cost

You as the franchisor are no longer required to fund the capital expense of establishing the business. This means that you will not be burdened with the responsibility for managing capital expenses including lease or mortgage payments, equipment & employment expenses plus all other expenses incurred in the running of the business.

Protection from Liability

Franchise business models allow for a liberated contractor relationship between you, the franchisor, and your franchisees. Whilst the franchise brand and network may be perceived in the common market as a single unified entity, it is in fact a mutually exclusive arrangement regarding liability, government record and registration.

Is your business “Franchisable”?

The concept of franchising can be adaptable to any business, provided it qualifies for some basic characteristics:

Is your business proven?

Franchisees have invested their own capital in the franchise business and that “skin in the game” arrangement places an added commitment and obligation on their own personal part, pushing them further to ensure the business is successful and performs even better than if you were managing the operations of the business yourself.

Is your business concept unique?

Is your business adequately differentiated from its competitors? Is it marketable as a business opportunity? Does it have a sustainable competitive advantage?

Is your business systemised?

Do you have operational systems in place? Are operating procedures documented? Could someone learn to operate your business in three months or less?

Is your business commercially profitable?

Does your business have a marketable return on investment for a prospective franchisee even after all royalties are distributed? If a business can’t generate a healthy enough return on investment after deducting a royalty it’s going to have difficulty keeping franchisees happy, let alone attract them to invest.

Is your franchise model commercially viable to you?

Do you know what it will cost to create your franchise model? What are the costs of marketing your franchise offer? What will be the growth assumptions of your franchise network? Have you determined what it will cost you to support your franchise network, now and in the future? What will be your returns, now and in the future?

Is there a clear and determined long term strategy in place?

re you committed to investing, building, growing and expanding your business? Are you set up for what that commitment will require of your time and your desired lifestyle? Do you have an assumed exit strategy?

And Finally

Franchising your business is not as complex as it looks. Nevertheless, it requires a firm commitment from you to be thorough, compliant, realistic and patient. Foregoing any of these professional characteristics could prove costly and stressful. You need to be prepared to do what it will take to make it succeed, and anyone who tells you otherwise hasn’t got the relevant experience or simply isn’t giving you sound advice.

Ready to Take the Next Steps?

We are leading franchise consultants and advisors with expertise in the areas of business or corporate growth, distribution, and licensing. We support and guide you with setting targets, objectives, strategies and solutions that are aligned to your business growth aspirations. All our clients started exactly where you are today.

Why our clients choose us?

Down to earth, straight to the point advisors with nothing more than a desire to assist in building successful businesses. Our clients enjoy the benefit of working directly with the senior team, fixed fees and ability to recognise the priorities for success.
  • Getting franchise enquiries, but not sure what to do?
  • Are you experiencing rapid growth and market attention?
  • Is managing staff becoming a constant headache and time consuming?
  • Is your cash flow limited for funding future growth?
  • Have you proven your business concept?

Enquire Today

Fill in the form below or contact us on (02) 9232 3511

Level 1, 109 Pitt Street NSW 2000 Australia
Level 1, 109 Pitt Street NSW 2000 Australia
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