Want to learn how to start a franchise in Australia?
Wondering what it is required to open a franchise in the country?
Go through this article. It covers all significant points you need to look into for setting up a successful franchise business in Australia.
Understand the franchise industry. This is the first step to polish your skills and enhance knowledge.
In its real sense, the franchise means ‘being in business for yourself, but not by yourself.’ It’s a license or permission for using the name and products of an existing business as well as the trademark.
Primarily, two parties are involved in a franchise: Franchiser and franchisee.
- Franchiser: The party that grants the franchise.
- Franchisee: The party that takes the franchise.
Franchise growth is inevitable in the country like Australia, offering excellent business opportunities for young entrepreneurs to climb the ladder of success. It is pleasing. It’s low on cost, high on returns and easy to develop faster consumer based. Also, the franchise lets you feel like you are your own boss and you don’t need to renew the wheel. The risk of failure is comparatively lower than setting up a new business.
There are many benefits you can reap as a franchiser or franchisee. Lately, this business has created a stir in the business sector – not only in Australia but around the world.
Approximately 350 new businesses launch a new franchise company each year.
How to start a franchise in Australia?
Starting a franchise in Australia may be more complicated than it seems. However, you can make it easy by exercising your due diligence. Here are the points you need to consider:
- Look carefully at your existing business model.
- Make your business distinctive, successful and replicable.
- Contact your desired franchise business.
- Choose franchisees slowly and carefully.
- Look for franchises similar to your business.
- Find out what your competitors charge for royalties and other fees.
There are many franchise consultants in the Australian business sector. They can help you gather a wealth of information about franchisee. But, make sure they’re providing you with correct data. In a nutshell, you should run a franchise pilot before anything else to demonstrate your franchisees that you’re a viable business.
Following are the things to consider for starting a franchise. Knowing them is indispensable:
Increase your knowledge
Franchising is not a rocket science, instead a simple business model. Invest time to learn about the industry. Be careful to acquire good advice from several resources and specialist franchise consultants in Australia. The International Franchise Association, Franchise Council of Australia and the FTC provide a large amount of information.
Ensure to set up your franchise correctly from the onset. For this, have a franchise agreement drawn up, decide about your pricing, put together a comprehensive operations manual for your franchisees and be sure you have intellectual property protection for all your branding.
Choose the right franchisees
It sounds obvious. Choosing franchisees that are right for your business is of paramount importance. Be sure your franchise partners are self-motivated individuals who genuinely look forward to running their own business.
Most often new franchisers – because of an understandable desire to grow their network – take on wrong franchisees. Due to this, they meet problems down the line. You should take time. Think carefully what application process is most appropriate for your particular business. Both the parties must be assured and be confident of having the right fit for a good ongoing relationship.
Take professional advice
For a successful franchise in Australia, take appropriate advice from solicitors, accountants, bankers, and possibly renowned franchise consultants. Make sure you have a financial model in Excel of a prospective franchise operation such as cash flow projections, pro-forma income statements, and balance sheets. Your accountant is the most helpful and reliable professional to do this. Don’t convince yourself that franchising will work because you have conducted a thorough analysis. You can be in big trouble.
It’s, therefore, essential to consult an experienced franchise attorney and get the Franchise Agreement written by him/her. But, before this, make sure what professional counsels charge to write franchise documents.
Training and support
Focus on giving your franchisees the best possible opportunities. This includes providing them with comprehensive support and first-rate training. In general, new franchisees need a substantial amount of support. However, their training requirement lessens as they become more established. But, you should be committed to offering constant support for their unstoppable growth.
Stop Temper Expectations
Franchising has empowered countless small businesses to achieve a level of professional and financial success. Some franchises reach beyond their expectations. But, others fail to get the results they believed franchising would deliver.
So, it’s essential to carry out a franchise analysis with caution. Never go ahead of yourself. Avoid building an extensive franchise network before you sell your first franchise. Remember, launching a new franchise means you’ll be operating another business; thereby you’ll be risking capital.
Starting a franchise in Australia maybe or may not be your piece of cake. But if you are determined to venture into it, dig deeper and get insights into the franchise industry for a ‘quick fix route’ to growth.
Franchising may bring you specific challenges but if you approach in the right direction; it can lead you to a solid foundation. The key mantras are: do your initial research, thoroughly read and understand the franchise agreement, seek legal advice from a franchise lawyer, get the right franchise funding, choose a franchise location, and prepare for the opening day.
The franchise is all about good relationships, brand values, and comprehensive support. Once you find a professional franchise consultant, everything will be easier and hassle-free.