FRANCHISING BOOMS IN AUSTRALIA

Franchising in Australia is booming! Never before in our history has there been such interest in buying or starting a franchise. The Global Financial Crises may have claimed many corporate scalps, but Australia’s fastest growing franchisees are not among them. Companies in this Year’s BRW Fast Franchise List not only provide their resilience, they increased their revenue by 26% and boosted outlet number by 19%. It’s a performance to be envied” BRW Vol 32, No 7, Feb 25 – March 31, 2010.

The 2008 Franchising Australia Survey conducted by Griffith University reported that there were approximately 1100 business format franchisors in Australia. This figure is in fact an under estimation of the true number because the survey did not capture data on the franchises systems who did not participate in the survey. However despite this under representation, Australia still has the highest number of franchises systems per capita anywhere in the world – more than five times the density of franchise systems that exists in the United States.

Franchised businesses in Australia vary in size from multinational franchise systems with thousands of franchisees, such as McDonald’s, through too much smaller operations with just one or a handful of units

So what is franchising? Essentially franchising is a marketing concept. An innovative method which can be applied to the distribution of goods and/or the provision of services. It has its origins back to the late 18th century, but modern franchising as we know it today started after World War II.

In a nutshell franchising is a business model where the franchisor (the owner of the business providing the product or service) assigns to independent people (the franchisees) the right to market and distribute the franchisor’s goods or service, and to use the business name for a fixed period of time.

Franchising is an exciting and effective method for expanding a business. When it is properly structured and well run it provides benefits and satisfaction for both parties. However it s not get rich quick scheme for either the franchisor or franchisee, nor will it turn a fledgling business into a gold mine.

There are however a number of costly mistakes the business owners make when franchising a business. Click here to subscribe our FREE franchising report.

How will I know when my business is ready to franchise?

This is one of the most commonly asked questions. Often the business is in good shape, that is

• it is profitable

• well established

• has a good customer base

• has potential for expansion

• has a recognisable or distinct name and logo

• it is able to be replicated.

What’s “not ready” is the business owner.

As Clive Rogers, from the Car Kit Company says of his decision to franchise his business…..

“You’re never ready, there’s always something else that need to be done first, new equipment to purchase, new business to secure, so it’s just a matter of making a decision and committing to that decision. Once I had made the decision to franchise I felt so much less stressed about the whole thing.

 The decision to franchise my business made me step out of my day-to-day role of working in the business and take an more holistic longer term view of where my business was headed I saw things in a very different light and it was refreshing”

Is your business name and logo or ‘Intellectual Property’ Protected?

No matter how great your business is and how many happy customers you have, you run the risk of losing it all if you haven’t protected your intellectual property.

The registration of a business name only confers very limited protection. To really protect your name and logo you need to register them as a trademark

If you’re thinking of franchising your business this step is essential. The right to use the franchisor’s name and logos is a core part of most franchised systems. So protecting the name is of utmost importance not only to the franchisor but also to other franchisees in the system.

But even if you’re not planning to franchise registering your name and logo as a trademark is good business practice.

Registration can be sought in one or more of a number of classes defined by product or industry. The protection will be given in the class in which you apply for. There are about 40 different classes.

It’s not an expensive process with costs starting at around $150 per application per class as well as an additional filing fee of $300 per class upon acceptance of the application for registration of the mark. Most businesses only need to register their name and or mark in 1-2 classes.

You can do the process yourself by going to www.IPAustralia.com.au or engage the services of a lawyer to do it on your behalf

FEAR – A FOUR-LETTER WORD

What is fear and why does it hold us back? To most fear in business is something we don’t talk about explicitly but its pervasive across all areas of what we do. Fear manifests itself in thoughts such as “what if it doesn’t work” “what will people think”. Of course its normal to feel some anxiety (and excitement) when we try something new, but on the whole we are much more prone to focusing on what if something doesn’t work rather than thinking about what our business would be like if IT DID WORK.

So here is a new definition of FEAR:
“False Expectations that Appear Real”.

RECOMMENDED READING

THE E-MYTH REVISITED: MICHAEL GERBER

If you’re thinking of franchising your business or just expanding it the traditional way then this is a MUST read

In The E-Myth, Michael Gerber dispels the myths surrounding starting your own business and shows how commonplace assumptions can get in the way of running a business. He walks you through the steps in the life of a business from entrepreneurial infancy, through adolescent growing pains, to the mature entrepreneurial perspective, the guiding light of all businesses that succeed. He then shows how to apply the lessons of franchising to any business -- whether or not it is a franchise. Finally, Gerber draws the vital, often overlooked distinction between working on your business and working in. your business. After you have read The E-Myth Revisited, you will truly be able to grow your business in a predictable and productive way.

FRANCHISING MADE EASY -- THE SECRETS THAT FRANCHISE EXPERTS WON’T TELL YOU BUT YOU NEED TO KNOW: JAMES CORNE

This book is about creating enormous wealth by realising the hidden potential in your business. No one has ever made it big by trading their time for money. This book shows you how you can leverage your success and break free from your daily challenges. Click here to buy Franchising Made Easy.