Home		The Franchise Institute Report : Volume 1

Volume 1, August 2004

THE FRANCHISE REPORT

Why franchise?

Franchising in Australia is booming! Never before in our history has there been such interest in buying a franchise or in starting a franchise. It has been estimated that franchising is a $80 billion a year industry and growing. There are many SME and Micro Business owners in Australia who would like to explore the possibility of franchising their business but either don’t know where to begin or can’t afford the $50,000 plus fees it usually takes to get some assistance. But all this has changed with the release of The Franchise Institute’s “Franchise for Success program".

“Franchise for Success Program”
For a mere fraction of the price it would normally cost the “Franchise For Success” program enables its users to work through the self-paced interactive software program which focuses on all aspects of preparing a business for franchising. The program contains information, gives examples and enables users to answer specific questions and by doing so create customised documents for their franchise. The program is also fully supported by an on-site* mentoring program.

The Franchise For Success program shows you how to:

• Structure your franchise
• Package you franchise offer
• Profile your ideal franchisees
• Recruit franchisees
• Manage Franchisee’s performance
• Sales, Marketing and lead generation for franchisees
• Customise and create your Operations Manual
• Prepare your Disclosure Document
• Prepare a brief for your Franchise Agreement

Is your business franchisable?

Franchising is a huge industry globally and in Australia alone is an $80 billion industry. Many businesses franchise - you have heard of the few high profile ones such as McDonalds, Kentucky Fried Chicken and Jims Lawn Mowing, however did you know that there are over 40,000 businesses that are franchised in Australia?.

There are many myths and misconeptions surrounding franchising. One of the common ones is that you have be a large company, with a big bank account to be able to franchise. This is definitely not the case. Many small businesses have franchised successfully. The challenge in knowing what to do and what not to do.

While a franchise model offers an excellent way to grow and expand your business it is not for every business nor is it for everyone. So the first step in the process is to determine whether your business is ready to franchise

Is your business franchisable?

1. Is your business profitable?
2. Does it have potential for further growth in a range of locations?
3. Does it have some feature that makes it unique?
4. Does it have a recognisable or potentially recognisable name and logo? Are these registered?
5. Does it have a good reputation?
6. Is your business system sufficiently documented to enable another person to run a similar business successfully in a different location?
7. Are there measurable advantages for prospective business owner to join your franchise rather then start a similar business from scratch?

If you answered NO to any of the above questions, then you need to consider what you would have to do to be able to answer “yes” thereby increasing your chances of successfully franchising your business
Assuming your business is franchisable the next questions you have to answer is would you make a good “franchisor?”

What makes a good franchisor?

Despite the importance of systems to a franchised business, businesses are still run by people. So people management skills are of paramount importance to a franchisor. In particular the franchisor must be able to

• Identify and articulate the set of skills required to be a successful franchisee in their business
• Identify the type of personality suited to the role of franchisee in their business
• Communicate effectively with a range of different personalities in their business
• Manage change in their business
• Resolve conflict in their business
• Inspire and motivate franchisees in their business

Each franchisee will have a different set of skills, a different personality and different set of expectations. Managing this diversity amongst franchisees can be one of the most challenging roles facing franchisors. Therefore you need to feel confident that you have the skills to do this, or if not that you can employ someone who does.

*on-site - available in most metropolitan areas in Australia, rural areas subject to negotiation.