Anyone who has ever thought about their own business, also thought about the franchise. It looks so simple: you only need a budget, and you get the keys to an already operating business. But is it really so, and is it possible to buy a franchise in Australia and earn?
Australia, a country in which franchises can be seen at every turn.
According to the Franchise Council of Australia, more than 1,200 different franchise systems operate more than 94,000 individual franchise outlets, employing 565,500 people and a growing number of franchises.
Such popularity of buying franchises is understandable to those who are familiar with them. But, if you’re new then the best way to explain what a franchise is would be to address the words of Michelle Bowes of Forbes –
“Franchising is a business model whereby a franchisee buys the right to operate a business for a set period of time using the name, brand, products and services of a well-known business known as a franchisor. Instead, the franchisor provides access to various resources and support “
Steven Giles, partner and expert at Norton Rose Fulbright, believes that franchising is an excellent opportunity to start your own business in the field of small and medium-sized businesses. He emphasizes that franchise businesses have a higher success rate compared to traditional small businesses. However, even with this advantage, success is not guaranteed.
Franchising offers certain advantages, in particular a proven business model, but requires the same effort and dedication as any other form of entrepreneurship. However, you generally may not be a suitable franchise as a business model because it has its drawbacks.
Should I start a business with a franchise?
If you are interested in opening your own business and are already looking for a suitable franchise, we recommend that you wait a little and understand in more detail. The fact is that a model can perfectly improve your start in business, but it does not solve all problems.
According to expert Tariq Johnson, “The biggest drawback of buying a franchise is that you need serious money at one point. Most popular companies are expensive, and although many mention a restaurant at the word “franchise,” there are many manufacturers and factories on the market that are also franchises. “
Why You Should NOT Buy a Franchise (Pros & Cons)
Due to the fact that franchises are present in all business niches, you can choose what will bring more money in the future. But what is it about Australia that is growing steadily and becoming more expensive? For both industry and ordinary citizens, the answer is pump solutions.
How the Pump solutions market can bring you money
According to a study by TechSci Research, the water pump market in Australia expects steady growth over the period 2024-2028. This growth is driven by the active use of pumps in industries such as agriculture, the residential sector, mining and wildfire control.
Water pumps are key machines that move water through pipeline systems and play a critical role in a variety of areas, from residential and commercial facilities to large agricultural operations.
Dependence on groundwater and uneven monsoons have greatly increased demand for water pressure pumps, especially in agriculture, which consumes about 60% of the country’s water resources. This kind of pumps are used to irrigate, fill and drain reservoirs, manage dams and maintain water balance in rural areas. In addition, these pumps are widely used for such needs as drainage, fire extinguishing, creation of water bodies in gardens, as well as in vehicles and boats.
The Australian government actively supports the modernization of water supply and sanitation infrastructure throughout the country, which will further stimulate the development of the market. Everything says so right now it’s time to collect all your money and buy a business of pumping solutions, but how does it work?
What are the conditions for acquiring a franchise
Among the advantages offered by this franchise, it is worth noting several important aspects:
- Royalty
You pay 5% of gross monthly sales, but not less than 255 EUR. The first two months franchisees are exempt from this fee, allowing you to focus on starting a business at no additional cost.
- One-time fee
To enter the franchise, you must pay a one-time fee of 6391 EUR. This amount provides you with access to all the resources and support of the company.
- Advertising contribution
You also pay 1% of gross monthly sales for advertising, which helps maintain the brand image at a high level.
- Additional investments
To start a business, it is necessary to take into account the costs of renting and repairing the premises, and the initial supply of goods and software.
- Duration of franchise agreement
The agreement is concluded for 5 years, which allows the franchisee to plan a long-term cooperation with the Pump System.
Assessment of the profitability of the terms of the purchase of franchising depends on many factors. You need to take into account the market situation, predict the likely demand for products, inflation and costs. In addition, you will need to analyze different deductibles to purchase the one that will bring the most money.
Comparison of franchises: what aspects to pay attention to
Choosing the company that has the best chance of success is the key to reaping the benefits. Specialists from franchisee.ai listed the main parameters by which it is worth comparing franchises, and also provided results to which it is worth striving.
Metric | Description | Benchmark |
Gross Profit Margin | Percentage of revenue remaining after deducting costs | Industry average: 45-60% |
Net Income Margin | Percentage of revenue remaining after all expenses are deducted | Average small retail business: 3-4% |
Return on Investment (ROI) | Net profit in relation to the total amount of investment | Goal: 20-30% |
Break-even Point | Sales or revenue required to cover business expenses without profit or loss | Depends on industry and franchise |
Each of these options can help you choose and buy a profitable franchise. Pay attention to the market you are interested in, check out the available company and make a choice that can change your life.