Choosing the right franchise

The Answer to the Big Question for New Franchisees. How do you choose the right franchise?

There are consumer signposts everywhere in modern society for people looking to make purchases of all shapes and sizes. But how do you find the same roadmaps that will guide your way into franchising?

For large purchases such as a house, car or holiday, right down to everyday dining or grocery items, consumers now have a myriad of ratings and comparison mechanisms at their fingertips. From open for inspection and test drive checklists to detailed advice on choosing holidays, restaurants and household products, readily accessible knowledge underpins all modern-day decision making.

Buying a franchise is arguably the biggest and most important decision that someone will make in their lifetime, and is one that will have a huge impact on their finances, work-life balance and future. It therefore makes sense for this decision to be afforded the same level of scrutiny, comparison and analysis as more routine and less-influential purchases.

A Big Decision

As Professor Lorelle Frazer of Griffith University’s Asia-Pacific Centre for Franchising Excellence explains, you wouldn’t buy a car before taking it for a test drive, having it checked by a mechanic and making sure there was no money owing on it. Franchisees should take a franchise purchase even more seriously, for two reasons.

First, a franchised business is likely to cost much more than a car. Second, unlike when you buy a car, there are no consumer warranties when you buy a franchise. Franchisees must take responsibility for their own investment decisions.

Many people have a dream of one day being their own boss, and buying a franchise can provide the pathway to making this happen. However, there are endless franchises out there to choose from and plenty of traps for unsuspecting newcomers to franchising. Also, the reality of life as a franchisee can be very different to the dream.

Don’t wait until it’s too late – Ask Questions

Those looking to chase their franchise dream need to analyse, ask questions and think hard about what it will actually be like in reality. The time to do this is upfront, before they make the decision to buy a franchise and it is too late. Are you the right personality for that business? How will it affect your lifestyle, your relationships with your family, your social life?

Regardless of the franchise and the product or service it provides, it is important for people who are considering buying a franchise to undertake pre-entry education and ask critical questions about what they are seeking to achieve. Is return on investment the key motivator for becoming a franchisee, or is it predominantly a lifestyle choice? Seek to define upfront what your priority is and exactly what it is you want to achieve by buying a franchise.

Prospective franchisees need to rely on much more than just their ‘gut feel’ or their dream-like vision of what franchising will actually be like. Doing your homework, or ‘due diligence’ as it is more formally referred to in the franchise sector, will help to build solid foundations for any potential franchisee, and will ensure you are as fully prepared as you can possibly be and know exactly what you are getting into.

Research, Research, Research

Research by Griffith University’s Asia-Pacific Centre for Franchising Excellence has shown that many franchisees enter franchising with unrealistic expectations. An emotional attachment to a franchise brand and a dream-like vision of what their life as a franchisee will be like often overrides objective information.

The more due diligence prospective franchisees conduct and the better informed they are before they buy means they are much more likely to invest in a franchise with realistic expectations that are aligned to their business and lifestyle goals.

The first port of call for anyone thinking of buying a franchise should be the free online Pre-Entry Franchise Education Program developed by the Asia-Pacific Centre for Franchising Excellence and funded by the Australian Competition & Consumer Commission (ACCC). This program was introduced in 2010 and in 2017 passed a major milestone of more than 15,000 registered participants, with an average of approximately 2000 prospective new franchisees completing the program every year since its launch.

Armed with this invaluable pre-entry information and having made a decision that becoming a franchisee is the best path forward, how do you then go about actually finding the right franchise business for you?


The best advice for deciding on a franchise to invest in is to not totally rely on one single source of information. Remember, there is always going to be another franchise opportunity so if you are not completely happy do not rush into buying.

Prospective franchisees are encouraged to do as much homework as they possibly can before making the decision to invest. Take full responsibility for what is a life-altering decision. Probe, question, compare and analyse, not just blindly accept what someone selling a franchise says.

Thoroughly research the franchise brand, its competitors and the industry in which it operates on the internet. Talk to your friends, family and colleagues. Ask them if they heard of your potential brand and what do they think of it? Have they shopped there, used their services, or would they?

Also, try to imagine what your day-to-day life will be like in that franchise? You may like drinking coffee, eating pizza or looking after dogs. But have you really thought about what it would be like if you have to serve coffees, make pizzas or wash dogs all day, every day?

Does the franchise feel like a good fit for you? Will you be engaged for the next six months, two years or 10 years? How does this fit with your earlier decision about what you want, a high yield on your investment or greater lifestyle flexibility?

Be diligent in asking for all costs involved in your purchase. This should be in your disclosure document so make sure you scrutinise this and ask questions before you buy.

There is much to consider. Are you the right personality for that business? How will it affect your lifestyle? What are the financial implications in the short and long-term? This is before you even get to managing staff, cashflow, IT, HR and the hundreds of other issues that come with being your own boss.

There is a lot more to becoming a franchisee than meets the eye. The crucial first step for prospective franchisees is to define what they want, knowing what to look for when researching a franchise, and learning how to accurately access franchise business opportunities. Only then will they be in the best position to buy a franchise that is profitable, aligned to their personal interests and goals, and a pleasure to own.

Do your homework


Here are some key signposts to navigate the way into buying a franchise:

  • Know your ‘why’ for buying a franchise;
  • Analyse your financial position to know what price range to look for;
  • Create your personal selection criteria to use when making franchise enquiries;
  • Know your strength, weaknesses, skills and abilities that will help you become a franchisee;
  • Prepare your personal information package to share with potential franchisors;
  • Learn what to look for in a franchise system and its business model;
  • Actually analyse your chosen franchise system; and
  • Complete a five stage due diligence process.

The reality of life as a franchisee is usually very different to the dream. That is why it is so critical to take a step back and start asking questions and finding answers in order to make well-informed decisions.

Anyone contemplating jumping into a new life as a franchisee needs to take a deep breath and do their homework so that it is their head, not just their heart, driving their decision-making.

How to choose a franchise that is right for you

Building on the success of its ACCC Pre-Entry Franchise Education Program, the Asia-Pacific Centre for Franchising Excellence has developed an innovative educational offering for prospective franchisees – the How to choose a franchise that is right for you eClasses.

This new product adds another important layer of learning to pre-entry franchising education for those who have made the decision to buy a franchise, but have yet to decide which one.

How to choose a franchise that is right for you provides practical guidance, knowledge and education on the key question of how to choose a franchise that is right for your personal, professional, financial and lifestyle goals.

This is the essential guide to choosing, buying and becoming a franchisee. The eClasses are filled with valuable tools, checklists, calculators, timelines and templates to ensure you are making the most informed and vigorously road-tested decision possible.

The How to choose a franchise that is right for you program empowers those seeking to buy a franchise with the knowledge to expertly navigate this process, covering everything from understanding franchise terms, the questions to ask, the paperwork and costs involved, due diligence and the professional advisers you need on board. The eClasses will help to avoid the pitfalls, save money in the long run by making the right decision upfront, and set the foundations for a successful and sustainable franchise journey.

Key learning outcomes include an understanding of: why you want to buy a franchise; the different franchise types and their pros and cons; how to assess the franchise business model and if it is suited to you; the processes to go through to know what you are actually buying; and how to go about making a decision on which franchise to buy. This is a unique educational tool, not available anywhere else in the franchise sector, which provides the valuable framework and signposts for prospective franchisees to navigate what is a life-altering business decision. It is 100 per cent impartial and independent, with no vested interests or selling of franchise systems.

It is the only product of its kind that will step you through the process of actually deciding which franchise is best for you, with no strings attached.

These eClasses have been specifically developed in response to demands for more practical guidance, knowledge and education on the key question of how to choose a franchise that is right for you.

Just as ever-increasing consumer demands have lifted the standards of product and service offerings across all aspects of modern society – from buying a coffee, a car, a house or holiday – it is envisaged that this new learning tool will help to boost standards throughout the franchise sector on the back of better educated and more discerning franchisees.

The authentic and ethical nature of the educational resources provided to prospective franchisees is what sets the Asia-Pacific Centre for Franchising Excellence apart in the franchising sector. There is no hidden agenda or selling of franchise systems or products. As well as setting franchisees on the right path to franchise business success, the Centre offers a wide range of ongoing, industry events, resources, and educational programs for both franchisees and franchisors, as part of its commitment to lifelong learning and professional development for all in the franchising sector.

Visit the website for more information on the educational resources available.

Professor Lorelle Frazer
Asia-Pacific Centre for Franchising Excellence
Griffith University

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Benefits of franchising

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Franchising code of conduct

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Choosing the right franchise

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Due diligence

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Asking the experts

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Disclosure doc & agreement

For many years Australia has been one of the most regulated countries in the world when it comes to franchising

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The FCA aims to support, promote and develop Australian franchising to drive economic and entrepreneurial success within the sector