DO RETAIL FRANCHISES MAKE A GOOD INVESTMENT IN A POST-COVID WORLD ?

 

It’s no secret consumer behaviour has changed, at least in the short to medium term, and possibly forever, as a result of the COVID-19 global pandemic.

While some retail outlets have suffered terribly, and even closed their doors for good, others have thrived.

So, you may be asking, does retail franchising make a good investment in a post COVID-19 world?

 

 

 

Well, there are many retail brands doing really well, particularly in the home improvements space. The benefit of investing in a franchise business over independent business ownership is there is a lot of data available to help you assess the opportunity.

The franchises which are performing well have strong brands and continue to invest strongly in marketing and adapting to consumer needs.

In retail in particular, it’s all about the brand, as it’s the brand which helps attract people to the store, so when assessing a franchise business, you need to look for exceptional marketing strategies.

For example, Beaumont Tiles works with The Block where you can see the products on the TV program and then buy in-store.

Other retailers doing really well are ones which compete and add value to online shopping. These tend to be price competitive and/or they add extra service that you don’t get online.

When it comes to franchise businesses, retail franchises tend to be on the higher end in terms of investment level. This is due to the stock required, the fit out and cost of rent. You also need to consider the amount of start-up capital you’ll require to keep the business operational until you return a sustainable profit. Doing your due diligence is crucial as you have the potential to do a lot of dough.

The Australian Franchise Marketplace offers some essential information to help you do your due diligence on retail franchises. It brings together some of Australia’s best franchising minds, who offer their best practice tips for free – it’s all part of our combined commitment to building a stronger franchise sector.

One of these experts is Avatar Consulting Director David Campbell, who is an expert on franchise financials. He covers how to assess if the risk and return of a potential franchise is right for you, in easy-to-follow steps, as well as create cashflow forecasts and calculate breakeven. Having a clear picture of these numbers before you invest is critical to success.

Franchise Accounting and Tax founders Kate Groom and Peter Knight also share their tips on the key elements you should be looking out for in light of the impacts of COVID-19.

While investing in a franchise doesn’t guarantee business success, the trading history, brand value, head office expertise and shared investment does provide you with a really good dashboard to help you assess if the business if right for you and likely to generate a good return.

I created the Australian Franchise Marketplace to help people looking to invest in a franchise to access and understand that dashboard, to make informed business decisions. Not only can you access this great, free resource to equip you with the questions to ask franchisors, you can also apply your new skills and knowledge straight-away with a range of franchise businesses, including retail franchises, exhibiting online. You can deep dive into a range of franchise offers, ask questions and download information online, 24 hours a day, every day of the year, from the comfort and safety of your own home – because COVID-19 has changed our behaviour, at least in the short to medium term. Find out more or register for your free ticket at: AustralianFranchiseMarketplace.com.au

 

 

 

 

Kerry Miles is Director of FranchiseED, Founder of Australian Franchise Marketplace, a Franchise Mentor & Coach, and Adjunct Research Fellow at University of the Sunshine Coast. She has nearly two decades of experience in the franchise sector with clients including small and large franchises and government organisations with an interest in the franchise sector.