Due diligence will help you to hit the ground running in 2015


This article appears in the Jan/Feb 2015 issue of Business Franchise Australia & New Zealand


By all rights, 2015 will be a fantastic year for franchising.

The last two years have carried the burden of legislative uncertainty and a feeling of the sector being in limbo. Despite this, Griffith University recently released research showing nine per cent revenue growth in the sector for the same time frame. Now the legislation has been implemented and things are far more certain and concrete.

The Griffith research also showed a consolidation of brands (from 1,180 down to 1,160) from 2012 – 2014, while the number of franchised business units increased (from 73,000 to 79,000). Though some brands have ceased franchising, those with  solid business systems, a key focus on training and support and an investment in brand awareness across the network, continue to ensure franchising grows at a rate that surpasses the wider small business community.

Though there are new provisions to comply with, the new Franchising Code of Conduct, implemented on the first of this month, holds the same fundamental principals associated with best practice franchising.

The very nature of franchising when done well is win-win. The business model, along with the importance of brand integrity both to the head office and other franchisees means the franchisor is heavily invested in your success.

In order for a franchisor to succeed, they rely on satisfied and profitable franchisees, both from a royalty perspective, but also from a brand growth perspective. That’s why, when researching a brand, it is incredibly important to speak to franchisees currently invested in the system. You should never commence negotiations with a brand without a solid understanding of what your day to day life would look like. A good franchisor will make contact details of several franchisees available to you.

Though much of your initial research will take place online, another fundamental part of the discovery process is to talk to your prospective franchisor face to face. By doing this, you will get a feel for culture of the brand, what they’re looking for in a franchisee and whether you fit that mould – and similarly, if that brand fits your expectations.

A great place to do this is the Franchising and Business Opportunities Expo. Held across the Eastern seaboard each year, the expo brings together franchisors from a variety of industries as well as legal professionals and other service providers from the sector.

Even if the brand you are interested in is not exhibiting you should attend to get a better grasp of the business format and the way different brands have set up their model. There are legal and accounting professionals on hand to help you better understand your rights and obligations and as always, the Franchise Council of Australia will help you understand how to do your research and how to get the best out of your day at the expo. If you’re thinking about investing in franchise it is really an  opportunity you should not miss. 2015 dates can be found at www.franchisingexpo.com.au

Celebrating Success

In my last column I congratulated some of the regional winners at the FCA Excellence in Franchising Awards. These awards are a fantastic opportunity to showcase all the great things going on in our sector. The national winners were announced at the culmination of the National Franchise Convention in October.

Held at Allphones Arena to a capacity crowd, the MYOB FCA Excellence in Franchising Awards winners can be found below.

On the same night we also inducted a new member into the Franchise Hall of Fame. I would like to take this opportunity to welcome Greg Nathan, Director and Founder of Franchise Relationships Institute to the Franchise Hall of Fame.

Greg has worked in franchising for more than 30 years, starting as a franchisee with Brumby’s, before founding FRI, through which he has revolutionised the way we look at the franchisee-franchisor relationship. He has provided invaluable research to
brands starting out, in the growth phase and expanding overseas. He is a well-known and revered speaker on all things franchising and a tireless contributor to the Australian sector. I cannot think of a more fitting inductee for 2014.

MYOB FCA Excellence in Franchising Awards 2014 Winners

Australian Established Franchisor of the Year
Wendy’s Supa Sundaes

Sponsored by 7-Eleven Australia

Australian Emerging Franchisor of the Year
Shingle Inn

Sponsored by 7-Eleven Australia

International Franchisor of the Year

Sponsored by LeaseEagle

Multi-Unit Franchisee of the Year
Brad and Matt Walker, Grill’d Camberwell, Knox and Southland

Franchisee of the Year, two or more staffApril and Tony Carnie, Nicki Nesbitt and Wiesiek Lewandowski , Shingle Inn Mount Ommaney

Franchisee of the Year, less than two staff
Rowan Prendergast , OPSM Waurn Ponds

Franchise Woman of the Year
Sharon Jurd , Hydro Kleen Australia

Sponsored by Battery World

Field Manager of the Year
Danika Heslop , Jamaica Blue

Supplier of the Year
Shift 8

Excellence in Marketing

Sponsored by American Express

Franchisor Social Responsibility

Sponsored by Battery World

Franchisee Community Responsibility and Contribution
David Price, Grill’d Cairns

Sponsored by Crea Legal

Franchise Hall of Fame Inductee 2014
Greg Nathan, Franchise Relationships Institute