It’s with great pleasure that I accepted the role of Executive Chair at the Franchise Council of Australia (FCA) and commence the task of further boosting what is already a vibrant sector and vital contributor to Australia’s economy.
I am passionate about supporting the entrepreneurial women and men in the Australian economy and as FCA Chair am enthusiastic about applying my ambition to continue to ‘energise enterprise’ to the benefit on the innovative and highly motivated business people who drive success in this important sector of the economy.
What is franchising’s competitive advantage?
The decision to become a small business owner can be both an exciting and a daunting one. On one hand, there is the anticipation of being your own boss and all the independence that entails. On the other, you will need to have – or quickly develop – the management, technical and administrative skills required to run the business.
Franchising is a method of business that provides independent small business owners with the strategy, training and support, systems and processes, brand development, group purchasing and marketing power that if adhered to can lead to small business success.
As a franchisee you are running your own business, but you are not alone – you have the knowledge and resources of your franchisor behind you.
Think of it like learning to dive. If you’re poised to enter the water for a first time, even as a seasoned swimmer or lifelong beachgoer, you want an experienced instructor with you – to have worked with you to build knowledge of the technology and systems, to alert you to what to watch out for, to help guide and develop of your own competence and to help identify and make your own positive new opportunities. Wisdom and experience delivered via a partnership that nurtures know-how and helps to guide your success. A great experience encourages others follow your course …
That’s what franchising is. It’s a business model where two independent businesses – one run by the franchisor, and one operated by the franchisee – work separately but collaboratively for both their mutual and individual benefits.
It is this relationship, where both franchisors and franchisees have ‘skin in the game’, that enables franchised businesses to compete effectively against major corporations. Indeed the best of the franchise model with a shared purpose and mutually supportive and respectful relationship is probably the most dependable, proven and durable business model that provides an ongoing competitive advantage to franchisors and franchisees alike.
Realising the rewards of the franchise relationship
I was lucky enough during April to attend the FCA’s NSW/ACT Excellence in Franchising Awards and hear the success stories of franchisees who had benefited from being a part of a franchise network.
For Soul Origin’s Westfield Parramatta franchisee, Sherwin Djamil – who won the NSW/ACT Franchisee Community Responsibility and Contribution Award for 2016 – the support offered by a franchise system was a key attraction when deciding to become a small business owner.
“At first it (becoming a Soul Origin franchisee) seemed like an obstacle, because I’d never been a business owner before,” said Sherwin. “But I realised that it was an opportunity and I wasn’t alone. Soul Origin had a support system and that support system has taken me to where I am today.”
Sherwin’s sentiments were echoed by 2016 NSW/ACT Single Unit Franchisee of the Year, less than two staff, winners Shaun Birley and Sam Orders. These passionate young franchisees purchased their InXpress franchise as soon as they graduated university in 2013.
“We thought our degrees will always be there so why don’t we have a crack at something ourselves,” said Sam. “And what better industry than franchising where you’re given a proven business model to follow.”
The importance of due diligence
Purchasing a franchise is likely to be one of the biggest financial investments you will make. It’s an investment in your future livelihood and not one to be taken lightly. So, if you’re thinking about investing in a franchise business, the most important thing you can do is research. Proper due diligence is the most important part of any business decision.
Consider the brand you are looking at, and ensure you have a proper understanding of the franchise business model itself, along with your own ﬁnancial situation and lifestyle needs. Most importantly, remember to seek independent, specialist legal and ﬁnancial advice before signing any binding documents.
It’s also worth highlighting here that franchisees like Sherwin, Shaun and Sam all recognised the benefits and have been prepared to follow the established systems of their franchisor.
Franchising is not for everyone. And if you are a more entrepreneurial personality who prefers to do things their own way, realistically, you may not be ideally suited to be a franchisee. For while there are no guarantees of success in any small business, the franchisees who obtain the best results are those who work with and fully embrace the proven model of the franchise system.
The Franchise Council of Australia’s role
The FCA’s mission is to support the growth, success and vitality of franchising for the benefit of franchisors, franchisees and the 460,000 Australians that derive their livelihoods from the around 80,000 business units operating in our sector.
Contributing an estimated $144 billion each year to our national economy, franchising is a very big deal and needs clear, strategic and positive leadership to grow and prosper. The FCA is committed to providing this focus and leadership.
We need to make concerted efforts to expand the level of understanding of franchising and the structural and business reasons why franchising delivers competitive advantage to franchisors and franchisees while ensuring the interests of all stakeholders in the franchising sector are advanced and protected.
I am excited to be able to work to build on the positive momentum in franchising by continuing to nurture confidence in this model of commerce, the capacity of the sector and our commitment to quality to ensure more people see franchising as a pathway to a more prosperous future.
Bruce was appointed as the Executive Chairman of the Franchise Council of Australia in March 2016. Bruce brings with him to the role nearly two decades of experience in public life, having been the Federal Member for Dunkley from 1996 to 2016. As a Parliamentarian, he held numerous portfolios in government and opposition, including most recently as Minister for Small Business from September 2013 to September 2015 and previously as Shadow Cabinet Minister for Small Business, Competition Policy and Consumer Affairs from December 2009 September 2013.
The Franchise Council of Australia Limited (FCA) is the peak body for the $144 billion franchise sector in Australia, representing franchisees, franchisors and service providers to the sector. As the peak body for franchising, the FCAcontinues to add value to the businesses of its members by providing a range of services relevant to franchising and which represent good value. Membership of the FCA is voluntary, and open to any organisation or individual involved in the franchise sector.