Pre-Entry Franchise Education Program Passes 10,000 Milestone

In a major milestone in the ongoing efforts to promote early education among prospective franchisees, more than 10,000 people have now registered for a free online Pre-Entry Franchise Education Program.

This program, developed by Griffith University’s Asia-Pacific Centre for Franchising Excellence and funded by the Australian Competition & Consumer Commission (ACCC), is designed to boost franchisee due diligence levels and limit future conflicts in franchising.

The free online Pre-Entry Franchise Education Program was introduced in 2010 and has met a market need for easily accessible self-education by prospective franchisees before they commit to buying a franchise.

Research by the Centre has shown that many franchisees enter franchising with unrealistic expectations, which can be major cause of later conflict with franchisors. Pre-entry education aims to address this issue by empowering would-be franchisees to make better and more informed decisions.

Asia-Pacific Centre for Franchising Excellence Director Professor Lorelle Frazer said it was great to see that so many people have taken advantage of free franchise education. She said an average of approximately 1,200 prospective new franchisees have completed the free online Pre-Entry Franchise Education Program every year since its launch.

She said the 10,000 milestone was significant when viewed against the total size of the franchise sector. According to the latest Franchising Australia Report in 2014, there are 1,160 franchise systems operating in Australia and an estimated 70,000 franchisees.

“The Centre specifically developed this program following franchise conflict research findings that highlighted the need for new franchisees to do more due diligence before signing a franchise agreement,” Professor Frazer said.

“Passing the 10,000 registrations milestone is very satisfying as it means there are a lot more people out there who have entered the franchise sector with their eyes wide open about exactly what they are getting into when buying a franchise.”

“The feedback from those who have completed the program points to a more realistic understanding of just what is involved in operating a franchise. It has proven to be an important stepping stone and confidence builder for those entering the franchise sector.”

While people who have completed the Pre-Entry Franchise Education Program are more likely to become franchisees, for some the early education process can lead them to a decision that owning a franchise is not right for them. The importance of the program is that it leads them to this decision before they commit to buying a franchise. The end result of improved levels of early education is more satisfied, successful and sustainable franchisees and franchise systems.

“Knowledge is power and nowhere more so than in the franchising, where new franchisees are making the ultimate leap of faith in buying their own business,” Professor Frazer said.

“The Pre-Entry Franchise Education Program plays a crucial role in getting prospective franchisees to rely on more than just their ‘gut feel’ when making such an important decision. It provides the resources and tools to get them thinking, asking questions, finding answers and making well-informed decisions about their future.”

ACCC Deputy Chair Dr Michael Schaper said that as a regulator, the ACCC understands that potential compliance issues can be significantly reduced or eliminated if prospective franchisees are better educated about their rights and obligations under the Franchising Code before they enter into a franchise agreement.

“The Pre-Entry Franchise Education Program is designed to assist prospective franchisees make informed investment decisions, help them understand the demands of franchising, and know where to go for assistance if things turn sour,” Dr Schaper said.

“The program has been a great success and has been shown to significantly improve the confidence, knowledge and readiness of entrepreneurs who have gone on to operate a franchise. Anyone thinking about buying a franchise should complete the program."

“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.”

In addition to the effectiveness of the Pre-Entry Franchise Education Program for would-be franchisees, it has also proved to be a valuable recruitment tool for franchisors with a number of companies now incorporating the program into their franchisee recruitment processes.

The free online Pre-Entry Franchise Education Program consists of five modules, with each module taking about 40 minutes to complete. The modules are a combination of video, audio and text and include an assessment quiz at the end to test participants understanding of the content. Upon successful completion, participants receive a certificate of completion.

Topics covered in program include:

* An overview of the franchising sector and the Franchising Code of Conduct

* Franchise disclosure, agreements, royalties and finance

* Franchise support services, site and territory selection, retail leasing and franchise marketing funds

* Franchising intellectual property, the operations manual, franchisor-franchisee relationships and dispute resolution

* Questions to ask franchisors and existing and former franchisees, additional due diligence, useful business skills and assessing suitability to become a franchisee.

For more information on the Pre-Entry Franchise Education Program visit the Asia-Pacific Centre for Franchising Excellence website at: