In Mortgage Choice's Potential Franchisee Survey, it was discovered that female potential franchisees see the ability to control their own time and movements as the most important aspect of running their own business with challenge and personal achievement almost as important.
The second annual Potential Franchisee Survey, an independent online survey, was aiming to uncover behaviour drivers for over 500 Australians between 25 and 35 years of age, earning $60K or more per annum, who are looking to purchase a franchise in the next three years. Forty-five percent of the respondents were female.
Mortgage Choice financial services franchise National Manager Corporate Affairs, Warren O'Rourke said new female franchisees are more likely to enter the industry for the potential of a working environment rather than the money they can earn.
"Many studies show that females are more likely to carry out the majority of home duties within in a family household, so it makes sense that setting up, running and growing their own business is an attractive option. Although certainly not an easy task, especially on top of home duties, it allows them to juggle a number of important commitments around each other, thanks to the greater flexibility running your own business provides.
"Also, the concept of working to live rather than living to work continues to build in importance for Australian women. They are still working hard but place less importance on working long hours and striving for the best pay possible because they know that can mean sacrificing important aspects of their life, as well as feelings of personal accomplishment," O'Rourke said.
The top reasons female respondents put forward for wanting to run their own business were the same as with last year's survey:
- 54.6% – Flexibility i.e. ability to control own time/movements/etc
- 53.3% – Looking for challenge and personal achievement
- 48.9% – Improved lifestyle
- 48% – Income potential
It is interesting to note females were less likely to give 'break away from the corporate bureaucracy' as a reason to run their own show, at 16.2 percent compared to males' 23.9 percent.
Female and male responses combined saw the most appealing factors of being part of a franchise system as:
- Established franchisor brand recognition
- Established business model for franchisees to follow
- Level of support provided by the franchisor
- Higher likelihood of success in comparison to operating a small business
- Supplier relationships already established
- Level of advertising that can be achieved
- Level of media coverage that can be achieved
- Working within a collaborative franchise network
The decider when choosing one franchise over another was money (cost to purchase, initial cash flow, income level to be achieved), for 47.1 percent. Second was brand recognition (brand reputation, quality and longevity of goods/services offered, consumer proposition, ethics), third lifestyle (business portability, flexibility of office/working hours), fourth ease of business management (suitability of skills) and last was internal franchisor aspects (transparency of franchisor, local area marketing budgets).
Money is the biggest barrier preventing females from entering a franchise system, at 62 percent. Power of the franchisor vs. power of the franchisee was second (43.2 percent).
Being bound by the directions and business protocol of the franchisor was third (41.5 percent), giving some profit to the franchisor was fourth (37.6 percent) and meeting minimum performance standards was fifth (28.4 percent).
Retail - food, restaurants and cafes (48 percent) remained the most popular industry being considered for both sexes, then the results veered in different directions.
Second for females was business and professional services (27.1 percent), followed by domestic services (23.1 percent), health, beauty and personal services (22.3 percent), tourism, leisure and accommodation (20.1 percent), education and training services (19.2 percent) and retail - other (18.8 percent). These results were fairly on par with last year, though domestic services overtook health and beauty in popularity and retail - fashion accessories slipped from fifth to eigth place.
Interestingly 21.8 percent of females will be going it alone with their franchise purchase, which was on par with the male responses. However, a large gap also appeared within this question - 52.8 percent of females will enter into it with their partner/spouse, compared to a significantly higher 61.2 percent of males.
Another large gap arose when respondents were asked what region they were looking to purchase within - females were more likely to make a regional move.
Almost twenty two percent will look to regional areas, compared to 15.2 percent of males, and 55.5 percent are considering a metopolitan region, compared to 67.8 percent of males.
"The reluctance for males to purchase a franchise in a rural or regional area suggests there may be a number of missed opportunities where females could take advantage," O'Rourke said.
"However, the overall results show the majority of both sexes won't move from their own state and region, this reinforces the reluctance of potential franchisees to sacrifice lifestyle in order to run a successful business that provides them with flexibility and challenge. THey are looking for opportunities within the area they are comfortable in and familiar with."
Over one third of females will have no experience in the industry they enter (34.9 percent), 18.3 percent will have less than one year experience, 14.8 percent one or two years experience, 17.5 percent two to five years, 8.3 percent five to ten years and 6.1 percent will have 10 or more years' experience.
Males were more confident than females to make their entry into franchising with no experience (41.7 percent).
The planned cost to purchase and set up varied widely between female respondents. Twenty percent will spend less than $50,000 (compared to 14.9 percent of males), 24.9 percent will spent $50-100,000, 18.8 percent will spend $100-150,000, 17 percent will spend $150-200,000, 9.2 percent will spend $200-300,000, 5.2 percent will spend $300-400,000 and a surprising 4.8 percent will spend $400,000 or more.
It was a fairly even split between purchasing an existing franchise (46.7 percent) and a new one (53.2 percent), with females more likely than males to choose the latter (48.9 percent of males).
Ir was encouraging to see these female franchisees-to-be were conservative in their expected earnings in the first year. The most popular answer at 31 percent was 'break even', next was $20-50,000 (19.2 percent), followed by $50-100,000 (17 percent), $1-20,000 (16.2 percent), $100-200,000 (7.4 percent), 'make a loss' (5.7 percent), $200-500,000 (2.2 percent), and a confident 1.3 percent expected to earn over $500,000 in their first year.
21-Oct-2008