Service Franchises become most popular type of franchise in pre-entry education program

Service Franchises have become the most popular choice with nearly a third of participants indicating their interest in a Service franchise in a pre-entry franchise education program.

Registering their 2000th participant, the free online pre-entry franchise education program is developed by Griffith University’s Asia-Pacific Centre for Franchising Excellence and funded by Australian Competition and Consumer Commission (ACCC).

The pre-entry franchise education program had asked participants what type of franchise they were interested in and would consider to buy. The response included service franchises showing significant popularity with retail (food) franchise following behind.

Centre Director, Professor Lorelle Frazer, said the popularity of different franchise types was not a surprise.

“Service franchises are most popular at 31 percent and are less expensive to enter than retail so they often attract first-time franchisees,” said Frazer.

“Retail (food) and the Service sector are also travelling a little better in the downturn with a slump in non-food retail, which may be why people are avoiding the retail non-food sector.”

Non-food retail interest positioned in fifth place and mobile franchises came in last with only 4 percent interest. ‘Other’ franchise models were listed by 5 percent by participants.

However, according to Frazer there was an interesting, yet positive finding that 13 percent of participants were unsure of what type of franchise they were looking to buy.

“It’s positive to see a reasonable number of people ‘unsure’ of the type of franchise they’re looking to buy while undertaking the pre-entry franchise education program,” said Frazer.

“It demonstrates people are beginning to get a better grasp on franchising before deciding which franchise to buy – and are more likely to make a business, rather than emotional, decision.”
The pre-entry franchise education program was developed when a Centre research had identified a major cause of franchise conflict was due to franchisees entering the business with little knowledge and unrealistic expectations of the franchising industry.

“The more due diligence prospective franchisees conduct and the better informed they are before they buy means they’re more likely to invest in a franchise that suits their business and lifestyle goals,” said Frazer.