Franchises to watch

As a sector, franchising is still hot across the board. Griffith University’s recently released report, Franchising Australia 2006, provides ample evidence of the continuing growth and maturity of franchising in this country.

There are still big opportunities out there. But where should we be looking?

Staying home

“We have a very healthy economy with full employment and low interest rates,” says Richard Evans, CEO of the Franchise Council of Australia (FCA). “People are cashed up and time poor, and that’s what’s driving growth. They would rather pay someone to do things people used to have to do for themselves. That’s why we’re seeing so much diversification in home services. You’d think we had plenty of cleaners, but new systems are still being developed.

“One gap I can see in the market,” says Evans, “is for home laundry services – getting everything collected, washed and ironed. These kinds of services are very popular in other countries. There are some very strong brands in China, for instance.

“Here, you get these services in hotels, but not the home. But I think we might see it coming into the community shortly,” Evans predicts.

Finding a niche

Experts are reporting continuing growth in traditional sectors, such as food and clothing retail, though the most dynamic franchises tend to be creating a new space for themselves.

“You’d never have thought that people would pay $11 for a hamburger, but that’s exactly what they’re now doing,” says Evans. “Gourmet hamburger franchises, like Grill’d , have tapped into a niche market where a hamburger is seen more as a meal option than a quick snack.”

The security of a brand

While consumers may lament an apparent lack of choice as each shopping centre grows more like every other, they’re actually very likely to seek out the security of a brand. “If they’re a bit unsure, they’ll turn to a brand,” says Evans. ”And I think this is what’s happening in the business-to-business sector.

“People are starting to look for brands in areas like bookkeeping and accounting, and we’re also seeing franchises in areas such as coaching and speakers bureau – even psychologists. As long as your intellectual property is replicable, it can be franchised.”

Room to grow

With so many places to look, are there any sectors to avoid? “I don’t think any sectors are overdone,” says Brown. “Remember, franchising only represents 5 per cent of business in Australia – that says a lot about how much more room there is to grow.

“You’d think that the coffee and cake sector might be overcooked, but it’s not. It’s growing rapidly, but is still behind the global trend.”

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