Juggling all the balls
As the peak representative body for the sector, the Franchise Council of Australia (FCA) is a valuable resource for those looking to buy a franchise. The FCA helps potential franchisees understand what is involved in making an informed decision about buying a franchise and provides the guidance to get expert advice from consultants accredited in the sector. My advice to potential franchisees is always the same: first thing you need to do is read, read, read. Find out as much information as you can about as many different franchises (and franchising in general) as you can. Purchase franchising related information online at the publications page of the FCA website (www.franchise.org.au). Also keep a look out in news agencies for FCA endorsed publications including Franchising Magazine.
Once you're widely read and well versed on the topic of franchising in Australia, chances are you'll be juggling a whole new set of questions! The Frequently Asked Questions section of FCAs website offers basic answers to some of these – but they also recommend professional expert advice.
I strongly believe the path to success as a franchisee starts when you're looking to buy a franchise. You will need specialised legal, financial and accounting advice that can only be provided by firms or individuals with extensive franchising experience.
Prior to seeking legal, financial and business advice, potential franchisees should narrow down the list of franchise systems suitable to lifestyle and budget. With more than 1000 different franchises to choose from in Australia, this is not an easy task.
franchisebusiness.com.au also provides an extensiv( list of franchise systems with users being able to sor by category or purchase price. When you're looking at a number of different franchises the return on investment will no doubt come into consideration, bt just remember to consider these factors:
- Is the franchisor a member of the FCA? Members of the FCA are required to bide by the Franchising Code of Conduct, and FCA Member Standards.
- Has the franchisor been in business for a reasonable period of time? At the very least they should have run a pilot operation under franchise conditions to prove their model.
- How much is the up-front franchise fee? A higher fee does not necessarily represent a better offering
- How much are the weekly/monthly fees? Are they percentage of purchases or gross revenue, or are they a flat fee? Don't assume a lower fee is better value; you need to know what support the franchisor will give you in return for these payment
- How long is the franchise term for and can it be renewed?
- Has the franchisor's brand been established, trademarked and protected?
- What training in franchise specific and general business management will be provided?
- What administration and management support will the franchisor provide?
- How is advertising and marketing support for the brand managed?
- Is there a detailed operations manual and online support for you as a franchisee?
- Will you receive a territory and will it be exclusive?
- Is there wide public awareness and acceptance the product or service? Beware of products or services that have no scope for development. Avon businesses in declining markets and avoid fads.
Tony Melhem is a director of the Franchise Council of Australia (FCA) and the inaugural chairman of the Franchise Council of Australia's (FCA) National Franchisee Forum. He won the FCA 'Franchisee of the Year' for NSW/ACT 2005 and 2006 and was the 2004/05 Gloria Jean's Coffees Franchisee of the Year.
19.06.2008
FCA Member
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Contact Franchise Council of Australia
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VIC 3145
Tel: 1300 906 479
Fax: +61 3 9508 0899
