FCA highlights need for education for new franchisees

By Sarah Stowe | 29 Oct 2015 View comments

The Franchise Council of Australia predicts a role for its education program in improving understanding of the franchise relationship, following the recent survey findings that a quarter of franchisees don’t trust their franchisor.

FCA executive director Steve Wright said the findings were a surprise and highlight the need for franchisees to conduct due diligence before entering a franchise system.

But, he adds, the results of the franchise conflict research by Griffith University’s Asia-Pacific Centre for Franchising Excellence could have been skewed due to the nature of the industry.

“There is likely an underlying questioning attitude that is quite common among Australians that might be underneath all this, and if you were to ask whether that mistrust prevents you from doing business the answer might well be “no, it doesn’t”,” Wright said.

“The survey doesn’t necessarily represent the level of growth being recorded in the $130 billion sector. Australia is one of the most heavily-franchised countries in the world; this wouldn’t be the case if business owners were harbouring destabilising mistrust.

“Nevertheless, there are definitely lessons to be learned from the survey. Results showing that 20 percent of respondents said they had “no idea” of what they were getting into when they bought the franchise, suggest the FCAÕs national Eyes Wide Open franchisee pre-entry education program is very important and has plenty more work ahead of it,” he said.

Read more about the survey of 350 franchisees from across Australia here.