Griffith University’s Asia-Pacific Centre for Franchising Excellence has won funding to explore whether or not franchising is more sustainable than independent business.

The Australian Research Council (ARC) announced nearly $300,000 for the linkage project, ‘Survival of the Fittest: The performance of franchised versus independent small business during economic uncertainty and recovery’. Industry Partners, the Franchise Council of Australia and the Department of Innovation, Industry, Science and Research are also contributing significantly to the project.

The project team will be led by Asia-Pacific Centre director Professor Lorelle Frazer and includes deputy director Dr Scott Weaven and researcher Associate Professor Debra Grace.

According to Steve Wright, executive director of the Franchising Council of Australia, the study will provide the franchising industry with some much-needed information on how to keep a franchise afloat.

“Over the last two or three years, it’s become apparent that there’s a lack of empirical data about the factors in success and the reasons for failure among franchisees. We know that as a general observation, in the non-franchise sector, small businesses fail at an average of more than 40 per cent in the first two years. Franchises, on the other hand, have an average tenure of seven years and an average contract of length of five years. So that means that as a starting point, we can speculate that franchising does appear to give people a much better chance of getting started and staying in business.”

“But those figures don’t go into any detail about what does happen for those who do go on for longer versus those who don’t, and we would like to get closer to the answers to those questions so that we can try to do whatever we can to enhance the prospects of people succeeding in franchising,” Wright told Franchising.

The study’s results will also provide business owners and peak bodies with tools to improve business performance in periods of economic uncertainty and recovery, and will shed light on how sustainable the franchising model is compared to independent businesses.

Professor Frazer said, “The project will investigate factors influencing small business survival, both independent and franchised, in regional and urban localities, in periods of economic uncertainty and recovery.”

“Through the research we hope to identify key survival factors for small businesses, as well as to what extent small business survival strategies influence business performance in these uncertain times.”

Preliminary findings from the study will be released next year with final results released in 2011.