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Franchise Sector's Robust Growth

Written on the 21 October 2008 by Adelaide Advertiser

Franchise Sector's Robust Growth

Adelaide Advertiser, Page: 57
Tuesday, 21 October 2008

FRANCHISES have reported strong growth in the past two years despite tougher economic times, according to a survey commissioned by the Franchise Council of Australia.

Executive director Steve Wright said the results of the Franchise Australia 2008 Survey revealed confidence in the sector.

He said franchise systems recorded a 14.6 per cent growth rate between 2006 and mid-2008.

"These statistics illustrate business confidence in the franchising sector and the robust nature of the franchising model, which has a history of performing relatively well compared to the broader small business sector even when economic indicators are pointing down," he said.

The survey, undertaken by the Griffin Business School, also found that disputes in the sector had declined to just 2 per cent, most of which were in larger, older and more complex systems.

Mr Wright attributed the decline to "greater awareness of the obligations for all participants in the sector" brought about by changes to the Franchising Code of Conduct.

He said the result defied the recent revision of three franchise systems and franchising inquiries in WA and SA state parliaments.

"This is reinforced in recent statements by the sector regulator, the ACCC, which has noted a downward trend in complaints," Mr Wright said.

"Few franchise systems receive complaints from more than one or two franchisees." "This suggests that there is no widespread misconduct regarding the code or the Act by most franchisors. The number of franchising-related complaints and inquiries received by the ACCC has generally declined since 2004." Griffith Business School provice-chancellor Professor Michael Powell said the survey result was particularly good for a sector that had faced challenges in the past two years.

"The continued growth and maturation of Australian franchising is impressive, particularly considering the current economic outlook, a recent change of government, and a franchising sector that has faced government scrutiny," he said.

"There is always room for improvement and we are working on the question of what improvements can be made in the context of the current federal corporations committee inquiry into franchising."

Caption Text:
A continued growth rate of 14.6 per cent in franchise systems from 2006 to mid 2008. Business format franchised units represent3.7 percentof all small businesses in Australia, employing an estimated 413,500 people. Growth rate of franchise units is 15.4 per cent. The total sales turnoverforthe franchisingsectorwas estimated to be $130 billion.

Author: Adelaide Advertiser

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