Franchising: An Introduction
Franchising in Australia is amongst the most dynamic and progressive business sectors in the economy. It is a recognised and reputable way of doing business in Australia.
Franchise systems are present in most Industry sectors, and the economic impact of franchising is substantial and growing. It is hard to think of take-away food without thinking of a product produced using a franchised format; difficult to purchase petrol except through a franchised petrol station; and impossible to imagine a shopping centre without franchised stores. Franchising has revolutionised retailing in Australia, and provided small business proprietors with the competitive resources to compete against the large corporations that dominate Australian retailing.
Franchising in Australia may have initially provided a means for Australians to benefit from foreign products and systems, but it now is the chosen format for many Australian entrepreneurs to expand and develop their business. The great majority of franchise systems operating in Australia are home grown, and increasing numbers of Australian franchise systems are successfully taking their systems overseas.
Franchising in Australia commenced in a significant way in the early 1970's under the influence of the franchised US fast food systems - KFC, Pizza Hut, McDonalds - which commenced operations here at the time. The growth of franchising since that time has been remarkable. Over the last two decades franchising in Australia in its contemporary "business format" mode has developed into a highly significant and dynamic business activity which has expanded to include virtually every product and service business. As in North America the tremendous growth and popularity of business format franchising has transformed franchising from a specialised marketing technique into a highly competitive, innovative vehicle for expansion of retail product and service industries.
Growth of Franchising in Australia
Statistical surveys have been conducted for the Franchise Council of Australia in 1998, 1999, 2002, 2004, 2006, 2008 & 2010.
Click here to view the surveys.
Franchising Australia 2010 reveals:
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There are approximately 1025 business format franchisors in Australia in 2010, compared with 1100 in 2008. The majority of franchise system closures were small retailers.
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There are an estimated 69 900 units operating in business format franchises,
reflecting a decline of 2 percent during the economic downturn.
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Individual franchise systems have grown from a median of 18 to 23 units over the
past two years.
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There has been a modest decline in permanent employment in the sector and a shift towards greater casual employment to cope with economic conditions. Sales turnover of the entire franchising sector was estimated at $128 billion in 2009.
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Fully 91 percent of franchise systems were developed in Australia.
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