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Frequently Asked Questions


Can I franchise an idea?
Do I need a licence to be a franchisor?
How long should I be in business before franchising?
How much would it cost to franchise my business?
Should I join the FCA?
Where can I learn more about franchising?



Can I franchise an idea?
No. Any franchise must be derived from a tried and tested business formula that has traded through a number of seasons under different conditions, and preferably in more than one location.

Ideas are unproven, untested, and are not tangible until they are embodied in some form (trademark, patent, copyright, business format, etc).

Do I need a licence to be a franchisor?
Businesses do not need a special licence or registration to commence franchising in Australia, however they will need all the normal business permits required for the conduct of their general type of business, and must comply with the Franchising Code of Conduct.

The Code is administered by the Australian Competition and Consumer Commission (ACCC), which has powers to investigate complaints against franchisors made by consumers or franchisees.

All intending franchisors are strongly encouraged to join the Franchise Council of Australia, which is the recognised peak body for the franchise sector in Australia.

How long should I be in business before franchising?
If you are planning to franchise your business, you will need to prove that it can survive different trading conditions over time.

It is not recommended to commence franchising before completing five years of successful business operations.

If franchising is planned as a long-term objective of the business, this allows sufficient time to develop the systems and support mechanisms that will be required to develop and maintain a franchise network.

It is important that appropriate advice be considered along the way. Review the list of advisors in the Franchise Directory if you are looking for franchise development, legal, accounting or financial advice.

How much would it cost to franchise my business?
There is no set answer to this question. Estimates run into the tens of thousands (or more).

The cost to franchise your business depends on the quality and extent of advice a potential franchisor is prepared to pay for, how much they are prepared to do themselves, and the complexity of the business to be franchised.

The compiling of procedures into a comprehensive operations manual is something that can be done largely by the franchisor themselves, with external guidance on format, style, usability, etc.

Issues of franchise marketing and promotion may be an extension of existing marketing activity.

Identification of markets, territories, locations, etc, will require considerable work and cross-verification.

The development of the franchise agreement is a critical step where only qualified and experience franchise legal advisors can assist. This can be the most expensive component of establishing a franchise system, but is critical to the long-term protection and viability of the business to be franchised.

See the Franchise Directory on this site for a list of advisors.

Should I join the FCA?
If you are intending to franchise your business it is essential that you join the Franchise Council of Australia.

Members of the Franchise Council of Australia are part of a unique association where business information and the lessons of experience are exchanged freely. This is because FCA members share a common method of doing business, not a common business itself.

For this reason, service franchisors in say the lawnmowing industry, can freely exchange ideas about the operation of Franchise Advisory Councils with retail food franchisors (or indeed, most other franchisors), without fear of losing a competitive edge over a competitor.

It is this non-competitive culture of sharing that makes the FCA unique among trade associations, and this alone can repay the cost of membership many times over from a single piece of advice gleamed from a fellow member at an FCA gathering.

Furthermore, the well-established franchisor members of the FCA acknowledge that it is in their best interests to maintain the good name of the franchising business method, and are often happy to provide "mentoring" advice to newer systems coming through.

Franchisees are able to become involved in big picture issues affecting the sector through their membership, while service providers, such as accountants, bankers, lawyers, consultants, etc, join to maintain and develop their professional skills in franchising (as well as for the obvious networking benefits).

These are just a few of the intangible, but highly valuable benefits of being a member of the Franchise Council of Australia.

For more information, on membership categories and costs, click here.

Alternatively, to attend an FCA seminar or workshop to learn more about the FCA firsthand, click here.

Where can I learn more about franchising?
The Franchise Academy has been established to provide the Franchise Industry with access to all its Training and Development needs. It will offer a comprehensive range of programs in various formats including traditional learning, distance education and on-line education.

The aim of the Franchise Academy is to provide a structured education program for all people, either interested in or, currently involved in Franchising. The Franchise Academy will do this by offering specific accredited and non-accredited programs presented by specialist partners.

For more information on the Franchise Academy, click here.

The FCA run many seminars and workshops around Australia, and these are also very useful to learn more about specific aspects of franchising. For a list of events and locations, click here.

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