Home About Us Membership Information Events Awards Media Education Representation Bookshop Partnership Contact Us

Battle for internet profits

Written on the 21 November 2012

Daily Telegraph, Sydney, Tuesday 20 November
By Russell Emmerson

The growing presence of online systems is raising questions about whether franchisees are receiving their fair share.

Australian Competition and Consumer Commission deputy chairman Michael Schaper says the split of online business is a building issue in the sector.

Franchisors generally retain control of an entity’s intellectual property and stand in the driver’s seat for developing an effective online presence.

This could come at the risk of franchisees, who are geographically bound by their contracts, Schaper says.

I’m not aware of anything we have come across as yet but we need to think about it,’’ Schaper says.

People wouldn’t think about it they would look to their franchise agreement, and look for their franchise territory, what are the terms of sale, their rent, and so on.’’ He says this doesn’t mean franchisees are being exploited.

The best long-term interests of franchisors is to develop a good network of franchisees that are viable, so that’s not the problem,’’ he says.

The problem is the outliers, and we may need to ask whether there is a problem.’’ Griffith University’s recent Franchising survey, released last month, shows 40 per cent of franchisors are selling online and another 32 per cent are eyeing the space.

Although it is evident that online selling is gaining momentum among franchise systems, most franchisors are concerned with the impact of online selling to individual franchisees in this new landscape,’’ the report says.

However, it says franchisees do benefit from direct online sales as a result (32 per cent) or a trickle-down of profits (21 per cent) or revenue (17 per cent) from online sales.

But the results also highlight Schaper’s concerns about the outliers’’ 9 per cent retain all outliers’’ 9 per cent retain all online profits.

Franchise Council of Australia executive director Steve Wright says it is wrong to presume franchisees are powerless in the battle for online control.

It is a business for the franchisor as well, so they are looking at what works for the business model and what is fair,’’ he says.

The contract model is not the only thing this in a commercial relationship. The success of the franchisor and franchisee is bound, they are interdependent. You make it work for both parties.’’

Latest News

Statement from Bruce Billson, Executive Chairman, Franchise Council of Australia regarding calls from Michael Sherlock, joint-founder ...
A message from FCA Executive Chair, Bruce Billson The FCA Board is delighted to announce to FCA members, partners and stakeholders that Ms M...
"The Franchise Council of Australia (FCA) welcomes the ACCC's re-authorisation of an amended Casual Mall Licensing Code of Practice (th...

Upcoming Events

VIC: Building Better Teams

Start Time: 8:30am
Date: Tuesday 20th March 2018

QLD Breakfast: Positive Franchising - 22/03/2018

Start Time: 7:15am
Date: Thursday 22nd March 2018

Women in FranchisingFranchise AcademyFranchise Council of Australia