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Franchisees believe in the brand

By Sam Jeremic
Weekend West, Perth, Saturday 29 September

Jobseekers thinking of going into business for themselves may be tempted to look into becoming a franchisee.

While it can potentially minimise risk and provide support when starting up, industry experts recommend thorough research beforehand.

All franchising agreements are different, though generally a franchisee will pay an upfront fee to the franchisor, and then continue paying royalties via a set fee or a percentage of sales turnover, for the length of the agreement.

In return, the franchisee may get assistance with site selection and shop fitting, marketing, securing finance and other start-up support.

Some franchises will require previous knowledge and skills relevant to the industry they are in, but training is often provided.

Franchise Council of Australia executive director Steve Wright said passion for the company and industry were key necessities for franchisees.

"Most franchisors would prefer to bring into their brand somebody who believes in it and wants to succeed, than someone who has vast knowledge or qualification," he said.

Evan Hewitt, 34, opened the first WA restaurant of east-coast franchise Grill’d in Mt Lawley in 2010, and recently opened his second Grill’d eatery in the CBD.

He had previously run three Boost Juice establishments, and said franchising had worked for him.

"I don’t think you can put a value on the branding, on the internal procedures, online platforms, or training you get," he said.

"We employ people who pretty much know how the restaurant works before they even set foot in the door, and the time frame on that is quite invaluable." While he said he became a franchisee because of the support it provided when starting out, the driving factor was his belief in the respective businesses.

"We love the products, the brands sat very comfortably with me and represented who we are," he said.

"You’ve got to know who you are as a person, you have to pick a franchise in line with your values and what you believe is the right business opportunity" However, Small Business Development Corporation chief executive David Eaton said it was vital people understood exactly what they were committing to.

"Some people see a franchise as buying a job’, but they don’t realise it is a long-term commitment from which it can be very difficult, and costly, to resign’," he said.

"Being a franchisee often means meeting the franchisor’s business targets and following the franchisor’s marketing strategy" Mr Eaton said it was also important to note at the end of certain franchise terms, the franchise business was not obliged to renew the franchise, in which case the business and its goodwill reverted to the franchisor.

"It is very important to read the franchise agreement carefully and seek advice before signing it," he said.

"If possible, talk to other franchisees within the group as well as an independent business adviser."

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