Franchising is a business relationship where a company gives a part of the ownership of their brand, a product, or a production system to another party or group in return for a fair remuneration. The total market value for franchises in Australia will come down to 154 billion dollars by 2020-2021, and experts predict it to rise once the pandemic lifts. Franchising opportunities in Australia will grow more in the years to come since various brands and services are continuously improving their business agendas and production lines.
In short, franchising is more of an agreement between two parties. Here the franchisee earns the rights to a part of the business system, and the franchiser gains an adequate profit for lending or signing such contracts.
Different Methods of Franchising
- Special Training: The franchise conducts adequate and specialized training for the franchisers’ staff for a brief time and under contract.
- Royalties: The franchiser earns royalties for the part of the business that works under the party who bought it.
- Time: A stipulated time is given to the third party to purchase and sell the services and business processes under its name.
- License: The seller gives various rights to various trade deals and agreements to the third party.
- Support and Technology: The franchiser can lend state of the art business technology and technical support as part of the contract between a company and franchisee.
Using A Franchise to One’s Advantage
Know The Customers Wants
Before buying a franchise, make sure that there’ll be adequate demand for that product or service. The more the demand and cash flow, the more the profit earned.
Don’t Take Additional Risks
Since it’s already a business model that is tested and succeeded, the one who buys the franchise does not have to worry about risks. The only thing to make sure of is the constant flow of customer demands into the supply system.
Opportunities for Growth
Their respective parent companies offer most private franchise owners all support and growth. So there is no need for working out extra costs to learn the market structure and demand statistics.
Why are Franchise Businesses Profitable?
People who buy franchises face lesser risks than starting one’s own business in Australia. This is because the parent companies from whom one buys the franchise already have an existing and successful market model. All the buyer needs to do is to implement that model into the community to increase demand properly.
Training and Technical Support
The parent company will provide the necessary training and keep the staff updated on the various changes in the market demands and structure. Hence there is no need for the private business owner to take in additional costs for technical support.
The Assets are In The Buyer’s Control
Although parent companies have their market structures and agendas, from uniforms to various technologies, they are in the buyer’s control once a company buys the assets. It is the franchisee’s freedom to change the production structure or technological process for their benefit. This freedom is authorized by the parent company as long as the owner doesn’t fall short of the required royalties and fees that they must pay.
Franchising opportunities in Australia are a less risky business venture, but that does not make them easy. Before buying a franchise, make sure that there is proper knowledge regarding the market structure, business opportunities and customer demands. Various policies and conditions of the parent company must be thoroughly learned and acted upon accordingly.