Action beats Procrastination

I joined a challenge because I want to write, but just keep delaying it. I finally admitted that my internal deadlines weren’t working and that some form of external accountability was needed, to…

独家优惠奖金 100% 高达 1 BTC + 180 免费旋转

Why is Franchising in Australia on the Decline?

Australia was a world leader in franchising in the 1990s, what happened?

But the writing has been on the wall for some time.

#1 There is a Sharp Decline in Australian Families Buying Franchises

Australian’s are choosing to go it alone as independents small business owners as a more attractive alternative to investing in franchise systems.

There is a small business revolution going on!

There are more home-based family businesses than ever before, but they are not seeing the value for their money in being a franchisee.

The Retail Food Group(RFG) currently resources getting all the headlines, their recent results should be terrifying to all those in franchising in our c country. Consider, in March 2018, Retail Food Group stocks hit 10-year low on $88m loss and 200 stores to be closed in 2019. The company blamed unsustainable rent, declining shopping centre performance and a sharp decline amongst domestic franchise sales and renewals as the main reasons for it’s disappointing performance.

Our largest franchisor can’t sell franchise!

They have huge financial resources and the largest marketing budgets of any Australian franchisor, they are planning to close 200 franchises in the next 12 months, what chances do the lessor lights have.

Australian Franchisors are reliant on new franchisee’s buying into their business. In the most part they are Families’ who invest in franchises. This just isn’t happening at the same rate as in the 90s and 00s.

Secondly, but very tellingly, even long term successful franchisees are choosing not to resign their “renewal agreements”. They are choosing to be rebrand from the network, rebrand in their own name and carry on without paying those annoying franchise fees.

The world has changed, but it appears that most Australian franchisors are still Partying like it is 1999, but most family small businesses are deciding it is better to go it alone.

#2 Australia is Oversaturated with franchisors.

The “Franchising Australia 2016 Report”, comply by the Griffith University’s Professor Lorrelle Frazer, sponsored by the Franchising Council of Australia is the last detailed industry report directly from Australian Franchisors’

This is a valid, up to date report that is based on information supplied by Australia’s Franchisors, If anything this report is most likely to be franchisor friendly?

To quote the report:

One of the most telling facts in this report , To quote the report

Simply: Australia is oversaturated with franchisors, there are 650% more franchisors to ratio of population than the USA, the home of franchising!

Franchise brands are vanishing each year and the FCA expects this to continue into the near future.

On these numbers, Australian Franchisors are an endangered species. We have to lose around 800 brands to be on par with the USA?

It will be survival of the fittest. The strongest and long term ethically sound businesses will be around in the next 5 to 10 years.

In 2018, Master franchising in a market as small as Australia is an outdated concept.

The internet has more useful tools available to manage, educate, support and market franchisee’s businesses. The Master Franchisor model adds an extra level of unnecessary cost for both the Franchisee and the Franchisor.

It is true, that if Franchisors do go out of business, then some franchisees may go with them, but successful franchisees can still trade on with their own sign above the door.

#3 The Internet has Changed the World and Most Australian Franchisors Haven’t Caught Up.

Many Franchisors are overcharging to compensate for the decline in sales.

In every franchise system there are 3 keys systems areas that are the foundations on their intellectual property.

In the 1990s to early 2000s, it wasn’t easier for the average small business owner to get access to these tools or education. In 2018, it is a very different world.

Training:

Everyone has access training in everything needed to run a successful small business. There are qualified trainers all around the world.

Marketing:

It has never been easier for small business owners to market their businesses. They can hire your own Marketing Guru to build their local brand for a fraction of the franchise fees. Just check out Upwork.

Support;

There are a huge range of business coaching and support options. The selection of specialist business coaches is never ending.

There is plentiful supply of information, education and business systems online.

If franchisors are asking new business owners to spend for a $30,000 for initial fees they have to offer greater value than the other suppliers that are available on the internet.

For many franchisors, they are offering no intellectual property that the average family cannot be buy elsewhere on the internet for a fraction of the price they are asking them to pay.

Franchisors have to offer a better product for family business than what is available online!

Simply, the elite franchise systems will continue to grow and prosper. The strong credible brands will be the survivors, McDonalds is here to stay.

In the 1990s franchising in Australia was cutting edge business stuff, it truly empowered small business owners to succeed and prosper. But the reality is that in many systems there will be in a continuous negative growth over the next five to ten years.

For many franchise systems the internet is the catalysts to the beginning of the end.

In 2018, there is a small business revolution around the world, more families than ever are choosing to work from home .

The vast majority are choosing to go it as independents with help from experts found on-line.

The internet changed the game for franchising in Australia, but most Franchisors are living in the good old days of 1999, before the internet came along.

This is a time of great opportunity for pragmatic Franchisors who embrace the changes ,evolve their business systems and to add the extra value to the franchisees business.

Action beats Procrastination

Why is Franchising in Australia on the Decline?

Add a comment

Related posts:

PETER EKPE

Ed Sheeran wins twice at The Ivors 2018

Dirty Fighting