Franchising on the rise in Australia
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<strong>the</strong>y re-acquired follow<strong>in</strong>g <strong>the</strong> GFC or franchise outlets <strong>the</strong>y opened <strong>the</strong>mselves<br />
through a lack of suitable franchisees). There has been no net overall change <strong>in</strong><br />
<strong>the</strong> number of franchise units s<strong>in</strong>ce <strong>the</strong> 2014 survey.<br />
The survey notes that New Zealand rema<strong>in</strong>s <strong>the</strong> most comm<strong>on</strong> dest<strong>in</strong>ati<strong>on</strong> for<br />
<strong>Australia</strong>n franchisors seek<strong>in</strong>g to expand <strong>in</strong>ternati<strong>on</strong>ally, 'despite its small<br />
potential market'.<br />
The proporti<strong>on</strong> of franchisees <strong>in</strong> dispute with <strong>the</strong>ir franchisor across <strong>the</strong> sector<br />
was estimated at 1.8 percent, c<strong>on</strong>sistent with previous surveys. Disputes with<br />
franchisees <strong>in</strong>volv<strong>in</strong>g an external advisor were reported by 25 percent of<br />
franchisors with a median of 2 of <strong>the</strong>ir franchisees. The most comm<strong>on</strong> causes of<br />
disputes were those related to franchisee compliance, communicati<strong>on</strong> issues and<br />
disputes regard<strong>in</strong>g fees.<br />
Bruce Bills<strong>on</strong>, Executive Chairman of <strong>the</strong> Franchise Council of <strong>Australia</strong>, said<br />
franchis<strong>in</strong>g is a robust, vibrant and excit<strong>in</strong>g part of <strong>the</strong> ec<strong>on</strong>omy, account<strong>in</strong>g for<br />
approximately 4 percent of all small bus<strong>in</strong>esses <strong>in</strong> <strong>Australia</strong>.<br />
'The survey results show <strong>Australia</strong>‟s franchis<strong>in</strong>g sector has c<strong>on</strong>t<strong>in</strong>ued to perform<br />
str<strong>on</strong>gly, aga<strong>in</strong>st <strong>the</strong> backdrop of relatively slow ec<strong>on</strong>omic growth. The<br />
<str<strong>on</strong>g>Franchis<strong>in</strong>g</str<strong>on</strong>g> <strong>Australia</strong> 2016 survey po<strong>in</strong>ts to a matur<strong>in</strong>g sector hold<strong>in</strong>g its own <strong>in</strong><br />
a transiti<strong>on</strong><strong>in</strong>g ec<strong>on</strong>omy follow<strong>in</strong>g <strong>the</strong> end of <strong>the</strong> m<strong>in</strong><strong>in</strong>g boom. Total sales<br />
turnover for <strong>the</strong> sector has <strong>rise</strong>n slightly, while employment has steadily <strong>rise</strong>n<br />
and created more permanent full-time jobs. Franchisors are also predict<strong>in</strong>g<br />
growth <strong>in</strong> franchise numbers over <strong>the</strong> next 12 m<strong>on</strong>ths.'<br />
What's driv<strong>in</strong>g <strong>the</strong> franchise sector right now?<br />
The franchis<strong>in</strong>g <strong>in</strong>dustry is still grow<strong>in</strong>g, despite be<strong>in</strong>g a mature sector. In <strong>the</strong><br />
five years up to 2015-16 <strong>the</strong>re is an expected annualised growth of 2.8 percent.<br />
In <strong>the</strong> five years through to 2020-21, growth will be a steady 2.3 percent. That<br />
will take <strong>the</strong> sector's franchisor revenue to $192.6 bn.<br />
<str<strong>on</strong>g>Franchis<strong>in</strong>g</str<strong>on</strong>g> has seen some ups and downs <strong>in</strong> trad<strong>in</strong>g c<strong>on</strong>diti<strong>on</strong>s, and as it heads<br />
<strong>in</strong>to <strong>the</strong> next five years c<strong>on</strong>solidati<strong>on</strong> of bus<strong>in</strong>esses is expected to create more<br />
multiple-brand franchisors. There will be more franchisees across <strong>the</strong>ir<br />
networks too, and a trend for <strong>the</strong>se franchisees to operate more than <strong>on</strong>e unit or<br />
outlet.