Franchising as a concept has been very well accepted in Australia and there are now more than 1,000 franchising systems offering almost every product or service. There is a misconception however, that buying a franchise is a sure path to business success. Many franchisees have found to their detriment that understanding the business, working hard and having sufficient capital to run it are still the cornerstones of a successful operation, regardless of whether it is a franchise or not.
One of the main attractions of a franchise is the ready-made system that comes with the purchase price. It means that the new owner is providing a product or service already known to the market. That business operating practices and instructions are in place and there is training and ongoing support from the franchisor. A new start-up can take twelve months or more to establish this. It is this shortening of the start-up process in particular that can be very appealing.
Unfortunately, many franchisees who have put their money into an established system have failed to understand that they still need to have business skills to run it. Simply being part of a franchised system will not save a business that is under capitalised or poorly managed.
It is highly recommended that you work with an adviser to help you maximise the opportunities that a franchise offers. Working with a business adviser can ensure you have thought through the process and have established goals and objectives that are consistent with the projected outcomes. By challenging our clients with key questions, we are able to pinpoint issues they may not have examined that could affect the success of the business.
If you are considering buying a franchise then make sure to read our handy guide that can assist with the decision making process.