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Franchising sector continues to grow
Written on the 1 September 2008 by Fiona Taylor
The Australian franchise sector continues to grow despite the economic downturn, a recent study has found.
The Franchising Australia 2008 study, conducted by the Asia-Pacific Centre for Franchising Excellence revealed some good news for the sector.
Project leader and Asia-Pacific Centre for Franchising Excellence Director Professor Lorelle Frazer said the bi-annual study provided a clear picture of the Australian franchise sector.
“The franchise sector has grown more than 14 per cent in the past two years and revenue from sales in the sector has increased to an estimated $130 billion,” Professor Frazer said.
“The majority of franchising continues to take place in retail trade, followed by accommodation and food service, including fast food. Most franchises are relatively small and the sector represents 4 per cent of Australian small business.”
There are more than 1100 business format franchise systems operating and more than 71,400 units within these systems. Most systems are Australian-grown, with less than 10 per cent being introduced from overseas.
“Consistent with 2006 results slightly more than a quarter of Australian systems have expanded their operations internationally,” Professor Frazer said.
The study showed nearly 415,000 people are employed full-time in the sector, however the proportion of people in permanent part-time and casual positions appears to be increasing.
“Part-time franchising appears to be a growing trend,” Professor Frazer said.
“Individuals are seeking a form of independent business ownership that accommodates existing employment and family commitments, and results show the sector is catering for franchisees who require more flexibility,” Professor Frazer said.
"Slightly less than half the franchisors reporting they appointed franchisees who work in a part-time capacity.”
Results also revealed an estimated 2 percent of franchise systems experienced disputes.
“Substantial disputes, which are those referred to an external advisor for action, were experienced by 17 per cent of franchisors in the previous 12 month period, but most only involved two franchisees,” Professor Frazer said.
The Franchising Australia 2008 research team also includes Dr Scott Weaven and Owen Wright. The study was sponsored by the Franchise Council of Australia.
Franchising Australia 2008 key findings include:
Author: Fiona Taylor