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Understanding potential franchisees
To assist with franchisee recruitment the Asia-Pacific Centre for Franchising Excellence surveyed attendees at a franchise business opportunity expo.
The surveys, conducted by Centre researcher and PhD candidate Steve Bennett, provided insight into potential franchisee’ needs and wants to help franchisors create better franchisee recruitment practices.
Mr Bennett said results showed the main reason potential franchisees attended the franchise business opportunity expo was planning for the future, followed by curiosity and interest in a specific franchise business opportunity.
“More than half were interested in franchising as a business model, while a quarter were unsure or interested in both franchising or independent business,” Mr Bennett said.
Franchise Business Qualities
A franchise system with a good reputation was deemed to be the most important factor in choice of system as well as growth opportunities and system success as a whole.
Initial training was seen to be more important than on-going training, however support in running their business was rated highly, particularly in a crisis situation.
Potential franchisees identified being able to spend more time with their family as the most important lifestyle concern followed by independence and work-life balance.
Earning a lot of money and generating a long term income through a franchise business were seen as the most important aspects of achieving a return on investment.
Potential Franchisee Demographics
Over half of the franchise business opportunity expo survey respondents were employed within managerial or professional positions, while 24 per cent were self-employed.
“This indicates qualified individuals with management and/or entrepreneurial experience appear to be a potential franchisee target market for franchisors,” Mr Bennett said.
Ninety per cent of respondents had achieved an education of Senior High School level or above and just under half had a tertiary qualification.
More than three quarters of the respondents were either married or in a defacto relationship and the majority would have their partner involved in the business.
Most respondents were male and between 31 and 50 years of age. Only a quarter were female and a fifith of attendees were in the 18-30 year age bracket.
The majority of respondents were in the lower to middle ranges of income ($31,000-$90,000), with only a small proportion (31%) high income earners ($51,000 - $90,000).
Previous business ownership was split equally with non-ownership and less than 10 per cent had run a franchise. The majority of previous business ownership was in retail trade or personal and other services (60%) industries.
The lower ranges of investment (up to $50,000) attracted the most interest (52%) with the $100,000 - $300,000 bracket the next highest, attracting 35 per cent.
Franchise Business Industry Choice
“While at the expo half of the respondents found a specific business opportunity they were interested in,” Mr Bennett said.
“Business in the food and the personal and other services industries were the most popular.”
Franchise Information Sources
Most respondents gained information about franchising from newspapers and television.
“Networking with current franchisees, friends and relatives also emerged as important sources of information,” Mr Bennett said.
These findings are based on surveys of 80 attendees at the Franchising 2006 Business Opportunity Expo. Expo organisers Diversified Exhibitions Australia donated a booth for Mr Bennett to complete the research.
Author: Fiona Taylor