Forecasts of thousands of job losses from Australia’s big banks could have a positive impact on franchisee recruitment – believe it or not. Although the banking sector changes are likely to reduce financing options further, which is already a concern for franchisors and franchisees alike, it may also provide a boost to the number of suitable and cashed-up franchisee recruitment candidates. Between 5,000 and 14,000 jobs are tipped to disappear in the next year or two from Australia’s big four bank – ANZ, Westpac, Commonwealth and NAB. The silver lining is that...

In a recent discussion with a franchisor, I was asked, ‘what the norm was for end of franchise agreement term arrangements when a franchise was being renewed?’ Having never researched franchise renewal processes I was unable to answer. She suggested some franchisors may just send out the new contract with an invoice for any fees that are payable and/or publicise the renewal in internal communications through an intranet or newsletter. With a franchise renewal approaching she wanted to know if franchisors generally offer a gift such as a dinner voucher or something like that...

What a year 2011 has been for franchises. From the start of the year with the floods, earthquakes and a tsunami across different parts of the Asia-Pacific, the focus was on disaster recovery tips and disaster management planning. Recently the Australian Federal government also launched a new iPad App to help franchises and businesses with emergencies, however hopefully it won’t be needed this holiday season. With turbulent economic conditions, (not helped by the natural disasters), this year saw a number of franchise systems (and independent) businesses become insolvent, including...

 State-based franchise regulations in Western Australia (WA) are back on the cards, less than a month after the last attempt failed. This time the private members bill, the Franchise Agreements Bill 2011, was introduced to the upper house by Labor MP the Honorable Ljiljanna Ravlich last week. According to franchise law experts the Bill seems almost identical to the Franchise Bill 2010 introduced by WA Liberal MP Peter Abetz, incorporating the majority of amendments made to the original Bill during its debate. Difference between the proposed old and new franchise regulations Abetz...

The West Australian Franchising Bill 2010 has been defeated. The defeat came yesterday at the third reading in the West Australian Parliament Legislative Assembly. Liberal MP Peter Abetz, who introduced the Bill, is now likely to explore incorporating some of its elements into the Small Business and Retail Shop Legislation Amendment Act. The Bill, which was first introduced into the West Australian parliament just over twelve months ago, was originally referred to an Inquiry with the final report recommending no state-based laws be introduced. However, Abetz continued to pursue...

Journeys are generally easier with a map to follow, and now you can create your own road map for franchise success, learning from the mistakes and experiences from others along the way, thanks to a new book. New book, Jump Shift, shares the collective franchise and business wisdom of former Brumby’s Managing Director Michael Sherlock and franchise consultant Alan Anderson. It provides an excellent case study of the transformation of a business, namely, how Michael and his team took Brumby’s from a ‘basket case to success’ over four years. And, if you’ve...

Is the Australian franchise sector suffering from an image problem? And are there franchising issues which need addressing? Comments made by Australian Competition and Consumer Commission (ACCC) Chairman Rod Sims last week at the National Franchise Convention in Melbourne, suggested the Australian franchise sector had an ‘image’ problem. Franchise conflict facts The Centre’s Franchising Australia research reveals less than 1 percent of franchisees are involved in major disputes with their franchisor. Further, our franchise conflict research reveals a major cause of...

Top performing franchisees may have higher operating costs than lower performing franchisees according to the new Franchise Performance Metrics research. The research, conducted by the Centre, analysed a range of key performance indicators, looking at averages for all franchisees, as well as the top 20 percent and the bottom 20 percent to identify trends in franchisee performance. Franchisee cost-minimisation versus quality and profit These findings suggest that when the focus is purely on minimising costs, service or product quality may suffer at the expense of the business. This is...

With the Franchising and Business Expo on in Brisbane this weekend I thought it would be timely to provide a list of questions prospective franchisees should ask as part of their due diligence. As part of your due diligence it’s important you speak to the franchisor, existing franchisees and ex-franchisees. What to ask franchisees and ex-franchisees The franchisor must provide contact details for existing and ex-franchisees in the Disclosure Document, so it should be easy for you to get in touch with them. As you investigate franchise opportunities you’re likely to have...

Research reveals the majority of franchisees are required to undertake a refurbishment at least every five years. (If only the franchisee from The Cheesecake Shop, who was making a lot of noise about refurbishment requirements had known this fact, perhaps he wouldn’t have been so disgruntled – fortunately a resolution was reached between the franchisor and franchisee at mediation a fortnight ago). The Franchise Performance Metrics research reveals two thirds of the franchises surveyed required franchisees to undertake a refurbishment at least every five years. Cost of...

Yet another disgruntled franchisee launches a negative website accusing their franchisor of unfair acts – this time it’s The Cheesecake Shop. As prevention is better than cure, rather than covering what can be done in this situation to minimise damage after the fact, (which was discussed at a roundtable session at our Franchise Forum), let’s look at prevention. Based on an article in Smart Company (August 1) the franchise head office was aware the franchisee had been disgruntled ‘for some time’. The cause for his pain appears to be shop refurbishment...

Unlike Singaporean night club, Clinic, where customers ordered drinks in syringes or drips and sat on hospital beds or wheel chairs, your business concept needs to be sustainable. Although it caught the eye of a few Centre members on previous trips to Singapore, businesses based on a gimmick generally go out of business – just like Clinic did. As one Gen Y colleague put it: “Once you’ve been there, have the photos up on Facebook, then there’s no need to go back.” According to advisory board member Albert Kong, CEO of Asiawide Franchise Consultants, there...

Australia has been pitched as offering good growth for overseas franchises looking to expand beyond their own shores at a United Kingdom (UK) franchise seminar. At the International Franchise Seminar Australia’s performance during the Global Financial Crisis was highlighted as a key indicator of the strength of the franchise sector. As we’ve seen since the Global Financial Crisis, Australia has become a highly attractive destination to franchises from the United States, with Gap and Ben and Jerry’s commencing operations and several other US brands scouting for locations...

Franchise conflict prevention is better than cure, and minimising or avoiding conflict became a lot easier (and more affordable) this month, with new free early intervention services from the Federal Government. From July 1, franchise sector participants can access new early intervention dispute resolution services, which aim to resolve disputes with a convenor before going to formal mediation. When resolving franchise conflict the earlier the better, particularly as formal mediation can be costly, stressful and time-consuming, and litigation even more so. Franchise conflict...

The West Australian Parliamentary Committee Report found there is no need for state-based franchise laws, yet Western Australia MP Peter Abetz still plans to proceed with his private member’s bill. Having uniform national regulations for the sector is a good thing which I’ve discussed in previous blog posts, ‘A seamless or divided economy’ and ‘State and federal franchise regulations reforms’. West Australian Parliamentary Committee Report Centre Adjunct Lecturer Jason Gehrke in his Smart Company blog post, ‘Why franchising certainty is...

There was little time for questions at the Franchise Performance Metrics Seminar, jointly hosted by the Centre and Westpac this week, so we’d like to invite you to ask your questions here. If you have a question or would like further clarification on any points relating to the ‘Franchise Performance Metrics Report’ please leave them below and I will respond. The three main questions we’ve received so far When will the Franchise Performance Metrics Report be released? The answer: The report is anticipated to be released August 1, 2011. Those who submitted...

The next generation in sustainable business practices is ‘Corporate Shared Value’, and the franchise business sector is well placed to lead the way on this new approach. ‘Corporate Shared Value’ is a business model discussed by Harvard University Professor Michael Porter at the inaugural Australian Chambers Business Congress held at the Gold Coast earlier this month. Demonstrating Shared Value sustainable business practices The best way to explain Corporate Shared Value and how it is different to is through a simple example. Take a coffee franchise that stocks...

Specsavers take an innovative approach to their franchise model, joint venturing with franchisees, much like top Vietnamese franchise, Pho24. An article in Smart Company earlier this week provided an insight into the Specsavers franchise model.  Through the Specsavers and Pho24 franchise models the franchisor co-invests with the franchisees, providing head office (back office and marketing) support, while the ‘joint venture partner’ (aka franchisee) is responsible for the day-to-day operations. In the Specsavers case the partner receives all profit, with royalties set...

Guest blogger: Griffith University PhD Candidate Ashlea Kellner* New research reveals the greatest challenges for franchisees employing staff. Top of the list is: Industrial Relations, and in particular the recent Fair Work changes. Followed by: Recruiting staff, and retaining good staff. The research also reveals the level of support provided by franchisors to help franchisees with this aspect of business varies from franchise to franchise, with some franchisors not offering any support. Franchisees don't often consider franchisor support in these...

Although most products or services can be franchised, there are some that can’t as they are unique and can’t easily be replicated – just as the Royal Wedding is an once-in-a-lifetime event. Being in America for the Royal Wedding I was unsure if I’d get to see the ceremony. Royal Wedding coverage in the US Turns out Americans are infatuated with the monarchy, with the wedding receiving more coverage than devastating tornadoes in the south, which killed more than 300 people. The unsocial hour at which the wedding took place due to the time zone difference (which...

Franchising was in the lime light earlier this week with ABC Radio National ‘Australia Talks’ program running a panel discussion on the topic, of which I was one of the panel members. Also on the panel was Franchisees Association of Australia President the Hon David Beddall and franchising consultancy FC Business Solutions Director Corina Vucic. Franchise Council of Australia CEO Steve Wright and University of NSW law academic Frank Zumbo were also on the show debating state-based legislation. Franchise Essential Brands Group Australasian Sales and Marketing Manager Scott...

Speaking with a disgruntled ex-franchisee yesterday, who now works at the University, highlighted how easy it can be to get distracted by a glossy franchise offer. My colleague was a franchisee of a well-known brand five years ago. After emigrating from the UK she and her husband decided to buy a franchise. They didn’t shop around much. They chose a brand and went with it. They didn’t even speak to any of the current or previous franchisees. “If I’d spoken to the franchisees I would have known not to get involved,” she said. “I would have been...

What is a top franchise to buy? It’s a question I often get asked, and the answer is a bit tricky. It can be hard to rank franchises, as it can be quite subjective. The best franchise to buy for one person may be the wrong choice for another. People need to consider: their motivation for entering franchising, what they hope to achieve, what time commitment they want to invest, how much money they have to invest, and whether their personality is suited to franchising in general, and the particular franchise they are considering. There is a range of different investment...

If fire, floods and cyclones across the nation aren’t enough to get you writing a disaster management plan, then perhaps a template to get you started will. The Queensland Government’s Business and Industry website offers a free downloadable business continuity plan template to get you started. Also on the website is a range of resources to help you with managing risk and building resilience in your business. When preparing your disaster management plan, here are three things to remember: Having a plan is not enough – you need to conduct mock scenarios periodically...

Keeping communication channels open – with your bank, insurance company and the Australian Taxation Office (ATO) was one of the key messages at a special business disaster recovery event. The Kochie’s Business Builders Disaster Recovery Special, broadcast free in cinemas throughout flood affected areas in Queensland and Victoria, provided a combination of useful information, advice and personal experiences. Government support for natural disaster affected businesses In addition to communicating regularly, small businesses are encouraged to access the range of government grants...

Having an over-arching plan for the franchise brand is important, however franchisees need to be developing yearly plans too (and ideally three and five year plans, depending on the length of their franchise agreement). Equally as important as having a plan, the plan also needs to be broken down into real, achievable, tangible targets. Avatar Consulting Director David Campbell is an expert in this area. Real and achievable franchisee business targets He says there’s no point giving franchisees an overall target of increasing sales by 10 percent because that doesn’t really mean...

As the Federal government tries to unify Australia through seamless national business-related reforms, it’s not just flood waters that are dividing the country. Three of the eight states and territories of Australia all have state-specific legislation on the cards – Western Australia, South Australia and Queensland. Submissions for the South Australian supplementary inquiry and the Western Australian franchise bill inquiry closed last week, and Queensland MP David Gibson plans to present his private member’s bill on the matter early this year. Whether state-based...

It’s the end of another year and many of us are feeling weary and a little drained. Like many of you, on my list of New Year Resolutions for 2011 is achieving work-life balance – imagine how great it would be to have energy and enthusiasm every day when you get to the office or van (for mobile franchises). To help me achieve this feat, I’m taking one little resource with me on my Christmas holidays to help prepare me for the year ahead – Bounce Back: 7 insights to help manage life balance. This little gem of an eBook is based on franchise sector-focused research, as...

Colleagues of mine attended the Benchmarking Roundtable at MYP Corporation, run by the Franchise Council of Australia in Brisbane last week. A lot of valuable points around benchmarking and using the data effectively to boost business results were covered. However, it was a side note which had the greatest impact on both my colleagues. One of the MYP Corporation presenters, Steven Eager, mentioned that when he was in his early thirties he landed a job as CEO for a law firm. Admittedly in over his head in the early days, Steven developed a system to help him keep focused on what was...

DC Strategy’s survey of 150 franchisors released recently reports a significant proportion grew more than 8 per cent, during a period when gross domestic product grew at only around 3 per cent. This is consistent with findings of our Franchising Australia 2010 research, which reports many franchisors who survived the economic downturn are growing. Factors contributing to franchise growth As DC Strategy points out, it’s reasonable to assume the strength of a franchise brand contributes to its level of growth along with a continued spend on marketing when many independent...

Without your support and assistance with research so much would not have been possible. My contribution to franchising, for which I was recognised this week at the National Franchise Convention Gala Dinner, would not have been possible. I would like to extend my warmest gratitude to you for your continued and on-going support, and for your openness and honesty in responding to franchise research surveys and interviews. For more than a decade franchise research has been conducted in the Australian franchise sector. I would also like to congratulate my fellow award winners, including Gloria...

With franchising often considered more successful than independent small business, is it the answer for promoting positive economic growth in developing countries? This was the question asked in a report by Dalberg Global Development Advisors with support from the John Templeton Foundation and the International Finance Corporation. Although there is a lack of solid data confirming franchising is indeed more successful than independent small business (as it varies from franchise to franchise) the Dalberg report raised some interesting findings. Their findings show...

For the first time in several years I resisted the temptation to look at emails while on holidays (mainly because I couldn’t get my iPhone to connect in Greece), but it was still a great achievement! It made me realise I don’t have a good work-life balance. During the holiday (which followed a presentation I made at a SME conference in Athens) I remembered what it was like to relax properly and how therapeutic it is to take a decent break. And when I returned from leave, the Centre was still continuing from strength to strength – we really are more dispensable than we...

Franchises consistently outperform independent enterprises according to a longitudinal study conducted in the United States (US). The Fran 50 study, conducted by the William Rosenberg International Franchise Centre, compares the performance of the top 50 publicly-listed franchise groups, with the top 50 publicly-listed independent enterprises based on the S&P 500 index. Conducted quarterly since 2000 by Professor Hachemi Aliouche and Professor Udo Schlentrich, the franchise research provides more than a decade of data. Professor Aliouche says results show franchises...

Franchise professionals from Queensland, New South Wales and Victoria converged on Brisbane this week, to make our second annual Franchise Forum another sell-out event. Jointly hosted with the Franchise Advisory Centre, the Franchise Forum commenced with McDonald’s Strategic Franchising Vice President Joanne Taylor. Re-branding the right way Joanne shared insights on how the world’s biggest franchise reinvigorated its brand to attract old customers back and entice entire new market segments – with success that surpassed even their expectations!! One of the secrets to...

For the first time the International Society of Franchising (ISOF) Conference was held on Australian shores, jointly hosted by Griffith University’s Asia-Pacific Centre for Franchising Excellence, the University of New South Wales and Bond University. Held over two days at UNSW in Sydney last week, more than 40 academics from the United States, Malaysia, China, Australia, The Netherlands, France, India, South Africa, and several other countries presented their latest franchise research findings. Research being undertaken in The Netherlands by Evelien Croonan and two other Dutch...

Recent news reveals Boost Juice is the latest Australian franchise brand to take on private equity in order to expand operations, selling a 70 per cent stake for around $65 million. Boost Juice founders Janine and Jeff Allis, who will continue in the same roles, sold to US private equity firm, Riverside, which has stakes in other franchised businesses in America, and more than 70 businesses in total, globally. The deal will provide the Boost Juice Group with international contacts, as well as the resources to continue to expand nationally and internationally, and to continue making...

Eagle Boys Pizza Founder Tom Potter revealed how putting people first reduced staff turnover from 30 per cent annually to 5 per cent, at a Griffith Business School luncheon event last Thursday. As always, Tom was an entertaining speaker and with quick-witted facilitator of the Global Insights Luncheon series, Adam Spencer, there was plenty of laughter. Covering a range of topics, including the Eagle Boys’ response to being sued by Pizza Hut (with comments from then Eagle Boys In-House Legal Counsel Alan Bates, who happened to be in the audience), the most interesting part, for me,...

A recurring theme throughout much of our franchise research findings is the importance of communication in a franchise relationship – and new franchise conflict research findings are no different. Franchise conflict research conducted by the Centre, and funded through an Australian Research Council linkage grant with the Australian Competition and Consumer Commission, reveals interesting results relating to communication. Findings show three quarters of franchisees trust their franchisor to be honest with them, however it’s a little concerning that there is still a quarter who...

American franchise brands are setting their sights on the Australian market with retailer Gap being the latest to announce plans to open a store in Melbourne during the first half of the year. Ice-creamery Ben and Jerry’s commenced operating in the Australian market in 2009 and in the same year a representative from Hardee’s and Carl’s Junior burger franchises announced plans to expand to Australian shores. Other franchise brands such as Victoria’s Secret, Maggie Moos, Shoebox New York and 1950s diner chain Johnny Rockets, among others, were reported in Smart...

Buying into a big franchise brand is safer, right? Not necessarily. Big franchise brands are not necessarily immune from collapse. You only need to look as far as the recent Australian cases of Kleenmaid, Kleins and EzyDVD to name a few. Our research reveals that while older, more mature brands seem like a safe choice, it may not always be the case. The perceived benefit is older franchises have had more time to iron out any teething problems, the business model and systems are well proven and the brand well known. However, bigger franchise networks may also have higher levels of...

I had the opportunity to hear from an amazing woman in franchising last week, Franchise Woman of the Year and Price Attack Franchisor Carroll Jarred, at Westpac’s SheO Circle High Tea in Brisbane. Carroll is an amazing woman and there’s much we can all learn from her. Her story is an interesting one. She took over Price Attack from former owners API in 2007. One of the most fascinating parts (for me) was that she was a franchisee in one system as well as being a franchisor in a different system, which would certainly have to mess with your head! However there are definite...

A few studies have found the cost of a franchise unit is higher than establishing an independent small business. This is mainly due to the fact that a franchise generally includes an initial franchise fee (average fee in Australia in 2008 was $40,000 in retail and $25,000 in non-retail franchises) in addition to the other start-up costs experienced in starting a business. Depending on the business format start-up costs may include shop fit-out or uniforms for example, as well as legal and financial advice and more. Franchise fee The initial franchise fee usually covers the...

Despite the often significant financial investment of buying into a franchise business opportunity, you need to realise you’re only guaranteed the franchise unit for the term of the franchise agreement. In Australia the average franchise agreement term is five years. At the end of the franchise term you may not get the opportunity to renew for a further term. Franchise agreement, return on investment and due diligence This means when investing in a franchise you need to consider whether you’ll be able to get a return on your investment during the franchise agreement...

When creating a new business an entrepreneur needs to work hard to get the business established, and franchising is no different. Franchising may provide procedures for the day-to-day running of the business, established distribution and supply chains, as well as support from the franchisor, but the work still needs to be done. If you conduct your due diligence correctly you’re likely to discover that many franchisees work as much as 70 or 80 hour weeks in the early days (depending on the franchise). Once the franchise unit becomes established franchisees may continue to work...

Changes to Australian franchise regulations were announced yesterday by Australian Federal Minister for Small Business Dr Craig Emerson. The reforms to the Franchising Code of Conduct aim to create greater transparency and disclosure, while not restricting the operation of business, and are the most significant changes to the legislation since its introduction in 1998. Based on recommendations of the expert panel, Dr Emerson will not ban unilateral contract variations or unforseen capital expenditure. The panel’s report outlines there may be legitimate commercial reasons for such...

Although it’s often said franchising is a less risky option than independent small business there is a lack of solid data to support this statement. The difficulty in proving franchises are less risky than independent small business is it varies from franchise to franchise, and really depends on the sustainability of the individual business model. Despite joining a franchise network with a well-known and established brand you still may not be protected from everyday business risks. There have been a number of cases where franchise networks, despite their size or age, have ceased...

When you become a franchisee you become an owner of a business, however you don’t receive the same freedom as you would if you started your own independent business. One of the reasons you may have been attracted to franchising is the established procedures, policies and brand. However, along with these also comes the need to operate within the franchise network policies, procedures and brand guidelines. It’s through these elements the franchise establishes and maintains a strong brand which adds value to your investment. Franchisee Mindset and Conflict Again, as discussed...

One motivation of people entering franchising is to effectively ‘buy themselves a job’. However becoming a franchisee is actually far more complex than ‘buying a job’, it’s actually a business you’re buying. Franchisee and Employee Differences Unlike being an employee, it’s your finances that are tied up with the business, so if your franchise unit struggles you may struggle, which may also impact your family.

Also you don’t get the same leave entitlements as if you were an employee. If you get sick or want to take...

Go Sushi has announced a profit guarantee for new franchisees who sign up in 2010, and although it seems like a great offer (and it very well may be) it got my attention. The franchise is guaranteeing $100,000 net profit* in the first year or they will make up the difference, provided franchisees comply with the franchise system operations, reporting requirements, and similar conditions. When I initially read about the guarantee it brought to mind failed franchise Kleins. That’s not to say Go Sushi won’t be successful, I’ve just never seen a profit guarantee rather than...

I was down in Sydney earlier this week, to visit relatives. As the family was all together we went out to lunch, (as you do). While I was engrossed in conversation with my niece others at the table starting singing ‘Happy Birthday’. It took me a moment to realise the cake the waitress was bringing over was actually for me! (My birthday isn’t until this coming weekend). As the cake got closer to the table more and more people in the restaurant, people I didn’t even know, starting joining in the singing. I was so embarrassed. It was all very lovely, but it did...

The New Year in Australia brings new industrial relations laws. The Federal Government’s Fair Work changes – the new National Employment Standards and the Modern Awards System – are now in effect since January 1, 2010. The National Employment Standards, (part of the Fair Work Act 2009), aims to provide a safety net of minimum terms and conditions of employment, and brings with it changes franchisors and franchisees need to be aware of. If you’re a franchisor, you may find value in pointing these changes out to your franchisees (if you haven’t already done so),...

What a year 2009 has been: From the uncertain days of the beginning of the Global Financial Crisis (GFC) when no one knew just how big the crisis would become, to the shimmer of positive economic growth on the horizon for 2010. Franchise failure As the GFC was first coming to light, shockwaves were sent through the franchise community with the collapse of the Kleenmaid franchise in early April. With debt of more than $100 million, it’s the most expensive franchise collapse in Australian franchise history, and despite initial claims Kleenmaid was a victim of the GFC, closer...

I was speaking with a Gen Y colleague today about how she (and her other Gen Y flatmates) are really lost at the moment because their internet connection was destroyed in recent storms. Not only did it make me laugh at how dependent a generation can be on the internet, but it made me think about what contingencies the Centre has if our internet went down, and what impact this would have on business. For many franchise businesses the internet, and their website in particular is more crucial than they realise with nearly eight out of ten customers researching their purchases online, even...

Recruiting suitable franchisees is the biggest concern for the sector (based on our latest website poll), despite the downturn, so migrant franchisees may provide a solution. Franchise business opportunities provide migrant franchisees the opportunity to buy themselves Australian residency. Migrant franchisee growth increasing According to demographic and social change advisor, Bernard Salt, at the National Franchise Convention in Perth, Australia, earlier this year, the growth in migrant franchisees is likely to increase significantly. Bernard says the Federal Government recently adjusted...

The Australian federal government announced changes to the country’s national franchise regulations last week, and this week vocal South Australian State Labor MP Tony Piccolo says he will launch his own state-based bill. How could this change Australian franchise regulations? Currently the franchise business sector operates under one unified body of legislation, namely the Franchising Code of Conduct and parts of the Trade Practices Act. Having consistent national laws makes it easier for franchise businesses to move from state to state, creating a consistent playing field. The fact...

Gloria Jean’s Coffees is in 38 countries and counting, so it’s easy to understand why they won this year’s Franchise Council of Australia International Franchising Award. Gloria Jean’s Coffees Global Capability Manager Karli Furmage, shared with me some success secrets which have led the brand to become one of Australia’s, and indeed the world’s, most successful international franchise businesses. Karli is speaking at our Franchise Forum this month (November 18) in Brisbane, but said I could let you in early on a few of her secrets (as long as I save...

Hong Kong works as a good stepping stone into China, according to Hong Kong Trade Development Council Australia and New Zealand Director Bonnie Shek. She says the reason Hong Kong makes a good stepping stone into China is because Hong Kong has a resilient and service-oriented economy, free flow of capital, and western-friendly business conditions with low tax rates. Like mainland China, Hong Kong also has a rising middle class. The Hong Kong Pearl River Delta region alone has a middle class of 47 million people with high levels of disposable income. The region also accounts for 24 per...

Interest in China as a franchise opportunity destination is on the rise in line with its rising middle class, currently at around 200 million people. For an Australian that kind of scale of size is hard to comprehend – China’s middle class is close to ten times our entire population. No wonder its generating interest as a franchise opportunity market. One franchise business set to gain from China’s growing middle class is Gloria Jean’s Coffees.

Gloria Jean’s opened their first of 600 planned stores in China earlier this year, but franchising is not...

I’m reading Eagle Boys Pizza franchise founder Tom Potter’s book, The Eagle Boys Story, at the moment - it’s a great read! Knowing Tom I can hear him speaking as I read and have a little chuckle. He’s very frank and that’s one of the things that makes him so great.He tells it like it is which is why I’m so pleased he’ll be speaking at our Franchise Forum 2009. It’s clear from the book his mother played a really big role in his life and in his success. She always believed in him and it’s nice to see Tom pay tribute to her throughout the...

Half of the winners of the Queensland Business Review Women in Business Awards are involved in franchising. Aussie Pooch Mobile franchisor Christine Taylor took out the Personal Services category. Smartline Personal Mortgage Advisors franchisee Karen Le Comte won the Business and Financial Services category and Remax Wynnum/Manly franchisee Narelle Gill was winner of the Property and Construction category. Franchising success stories These women demonstrate some of the success stories which franchising achieves and provide examples of franchisee profitability as well as the success...

A Franchising Inquiry was held this week, at Griffith University’s South Bank campus in Brisbane. The mock Inquiry was well attended and held as part of our Franchising course – we even had students who usually study entirely online travel to Brisbane to attend in person. Online students could also participate via videoconference with people from Brisbane, Melbourne and as far as New Zealand logging-in. The event ran like a real franchising inquiry, including the formalities and seating arrangement, and we had a combination of franchising students and industry professionals...

Results from our first website poll are in and although only antedotal, may indicate a growing trend towards born franchisors (that is, businesses that plan to franchise from inception). The majority of franchisors (34%) which responded to the website poll granted between two and five franchises in their first year of operation, followed by a quarter granting one unit. Fifteen percent granted between six and ten units, and a further 15 percent granted more than ten units in the first year. In our past academic research we’ve found most systems operate for three or four years before...

If you’ve been involved in a dispute, whether in franchising, the workplace, or another area of your life you may have a particular opinion on how effective mediation is, or under what circumstances a mediator should become involved. And your response is likely to be highly dependent on the outcome of your individual experience. The Office of Mediation Advisor, who coordinates mediation in the franchise sector finds between around 73-76 per cent of mediations it handles end in an agreed outcome. That’s close to three out of every four, which isn’t bad. The Office of...

I was having a conversation with a franchise colleague the other day about the rising interest from franchises in social networking. Most franchises realise the importance of having an online presence but are unsure how to.

She mentioned at the National Franchise Convention last year and more recently at the Queensland Franchise Conference it seemed many franchises weren’t acting for fear of making a mistake. Franchises not acting for fear of making a mistake - why is this bad? Whether you’re actively involved in the online sphere or not, social networking impacts...

Yes the franchising course is still open for enrolments, yes there’s lots of industry involvement, yes you’ll learn a lot of stuff you’ll be able to apply at work straight away, yes the content is in tune with the latest best practice – I was finalising it yesterday (that’s how up-to-date). I’ve received so many phone calls the last few days asking if enrolments are still open for Semester Two for the Franchising Specialist Course and the Graduate Certificate in Franchising. As everyone asks the same questions I thought it would help to answer them...

I have just returned from the Franchise Association of New Zealand Franchise Conference in Queenstown, where there was an obvious relief from the franchising sector that no legislation will be introduced following the recent government inquiry. The New Zealand Minister of Commerce, the Honourable Simon Power, released a paper last month, announcing no franchise specific legislation would be introduced, and so the sector continues to operate under a voluntary code of conduct. Although there were some concerns raised around this decision at a law symposium hosted at the University of...

The world’s leading franchise researcher, Professor Rajiv Dant from the University of Oklahoma is spending two weeks with our Asia-Pacific Centre for Franchising Excellence. While in Australia, he’s sharing his research and also helping coach early career researchers on how to get published. Centre members, including myself, have also been working with Rajiv on a new research project exploring consumer acceptance of western fast food in emerging markets of India and China. It’s a great opportunity for some of our members to build on their skills. As Rajiv lives in...

 Our Asia-Pacific Centre for Franchising Excellence received a visit from the senior staff of the Australian Competition and Consumer Commission (ACCC) this week. It wasn’t related to anti-competitive behaviour or breaches of legislation –it was highly positive – they came on-campus to learn more about the Centre and meet Centre members. We had the opportunity to hear first hand from three of the ACCC’s most senior people responsible for franchising — Deputy Chairperson Dr Michael Schaper, Compliance Strategies Branch General Manager Nigel Ridgway and...

Members of the franchise community have been asking lots of questions about our new Asia-Pacific Centre for Franchising Excellence — it’s great to see so much interest and excitement. A few people have been asking how our research funding works and if the Centre is independent, and to shed some light on how these things work… Research Independence All our research is independent. Even when we receive funding from external organisations they have no influence over the data or its analysis. All research projects need to be approved by the University’s Human...

Building a strong franchise group is clearly what all franchisors want to achieve. So what makes a good franchisee? Surely that is the holy grail of every franchisor, to find the perfect franchisee and replicate them a hundred times over. Equally, the perfect franchisor is what every franchisee hopes to work with. So how do they find each other? Franchising is a commercial relationship between the two parties; the relationship will be more successful if franchisors and franchisees are compatible. But what makes them compatible? Let's look at research recently undertaken by Stephen Bennett...

Research conducted by PhD candidate Owen Wright has been exploring the new phenomena of the use of co-branding in franchising to stimulate and rejuvenate growth in a mature franchising sector. The case study Owen's been looking at is the McDonald’s/McCafe co-branded arrangement, which evolved in Australia. Why co-brand? Development trends such as multiple unit franchising, mobile franchising and co-branding, occur because of the sector’s need to find new means of expansion beyond the standard model of franchising. Franchising in Australia is reaching a...

“There are no new ideas. There are only new ways of making them felt”, according to American poet Audre Lorde. This is obviously the premise upon which some franchisees build their businesses after leaving the franchise structure. Brand piracy is relatively common in the business world. Our franchise research explores how and why it happens among ex-franchisees when they choose to operate independently after leaving a franchise network. People get into franchising because it provides an opportunity for people without prior business experience or who have low levels of...

Australia has been coined the ‘franchise capital of the world’ because it has over three times the number of franchise systems per capita than the United States.  The Australian franchising sector is described by BRW as ‘booming’ and in 2006 franchising was found to contribute $128 billion dollars to the Australian economy.  Australia naturally has some strength within the Asia-Pacific region and within Australia Griffith University has considerable academic expertise with a core team of experts in franchising. So it makes sense that it’s Griffith...

Australia is said to be the ‘franchise capital of the world’ because it has over three times the number of systems per capita than the United States. However, fewer women enter franchising than small business generally. Only 11 percent of all franchises are independently owned by women, which is significantly less than the reported 33 percent of female owned independent small businesses. So is it the case that women are rejecting franchising? Or are there are unique industry characteristics preventing women entering franchised businesses? Why we need women in...

Bill Merrilees, Greg Nathan and I conducted research recently on the building of relationships between franchisees and franchisors, and how those relationships change depending not only on the individuals but also on the stage they are at in the franchising cycle. To a large extent, the relationship is dependent on the dynamics of individual personalities and as the franchisor usually has numerous franchisees at various stages of development at any point in time, it is a great challenge for them to remain connected with each person. The franchising experience is unique for each...

There are many issues in franchising that, if not directly causing conflict in the first place, often do no good in reducing that conflict down the line. Issues include change (whether good or bad), external advisers such as lawyers and accountants getting involved, lack of innovation or development within the franchise and divergent expectations of the parties involved. Researchers at the Griffith Business School and the Griffith Law School undertook research into a greater understanding of franchising conflict as part of an Australian Research Council (ARC)-supported study in...

by Professor Lorelle Frazer Following on from the earlier blog “Who wears the pants”, a team of researchers at Griffith University have been awarded an Australian Research Council (ARC) linkage grant with the Australia Competition and Consumer Commission (ACCC) to research conflict in franchising.
Although the level of disputes in franchising is relatively low, the impact of a dispute can be very disruptive. Fewer than 4 percent of franchisees were reported to have a substantial dispute with a franchisor in 2006, however the effects of a dispute can be far reaching...

At a recent seminar on power relationships in franchising, presented by myself and Franchise Advisory Centre Director Jason Gehrke, we discussed that franchisors and franchisees wield significant power, but that the parties often misunderstand its extent and use. Franchisor versus Franchisee The seminar ‘Franchisor versus Franchisee – Who really wears the pants’ was jointly presented by myself, and Franchise Advisory Centre Director Jason Gehrke. The seminar discussed preliminary findings of research into power relationships, and proposed a model for movement of power in...