News
Issue No. 48 - August/September 2009
Is your business right for franchising?
Every business journey is different. Each person has different reasons and motivations for being in business.Your dreams and aspirations are as unique as the business you have built. Does your vision for the future include franchising?But while every business possibly CAN franchise, not every business SHOULD franchise. Ask yourself:Is your business ready to be franchised? Have you considered franchising as a methodology for growth, nationally or internationally?
By analysing many franchise models, Australian and foreign, we have been able to determine a set of
characteristics businesses should possess.
What is Franchising?
Franchising is when you say to someone:
• if you have passion for my business and if you agree to do your best to follow my tested rules, I will grant you the right to run a copy of my business; (franchisee drives business)
• we will show you what you need to do;
• we will give you the tools to do the job;
• we will support you in your efforts to do it;
• together we will grow this business to be bigger and better than the sum of its individual parts; and
• you will pay a fair price for brand and goodwill and support while you make a return on your investment
• The Franchising Code of Conduct (ACCC) also specifically defines a structure as a franchise if it contains all of the following elements:
• An agreement between the parties, written or oral (Contract)
• Payment, up-front or recurring, for providing goods or services (except at wholesale price)
• Provision of a marketing plan substantially determined, controlled or suggested by the franchisor (Control)
• Use of Trademarks, Brands or Names owned by the franchisor
If a business model contains these elements it will be judged by the Australian Competition and Consumer Commission to be a franchise, whether the business
owner wants it to be or not.
Franchising is s...
