Overview
Although relatively mature, the Australian franchising sector is experiencing solid growth. There are around 960 business format franchises in Australia (93 per cent ‘homegrown’), compared with 850 in 2004 and 700 in 2002. There are an estimated 62,000 units operating in business format franchises, employing around 430,000 people. Sales turnover for the sector was estimated at $128 billion in 2005.
Almost half of Australian franchises are in the retail sector (food and non-food), followed by property and business services (21 per cent) and personal and other services.
A key trend in Australian franchising in recent years has been the big increase in international activity, especially as systems mature and exporters are compelled to look beyond the relatively small domestic market for further growth opportunities.
International franchising opportunities have never been greater, with more and more markets opening up and franchising almost universally accepted as a way of doing business. Around 27 per cent of Australian franchise systems have international operations, contributing millions of dollars in export income from royalties and franchise fees.
The opportunities, however, do not apply in equal measure across all Australian systems or markets. Individual franchisors need to assess their own readiness and capability to export, as well as undertaking comprehensive market research, before going anywhere.
What are the key opportunities?
Social and economic trends such as an ageing population, increasing disposable incomes, single parent families, health and fitness and internet usage are a good indicator of opportunity areas in franchising. These trends can translate into demand for products and services such as aged care and child care, retirement planning services, recreation services for the over-55s, security services, healthy take-away food, domestic and personal services, home improvement services, specialised fitness gyms (such as women-only gyms), and technical services such as telecommunications and IT services.
Products/services that are selling well internationally at present are:
- Retail food such as coffee shops, cafes, juice/salad/noodle bars
- Retail non-food such as homewares/home storage
- Business services, such as financial planning, tax agents
- Personal services, such as fitness training, beauty treatments
- Home services, such as home maintenance/renovation
Where are the key opportunities?
As franchising is a business model covering many different industry sectors, market opportunities depend on the products and services being offered.
New Zealand is always popular, especially as a first market, although its small market size can be a drawback. Other English speaking markets, such as the UK, US and Canada have well developed franchise sectors and offer a level of familiarity that tends to outweigh their distance.
Closer to home, South-East Asian markets such as Singapore, Malaysia and Indonesia also offer opportunities however, the considerable cultural diversity must be understood and factored into business plans.
High-growth emerging economies such as India and China are generating strong interest, as well as Central Europe, the Middle East, and Latin America.
Please see the list of industry country profiles for the franchising industry at the end of this overview.
How can we help you?
With a network of over 140 overseas locations in more than 60 countries backed by highly experienced and qualified staff, Austrade provides a number of dedicated and tailored services to Australian exporters.
Services include:
- Coordinating trade missions around international events such as Franchising and Licensing Asia in Singapore, SIF in Spain and IFE in Washington DC
- Conducting seminars in Australia, often with Austrade staff from overseas offices
- Undertaking market research and business partner searches
- Individualised market visit programs
- Buyer visits
For further information please contact Austrade on 13 28 78 or email info@austrade.gov.au.
Useful contacts
Austrade’s franchising contact
Cheryl Scott
Tel: +61 2 9390 2931
Email: cheryl.scott@austrade.gov.au
Government contacts
Department of Innovation, Industry, Science and Research – www.industry.gov.au
AusIndustry – www.ausindustry.gov.au
Australian Competition & Consumer Commission – www.accc.gov.au
General industry contacts
Franchise Council of Australia – www.franchise.org.au
Franchising Magazine – www.franchise.net.au
International Franchise Association – www.franchise.org
Entrepreneur Magazine – www.entrepreneur.com
Last updated: 19 Dec 2007
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