Despite Australia today claiming to be one of the major players in the world of franchising, as a concept it was virtually unknown in Australia until the early 1970’s. An influx of successful US fast food franchise systems, such as KFC, Pizza Hut and McDonald’s into the local marketplace, led to the rise in popularity of franchising as a format for creating and expanding businesses in Australia.
Franchising is fast becoming a mature sector of the Australian economy, with franchise systems now present in most Australian industries e.g. b2b, real estate, catering, children’s services, vending, recruitment, leisure industry, cleaning, home improvements, pet services, hotels, to name just a few. No longer is franchising limited to fast food and coffee chains!
Franchising may have initially provided a means for Australians to benefit from foreign products and systems, but it now is the chosen format for many Australian entrepreneurs looking to expand and develop their business throughout Australia and also internationally.
The stats…franchising in Australia
The Australian franchise sector is still strong despite a decrease in the number of franchise systems following the economic downturn, according to new franchise research findings.
The results of the Franchising Australia 2010 survey, sponsored by the FCA, identified the following:
Some 1025 business formats are operating in Australia, compared to 1100 in 2008. The majority of franchise system closures were small retailers.
There is an estimated 69,900 business format franchised units operating in Australia, reflecting a decline of 2% during the economic downturn.
The franchise sector is estimated to contribute $128 billion to the Australian economy.
Individual franchise systems have grown from a median of 18 to 23 units over the past two years.
There has been a modest decline in permanent employment in the sector and a shift towards greater casual employment to cope with economic conditions.
91% of franchise systems operating in Australia are home grown. 28% of Australian franchisors are operating internationally, with New Zealand the most popular destination.
The retail trade industry continues to dominate franchising with 26% of franchisors and 24% of franchise units involved in retailing.