Buying a franchise may, on the surface, seem exactly the same as buying a business.
Principally they are the same, except with a franchise the brand and business operational model has been systematised.
While the operational and other support mechanisms that come with a franchise are appealing when compared to an independent business, it’s important to consider the additional requirements and costs you may have to meet.
The infographic below contains four key questions for people considering buying a franchise:
For a more detailed list of questions to consider when looking at franchise opportunities, download our free Buying a Franchise Planning Sheet. You can also visit the Buying a Franchise page on our website.
Franchisors behaving badly
Earlier this year we published a blog in response to the release of a damning federal parliamentary report into Australia’s franchise sector.
The parliamentary inquiry into ‘Fairness in Franchising’ recommended an overhaul of the industry's regulatory framework, stating that it had “manifestly failed to deter systemic poor conduct and exploitative behaviour”. It said the existing rules had “entrenched the power imbalance” favouring franchisors.
However the report also acknowledged there are good franchise systems that “operate to the mutual benefit of the franchisor and their franchisees”.
Our takeaway message from the report: when it comes to franchising, get robust, independent advice before you buy a franchise (or any business, for that matter!)
You can follow this link to read our full blog in response to the report's release.
If you are considering a franchise opportunity and would like support or advice, contact the team at JPAbusiness on 02 6360 0360 (Orange) or 02 9893 1803 (Parramatta) for a confidential initial discussion.
James Price has over 30 years' experience in providing strategic, commercial and financial advice to Australian and international business clients. James' blogs provide business advice for aspiring and current small to mid-sized business owners, operators and managers.