The Definition of Franchising
In basic terms franchising is defined as a legal and commercial relationship between the owner of a trademark, services mark, trade name or advertising symbol and an individual or group wishing to use that identification in a business. Franchising is an extremely successful and proven method of distributing goods and services in Australia.
The franchising industry in Australia is rapidly growing, generating approximately $175b of revenue across 1,175 businesses in 2015/2016. (IBISWorld 2015)
So how does franchising work?
There are four main elements to any franchise system:
- The Brand
The brand associated with the services delivered in a memorable and satisfying experience to the customer.
- Operating System
The operating system takes the excellent service delivered from one location and replicates the experience in each and every franchise location.
- Support System
The support system helps the franchisee get better and better at delivering the services in a memorable experience which ultimately improves the franchisees performance.
The franchisee provides the talent, the motivation and the passion to the franchise system.
Advantages of Franchising
Good franchising will always be a win-win situation for the franchisor and franchisee:
- Rapid expansion of the business
- Having the right people within the business
- Franchisee operated locations statistically perform better than company owned locations
- Reduced risk – purchasing into an established brand rather than starting from scratch
- Franchisees are provided with support services such as marketing, human resources, business development, etc.
- It’s easier for a franchisee to obtain finance
These are only some of the advantages of being a part of a franchise system. Read our other blogs for more specific articles on each aspect of franchising.
Are you looking to franchise your existing business?
FC Business Solutions offer a wide variety of franchise support services varying from system development, recruitment strategy and operations manuals. Contact FC Business Solutions to see how we can help grow your business into a national franchise system.