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 Franchising is a vibrant and expanding sector of Australia’s business community.
Well regulated and highly developed, franchise businesses flourish in a diverse range of industries and contribute approximately 14 per cent to the national GDP of Australia.
In 2006, there were an estimated 960 business format franchises in Australia (93 per cent ‘home-grown’), compared with 850 in 2004 and 700 in 2002.
Around 62,000 units are operating within business format franchises, employing up to 430,000 people. Sales turnover of the entire franchising sector was estimated at $128 billion in 2005.
International expansion
International franchising opportunities are expanding rapidly as Australian exporters look for opportunities beyond the relatively small domestic market.
Just over 27 per cent of Australian-based franchises are currently operating overseas, with the majority targeting New Zealand, Singapore, Malaysia, China, Hong Kong, the UK and the US.
Global social and economic trends such as an ageing population, increased single parent families and better health awareness have boosted demand for services such as child care, aged care, retirement planning services, fitness outlets, healthy food and home improvement services.
Most Australian franchise businesses choose master franchising or 100 per cent ownership to structure their overseas operations.
Franchising profile
Australian franchise businesses prosper in a diverse range of industries, but the majority operate in the retail non-food industry (29 per cent), followed by property and business services (21 per cent).
The growth rate of franchise systems from 2004 to 2006 was 12.9 per cent, with 24 franchisors appearing in the BRW List of Top 500 Private Companies in Australia.
Of the $128 billion franchising turnover in 2005, motor vehicle sales were estimated at $30 billion and fuel retail sales at $31 billion.
The majority of franchising businesses operate in New South Wales (34 per cent), followed by Victoria (24 per cent) and Queensland (20 per cent).
Australia’s fastest growing franchises by revenue
According to a BRW 2006 survey, the 10 fastest growing franchises are:
- Caffe Primo – restaurant chain
- Beach House Health and Fitness Centres – recreation centres
- John Brennan Hair – retail hair salons
- Healthy Habits – retail health stores
- Bark Busters Home Dog Training – personal dog services/training
- Cartridge World – recycler and refiller of print cartridges
- Zarraffa’s Coffee – restaurant and coffee shop chain
- PETstock – pet supply retailers
- David Reid Homes – home construction
- PoolWerx – mobile pool and spa maintenance
(Sources: BRW Magazine, IbisWorld, Franchising Australia 2006)
For more information please visit:
www.accc.gov.au – The Australian Competition and Consumer Commission
www.brw.com.au – BRW Magazine
www.business.gov.au – Business Entry Point
www.entrepreneur.com – Entrepreneur Magazine
www.franchise.org.au – The Franchise Council of Australia
www.industry.gov.au – The Office of Small Business
(Last updated: 19 Aug 2007) |