Potential franchisees have an appetite for the food sector and want to run their own business for the job satisfaction, according to a Mortgage Choice-commissioned national survey of 500 potential franchisees planning to invest within the next three years. But potential franchisees are also concerned about cash flow and profit, the survey revealed.

Food retail, cafes and restaurants proved the most popular category (53 percent), followed by other retail (20 percent), then tourism, leisure and accommodation (19 percent), and fashion and accessories retail (19 percent).

There is a balanced spread of planned investment, with the most popular range $50,000 to $100,000 for franchise purchase and set up (22 percent). Another 19 percent estimated under $50,000 and 17 percent indicated $100,000 to $150,000 was the target investment.

The $200,000 to $300,000 franchise systems appealed to 15 percent of respondents, while 13 percent are looking to invest between $150,000 and $200,000. Fourteen percent are looking to spend more with Queenslanders the most likely to spend over $400,000 (9 percent), as were men (7 percent) and Gen Xs (8 percent).

The top three reasons given for wanting to run their own business were job satisfaction (50 percent ), flexibility (47 percent) and income potential (45 percent). Interestingly, income potential had dropped two places from top position in last yearÕs survey while job satisfaction and flexibility each moved up one place.

Mortgage Choice spokesperson Kristy Sheppard said, “Potential for income as a key motivation for purchasing a franchise is less important now than in 2009, perhaps due to Australians rethinking their priorities during the recent economic uncertainty. The proportion listing it as the chief reason to buy dropped by nine percentage points year on year. Has the Ôwork to liveÕ mantra become stronger due to a wakeup call?”

When asked to describe which type of franchise buyer they were, the highest proportion (34 percent) related to achieving the work life balance.

Brand recognition was rated as the top benefit of buying into a franchise, with an established business model for franchisees to follow the next most appealing aspect of franchising. Potential franchisees also believe there is a greater chance of success in a franchise than in running an independent small business, value the level of support provided by the franchisor and the existence of a supplier relationship.

But they don’t expect an easy ride, with cash flow and making a profit the biggest first-year concerns of potential franchisees. Twenty three percent of respondents expected to break even in their first year of business, 22 percent envisaged a proft of $50,000 to $100,000 while nine percent expected to make a loss.