Franchising in Australia is big business. There are more than 1100 franchise systems across the country, employing more than 400,000 people in more than 71,000 outlets nationally. From 2006 to 2008, franchise units grew by more than 15 per cent (Griffith University Franchising Australia Survey, 2008).

There is a franchise available in almost any goods and service industry you can think of. Why is it that people who want to get into their own business choose franchising as their model to do so? The answer is simple – support.

The franchisor provides a franchisee with the processes, methods and opportunities to operate a business using the name and trademark of the company. In addition, they usually get access to product, storefronts, staff training, marketing strategies and more.

However, the support offering can change from franchisor to franchisor.

According to Franchise Careers director Corina Vucic, there are at least a dozen key performance indicators (KPIs) that a prospective franchisee looks for from their franchisor.

While support was high on the list of priorities, Vucic says the large majority of prospective franchisees are looking for a proven franchise system.

A proven system is the first KPI that attracts a new franchisee. Everything flows on from that – business support, training, leadership, financial management, marketing and PR and of course brand awareness,î Vucic says.

There are many franchisees who join a system despite the fact that they have never worked in that particular industry in the past. A tradesman with no retail experience may have a passion for cooking and restaurants and as a result chooses to purchase a La Porchetta franchise.

In this instance, the franchisor runs a successful business model, provides all the training and support that the franchisee requires, assists with financial and business management, provides the local area marketing and public relations to support the franchisee and provides the leadership and mentoring to ensure he is provided with all the tools to succeed.

If the franchisee is committed, works hard, follows the system that he has invested in, embraces the training and mentoring available to him and manages his back office (financials) in a professional manner, then he gives himself every opportunity to succeed and grow. This could result in reinvesting in the brand and purchasing a second or third franchise.

Like everything in life, you will only get out of a franchise what you are prepared to put in. DonÍt expect because you have bought into a franchise that you don’t have to work hard to achieve your business and personal goals, Vucic cautions.

The franchisor provides you with a tool box. It’s the same tool box that all franchisees receive. The utilisation of that tool box is what differentiates the good from the not so good performers within the group, Vucic explains.

Franchisee view
One franchisee who has made the best of the tool box provided to him is Life Resolutions business associate, Joel Curtis.

Life Resolutions is a leading private network of professional psychology practices. Since being established in 2001, Life Resolutions has grown to 32 business associates.

According to Curtis, having proven systems, support and marketing was the key motivation for him when he made the decision to start his own business.

Psychology is a unique business and can also be a very isolating business. To have the support and networking opportunities around me ensures that I never feel like I’m going it alone, Curtis says.

Setting up a practice and ensuring the front office is managed and accountable and having the ability to market yourself to the community are all very tough when you start a business.

I’m fortunate that all of this was taken care of by Life Resolutions. Life Resolutions has enormous power to reach a lot more people than what I could afford to if I was on my own.

The franchise model allows me to be out of the business and not have a phone to my ear all of the time. The system continues to take care of things when I’m not around.

I don’t want to be here for the rest of my life but the system allows my business to continue to develop and grow, under the banner of Life Resolutions. My business is not about me, it’s about the brand.

While Curtis concedes that he bought himself a job, he admits he’d much rather be building his own business than someone else’s.

The harder I work, the more I’m going to get out of my business. But the business isn’t Joel Curtis Psychology, it’s Life Resolutions Miranda. When the day comes that I want to spend less time in the business, or begin a second or third practice, then the brand will continue to drive the business.

As far as I’m concerned, everything I wanted from Life Resolutions I’ve received. The system, the ongoing financial and business support, marketing my business, networking with other business associates – it’s all making a significant difference.

The system is working for me and I’m working the system to my benefit. If you want to be part of a franchise, then it’s only natural to follow the system.

Managing expectations
The Office of the Mediation Adviser (OMA) administers the mediation process under the Franchising Code of Conduct. The OMA receives enquiries and requests for mediation and arranges for the appointment of a mediator to each dispute from a national panel of specialist franchise mediators.

As the appointed provider of dispute resolution services under the Franchising Code, we hear and see some very interesting stories and behaviours, writes Bianca Keys, assistant mediation adviser.

We know that the Australian franchising industry is a flourishing one – you only have to attend a franchise expo or conference to hear of the numerous success stories, or take a stroll down to your local shopping centre where Australian franchise brands are alive and well.

However, while the majority of franchise relationships may bear the fruit of hard work and success, our role means that we tend only to hear of the relationships that have taken a wrong turn and ended up in Sour-ville, on Betrayal Road or in Distrust Central. Most are unravelled fairytales by the time contact is made with our office.

Nevertheless we have also been witness to some amazing turn-a-rounds, and the majority of matters that do proceed to mediation result in a commercial resolution.

Our role in all of this is a small but effective one in the grand scheme of things, and experience has left us with a fairly solid understanding of some of the most important factors in successful franchise relationships.