Franchise Businesses

Franchise Businesses

Franchise Businesses

It is great to see the federal government’s new simplified version of the Franchising Code of Conduct. The much improved document is effective from January 1st 2015 and is relevant to tens of thousands of South East Qld franchise owners.

This comes at a time where we are seeing resurgence through strong buyer demand for franchises. Over the past month we have achieved several franchise sales in a diverse range of industries, totalling over $4 million in value. Those investing are astute operators, generally from a business background who are seeking low risk, proven systems and the power of national branding.

Franchising is amongst the most dynamic and progressive business sectors in the economy. It is a recognised and reputable way of doing business in Australia. There are approximately 73 000 franchises and 1180 individual systems in Australia, generating an annual turnover in the order of $131 billion.

Most Industry sectors are represented by franchise systems. It is hard to think of take-away food without thinking of a franchised format, difficult to purchase fuel except through a franchised petrol station, and impossible to imagine a shopping centre without franchised stores. The appeal of a franchise is they provide business proprietors with the competitive resources to compete against the large corporations that dominate retailing.

Unfortunately though the selling process is much more involved than a normal business sale. Franchisors employ lawyers and accountants to carefully assess potential applicants, who will have to pass a thorough application and compulsory training period. It is crucial to find the right buyers as the franchisor will only accept those that they are confident can grow the business and fit their financial criteria.

A business broker with experience in franchise sales will handle the numerous incidentals that arise with the transfer of a franchise and give you the best chance of achieving a smooth sale.

For more information contact Rod Russell, Principal of Queensland Business Sales on 0409 931 600.

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