Firstly, what is a franchise?
Franchising is more than a business, and in its most raw terminology it is simply a marketing concept that can be described as a way of doing business! However franchising is a very successful and growing part ofAustralia’s small and large business sector.
Who are the people behind the Australian Franchise council?
The Australian Franchise Council has a very clear and definite set of policies and practices that are legally bound within the Australian governmental system.
The Franchise Council of Australia represents over 600 franchise companies and is currently organized and run by a realm of professional leaders in their fields, who support franchising as a way of business. The Board of Directors represent all States of Australia, including some of the leading franchise system CEOs.
These Directors are dedicated to ensuring the franchise sector is: well governed, represented, is providing quality education, has exclusive membership benefits and that it continues to allow and support the many benefits of business networks and networking and franchising opportunities.
Why have an Australian Council?
Buying a franchise is a major decision. The commitment in capital and borrowings can be significant. A new entry into the sector needs to consider the process very carefully. Franchising is not a guarantee for success. Rather, it is an opportunity to establish a healthy rewarding business with the support of a network focused on both individual and collective community and national success. The old adage is true in franchising where the sum of the whole is greater than the individual.
What about Foreign Investment in Australian shores?
Franchising opportunities inAustraliainclude many different options, including the option of overseas franchisors considering to expand their operations into the Australian market. They can achieve this through implementing either a branch office or company to develop and operate the franchise system. They could also achieve this by a grant, grant licenses or franchises in joint partnerships with franchisees inAustraliaand so on.
It’s all about relationships
The relationship between the franchisor and franchisee involves very specific regulations and standards. These not only define the quality of the service or products to be provided or sold by the franchisee to the consumer but they also protect both franchisee and consumer.
The franchisee has purchased a business whereby he now owns the licence or trademark entity of the specific phenomenon and is required to carry out the terms of the contract with the franchisor under this abiding contract. The terms of contract are variable depending on individual circumstances, but on average will be between three and five years.
A good franchise system will be properly documented in all its parts. This documentation should include:
- A comprehensive information memorandum sometimes refereed to as a disclosure document
- A contract otherwise referred to as a franchise agreement
- A set of operational manuals
The commercial marriage
Although, the franchise agreement will determine the entire basis of the relationship from the outset, however, remember that this is only part of the equation. Relationships require partnership, good communication, honesty and respect, all of which are only established after both parties agree to invest in the future of each other and this does take time. It has sometimes been called the ‘commercial marriage’ and this appears to be a very apt term for the metaphorical marriage, franchising opportunities present.