Published on 01/07/2016 by Punchmedia

Why it's Time to Buy that Franchise

There’s a lot of weird and wonderful franchises available out there – but which one is right for you? We take a look at the franchising industry, the ins, outs, pros and cons and some that are currently for sale. The Franchising industry has faced mixed results over the past five years, however solid recovery in industry conditions over the second half of the five-year period created more buoyant trading conditions for operators. As a result, industry revenue is projected to exhibit steady annualised growth of 2.7% in the five years through 2015-16 with growth of 3% in 2015-16, to reach $171.6 billion.

Trading Landscape

Growth in real household disposable income has supported consumer demand for franchised goods and services over the past five years. An increase in disposable income has enabled consumers to spend more on goods and services provided by franchised operators, such as pet care, hairdressing and beauty salons. Growth in online shopping has fuelled demand for courier services over the past five years. Interest in health and wellbeing has also stimulated demand in 24-hour gyms, niche health food businesses and allied health services.

Profit and Competition

Industry profit has increased modestly over the past five years. In general, larger franchised businesses have continued to perform better than smaller operators due to their advantage through economies of size and scope. Profit growth among larger franchises can also be attributed to the advertising, brand awareness and market penetration achieved by having a collective group of franchises.

Operating Structure

The Franchising Australia surveys indicate that the number of industry enterprises is expected to trend upwards over the five years through 2015-16. Following solid growth in enterprises during the early part of the five-year period, the number of franchise systems in operation across Australia then contracted. The data indicates a turnaround for the retail sector, compared with the earlier part of the five-year period when retail businesses suffered as a result of the economic slowdown. Overall growth in enterprise numbers is also projected to have stemmed from the perceived advantage of a better work/life balance for those individuals choosing to invest in a franchise rather than work for someone else.

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Curtis is a leading expert in the business-for-sale industry, serving as a senior content creator at anybusiness.com.au.

With a career spanning over fifteen years, Curtis has accumulated extensive knowledge in the domain of business sales, acquisitions, and valuations. His deep understanding of market dynamics and his ability to translate complex industry jargon into accessible insights make him a trusted resource for entrepreneurs and business owners looking to buy or sell businesses.

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