If you're planning to buy your own business, you could well be considering a franchise. And that can be a great decision, so long as you do your research and choose the franchise that is right for you.
Franchises are available in just about every type of business in Australia. That means there is plenty of choice, so you can match your purchase to your budget, skills and goals.
Virtually untapped in Australia until the 1970s, franchising is now a crucial part of our economy. The last round of statistics, compiled in 2016, revealed that the sales turnover for the franchise sector was around $146 billion.
In addition, despite a relatively flat economy over the past few years, the number of people employed in franchising - including permanent full-time - has risen. That's a very positive affirmation that buying a franchise could be a smart move.
Investing in a franchise can suit a wide range of buyers. If you are new to owning your own business, it can be a great way to start. With tried and tested systems in place, great support and, generally, dedicated territories, it's as close to a 'sure-thing' as you can get.
A franchise can also be a great purchase for a hands-off investor, who just wants to see a good return on his money.
There are around 1120 franchise brands operating in Australia, so how do you choose the one that is right for you?
Dominating the sector is the (non-food) retail industry, with 26% of franchises operating in this area. The next biggest is accommodation and food services, at around 19%. So if you're seeking a major franchise opportunity, and you have skills in these areas, it could be the right move for you.
However, the franchise sector also includes administration and support services, personal services, automotive repairs, IT services, and more, so there's plenty of variety to choose from.
Around 60% of franchise brands have been operating for 10 years or more, and that's something you should take into account. If you're investing your hard-earned cash into a franchise, you want to know the brand is well established and will be around for a long time to come.
A real positive is that franchisors are predicting strong growth in the sector over the next 12 months, so now might be the perfect time to make your move. In fact, the number of franchise brands in Australia is predicted to increase to 1284 by 2018, and 1344 by 2020.
Of course, all this is well and good but you should still be checking all the facts yourself, just as you would when buying any business. And the first two people you should be talking to are your accountant and your solicitor.
Remember, you are not only investing a great deal of money, but also signing a legal contract, that could commit you for a certain amount of time.
The ACCC offers some very good advice for prospective franchisees. As well as the obvious - like reading all the paperwork - it's also wise to talk to other franchisees.
The ACCC says the disclosure document must include the contact details of current - and some past franchisees. So make good use of that information.
Find out if current franchisees are making as much money as they were promised. And ask former franchisees why they left!
It's important to be very honest with yourself when buying any sort of business. Why are you buying a business? What do you want to get out of it? How hard are you willing to work?
There's no point buying a super busy franchise if you only want to work school hours, or part-time. And although training is available, it makes sense to choose an industry where you have some experience.
Are you planning to buy a franchise with your partner? If so, discuss in advance who will be control of which areas. Working with your husband or wife can be a challenge and it's important to set some ground rules in advance.
Of course, buying a franchise is a great self-employment opportunity - especially if you have redundancy cash in your pocket ready to go. But be careful you're not making a knee-jerk decision.
A franchise can also be the opportunity you've been waiting for to make a sea-change, or even a tree-change. If that's the case, and you're thinking along the lines of a lifestyle business, make sure you choose something manageable.
Having done your homework, secured the finance and chosen your industry, it's time to buy. Did you know that you can buy a franchise without using a business broker?
Just as more and more people are selling property privately so, too, are business and franchise owners. And because they won't be paying any commission, it's usually possible to negotiate an even better price.
Sell your commercial property or business privately without business brokers. We advertise your business for sale or real estate listing in our go-to website, national glossy Coast to Coast Magazine and major real estate websites reaching many motivated buyers. Call now to sell your business or property 1300 793 792 or email firstname.lastname@example.org.