There is no doubting the success of franchising – especially in Australia, which is now the most franchised nation in the world on a per capita basis!

Australia currently has over 80,000 franchised outlets, employing 413,000 people! That’s a lot of Hamburger Bars, Mowing Operators and Pizza restaurants! You only need to have a look at a franchise directory to see the huge range of businesses you can buy into.

There is no doubting the benefits that can be gained  from entering into a franchise arrangement, but there may be alternatives. To be fair, the franchising sector has boomed by giving consumers what they want: better value and standardised products. Consumers know that if they go to Starbucks in Melbourne they will get exactly the same product as if they went to Starbucks in Brisbane.

I would argue however that there is now room for individualism – for something that is not standardised. One only has to look at the success of the website NotOnTheHighStreet to understand that people want something different. This website specialises in giving a marketing advantage to those businesses who are different and who want to reach a larger target market.

From my year s of experience, there are only two thing that I am certain of – after a boom comes a bust and after a bust comes a boom! It may be that we are over franchised now and that it is time to think for ourselves again. It is true that franchised outlets have a lower failure rate than independently owned small enterprises – but the assistance of good advisers can help you through those dangerous early years .

Take care of paying big prices for a franchise – do your due diligence and search for value. No one ever made money by paying top price at the top of a boom!

If you would like to discuss this article or anything else about accounting, tax and business life, call Mike on 0401 631 904