IF you travel to almost any country in the world, there is a good chance you will encounter a business that is part of a franchise system originating in Australia. While food-based franchises such as Gloria Jean’s and Boost Juice are the most visible, there are many other Australian franchisors that have found overseas success: lawn mowing franchises in Canada, pool cleaners in the US and dog washers in Britain.
“There are huge opportunities for Australian businesses,” says Rod Young, who, as executive director of consulting firm DC Strategy (formerly Deacons Consulting), has provided advice to numerous franchisors expanding overseas.
“About 22 per cent of Australian franchisors are either already operating overseas or are actively looking for ways forward. Australia has a major advantage: our legal framework for franchising is widely seen as the best in the world, and that lends credibility to the Australian franchise industry.”
Young nominates Howard’s Storage World, Cartridge World, Domes Coffee and Cash Converters as a few of the franchise groups which have successfully expanded overseas.
“In my experience, there are two categories,” he says. “The first group, the ones most likely to be successful, are those who do their homework, plan carefully by developing an international franchise strategy, and put effort into building their relationships.
“The second are those franchisors who have not considered international expansion until someone emails them and, usually with a big dose of flattery, says they would like to negotiate a master franchise for an overseas operation. In these cases, the franchisor often hands over more than they should, and doesn’t follow up overseas operations properly. The result is that the expansion either fails or just splutters along.”
Pro-active franchisors, according to Young, should be willing to put a minimum of $250,000 into an expansion move, and not expect a positive return for two years of more.
No comments yet.