Australian Franchising

Euro2Day.gr:

When the malls go shopping for brand-name stores and chi-chi cafes – a growth market as retail meccas proliferate across Asia and the Middle East – they increasingly wind up Down Under.

Franchising is big business in Australia, covering everything from lattes to overdrafts. Measured on the basis of franchise system per capita, the industry is 4 times the size of that in the U.S. That may reflect the country’s vast size and the traditionally limited amount of seed capital available to small and medium-sized businesses.

Partly because of that, franchising in Australia has some particularities. Regulation is streets ahead of other markets, with a mandatory code of conduct. There is more head office involvement at the operational level, as a greater portion of income is earned from ongoing royalties. (Typically, in the U.S. the big kicker comes from selling franchises.) The climate is also tougher, given high labour costs: one reason, perhaps, for the high failure rate among U.S. franchise systems. It took Subway, the sandwich chain, a decade to gain traction.

But Australia is now setting the pace with corporate franchising. Read about it.