IFA:
Franchising is alive and flourishing ‘Down Under.’ In a market that offers U.S. companies a stable, transparent and developed business environment with world-class infrastructure, the concept of franchising has taken hold. Since 2004, franchise systems have grown by 12.9% to reach 960 systems, reflecting a confident, regulated franchising sector in a strong local economy.
Franchising in Australia took off in a significant way in the early 1970s with the introduction of such franchised U.S. fast-food systems as KFC, Pizza Hut and McDonald’s. Since then, the sector’s growth has been extraordinary. Over the past 20 years it has expanded to include virtually every product and service sector.
Australia now has the most franchising outlets per capita in the world and 3 times more per capita than in the United States. Australian-origin concepts account for 93 percent of the market with U.S. concepts second at 5%.
A recent survey estimates that there are 61,860 franchised units operating in Australia including 5,660 company-owned units, which in comparison to a total of 54,000 units in 2004, illustrates the strength of the sector. In addition, there are approximately 5,700 fuel retail franchised outlets and 2,690 motor vehicle retail franchised outlets. These numbers are all the more significant when one considers that Australia’s entire population is only 20 million people.
Total sales turnover in 2005 of franchise units was approximately $96 billion, an impressive 14% of Australia’s GDP. This is made up of business-format franchises totaling $50.3 billion, motor vehicle sales franchises with an estimated $22.5 billion and fuel retail franchises with approximately $23.2 billion.
Read on: ‘Australianize’ the concept.
Nick on March 27th, 2007 at 1:54 am
To temper this article, I’d like to highlight that although Australia is a flourishing market, it’s also a very small market. There are about 18 million inhabitants in Australia which is pretty much like the greater LA area….