Franchising A Safe Haven In Tough Times

Melbourne Herald Sun:

Be it a pizza chain, a gardening service, an accounting group or a string of furniture shops, members of the franchising sector are in a favourable position to ride out tough economic conditions, according to chartered accountants PKF.

Partner and national chairman of corporate recovery, Michael Scales, said more banks were assessing loan applications from franchise owners seeking additional funds.

“Small business owners are turning to the banks to secure more working capital to enable them to cope with their increasing expenses,” he said.

“However, in turn, higher interest rates and credit scarcity have resulted in increased borrowing costs, creating additional stress for business owners.”

Mr Scales said franchisees and franchisors need to work together during tough economic times.

“Well-structured and organised franchises, which focus on the operational success of individual franchisees rather than franchise sales, are best placed to navigate the current turbulent market conditions compared to independent stand-alone businesses,” Mr Scales said. Read more.