Are You Ready to Franchise? Key Insights for Australian Businesses

A common question I hear from business owners is, “How do I know if my business is ready to franchise?” While the answer depends on your unique circumstances, it often boils down to a decision to scale and a willingness to embrace change. Staying the same can sometimes be riskier than taking the leap into franchising.

Recognising When It’s Time to Franchise

If your business model feels stagnant, with progress often followed by setbacks, it may be time to explore franchising. A common myth is that you need multiple locations or an expensive head office setup to begin franchising. In reality, a single successful location can serve as a model, and franchising often requires less day-to-day oversight than managing employees.

Well-trained franchisees typically become self-sufficient within six months, allowing you to focus on strategic growth. If you can train and support employees, you already have the foundation to support franchisees.

The Four Key Elements for Franchising Success

At Tereza Murray Franchising, we emphasise four critical factors that franchisees look for when assessing opportunities:

Consistent Demand: Franchisees want confidence that the product or service has ongoing demand. A reliable customer base is essential for long-term success.

Profitability: Your business model must be profitable enough for franchisees to earn a return on investment within two to three years. Ideally, they should also draw an income that exceeds what they’d earn as an employee in a similar role.

Effective Systems and Processes: While you don’t need fully documented systems to start franchising, your business should operate on consistent processes. These will later be formalised into training and operations manuals.

Franchisor Commitment: Franchisees are investing in your business as much as their own. They want to know that you’re committed to their success and prepared to offer ongoing support and guidance.

You Don’t Need a Famous Brand

A common misconception is that only well-known brands can franchise successfully. In fact, emerging franchise systems often attract more franchisees than established networks. Many prospective franchisees prioritise the relationship with the franchisor over brand recognition.

Smaller franchise networks offer advantages like personalised support, mentorship, and greater collaboration on strategies and policies. This level of engagement often fosters a more meaningful and rewarding journey into self-employment, making emerging franchises particularly appealing.

Why Emerging Franchises Have the Edge

In large franchise systems, a lack of personalised support and mentorship can lead to dissatisfaction among franchisees. Smaller networks, on the other hand, allow franchisors to maintain closer relationships with their franchisees, ensuring they feel valued and supported.

At Tereza Murray Franchising, our clients, many of whom are small businesses not widely known outside their local areas, have collectively sold around 80 franchises in the past two years. This proves that franchisees are drawn to the opportunity and the franchisor’s enthusiasm, not just the size of the brand.