Key Insights into Franchising in Australia 2012

Professor Lorelle FrazerAsia-Pacific Centre for Franchising Excellence

Griffith University

www.franchise.edu.au

Five key findings

Size & Growth

Economic contribution

Response to economic downturn

Social media

Online sales

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Size and Growth

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Industries

Retail (non food)

Retail food

Admin & support services

Other services

Rental, hire, real estate

Education

Finance / Insurance

Professional / technical

Recreation

Other

0% 5% 10% 15% 20% 25% 30%

27%

18%

16%

10%

7%

6%

4%

3%

3%

6%

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2002 2004 2006 2008 2010 20120

200

400

600

800

1000

1200

1400

700850

9601100 1025

1180

Franchise systems

www.franchise.edu.au

2002 2004 2006 2008 2010 20120

10000

20000

30000

40000

50000

60000

70000

80000

51000 5400062000

71000 70000 73000

Franchise units

Mature; 51%

Young; 19%

Emerging; 21%

Franchisor Experience

Young:Franchising 1-5 yearsEmerging : Franchising 6-10 yearsMature: Franchising > 10 years

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Large; 30%

Medium; 24%

Small; 46%

System size

Small: 1 – 20 unitsMedium: 21 – 50 unitsLarge: More than 50 units

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2009/10 2010/110

5

10

15

20

25

30

3532

28

1517

21 22

RetailNon RetailOverall

Internal system growth

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Causes of growth (PWC)

Franchisee performance

Strategic direction

Market positioning

Access to new franchisees

New products/services

Site availability

Economic conditions

New systems/tech

0% 10% 20% 30% 40% 50% 60%

54%

54%

39%

26%

18%

16%

14%

14%

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Economic contribution of

the sectorwww.franchise.edu.au

Sector turnover($ billion)

BFF Vehicles Fuel Total$0

$20

$40

$60

$80

$100

$120

$140

$61

$37 $32

$130

$60

$29

$39

$128

$62

$31 $38

$131

200720092011

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2010 20120

50000

100000

150000

200000

250000

300000

350000

400000

450000

500000

142000 145000

91000124000

456000

138000

F/TimeP/TimeCasual

Employment

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Response to economic downturn

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Franchisor activity levels

Sales turnover

Profitability Product promotion

Franchisee recruitment

System promotion

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

No changeDecreaseIncrease

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Franchisee activity levels

Product

sales

Profitabilit

y

Customer c

ount

Loca

l mark

eting

Staffing

Competition0%

10%20%30%40%50%60%70%80%90%

100%

No changeDecreaseIncrease

Key challenges (PWC)

Franchisee availability

Economic conditions

Franchisee access to funds

Site affordability

Increasing competition

Site availability

0% 10% 20% 30% 40% 50% 60% 70% 80%

68%

58%

55%

36%

22%

21%

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Disputes

Yes: 18%

No: 82%

YesNo

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25%

10%65%

LitigationMediationSolicitor

Dispute resolution

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Top 5 causes of disputes

System compliance

Fees

Territories

Profitability

Misrepresentation

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

46%

39%

31%

31%

31%

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Social Media

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Types of social media use

Facebook

Intranet

Twitter

Linked in

Blogs

0% 10% 20% 30% 40% 50% 60% 70%

64%

59%

39%

27%

14%

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Online sales

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Online sales

Yes: 40%

No: 60%YesNo

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How $$ are distributed

Profits to franchisees

Sales direct to franchisees

Profits to franchisor

Profits to marketing fund

Other

0% 5% 10% 15% 20% 25% 30% 35% 40%

38%

32%

9%

4%

17%

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Proportion of system sales which are online sales

Up to 5%: 64%

18%

18%0 to 5%6 to 50%> 50%

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