Five Reasons to Consider Buying a Franchise Business

Franchise business ideas

Franchising in Australia is a huge business, and its popularity has grown among small and middle scale entrepreneurs across the country. It's almost impossible for you to travel a couple of streets in most major urban centres without coming across one or more franchise businesses.

Franchising is very popular in the retail industry, but it is also thriving in a lot more industries including, vehicle maintenance, accounting and real estate for example.

Today, we will look into five things to consider before purchasing a franchise business as well as the advantages of building and investing in a franchise business. Australian franchise business is booming at the moment. With large brands such as Elctrodry, Jim's Mowing, bakery businesses and more, there is plenty of opportunities to invest your expertise and skills as well as develop your business acumen in a range of industries.

Unfair Advantage

Investing in a previously existing franchise gives entrepreneurs the benefit of growing off the back of a strong brand. A franchise business can give you all sorts of ground-level opportunities. A strong brand with strong name recognition can give you a heads up in a competitive industry and prevent you from overcapitalising on marketing that get you nowhere.


As an independent business, without a short or long term business loan to provide the needed capital for marketing and structural setup for your business, it will take you and your team years or decades to come close to building something close to the brand reach that most major franchises currently enjoy.

According to the CEO of the National Retail Association (NRA), around 20% of all new franchises fail within their first five years this is compared to the over 80% of new independent business ventures that cease trading within their first five years. This should give anyone considering a franchise business a lot of confidence. The business Marketplace, and in particular, the online Marketplace, is becoming increasingly competitive. Franchise businesses offer good pricing models and relatively inexpensive start-up costs when compared to the same industry as an independent.

This gives the franchisee an unfair advantage and one that is attractive to many young families. Entry-level in terms of Education and expectation are often a little lower as many of the fundamentals have already been put in place by the larger company and its structures.


When you set up a new franchise business, you will be joining a business with an already existing marketing strategy and in most cases, infrastructure.

All you need to do in most cases is align your outlet's marketing to that of the franchises brand and pay marketing fees where applicable.

Keep in mind that you cannot rely on your franchisors marketing efforts alone, especially if you are in a very competitive territory with other franchisees working with a single franchisor operating very close to each other.

Practical marketing efforts include car signage options to market your outlet to people in your immediate environment and beyond.

You will want to look at for your franchise business so that people will readily recognise the business you are in.

Working System

By purchasing a franchise, you are automatically buying into an entire system of doing business.

A lot of the most successful franchises in Australia operate on an established system that all franchise owners are required to adhere to in order to distribute the franchisor's services or products.

A proven system will eliminate most of the errors, guesswork, and mistakes common to new business owners, and a working system will serve as a guideline, framework or gameplan for new franchisees to make use of.

More often than not these systems are tested and trusted and can be replicated multiple times in multiple locations.

Obtaining Credit

In most cases, financial institutions are more comfortable with financing the purchase of a franchise with a strong track record rather than a new independent venture.

Bankers consider successful franchises to be of lower risk when it comes to repayment default and is more likely to give you a better deal based on that assumption. It may be some franchises may offer you in-house financing support and/or leasing options where applicable.

When setting up a new franchise outlet, your choices when it comes to financing can be significantly increased.

Training and Ongoing Support

When you buy into a franchise, most franchise companies usually offer training programs to both you and those that will be working with you at your location. You will be trained on how to run a franchise the same way successful franchise locations operating under the same framework run theirs.

As a franchise owner, you can rest assured that you are part of an ever-evolving system and can always pick up the phone to ask other franchise owners or even the franchisor for help and guidance when needed.

As with any franchise, you need to continue training and building on the wonderful base of support you have been given. A good franchise will provide you with a solid income, and opportunity for ongoing employment and the ability to employ others and train them up in business. Many franchises are also suitable as family businesses creating a steady growth in wealth and assets over time.

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