Franchising accounts for $130 billion of the Australian economy, employing 600,000 people.
Rod Young, executive director of DC Strategy, knows the sector well, with more than 30 years experience advising businesses around the world. He says buying a franchise can reduce the risk of starting out in business, but you still need to do your due diligence. In particular you need to ask the franchisor to reveal the financials of sample businesses, and talk to a wide variety of franchisees, asking them would they have started up their franchise if they had their time again.
I suggest in today’s program that there is a stigma attached to parts of the sector. So, how do you ensure that you attach yourself to a reputable outfit and not a fly-by-night operation that makes most of it money from selling franchises, with little focus on sales and profitability of its membership.