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There has been a constant call for years for the Australian federal government to intervene in small business; particularly in franchising. The banks have tightened lending criteria, franchise sales are down and franchisors are squealing.
In fact; franchising in Australia is now complaining that the number of franchise systems has dropped but many politicians ask why should the government step in when franchising appears little interested in doing anything to improve franchise performance or the reputation of franchising in a saturated market.
A recent survey, conducted by the Asia-Pacific Centre for Franchising Excellence, shows the total number of franchise systems operating in Australia has decreased slightly, from 1,100 in 2008 to 1,025 in 2010. StartUpSmart
The truth is the US population is over 300 million with apparently around 3,500 franchise brands. Australia on the other hand has a population of less than 22 million with a now reported 1,025 franchise brands.
Basically, American franchising is lagging behind. Australia’s saturation of franchise brands is more than 4 times higher that of the USA. Or if you think like many; Australia could lose around 70% of its brands and still reach the heights of the franchising industry in the good old US of A.
Alternatively; perhaps Australia should be the benchmark and the US needs to increase the number of franchise brands dramatically. The Australian suggestion is to establish some sophistication and creativity in media spin;
Phil Blain, principal of franchise systems at the Business Development Company, claims that buying a franchise is still 10 times less risky than starting your own business, despite the GFC dip and recruitment woes.
‘Never let the truth get in the way of a good story’ is said to have been misappropriated by journalism from the franchising industry.
Some of the benefits of buying into a franchise include existing brand awareness and marketing support provided by the franchisor, market knowledge of products or services, established business systems with ongoing support, designated geographic operating territories that manage competition, combined buying power with suppliers and reduced failure rates compared to other small business start-ups. Is it a Good Idea?
A recent Australian recruitment strategy to bypass some of the lending difficulties is a return to the established and less needy market.
Australia’s newest franchise expo has aligned itself with a baby boomers event as franchisors attempt to ramp up their recruitment efforts with the over-55 demographic. Franchise Fair Targets Baby Boomers
But there is another suggestion and its not so silly; if the Australian federal government would just get behind franchising and open the gates and increase the population by 65 million cashed up people all the troubles would soon just fade away.