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Australian Franchise Mergers and Acquisitions

Australian franchise mergers and acquisitions have been occurring for decades but with an evolving franchising culture, tighter margins, a highly competitive market and continuing low investor confidence, the need for franchise expansion can be expected to ramp up the incidence of mergers and acquisitions.  

The US based Midas International’s expansion strategy in entering the Australian market in the early 1980s on the back of numerous state by state acquisitions was not the first or the last.

Jason Gehrke, director of the Franchise Advisory Centre, says when a franchisor makes the decision to enter a new geographical market, it is often more viable to undertake an acquisition.  StartUpSmart

Acquisitions and mergers offer fast growth and can be a considerably cheaper strategy when the market is down. Considering Australia’s obscene number of very small brands in a saturated market and generally low levels of investor confidence amidst a federal government ramping up the cost of being in business; the market lends itself to some shrewd brand mergers and potentially some soon to be, classic fails.

And all this with the franchisees of concerned brands as mere onlookers waiting to see which way the dice roll and how their investments will be influenced with many new brand owners typically and solely looking to maximize return on investments on the back of new improved supply chain strategies and a calculated thinning of 'poor performer' franchisee numbers.

And given all indicators and considering that the market is ripe for private equity acquisitions, Australia can expect another few generations of 'poor operator' franchisee failures to create yet another growth spike of their own in what is today a weakly regulated Australian industry with virtually zero relationship Law.

The setting is ripe for the franchising industry's existing sheep where franchisor operators, not the market, will determine who survives.

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About Ray Borradale

Ray Borradale's picture

Public Profile

Over forty years experience in Small Business and more than twenty-five years in franchising operations as a franchisee and employed by three franchisors, mostly in operations.

I have dedicated more than ten years and over 15,000 hours in the pursuit of quality franchising and exposing franchisor abuse of franchisees while advocating for the introduction of franchise relationship Law and the levelling of the dispute processes between bigger business and small business.

Contact: rayborradale@yahoo.com.au

Area of Interest
Franchise Operations