What is Franchising?

Franchising is a method of marketing goods and services and has almost no limits in terms of business categories it can apply to. Franchising is a very popular and successful business format and the franchising sector in Australia and New Zealand has over three times the number of systems per capita than the United States.

Typically franchising involves the payment of an initial franchise fee and ongoing royalties, and in exchange the Franchisee receives a license from a franchisor to conduct business under a brand name for a specified period of time.

Franchising has proven that it can offer a high-level of standardised quality, brand image, favourable reputation and convenience that many people today find important for guiding their consumer decision processes when selecting products and services.

The trend in the consolidation of franchise systems and strong growth in franchise units combined with the greater acceptance of multiple unit and mobile franchising practises, indicate that the Australian and New Zealand franchising sector is maturing.

There is now high acceptance of the Franchising Code of Conduct (of Australia) and lower levels of disputation and agreement terminations in the franchising sector.

Franchising offers business buyers the opportunity to purchase a 'turn-key' operation with the requisite support to run a successful business.