Franchises account for almost 4 percent of all Australian small businesses. Despite the sluggishness of the wider economy, Australia’s franchise sector performed well in 2016, with the Franchise Council of Australia’s (FCA) biennial survey reporting a $146 billion annual sales revenue, up from $144 billion in 2014.
Today’s franchises are eyeing off overseas markets as means for expansion. However this entrepreneurial development is still strongest close to Australian shores with New Zealand as the most favoured location for those who are franchising internationally. The FCA notes that 32% of Australian franchise brands are already undertaking international operations. This global outlook reflects the health of the sector more broadly, and indicates continued confidence in what Australian franchises have to offer in international markets.
We love our food
The most successful franchise brands reveal a love of consumables, particularly within the food services sectors. 7 of the 10 most promising franchises in Australia sit under this umbrella and the food services and accommodation category account for approximately one fifth of the franchise sector overall. Edible consumables are thriving in a relatively flat economy as consumer purchases of bigger ticket items are delayed or scaled down in budget conscious households. Innovations in food concepts, and the increasing status of café culture and of food online and in the media are also tipped as reasons why consumers are responding well to the increased variety and creativity in all things food.
The USA reflects a similar picture with 6 of their top 10 franchises also operating in this field as ranked by their growth, and financial strength and stability.
Franchises are embracing new technology as a means to operate responsively and nimbly to their customers in order to gain a competitive edge. Mobile pay and apps are the strongest customer facing technology being deployed with increasing uptake by consumers. Wearable technology such as incorporating Apple or Android pay is also an emerging trend to take note of as the Internet of Things makes it mark in Australia.
Faster processing systems, cloud computing and refining algorithms to improve back end optimisation within a company’s logistics and SEO activities are also gaining traction as franchises invest in their online profiles. As a result, this investment enhances the experience of their customers and increase brand awareness. 45 percent of franchise brands will now engage in online sales.
Also within the online sphere, virtual support is increasingly central to many well performing franchises. With the ability to access resources and materials 24/7, even franchises not directly engaged in online sales can benefit from technology and cloud storage capability.
A clever trend gaining popularity in this sector is to provide customers with add ons that supplement a franchise’s core business. These may include supplementary services, goods or mew approaches to engage evolving demographics in order to attract a new customer base. The synergy produced by widening the scope of a franchise can result in increased revenue or lay the foundation for future proofing your business.
This technique could range from concept development for current or predicted future needs within your market, vertical integration within your supply chain, or cross promotional initiatives to foster brand awareness.
Franchises that seek to maximise grow potential may also consider population trends, geography, spending models and wider consumer habits before expanding their repertoires.
Brand building from the inside out
Staffing in the franchise sector is also moving forward to meet the demands of a 21st century workforce. Evolving a franchise’s internal hiring processes is gaining traction in response to the changing workplace demographics of Millennials and Gen-Z employees. Next generation staff have prompted rethinks of various HR processes which franchises are taking notice of, such as faster recruiting channels, and more frequent, yet less formal, performance review processes to proactively identify issues that may prevent the retention of valuable staff.
As the sector matures in Australia, franchisees and their franchisors are also aiming to attract the social media generation to jobs in their companies by spruiking the points of difference that their businesses offer. This includes shifting the focus from non-traditional hiring procedures, and an emphasis on the workplace culture, lifestyle benefits and broader contributions of a position in job advertising.
Written by the team at AnyBusiness, a dedicated business broking site, run by specialists from the business broking field in Australia.