For further information on the Franchising industry in Australia, please contact Commercial Specialist Melanie Heskin, U.S. Commercial Service Melbourne on Tel: (+61-3) 9526-5924, Fax: (+61-3) 9510-4660, Email: Melanie.Heskin@N0SPAM.mail.doc.gov .

Overview

Business confidence in the franchising sector is relatively high due to the robust support of the franchising model. This depends, however, on the specific industry sector involved.

The Australian franchise sector is a large and highly sophisticated industry, contributing approximately 14 percent to the nation’s GDP. There are more franchising outlets per capita than anywhere else in the world, including three times more per capita than in the U.S. The total turnover of the franchising sector in 2008, including the motor vehicle and automotive fuel retail industries, approached USD109 billion.

There are approximately 1,100 different business-format franchise companies in Australia, an increase of 15 percent since 2006. Of these systems, 91 percent are Australian-grown; the remaining nine percent are a mixture from New Zealand, the United States, and Europe.

In Australia, franchised businesses are two and a half times more likely to succeed than non-franchised businesses. The average start-up cost for an individual franchise across all industries is USD87,700. Retail franchise units have an average start up cost of USD216,000, to include fit-out costs, and non-retail franchise systems’ average start-up costs are USD44,000.

Best Prospects

Franchising continues to experience growth in Australia and has spread into virtually every area of commercial activity. Sectors as diverse as home building, carpet cleaning, repair systems, waste management, and financial planning enjoyed high growth in the recent past. The best opportunities for franchising in Australia are in the non-food retail industry, which accounts for 28 percent of franchise systems. Food retail concepts that promote health and well being are growing. Opportunity also exists within administration and support services, which accounts for 15 percent of franchise systems.

For a copy of the table listing the Australian franchise sectors by percent of market share, please contact Melanie Aitken at email: melanie.heskin@N0SPAM.mail.doc.gov

Opportunities

Australia’s urban centers are the best markets for franchising operations. In addition to the positive market dynamics, Australia and the U.S. share a common language and similar cultures (although there are some subtle differences to consider). Corruption risk is very low to non-existent and the franchise industry is well-regulated, well-educated, and highly-developed. These factors enable U.S. firms to enter this sector with confidence.

Growth in the franchise sector has, generally, been within the services segment, predominantly in the ‘personal and other services’ arena such as home maintenance. Time-saving and financial-service concepts remain popular and the growing elderly population in Australia presents opportunities in home services, healthcare, and mobile services.

Retail food trade (including fast food), another sector that presents opportunity for U.S. firms, accounts for 16 percent of franchisors, with a recent upsurge in healthy food concepts. Like the U.S., Australia faces an increasingly overweight/obese population. A recent health study estimated that 67% of males and 52% of females were overweight or obese and the problem is just as prevalent for children. Awareness of the importance of a healthy lifestyle has increased, presenting opportunities for franchise systems related to health foods and fitness.

Trade Shows

Franchising and Business Opportunities Expo
Frequency: Annual
Organizer: Diversified Exhibitions Australia
Telephone: +61 3 9261 4500
Email: shows@N0SPAM.divexhibitions.com.au
Web site: http://www.franchisingexpo.com.au

Sydney: March 20-22, 2009
Venue: SydneyConvention and Exhibition Centre

Perth: May 23-24, 2009
Venue: Perth Convention and Exhibition Centre

Melbourne: August 14-16, 2009
Venue: Melbourne Exhibition and Convention Centre

Brisbane: September 5-6, 2009
Venue: Brisbane Convention and Exhibition Centre

Franchise Council of Australia National Conference
Frequency: Annual
Date: TBC
Website: http://nfc.franchise.org.au/

Articles

For a copy of the 2009 International Outlook Report "Australia: Franchising", please email Commercial Specialist for Franchising, Melanie Heskin at: Melanie.Heskin@N0SPAM.mail.doc.gov

Wisewoulds Lawyers have produced the following information for international franchisors.