Franchising is on a roll. The sector that brings household names such as McDonalds, Pizza Hut and Subway to our shopping hubs, also delivers opportunities for new ventures; think of any service or retail item, and there will be a franchise system to match. ^

1. Its a boomIng sector According to the Asia-Pacific Centre for Franchising Excellence, the number of franchises operating in Australia has increased 15 percent in the last two years and stands at about 1180 businesses.

Facts to consider: More than 400,000 people are directly

employed in franchising There are 65,000 franchisee-owned units

and 8,000 company units Almost one third of Australian franchisors

operate overseas More than 90 percent of franchise systems

in Australia have been developed in the home market

Taking into account the car dealerships, the franchise sector is valued at $131 billion

2. busIness ownershIp wIth mInImIsed rIsk

Investing in a franchise gives an individual the chance to build a business with minimised risk. Of course there is never any guarantee of success, either with a franchise or an independent business, but the presence of tried and tested systems, a brand, and experience in trading creates something of a shortcut in establishing a business for franchisees.

Steve Rollings opened his first Anytime Fitness franchise in Muswellbrook in early 2008, and has gone on to open a total of 10 gyms in just five years.

I decided to purchase a franchise because I wanted to operate a business system, not create one. Its much faster to do business this way, he says.

Luke Baylis, SumoSalad co-founder, says It is very difficult for a start-up to create that same degree of competitive differentiation within a short period of time. Weve made a lot of mistakes along the way and weve learned from those mistakes weve built a

very strong, robust business system.

People can learn from our mistakes as opposed to going out there and making costly mistakes themselves.

The rigours of establishing a business from scratch are considerable and in a franchise there is a wealth of experience to draw on that can ease the process.

A franchisee starts out with training in the job, an operations manual and hands-on experience; there may also be advice on which equipment to buy, guidance on staff employment, help on choosing the right location, rent negotiations.

When a franchisee opens the door to their business, they are already ahead.

3. the power oF the brandWhat a franchise network offers the new franchisee is the chance to start off with knowledge and experience at their fingertips. Who wouldnt want to know which marketing tools are most effective in reaching customers, and how best to get a message across to the community?

What could be better than starting out in business with a brand that customers already recognise and love?

Why wouldnt a business owner want to have effective marketing collateral at their fingertips without having to do all the research and commissioning themselves?

For many franchisees the presence of a marketing team that feeds through valuable material and advice is a massive bonus in the business, relieving them of the time and effort of achieving similar standards on their own and most often without the marketing skills.

Lee Bennett, who with his wife Sheree runs two Quest Serviced Apartment franchises, says a strong brand helped them establish their second business after they relocated to a new area.

The best thing about it is people know it and when were selling it to our customers, its not a hard sell, people respect it and its such a strong brand, thats why we love it.

4. a competItIve advantage

Once the business is up and running, a franchisee can then turn to the depth of experience on hand in the network to gain competitive advantage. It is difficult for any individual business owner, even in established business networking organisations, to get access to the amount of information that a good franchise system can supply its franchisees on an ongoing basis.Already the franchisee has the advantage of a brand; then there is the hands-on support and training supplied, and ongoing business development, marketing, franchisor experience and perhaps most valuable, fellow franchisees.The beauty of a franchise network is the capacity for any individual to draw on the experiences of others in the same position. Some franchise systems offer formal forums for franchisee discussions, some have a network that is engaged through an intranet, others rely on mentoring or informal friendships to help steer franchisees through challenging times.The franchisor doesnt have the answer to everything getting practical advice, and a reality check, from others in the frontline is invaluable for a franchisee.

5. Focus on buIldIng your busIness

Every business goes through a rollercoaster of success and challenges; what is gained by being part of a franchise system that is harder to achieve as an individual is an ongoing focus on the progress of the business from professionals.Everyone who commits time, money and effort into running a business does so with financial goals in mind. While the level of capital and profit involved varies according to the individual system and each franchisee, there is a common aim of achieving an income that allows the franchisee to live the lifestyle they choose.Although a franchisees business is their own responsibility, most franchisors are engaged in helping franchisees achieve their own goals, and through business development or field managers are able to offer advice where needed about ways to improve sales, cut costs and increase profit.The more advanced franchise systems will use data sourced from the franchisees themselves to benchmark and inform the network about success, and will encourage sharing of best practice between franchisees.

Kate Groom is the co-founder of SmartFranchise and the Franchise Accountants Network. Comparing your business performance with that of others can help you identify areas to improve, she says. For instance, do others have higher sales with fewer staff? You can then learn what they do which leads to this result, and apply the lessons on your business. A franchise provides a ready-made set of comparison businesses, and this is regarded as one of the advantages of being in a franchise network.

6. access to FInance

Getting a loan from a bank is harder than it used to be; financial institutions have tightened their lending criteria, and although the open for business approach exists, it can still be tough to get the finance to open a business.

Banks have an accreditation system which means franchisees can get a higher percentage of the franchise investment loaned to them, on the basis of the franchisors model up to 70 percent. While this can be very beneficial for franchisees investing in the well-established brands, the reality is that accreditation plays a minimal role in financing franchisees.

But the existence of a tried and tested business, good operating systems, a visible brand and franchisor experience, can still be appealing to any lender.

Bankers are risk averse.

A bankers understanding of what the business is about is developed over years through a relationship with the franchisor and that cant be replicated by a start-up.

7. access to buyIng powerWhat advantage does a chain of stores or a national service operator have over an independent? Buying power. And thats something shared by a franchise system. Anyone considering a franchise investment should ask the questions, why not benefit from the franchisors negotiations on ingredient, products or equipment? Why not reap the financial reward of having a franchisor negotiate a retail lease on their behalf?

The bigger franchise systems will have someone appointed to these negotiating roles and they build up strong relationships with business partners and suppliers over time. A franchisee gets the benefit of this.

Some franchisors operating across the country in the business services field can also supply their franchisees with local clients as part of a national deal with an organisations head office.

8. access to InnovatIonIt is hard for any business today to make progress without attention to technology, whether thats for business data capture and analysis, operating tools, communication methods, or social media.

Independent business owners have to add to their other roles the task of staying abreast of the ever-increasing technological advances that will benefit their business. Not so for a franchisee.

Innovation, research and investment in technology are all vital elements to a business that a good franchisor will undertake, with the end goal the boosting of a franchisees business through greater efficiencies, swifter responses, improved communications, up-to-date data analysis, and a competitive edge.

Leanne Pilkington is general manager of the New South Wales group of Laing+Simmons franchises.

As part of our strategic growth strategy, we have invested significant resources in developing the best systems and tools to enable our existing and new franchisees to do what they do best and focus on their businesses, she says.

By working together with our franchisees to understand exactly where they require greater support and tailoring our service offering accordingly, weve ensured our investment will hit the mark.

The evolution of our franchise offering has effectively re-energised our franchisees and the results they are already achieving on the back of these initiatives are encouraging, she adds.

9. opportunIty to expandJust one business outlet might not be enough for the truly ambitious. A franchise network can be the landscape in which to set out on the journey to multi-unit ownership; while some franchisors are reluctant for franchisees to step back from their business in order to focus on developing multiple units many franchise systems see the value in successful franchisees expanding their reach and building the brand at the same time.

And while franchisees can leverage the brand benefits and reputation of their original outlet as they expand, they can also benefit from franchisor advice. Franchisors can assess if the business is ready and prepared for further growth, they can help the franchisee understand how best to manage the extra sites, and provide guidance as the business moves into a new sphere.

Carolyn McManus is an award-winning franchisee with multiple outlets in The Coffee Club network and a Ribs n Rumps franchise.

We now employ more than 200 people so we are very much in the people game. Once you have three units your system has to completely change. My role now is very much as a CEO of an organisation, she says.

As franchisees build successful mini-empires their power within the franchise network increases too, giving them greater capacity to influence strategy for the whole business.

Subways national franchisee of the year 2014, Kane Richards, operates two stores in Sydney and, in partnership with a master franchisee, owns another Subway outlet. One of his roles is to serve on the board of an independent Subway franchisee owned and operated purchasing company.

Being a board member has given me the opportunity to be involved with strategic buying, managing the supply chain and delivering business solutions to assist Subway franchisees, he says.

10. rules and regulatIonsBeyond the legal constraints that inform any business behaviour, for franchisees there is a regulatory code that governs the franchise sector, and fundamental to this is the relationship between franchisor and franchisee.

The Franchising Code of Conduct sets out rules for the content of key documents in the franchise buying stage the disclosure document and the franchise agreement and requires franchisors to provide these documents at least 14 days before they hand over non-refundable money or are signatories to an agreement.

Successive governments have tweaked the code, with the aim of achieving the requisite balance between franchisor and franchisee; there are proposed reforms set to take effect in January 2015.

The Franchising Code of Conduct is administered by the Australian Competition and Consumer Commission and the ACCC can investigate alleged breaches of the code and take action if necessary.

The ACCC has also teamed up with Griffith Universitys Asia-Pacific Centre for Franchising Excellence, and has funded a free, online, five module course on pre-entry franchisee education. F