For further information on the Franchising industry in Australia, please contact Commercial Specialist Kate Wilkie, U.S. Commercial Service Melbourne on Tel: (+61-3) 9526-5927, Fax: (+61-3) 9510-4660, Email: Kate.Wilkie@N0SPAM.mail.doc.gov .

Overview

The Australian franchise sector is a large, highly-sophisticated industry, contributing about 14% to the nation’s GDP. It has more franchising outlets per capita than any country and three times more per capita than in the U.S. The total turnover of the franchising sector in 2007, including the motor vehicle and automotive fuel retail industries, approached US$96 billion.

There are approximately 960 business-format franchise companies in Australia, up from 184 in 1988. Of these systems, 93 percent are Australian- based, as opposed to overseas imports. The remaining 7 percent are predominantly a mixture of systems from New Zealand, USA, UK and South Africa.

Franchised businesses in Australia are 2.5 times more likely to be successful than non-franchised business. The average total start-up cost for an individual franchise across all industries is US$58,500. The average cost for a retail franchise unit has increased to $197,000 to include the fit-out costs. On the other hand, non-retail franchise systems’ start-up costs have decreased to $38,000; this decline may be a result of the difficulty in finding quality candidates.

Best Prospects

Franchising is continuing 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 are enjoying high growth. The best opportunities for franchising in Australia are within the retail non-food industry (29 percent of franchisors and 36 percent of franchise units) followed by the property and business services sector accounting for 21 percent of franchisors and 7 percent of franchise units.

Best Prospects/Services

Franchising is continuing 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 are enjoying high growth. The best opportunities for franchising in Australia are retail, non-food industry (29 percent of franchisors and 36 percent of franchise units), and the property and business services sector (21 percent of franchisors and 7 percent of franchise units).

Opportunities

Australia’s urban centers are the best markets for franchise operations. In addition to the positive market dynamics, Australia and the U.S. share a common language and very 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, enabling U.S. firms to enter the sector with confidence.

Most growth in the franchise sector has been within the services segment, predominantly in the ‘personal and other services’ arena such as video hire and home maintenance. Time saving (such as food catering) and financial service concepts are also very popular. Australia has a growing elderly population with many baby boomers moving into retirement. This presents many opportunities for concepts in home services, health/care, and mobile sectors.

The retail trade food sector (including fast food) also presents some level of opportunity for U.S. firms, accounting for 16.5 percent of franchisors, with a particular upsurge in the number of healthy food concepts. Like the U.S., Australia faces increasing, overweight/obesity rates. A recent health study showed that 68% of males and 53% of females were overweight or obese. The problem is just as prevalent for children. Therefore, franchise systems related to health foods and fitness could also find a receptive market.

Resources

Australian Industrial Relations Commission, The: http://www.airc.gov.au
Franchise Council of Australia: http://www.franchise.org.au/
International Franchise Association: http://www.franchise.org/
Office of the Mediation Advisor, The: http://www.mediationadviser.com.au

Trade Shows

FRANCHISING AND BUSINESS OPPORTUNITIES EXPO

Frequency: Annual
Exhibition Organizer: Diversified Exhibitions Australia
Tel: 61 3 9261 4500
Fax: 61 3 9261 4545
Email: shows@N0SPAM.divexhibitions.com.au
Web site: http://www.franchisingexpo.com.au 

Sydney: March 28-30, 2008
Sydney Convention and Exhibition Centre

Adelaide: May 5-6, 2008
Royal Adelaide Show Grounds

Perth: May 17-18, 2008
Perth Convention and Exhibition Centre

Brisbane: September 12-14, 2008
Brisbane Convention and Exhibition Centre

Melbourne: October 10-12, 2008
Melbourne Exhibition and Convention Centre

FRANCHISE COUNCIL OF AUSTRALIA NATIONAL CONFERENCE
Date: October 2008 (exact dates yet to be determined)
Location: Sydney
Website: http://www.franchise.org.au