Franchising helps grow a business

IT STARTED with Pizza Hut, McDonalds and the rest of the fast-food giants, but now franchises have become one of the fastest-growing business types in Australia, racking up a retail turnover of more than $128 billion in 2009.

More often than not they are seen as an easy way for people to start their own businesses, with an estimated 70,000 franchises now operating across the country offering everything from lawn-mowing services to petrol stations.

For the uninitiated franchising is a business relationship in which the franchisor (the owner of the business providing the product or service) assigns to independent people (the franchisees) the right to market and distribute the franchisor's goods or services, and to use the business name for a fixed period of time.

Yet, while most attention is usually paid to those looking to buy a franchise, not much is given to those small businesses owners who want to franchise their own business.

Yet the director of How To Franchise Simply, Brian Keen, says that many businesses across the Northern Rivers could easy become franchisors, selling their successful business model to the rest of the country and even the world.

After buying one franchise in the early 1980s, Mr Keen soon became a multi-unit franchisee, selling out when he had five.

He then “jumped the fence” to become a consultant helping people to buy franchisees and businesses to sell franchises working for Ultra-Tune, Donut King and Jims Mowing.

“I saw a lot during that time, some did well and some didn't,” he said yesterday as he was making his way to give a seminar in Lismore on how business owners can became franchisors.

For those who may be sceptical that their business could become a franchise model, Mr Keen offers the example of Jim's Mowing that started off as little more than an idea of a university student studying history who fell on hard times.

“Most franchises out there started from very humble beginnings, that's what people don't realise.

They all think they are large corporations.

Even McDonalds was started by one guy who started a hamburger chain and found a formula.

Mr Keen, who has left the coalface of the world of franchising, is now trainingpeople how to realise the franchise value of their businesses.

“I came across the concept of internet marketing and how to train and educate people about how to grow their business and franchise it,” he said.

His focus is on assisting small to medium-sized business.

“So many people in Australia want to run their own business, but they become frustrated because they can't grow it, and this is a way of doing that,” Mr Keen said.

“Almost any business can do it, although there are criteria. It has to be proven and up and running, and it should be able to show a profit for the franchisor and franchisee.

“The other aspect is that it needs to be seen to operate as a franchise. We encourage people if their business doesn't have two branches to set up a pilot to prove the system.

That can be done by encouraging a staff member to set up a branch.

“Once you do that your customer goes from being a homeowner who wants a new patio to the franchisee who is delivery a product. It's a different mindset.”

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