Franchises doing well despite downturn

Australian franchises are doing well despite the downturn, and franchisees and franchisors alike are optimistic about the future, a new study reveals.

A study of 50 franchise networks across nine industries, undertaken by the Franchise Relationships Institute, finds 55% recorded better trading than last year, with 10% trading the same.

Retail franchises and mobile service franchises saw a 6% increase in year-on-year sales, while food, beauty and niche retailers saw a 6% to 12% increase. But real estate networks are down as much as 35%, while heavy goods retailers have dropped as much as 5.5%.

The study also shows networks are increasing face-to-face contact with franchisees, extra forums and meetings and using more coaching as a tool to improve positivity.

Greg Nathan, managing director of the Franchise Relationships Institute, says the results are encouraging.

“While franchise companies often boast they are more successful than independent businesses, there is little objective data to prove this. In an economic environment where small businesses are clearly hurting, we sought to find out how franchise networks were faring.

“The work that franchisors are doing to mobilise their marketing resources and motivate franchisees to drive sales at the local level seems generally to be making a difference.”