Why this is important to Wisconsin businesses: No other nation has more franchises per capita, and opportunities exist in retail, food, healthy and beauty, and business-to-business services in particular.
As the nation with the most franchises per capita, Australia has an especially dynamic and progressive franchise industry. Franchising is well established in Australia, and there are significant opportunities in the market for Wisconsin companies and franchisers, particularly in the areas of retail, food, health and beauty, fitness, mobile franchises and business-to-business services.
According to Griffith University’s most recent Franchising Australia report, in 2016 the Australian franchise sector represented a $146 billion AUD ($102 billion USD) industry. Notably, in the three years since that report, the sector has continued to grow, with the peak industry body, the Franchise Council of Australia (FCA), claiming that the industry is now worth $182 billion AUD ($127 billion USD).
Alongside the high level of awareness and interest in franchising, Australia has some of the most stringent franchising legislation in the world. The cornerstone of this regulatory landscape is the mandatory industry code—the Franchising Code of Conduct—which is administered and enforced by the Australian Competition and Consumer Commission (ACCC). All franchise businesses in Australia are required by law to comply with the code, which regulates the conduct of franchising participants.
In 2015, a revised Franchising Code of Conduct came into effect. One key change was the removal of the requirement for an overseas franchiser to provide disclosure documentation to a sub-franchisee in addition to the disclosure that is required to be given by the master franchisee to its sub-franchisees. The effect of this has been to make the Australian market more attractive to overseas franchisers by reducing unnecessary red tape, costs and delays in the roll-out of their franchise units.
In addition, although master franchising has been the main route by which overseas franchisers have entered the Australian market, there has recently been an increase in area development agreements. Because these agreements are not considered to be franchise arrangements, they are not restricted by Australian franchising regulations. For overseas franchisers, these agreements offer the potential to simplify the process of establishing their business within the Australian market.
Wisconsin companies and franchisers interested in entering the Australian market are encouraged to:
- conduct market and feasibility research and prepare a development plan before entering the market;
- engage local consultants who know the characteristics and trends of the local market;
- connect with key industry players and local franchise experts through the Franchise Council of Australia; and
- consider participating in industry events such as the National Franchise Convention.