Superfinish Express News

The "si test" AFR smart investor magazine

The franchising sector has had casualties over the past 12 months, of which the Kleenmaid collapse received the most publicity.
However, Franchise Council of Australia (FCA) executive director Steve Wright says franchises have continued to produce substantial success stories, particularly in niche areas and service delivery.

“The sector has continued to achieve the 7 to 8 per cent grown it has experienced for the past decade,” he says.
We suggest you ensure any franchise you purchase is a member of the FCA. Members have to abide by professional standards that reflect the requirements of the mandatory Franchising Code of Conduct that is enforced by the ACCC.

To make it onto the AFR Smart Investor list of Best Value Franchise Systems, a franchisor must first be a member of the FCA.
Contenders must then pass the following rigorous tests:

STEP ONE

  • Have a nationally recognised brand or a brand showing strong potential to achieve national recognition.
  • Have been an established franchise system in Australia for a number of years, operate in at least three states and have new franchising opportunities available.

STEP TWO

  • Require a competitive initial and total capital outlay within the peer group.
  • Have comparatively low borrowing requirements and an established relationship with at least one lender.
  • Charge comparatively low ongoing franchising and marketing fees.
  • Charge no non-refundable deposits.
  • Charge no, or comparatively low, training fees.
  • Offer a long initial franchise agreement term with excellent renewal options.
  • Offer excellent business planning support, initial and ongoing training.
  • Generate competitive expected and average annual turnover for franchisees.
  • Exhibit unique features that give the system a competitive edge.
  • Have the best possible territory or job allocations within the peer group.

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AFR Smart Investor Magazine /Dec 2009 / Page: 60 / News