Working for a boss ensures a weekly pay packet but the ambition of vast numbers of people is to join the ranks of " business owners ". The person who is the proprietor of a small business can expect an above average income and the respect of family and friends. In the estimation of others they have risen above the level of mere " wage slaves ".
Franchise agreements make that dream a reality for many. It seems a good idea to establish a store selling a nationally known product that people want to buy and that is now the basis of an extensive industry that promises to train entrants in all aspects of running a successful franchise business.
It all revolves around establishing an outlet for a nationally advertised retail product and success is measured by the number of similar franchise arrangements that are up and running in other suburbs of the city. Displaying the franchise name is of great importance and the franchise operation promises to plan the successful store setup, train the staff and take care of items such as stock control, and all this comes at a cost.
There are a vast number of very successful franchise operations in Australia - and there have been some dismal failures. Setting up a franchise operation requires capital and usually this is secured by way of a loan on the franchisee's assets. A business failure can be catastrophic and can involve the loss of the franchisee's home.
These franchise arrangements have just been the subject of a national enquiry which has delivered a finding that all is not well. In some cases the firm selling franchises is beset by incompetent management, resulting in too many franchise arrangements too close together or unlikely to achieve profitable trade because they are poorly sited. It is suggested that an overhaul of the entire franchising industry is urgently needed.
Not everyone is suited to running their own business, but often franchise management firms proceed with unsuitable applicants because volume swells their profits and they are indifferent to the loss suffered by an unsuccessful entrant. There always seems to be fresh applicants eager to become a successful business owner and high turnover now seems to be a way of doing business by the operators of the franchise trade.
Many franchise operations report that the main stumbling block to success is the degree of control exercised in their franchise agreement. That can involve stock movement and quality plus unreasonable costs levied without adequate explanation. In some cases the franchisee seems relegated to running his or her operation as the servant of the company that issued the franchise.
The government will carefully analyse this report and intends to create realistic reforms. Franchising is viable in Australia and it is important that it not be constricted with unnecessary regulations. It is important that franchisee's have the freedom to apply their own ingenuity and hard work to creating a successful business.
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