If you are a franchisor, you may be thinking about growing your franchise business and adding more products and services. In a robust franchising sector with diverse consumer preferences and regulatory oversight, successful expansion in Australia requires a keen focus. This article details several key considerations that you should know to ensure success whilst expanding your goods and services.
Understanding the Australian Franchising Market
Australia boasts one of the world’s most vibrant and thriving franchising industries. There are over 1,200 franchisors in Australia, making up an industry valued at over $180 billion. Franchise networks are across a range of sectors, including food, retail, and other services, with over 94,000+ individual franchised outlets across Australia. This does not include new markets that are appearing due to technological advancements.
With a diverse market come diverse customers, needs and wants. It is important to assess market trends and consumer demand when considering new products and services.
Customer Feedback and Analysis
It may go without saying, but any franchise business model requires a strong franchise network. This strong relationship between you and your franchisees will allow you to gather feedback from its existing customers to gauge their interest in any proposed new offerings. You could consider piloting the new goods or services in select locations or even corporate stores to test the market before a full-scale rollout.
Comprehensive market analysis is your first step in successfully expanding the goods and services you offer. As a franchisor, it is crucial to discuss any opportunities with your franchisees who will be best placed to understand their customers, their preferences and what their local area needs and wants. It is worth exploring consumer trends, purchasing patterns, and geographical nuances to pinpoint the most viable expansion avenues for your franchise network. It is also important to note that you must provide ongoing support to your franchisees. Regardless if they are new business owners, expansions of products and services require a lot of focus to integrate the changes successfully.
For example, a successful expansion of your franchise business’ offering hinges on adapting goods and services to suit local tastes and preferences across your network. Through market research, we understand that Australian consumers prioritise quality, sustainability and health-conscious choices as well as low prices. As such, you must customise goods or services to align with both these values and the wants and needs of your different franchisee territories. By specifically catering towards your target market, you can significantly enhance your business’s ability to see an upswing following an expansion of offerings.
Continue reading this article below the formCompliance is Key
In Australia, franchising is regulated by the Franchising Code of Conduct and all franchising must ensure that they are compliant. The Code outlines the rights and obligations of both franchisors and franchisees and how to ensure you meet all franchising requirements. Complying with these regulations is essential.
Additionally, the conduct of franchisees will also be regulated by both Australian Consumer Legislation and the Fair Work Act. As a result, do not forget to update your franchise agreements, operations manuals and any ancillary documentation to reflect the changes in your offering.
Keep it Local
To ensure the success of your franchise offering expansion, it is crucial to adjust your products and services to match the preferences of local customers. In Australia, consumers value quality, sustainability, and health-conscious options while also being mindful of costs. To maximise your success, you should tailor offerings to reflect these values and the specific preferences of each franchise location. Doing so will significantly increase your chances of success following an expansion of your offering.
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What makes ‘a Strong Franchisee’?
Franchisee training and support are critical to your successful franchise expansion. Ensuring your franchisees are well-equipped and supported in adopting any new goods or services will help the business maintain brand consistency, quality standards, and overall success of business expansion. Possible methods to ensure the quality of franchisees can include:
- issuing an operations manual:
- providing on-site assistance; and
- developing good communication.
We explore each method below.
1. Operations Manual
Comprehensive and regularly updated operation manuals are a reference guide for franchisees. They should outline standard operating procedures, best practices, and any troubleshooting guidelines related to the new offerings.
2. On-site Assistance
It may also be worth considering whether you will provide on-site support during the initial implementation phase of any expanded offering. Assistance could involve experienced trainers or support staff spending time at franchise locations to ensure a smooth transition will help you address any issues that may arise. Ongoing on-site support can also be invaluable to the continuous improvement and adherence to brand standards across your franchise network.
3. Developing Good Communication
When expanding your operations, there are many great opportunities for you to connect and share insights with your franchisees. It enables your franchisees to discuss any questions or concerns about the new goods and services, fostering a sense of community amongst franchisees.
Marketing
You should equip franchisees with the knowledge and skills needed to market and sell their new offerings effectively. Training on any promotional strategies, pricing models or customer engagement techniques is necessary to prepare your franchisees with marketing materials and collateral that align with your brand’s messaging and visual identity. You should provide these materials to your franchisees ahead of any expansion launch and detail any steps you deem necessary.
Risk Management
Expansion of both your network and range of goods and services demands significant financial investment. You should assess all potential risks, no matter how small, associated with the franchise expansion, including market acceptance, competition and any operational challenges. You should also develop contingency plans to address any unexpected issues that may arise and ensure that you have a ‘rollback’ strategy should the expansion not be suitable.
Key Takeaways
Expanding your goods and services in the Australian market requires a well-thought-out strategy, effective communication with your franchisees and a commitment to maintaining the overall integrity of the brand. You must regularly review and adapt your franchise expansion strategy based on performance metrics and market dynamics, making your network a long-term success.
If you need further assistance regarding franchisees, our experienced franchise lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
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