Sole Trader or Franchise: Setting up a Book Store

Despite a decline in the sale of printed publications and the rise of online shopping, book shops continue to pop-up, particularly boutique stores offering comfortable settings for book shoppers to browse and read. From joining a franchise chain to setting up your own boutique, the demand for book retailing continues to be competitive. Before you choose a business structure, it is important that you are aware of all the options available to you. Before you choose to put a business structure into practice, you will need to seek the advice of a legal professional, in order to ensure there are no legal obligations or liabilities that you have missed. In this article, we set out two business structures suitable for book retailing: franchise and sole trader.

Joining a Book Franchising Chain

Dymocks operates over 61 stores in Australia, where new franchisees are required to pay a franchise fee based on the size of the store. New franchise owners should be aware of operating costs such as royalty payments and marketing fees they want to charge their franchisees. You will be able to implement a franchise business structure in one of two ways; firstly, you may wish to join an already established franchise. Alternatively, it could be possible that you want to start your bookstore franchise.

If you enter an already established franchise, it will provide you with an advantage in the short term due to the existing goodwill of the franchise business. Furthermore, throughout the life of your book retailing business, you will be able to rely on the expertise of the franchise you join about advertising and market strategy. If done correctly, a franchise wide marketing strategy will gain you customers for a fraction of the cost of other business structures.

Another option available to your book store business is starting your franchise. However, this starting your franchise will require a significant amount of capital. It is the case that the more your business grows, the cheaper it becomes to buy products or create a marketing campaign within your stores.

Setting up a Book Store as a Sole Trader

If the franchise business structure is not for you, then you may consider a sole trader business structure for your book retailer. This structure will allow you to have complete ownership and control over your business.

The main benefit of a sole trader business structure is that you will have immediate access to all profits to use as you wish. If the bookstore profits, you may wish to reward yourself by spending the profits, while in the difficult times you can invest it back into your book retailing business. However, this control comes at a cost of complete financial liability on your part for any agreement entered into by you in the course of your book retailing business.

Key Takeaways

In addition to deciding which business structure is suitable for your book retailing business, whether it be joining a franchise or setting up a sole trader, you should also be aware of other specific regulations applicable to the industry. For example, the Copyright Amendment (Parallel Importation) Bill which affects import restrictions. Our business lawyers can assist you with setting up your book retailing business, as well as commercial leasing and employment contracts.