Education not a barrier to franchise success: Report
Typical Australian franchisees are getting older and no longer require a university degree in order to be profitable, according to new research.
A report by research house 10 Thousand Feet found that a lack of a tertiary education wasn’t a barrier to successful franchisees.
Of the 1,000 franchisees surveyed, the largest proportion of highly profitable respondents, 26%, only hold a year 12 certificate.
The average franchisee is also getting older, with 10 Thousand Feet saying that 7% of franchisees were aged under 30 in 2008. Today, that figure stands at just 3%.
Similarly, franchisees aged between 30 and 34 made up 11% of franchisees in 2008. This age range has shrunk to 8% of franchisees.
“Maybe if you’ve got a university education you think you have more potential to go out on your own, but from a franchisee perspective, the less education, the better the performance,” says Ian Krawitz, head of intelligence at 10 Thousand Feet.
“There are now fewer young franchisees as the economic conditions have become more challenging. Less young people are giving franchising a go, so we are seeing a slightly older demographic in the sector.”
The report also ranks the top 10 franchises of 2011, based on factors such as franchisee support, financial return and lifestyle.
Smartline was listed as number one, followed by Mister Minit and Mortgage Choice. Kwik Kopy and Mr Rental rounded out the top five.
“Smartline and Mortgage Choice are in the mortgage broking area, which is quite attractive in terms of lifestyle and finances,” says Krawitz.
“If you do the hard work up front, you can get a nice ongoing income, even if the housing market cools off. Mister Minit does well as the franchisee support is very good, as is Kwik Kopy.”
“It is a challenge to get good franchisees now, so it’s in franchisors’ best interests to treat them well.”