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Should I choose to buy an Australian or overseas-owned franchise?

Friday, 24 June 2011 | By Graeme McCormack
I’m keen on becoming a franchisee and have read lots on how there are plenty of US franchises coming to Australia at the moment. It is a good idea to go with one of them or do they offer you less control and help than an Aussie franchise?

 

There are some great franchise opportunities which enter the Australian market from the US, and the rest of the world for that matter.

 

The most important thing to consider when assessing a franchise from overseas is whether the franchise is being operated in Australia by the international parent company, or whether someone domestically has acquired the master franchise to operate the business model in Australia, which is the most typical scenario.

 

If it is a master franchise arrangement, then close consideration needs to be given to the Australian franchisor’s credentials in terms of their business experience and expertise in the specific industry the franchise is targeting, along with their financial strength, business plan and capacity to adequately service you and your fellow franchisees as the business grows.

 

Conversely, there are some very interesting home-grown franchise opportunities in Australia right now, particularly in the food industry where there is an emergence of some very exciting looking concepts.

 

In summary, your approach in assessing an internationally-owned franchise versus an Australian-owned franchise needs to be exactly the same.

 

You need to consider carefully who is running the business in Australia, their experience and capabilities, the level of investment required, and whether or not you believe the business products and/or services being sold by the particular franchise are not only needed but more importantly craved by the “Australian target market”.

 

A notable mistake made by some prominent US franchisors in the past is the assumption that Australian consumer will automatically like what US consumers like.