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Seven key questions to ask before buying a franchise

With the franchise industry contributing an estimated $131 billion to the Australian economy, it is fast becoming a mature sector with many small to medium scale businesses utilising a franchise model as one of their key strategies for growth.

Buying a franchise is a lengthy process, with the average prospective franchisee taking six months to decide on the franchise that is right for them. It requires considerable research and those looking to become small business owners for the first time can be overwhelmed with the plethora of information offered by franchisors in the ‘courting’ phase. With over 1180 different franchised businesses in Australia, there is a lot of choice. Every system does things a little differently, so for a potential franchisee to compare a business opportunity there is no easy method of assessment.

A recent study by topfranchise.com.au has revealed the seven key attributes of the most successful franchises in Australia, covering business categories of support, marketing, passion, lifestyle, brand, opportunities for expansion and financial.

Based on these categories, there are seven pertinent questions a potential franchisee can ask to gain insight into the mode, its suitability, and the likelihood of being satisfied with the business.

1. What structure is in place to ensure I receive the right level of SUPPORT?

With franchising, one of the key sale points is that you are in business for yourself but not by yourself, as support and structure are at the core of the franchise model. Key things to investigate include; what management support is available, does the franchise have business coaches, what training is provided on a regular basis, what systems are in place to track performance, does it have a proven performance structure to follow?

Ferguson Plarre Bakehouses, one of this year’s topfranchise.com.au Award top 10, scored highly in the support category largely due to the implementation of a 10 star excellence program providing a clear pathway for helping franchisees extract maximum value from the business. Covering 10 key aspects of business management from product selection to marketing and human resources, the program provides franchisees with clear indicators of best practice and provides them with a tangible way to assess their success at every level of operation. It was developed from examining the traits of the top performing franchisees and was implemented to make running the business simpler.

A franchise needs to be able to prove, very easily, the support structure it has in place to assist franchisees to manage their small business as effectively as possible at both a local and national level.

2. Will I receive assistance MARKETing my business?

Marketing in any business is necessary for growth, but it is also one of the elements of running a franchise that most people are the least confident about and find most difficult to execute on a regular basis. Franchises generally include a marketing fee as part of their structure a pool of funds enabling the brand in providing marketing for its franchisees, as well as satisfying general brand awareness. Apart from finding out the fee, a prospect needs to determine the key tools and training provided to help the business engage at a local level, from local areas marketing plans, to product releases, store opening support, public relations and advertising templates (to name some of the major elements).

Mister Minit performed well above industry standard in this segment of the topfranchise.com.au awards, providing a well-resourced and hands-on local area marketing campaign and training package for franchisees to maximise uptake and execution. It provided tools to allow franchisees to establish partnerships with others retailers, exploit in-centre advertising opportunities, as well as targeted national promotions and innovative product that focus directly on customers. All of which resulted in an overall lift in sales and franchise satisfaction.

Research shows a franchise needs to ensure its brand message is marketed in a clear and consistent manner to engender franchisee satisfaction, and to empower and trains franchisees to maximise marketing tools provided.

3. Will the franchisee and their family be PASSIONate about this business?

As most entrepreneurs will attest, without passion it is hard to find the motivation to maintain a business when times get tough and this is no different in franchising. Part of the decision-making process needs to be assessing your true belief in the product. The next step is to consider if your family and friends would also support your choice. There are a lot of hours and hard work put into business and the topfranchise.com.au survey revealed a clear link between strong family belief in the type of business and its values and a franchisee’s motivation to succeed. In other words, a person’s satisfaction in their business is directly correlated to their family’s passion and support.

Mrs Fields ranked highly in this category with a brand redevelopment at the centre of rekindling franchisees’ passion for their business. The overhaul of the brand helped franchisees to reconnect to their business by making the proposition for customers clearer. The exercise clarified what the brand stood for, rekindling the passion and providing a clear framework for what the business is about. The overall effect was more successful franchisees, which in turn lifted the perception of success with family and friends. Basically, passion is necessary to maintain success.

4. What type of LIFESTYLE balance is possible?

There is no denying owning a business is hard work and even in franchising, where support is high, success is still linked to the amount of input. Depending on the style of business the lifestyle benefits will vary, but at the core of any satisfied franchisee is a good work-life balance. Key things to enquire about include the average working hours of the most successful franchisees, flexibility of the model in regards to management hours, if the model lends itself to hiring managers and staff to allow greater freedom of hours for the owner.

Anytime Fitness scored well in the lifestyle category in the topfranchise.com awards, given its model is designed to make running the business low maintenance with greater flexibility in hours. The structure easily allows staff to be hired, so the business owner can choose hours that better meet their personal and family commitments. Support systems are also online and available 24 hours promoting further flexibility.

In any business you can’t escape hard work, but as the owner you can choose a model that enhances your lifestyle goals.

5. Is the BRAND well known and promoted?

In franchising, the popularity of a brand is certainly a key factor in attracting potential franchisees and the more highly recognised it is, the more perceived value is attributed to this asset of the business. How the brand is promoted is at the core of this satisfaction. Key things to investigate include how the brand is promoted throughout the year (e.g. regular advertising), the quality of the website, what the company’s digital brand promotion covers and if it has a strong presence on social media.

Snooze was deemed to perform this factor well by topfranchise.com.au, with the consistency of the brand message attributable to franchisees satisfaction in the business. They were able to prove and track brand recognition throughout the year both on and offline.

TV advertising remained a strong element, but a reallocation of resources saw more digital marketing and an increased focus on local area marketing assisting to drive brand awareness and sales. All of which lead to higher satisfaction within the business.

One of the key benefits of franchising is buying into an established brand, but the key for any new prospect is their belief that the well-known brand will help drive sales for their business.


The potential growth of a business is closely aligned to earning potential, so it is important to know if a franchise has a predetermined path for expansion. Depending on the model the options will be different, but key questions to uncover the possibilities include; are there different levels within the business, is it easy to expand to multiple sites, and what range of products are available?

PoolWerx, another of the topfranchise.com.au top 10, scored well for having four clear career paths for franchisees starting, from a man in a van to a full retail multi-site with franchisees able to buy in at any stage.

The number of locations or territories available and the potential of the market are also important factors to reveal.

7. Will the FINANICAL rewards meet my expectations?

Money doesn’t buy happiness, so they say, but research has revealed it is certainly connected to a person’s satisfaction in their lifestyle. Every business model will vary in earning potential and level of investment required, but some of the key things to ask as part of the decision making process include; what is the average return on investment timing, what is a typical franchisee earning potential, what are the different avenues for generating turnover, and what is the success rate of resales?

Topfranchise.com.au revealed that most successful franchisees have business owners that can draw a larger salary from their franchised business than they could receive elsewhere.

Smartline Personal Mortgage Advisers, who took out the number one spot for the 6th consecutive year, ranked the highest in this category. The introduction of a range of new products was key to taking their franchisee satisfaction a notch higher this year, as it offered further avenues for income generation regardless of market conditions.

The definition of success is indeed individual and the decision to go into business should be thoroughly researched to ensure the highest possible potential for satisfaction in all areas of life.

Topfranchise.com.au Awards Top 10:

About the author:

Ian Krawitz
Ian Krawitz is the founder of 10 THOUSAND FEET, the research company behind the topfranchise.com.au Awards and industry report.

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Ian Krawitz

Ian Krawitz

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