Matt Wunder is fresh off the Griffith University pre‑entry franchise course that aims to raise understanding among franchisees before they buy. Shortly he’ll open a ‘Hire a Hubby’ property maintenance franchise in Canberra—and he is glad he completed the online Griffith University course before he went ahead.
‘The course was easy to use and had relevant and up‑to‑date information. The key message was to research extensively before buying a franchise and be realistic in terms of your expectations,’ Mr Wunder says.
The Griffith University course, which began in 2010 and has hosted more than 2500 potential franchisees, is free of charge for participants. It is funded by the ACCC and Griffith University in a joint program.
The course is delivered completely online, reflecting the needs of participants who are spread across the country and want to study according to their own schedules.
ACCC Deputy Chair, Dr Michael Schaper, says the Griffith University course reflects the ACCC’s commitment to ensuring better outcomes for both franchisees and franchisors in the sector in Australia.
‘The ACCC’s main role in this sector is promoting compliance with the Franchising Code, which is mandatory for parties participating in franchising in Australia.
‘The Franchising Code regulates the conduct of participants in franchising towards each other and aims to ensure that they are sufficiently informed about a franchise before entering into it,’ says Dr Schaper.
The Code also provides a dispute resolution scheme for franchisees and franchisors. The ACCC investigates complaints about breaches of the Code, and, where necessary, takes enforcement action. The ACCC publishes twice‑yearly overviews of the franchising sector, specifically on trends and includes complaint rates.
Franchising contributes around 14 per cent of Australia’s annual gross domestic product (GDP), and provides around 600 000 jobs.
‘It’s often stated that Australia is one of the most franchise‑intensive countries in the world. And overall, franchising in Australia has been a success for the businesses involved,’ says Dr Schaper.
‘However, the ACCC has also seen a series of instances where the outcomes for franchisors and franchisees has been disappointing. This has often revolved around the financial results, with franchisees realising less than they expected.’
Dr Schaper says it is incumbent on franchisors to ensure that the information they provide to prospective franchisees does not give a misleading impression of the business opportunity that’s being offered to potential franchisees.
‘There have been instances where the relationship between the two sides has broken down, making it very difficult to actually run the business,’ he says.
‘We realised that deepening the understanding of potential franchisees— before they buy—is one way to head‑off these sorts of problems. Hence, the Griffith University course, which is provided through the university’s Asia Pacific Centre for Franchising Excellence.’
The program provides potential franchisees with a better understanding of their rights and obligations under the Franchising Code, and some of the practical issues they could face as a franchisee. It also strengthens judgement in knowing what to look for when assessing franchise opportunities before you buy.
‘This may reduce your risk of having unrealistic expectations and encountering unexpected surprises after you have purchased a franchise,’ says Dr Schaper.
The course suggests a list of questions to ask a franchisor, which Mr Wunder found extremely useful.
‘I had started my own list but there were a few questions I had not thought of. After going through them with the franchisor and completing the Griffith University program, I decided to purchase a ‘Hire a Hubby’ franchise.
‘I highly recommend the course to anyone considering becoming a franchisee. If you follow the guidelines outlined in the training, you will feel much better prepared when deciding whether to buy a franchise,’ Mr Wunder says.
New research reveals franchisees who complete the Griffith University pre‑entry franchise education are more likely to have positive franchising experiences.
The preliminary research was conducted by the Asia Pacific Centre for Franchising Excellence and measures the effectiveness of pre‑entry franchise education.
Lead researcher and Centre Director, Professor Lorelle Frazer, says the research assessed the pre‑entry education by comparing the experiences of people who completed the program against those who had not.
‘The main highlight from the research is that those who completed the pre‑entry modules understood the importance of due diligence and how they should go about undertaking thorough due diligence,’ Professor Frazer says.
‘Conversely, many franchisees that had not completed the program did very little or no due diligence—with a mixture of reports about their level of satisfaction with the franchise.
‘Therefore, preliminary results indicate prospective franchisees who undertake the pre‑entry program are likely to be better prepared to enter franchising, and will have more realistic expectations about what life as a franchisee entails,’ says Professor Frazer.
Janis Burns completed the course in May. She is considering buying a courier franchise in Hobart and says she signed up because she knew very little about franchising.
‘The program gave me really good introductory advice, particularly about the legalities of purchasing a franchise, the relationship between a franchisee and franchisor and what to expect in terms of working longer hours,’ says Ms Burns.
‘When you have the background information, you can compare what the franchisor has told you against a framework. Otherwise, when you speak to an organisation without much knowledge of franchising, you just believe everything they say.’
She found the course documents extremely useful and followed a key recommendation to speak to former franchisees to understand why they sold.
‘I would definitely recommend the program to friends who are considering getting into franchising. I feel much better prepared about making the important decision of whether I buy a courier franchise,’ says Ms Burns.
The pre‑entry franchise education program is delivered in five modules, one per day directly into a participant’s inbox.
Each module takes around 45 minutes to complete and consists of video, audio and text documents, as well as additional resources and a self‑assessment quiz.
Topics covered in the pre‑entry franchise education program include:
an overview of franchising
franchise disclosure, agreements, royalties and finance
franchise support services, site and territory selection, retail leasing and franchise marketing funds
franchising Intellectual Property, the operations manual, franchisor‑franchisee relationships and dispute resolution
questions to ask franchisors and existing and former franchisees, additional due diligence, useful business skills and assessing suitability to become a franchisee.
