Beginning a business
Downturns in the resources and retail sectors, along with a growing number of redundancies, have seen an increase in the number of people interested in buying a franchise, say industry insiders.
Mike Stringer, State president of the Franchise Council of Australia, said a slowing jobs market meant more people were looking into becoming their own boss — with food retail outlets leading the way.
“Jobs are getting a bit harder to come by in the current market, so the level of inquiry has grown in the past nine to 12 months, ” Mr Stringer said. “The food market is still quite buoyant — people continue to eat out, especially across Perth, so that’s generating the most activity. Electronics and clothing franchises are struggling a bit more, so there is less interest in those areas.”
All franchising agreements are different, but generally franchisees will pay an upfront fee and ongoing royalties to the parent company, handing over a certain percentage of turnover for the length of an agreement.
In return, individual business owners have the security of an established brand and start-up support in finding a site, access to marketing and securing finance.
Jim’s Fencing regional franchisor Meesha Watson said mining workers in their 30s were showing the strongest interest in setting up their own fencing franchise.
“Many of them have been retrenched but some can see everything’s slowing down and are looking ahead to a change in direction, ” Ms Watson said. “It’s a good way to make a fresh start.”
Former sales manager Dino Dissidomino, 45, is buying his first franchise business after 21 years in the coffee industry, teaming up with his brother Vince to buy a Tint-A-Car outlet south of the river.
“The security, product knowledge and business backing from the company’s head office were attractive and so was the 1800 free-call number that links back to our business, ” Mr Dissidomino said. “If you’ve never been in business, then a franchise is a good way to start because you’re working with an established company and have access to their expertise.”
Mr Dissidomino said he paid a goodwill premium but the Monday to Friday trading hours, low stock outlay and sound business model suited his lifestyle, family commitments and financial position.
Michelle and Joe Rechichi were among the first to buy a Crust Gourmet Pizza bar when the national company expanded into the WA market. The couple launched their Mt Lawley business in 2012.
“We came from different business backgrounds but Joe and I complement each other with our personalities and business strengths, ” Mrs Rechichi said. “His family has always been in franchises and I have a marketing background and write a food blog, so it was the ideal business for us.
“When we became really serious about buying, we did our research. Joe talked to existing (Crust) franchise owners and we wanted to hear all of their experiences — good and bad — so we could make an informed decision.”
They now employ 40 staff and like to get involved in local community events.
Mr Stringer said research was paramount in finding a business model that suited buyers’ interests, lifestyle and financial capacity. Those looking to buy at the top-end should enlist a lawyer to look over the fine print in settling the terms of agreement and lease options.
For more information on setting up a franchise, visit smallbusiness.wa.gov.au.
© The West Australian
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