The IBISWorld Industry Report on Franchising in Australia
(Report) was released at the end of March 2012. The Report notes
that in the last five years the Australian franchising industry has
continued to post solid growth, and is expected to continue to do
so for the next five years.
Some of the highlights from the 34 page Report include the
"sales are expected to rise from $209.7 billion in the
2012-2013 period to $238.5 billion by 2016-2017." This will
also be helped along by possible "mature US franchise systems
seeking opportunities" in Australia, and general economic
growth as we reap the benefits from the mining boom and a strong
Australia is arguably the most franchised nation in the world,
and the Australian market could be approaching saturation point. As
a result the franchising industry will see a continued
consolidation of franchise systems. The instability in the European
and other overseas markets is predicted to make things more
difficult for the attempts of smaller franchise systems to entice
franchisees into their system.
Service-based franchises are expected to grow exponentially and
challenge retail trade operators' domination of the
franchising industry. It is predicted that there will be an
increase in travel, domestic and industrial cleaning (including
laundry services) and gardening services-based franchises as well
as increases in franchises catering for the older generation,
single-parent families and children's parties.
International expansion continues to be problematic, with
franchise systems remaining locally focused, perhaps due to the
uncertainty of international markets and the global financial
crisis. New Zealand, the United Kingdom, Europe and the United
States of America remain priority destinations, with Australian
franchise systems less inclined to access prospective markets in
South-East Asia and the Middle East.
International franchises looking to invest in Australia are
also facing their own problems. While there has been an increase in
international franchises entering the Australian franchise
industry, the Report predicts most are likely to fail because
"operators place too much focus on selling the deal, rather
than expanding into the new country", undertake insufficient
preparation and have "little regard for [local] market
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