Ready for the new generation of super franchisees?

Australia is cultivating a new generation of franchisees who are expanding their businesses using a range of innovative models.

Research by the Franchise Relationships Institute (FRI) indicates this new breed of franchisees, who operate multiple units, now generate over 50 per cent of Australian franchise sector revenues. FRI predicts this percentage will grow.

Greg Nathan, FRI’s founder, says several trends will continue to drive the growth of multi-unit franchising in Australia.

“Because many franchisors are experiencing a softening of new franchisee inquiries, it makes sense that they expand their footprint using existing franchisees they already know, and who know them” he says.

“Also the maturing of the franchising sector means there are many highly experienced franchisees needing a new challenge, and growing their existing operations into multiple businesses is a great way to reinvent themselves.”

Nathan points out that in the US there is a trend that could be described as the rise of the super franchisee, with one per cent of large franchisees now controlling 23 per cent of all franchised units.

However Australia is more likely to see a different trend, characterised by a diverse range of multi-unit models, such as:

  • Family run franchises operating two to five units.

  • Entrepreneurs getting together as business partners to operate five to eight more units.

  • Corporately trained executives establishing mini-organisations with 10 or more units.

  • Mature franchisees mentoring high potential staff into business partnerships.

Nathan pinpoints the advantages of the last model in particular: it’s a win for the experienced franchisee, who gets to expand their business and enjoy the satisfaction of mentoring others; a win for the franchisor, who gets a new franchisee with experience and enthusiasm; and a win for a fresh generation of young franchisees who get to spread their entrepreneurial wings.

The FRI annual Multi-Unit Summit for existing multi-unit franchisees and their franchisors explores and promotes best practice in this growing area of franchising, drawing on expertise from the US and high performing Australian multi-unit franchisees.

This year the event will feature two leading experts from the US and two of Australia’s most successful multi-unit franchisees who own and operate nearly 100 stores between them.

“At the Summit we will be exploring these various models through panels and case studies, as well as running sessions to assist multi-unit franchisees develop higher level leadership and financial management skills, essential for success when expanding into multiple units.”

The Multi-Unit Summit will be held in Melbourne on Thursday August 24.

It is designed to deliver participants new ideas from outside of their industries, and proven tips to improve profitability and grow their businesses with confidence.