Overview of the Franchising Industry

In exchange for an initial franchise fee and ongoing royalties, a franchisee receives a licensed privilege from a franchisor to do business under a brand name for a specified period of time. The franchisee receives from the franchisor, guidance in training, merchandising and management together with other support services.

Franchising can work extremely well for both parties. A franchisee can enjoy the advantages of being in business for themselves whilst reaping the benefits of being associated with a well known and successful brand. The franchisee can also be confident in the knowledge that guidance and assistance is available. Franchising is one of the fastest growing business sectors in Australia and is a unique way of doing business built on mutual trust.

In 1998 the Commonwealth Government developed the Franchising Code of Conduct tangible evidence that it is strongly committed to the growth and of the franchising sector. The Franchising Code of Conduct is a code, the purpose of which is to assist Franchisees and Franchisors make informed decisions prior to entering into a franchise agreement to provide a standard framework for operating within the franchising industry.

How the Franchising Industry is Represented

The Franchising Council of Australia Ltd, of which Wendy's is a member, is an industry representative body and is responsible for liaison with government and commerce, industry ethics and standards, education, industry developments and promotion of the franchising
industry.

A survey of franchising practices and performance conducted by the University of Southern Queensland entitled 'Franchising Australia 1999' showed the following results:

Number of Franchise Outlets: The survey identified that there are currently 54,600 franchise outlets in Australia
Total Sales Growth: Franchise system turnover is currently $76.5 billion.
Employment: The survey identified that there are approximately 651,900 employees in the franchise sector.

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