Discusses opportunities for U.S. franchisers and legal requirements in the market.

Overview

Australia has more franchising outlets per capita than any other country, and three times more than the United States, but over 92 % of franchises are Australian-developed.  US brands (not individual units) only represent approximately 5% of the market.

According to an official study by the Griffith University in Queensland, there are over 1,100 franchisors, 65,000 franchise units and 8,000 company-owned units.  The franchise sector has been flourishing since the 1970s with most growth occurring since the 1980s and industry commentators note that it is now very mature.  The growth of new Australian systems and the expansion of existing systems have not only increased competition, but have meant the pool of quality franchisees has steadily gotten smaller.  Within this climate, identifying investors and potential partners with an interest in master franchise opportunities remains a major challenge.  The majority of recent market entry successes has resulted from Australian entrepreneurs actively searching out the opportunity and directly approaching the international franchisor.

Leading Sub-Sectors

Sectors as diverse as home building, carpet cleaning, repair systems, waste management, and financial planning have enjoyed growth in the recent past. The most popular opportunities for franchising in Australia are in the non-food retail industry, which accounts for over 25% of franchise systems. Food retail concepts that promote health and well-being continue to do well.  Opportunities also exists within administration and support services.

The Australian market is receptive to new concepts that speak to current and emerging trends. For example, Australia has an aging population and by 2020 there will be more 65 year-olds than one-year-olds. Demand for senior care services will continue to increase. It is also anticipated that older Australian generations will have an increased preference for independent living arrangements supported by community care and more affluent lifestyles.

Additionally, data shows a rise in participation rates in non-competitive activities. With fewer organized sports and less time for leisure activities, the 24-hour gym concept and personal trainers are increasingly popular.

Opportunities

Australian-developed brands dominate the market. The United States is a key international player, followed by the United Kingdom, and more generally Europe.

Australian Franchisors regularly use one or both of the top lead generation online platforms – Seek Business and Octomedia. These platforms are used extensively by local franchisors to find unit franchisees.  In terms of finding master franchisees, one option for US franchisors is to approach existing large Australian franchisors that have achieved saturation of their own brands in the market.

Rather than appointing master franchisees, some US companies have also entered the market by setting up their own corporately-owned units as a way of establishing proof of concept.
 

Web Resources

The Franchise Council of Australia (FCA) is a peak industry (trade) association, and works closely with local and international franchises alike to help them make progress.  More details on the FCA can be found at: https://www.franchise.org.au/

Besides the National Franchise Convention organized by the FCA there is the Franchise & Business Opportunities Expo series. The Expo is held annually in four key cities – Sydney, Perth, Brisbane and Melbourne.  More details on the Expo can be found at:  http://www.franchisingexpo.com.au/
 
 

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.