One of the dilemmas prospective franchisees face is whether to enter a fledgling franchise or a well established system, says Professor Lorelle Frazer, director of The Asia Pacific Centre for Franchising Excellence at Griffith University.

While it may be cheaper to enter a new system it may be more risky as the franchise may not have had sufficient time to ‘cut its teeth’.

There are seven signs Frazer suggests that indicate whether a franchise system is established.

1. Well-known brand. If you haven’t heard of the brand it’s unlikely the franchise has achieved sustainable market share.
2. Age. Age is a sign of experience and maturity. As a guide, an established franchise will have begun as a stand-alone business and then operated successfully for more than five years.
3. Structure. An established franchise will normally hold at least one company-owned outlet or a sophisticated corporate office responsible for research and development of new products and services. The network of franchise outlets will be large (more than 30 is a guide). Some franchisees will have renewed their franchise agreements and will be multiple unit operators. The outlets will be geographically dispersed rather than in one state.
4. National advertising. An established franchise will have a national presence, investing in system-wide national advertising and promotion.
5. Franchise Advisory Council. A sign of maturity in a franchise is inclusion of franchisees in the generation of ideas. This may be through a formal channel in which franchisees elect their peers to act as representatives of the franchisee body.
6. Conflict management process. An established franchise will be aware conflict is inevitable and will have a clear process for managing conflict when it arises.
7. Corporate governance. A mature franchise will have moved beyond the founder doing everything. You are likely to see in place a CEO and a Board of Directors.