What are the most popular franchises right now? Well, according to a recent survey the clear winner in the investment stakes is the food sector.
One third of respondents are looking at food and beverage franchises, 29.2 percent see potential in the fast food sector and 28 percent are interested in the coffee market.
Beyond the food sector just over a quarter of those surveyed are considering home based franchises, 18.3 percent have business service franchises in their sights and 18.1 percent are thinking about leisure and entertainment opportunities.
The survey was conducted with 600 users of FranchiseBusiness.com.au.
Why a franchise?
The most popular reason for looking to buy a franchise business is to achieve greater income and wealth building potential (47.9 percent), with 42.4 percent searching for more flexibility and a lifestyle balance, and greater control and better job satisfaction coming a close third and fourth on the list at 28.5 percent and 28.4 percent resepectively.
Most potential franchisees see a proven business system and an established and recognished brand as the major benefits of investing in a franchise system over starting an individual business (61 percent and 60.8 percent)
Start up and ongoing training and support, a lower risk of failure and marketing strength are the next most important reasons.
How much do you have to spend?
A quarter of people surveyed considering a franchise investment are looking to spend between $100,000 and $250,000. There’s a fairly even split with 20.2 percent eyeing up the franchise systems priced between $20,000 and $50,000 and 22.5 percent with a $50,000 to $100,000 budget.
The lower end of the scale (systems costing less than $20,000) is attracting 13.1 percent of users, while the $250,000 to $500,000 bracket appeals to 16.1 percent, and just 3.1 percent have ambitions to invest more than $500,000.
The business
The largest group of potential franchisees plan to go into business with a spouse or partner (44.2 percent) with 30.5 percent setting out by themselves.
One third of respondents have no experience in the industry they are considering investing in, but 22 percent have notched up more than 10 years in their chosen sector.
And when it comes to the nitty gritty of business ownership, more than half are very experienced in managing people and nearly three quarers (73.9 percent) claim to be highly experienced at customer service.
Interestingly, one third expect to make up to $50,000 profit in the first year, just under a third (28 percent) are looking for a $50,000 to $99,999 profit in 12 months. Just 19.9 percent are expecting to breakeven.
Financial issues
The majority of potential franchisees are looking for finance (67.4 percent) and happily 63.6 percent of those have not experienced any unexpected issues. However the vast majority of respondents had not yet made a finance application but of those who had, only 2.7 percent had been declined.
Slightly more concerning is the response to seeking professional advice, with only half of those surveyed getting financial and business advice and just a third turning to legal experts. Hopefully these potential franchisees will take advantage of independent expert advice before signing up.
Survey source: www.franchisebusiness.com.au
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