Supporting Elements and Impediments to Growth in a Maturing Franchising Sector: New Evidence from Australia

Abstract

The Australian franchising sector is expanding rapidly. This paper examines the nature of the sector's growth and whether such rapid expansion is necessarily positive for the sector. A comprehensive survey of the population of Australian business format franchisors was conducted in 2004 to examine trends in the sector and to asses the level of growth and maturity. The findings indicate that whilst rapid growth in the number of franchise systems and units has occurred, many systems remain small and may not be viable. Franchisors report difficulty in finding enough suitable franchisees to allow their systems to grow and appear to be resorting to alternative strategies, including mobile franchising, multiple unit and multiple concept franchising, as well as international expansion, in order to stimulate growth at the system level.