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Cockburn Gazette - - NEWS -

WITH more than 1000 franchise groups op­er­at­ing in Aus­tralia, there is no short­age of choice for those look­ing to buy into an ex­ist­ing busi­ness model.

Buy­ing a franchise can be a great path­way to run­ning your own busi­ness.

You po­ten­tially reap the ben­e­fits of an es­tab­lished brand with a pop­u­lar prod­uct or ser­vice and a re­spected rep­u­ta­tion.

There’s also access to sup­port with ad­ver­tis­ing and mar­ket­ing, and op­er­a­tion man­u­als to stream­line the way you run your busi­ness.

On the other hand, fran­chis­ing gives you much less con­trol of how, where and for how long you run your busi­ness.

For ev­ery suc­cess story, there is a cau­tion­ary tale of what not to do.

Be­fore sign­ing away your cher­ished sav­ings, it is es­sen­tial that the prospec­tive franchise buyer seeks ex­pert ad­vice.

Franchise agree­ments are not always writ­ten with buy­ers’ in­ter­ests in mind.

The re­cently re­leased re­port Fair­ness in Fran­chis­ing high­lights con­cerns that the Small Busi­ness Devel­op­ment Cor­po­ra­tion (SBDC) has aired around the im­bal­ance of power in the cur­rent Aus­tralian fran­chisor/fran­chisee re­la­tion­ship.

Fran­chis­ing is a big part of the Aus­tralian econ­omy, and con­trib­utes about 9 per cent to our gross do­mes­tic prod­uct.

It is also a pop­u­lar and im­por­tant en­try point for people want­ing to run their own busi­ness.

While the long-awaited re­port makes 71 rec­om­men­da­tions to help ad­dress the power dis­par­ity between fran­chisor and fran­chisee, it is still es­sen­tial that buy­ers un­der­stand the franchise agree­ment, read the dis­clo­sure state­ment care­fully, iden­tify fi­nan­cial risks, un­der­stand the range within which your franchise can op­er­ate, and learn about any on­go­ing fees and roy­alty pay­ments.

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