POSITIVE VIBES

Another survey questioned an independent panel of 258 Australian business owners with employees whose businesses are still in operation, commissioned by online financial information platform Money.com.au.

According to this survey profits have dropped for 50 per cent of businesses while 55 per cent have made serious cuts to their expenses.

However 35 per cent made the same profit as last year, and 15 per cent made more profit.

Among the 55 per cent of business owners who made cuts to crucial expenses, the great majority (44 per cent) let go of employees and contractors, despite JobKeeper. A quarter (24 per cent) cut back their own salaries, and 24 per cent froze salaries and did not pay bonuses.

One third (34 per cent) of businesses made cuts to lunches and entertainment, and one fifth (20 per cent) cut back on marketing expenses.

According to the survey responses, most businesses held onto their leased premises – despite rent accounting for up to 20 per cent of operating costs.

Retailers, in particular, pay an average of $12,000 in monthly rent and gym owners can be set back nearly $10,000 a month on rent.

The research discovered only 17 per cent of business owners cut rent expenses this year, by either moving out of the workplace or negotiating on the lease price.

Businesses also showed a reluctance to focus on growth this year, which may have been fear of further lockdown, difficulty in hiring, or wanting to remain eligible for JobKeeper - one third of surveyed businesses were on the JobKeeper program.

Licensed financial advisor and Money.com.au spokesperson, Helen Baker, says: “It is concerning that half of the businesses still in operation seem to be in survival mode – even while they made major cuts to their operational expenses.

“A proportion of businesses might have also felt adequately supported by the Government’s cash flow boost, JobKeeper, instant asset write off and the SME Guarantee Scheme and made the decision to keep their business growth stagnant until the end of the pandemic.”

Surveys reveal the rollercoaster ride that most business owners have been on in 2020.

The Franchise Council of Australia, the main organisation representing the sector, has commissioned quarterly surveys from independent body FRANdata.

The most recent report released end October, had 109 Australian franchise systems participate. These systems have 15,649 franchised units and 2,012 company operated units between them.

The Pulse Check showed positive trading experiences in the September quarter across the QSR, maintenance, health and pet care related franchise systems. Cafes, restaurants (sit-down), fitness clubs, lodging and child related services proved less resilient.

Mary Aldred, CEO of the FCA, said “Franchise businesses have demonstrated incredible resilience throughout the pandemic.”

However, both Mary Aldred and FRANdata CEO Darryn McAuliffe stressed the need for continued support for franchisees as the economy starts to revive.

“While it is pleasing to see increased optimism as trading conditions improve, the recovery will be a long haul and the survival of thousands of franchisees will depend on sustained support,” Mary Aldred said.

HOW FRANCHISORS HELPED FRANCHISEES

advice on navigating new regulations and restrictions assistance with accessing government support programs supporting franchisees with landlord negotiations providing royalty reduction and deferral programs actions that monitor and support the well-being of franchisees.

“Most of the franchisees we recruited at La Porchetta, are small, family-run enterprises and some of those families have been with the brand for more than 20 years, with the second generation now involved as well,” she says.

“They serve their customers and build relationships with them so much so, that their children and grandchildren have now become customers.

“Franchisees and their staff are treated like extended family members and all of them are part of their local community.

“I love family business because no matter how large or small the business, that sense of community and celebration is always there.

“The sense of community and family is particularly alive in franchising. The franchisor and franchisee relationship is sometimes compared to a marriage, where the relationship will break down if open communication is lacking.

“Similarly, successful franchise systems have a strong sense of community with an open and transparent relationship.

“I have seen first hand many franchisees succeed by harnessing their family talents and working together.’

Families and franchising go hand in hand - as you’ll find out here with a few of the family-franchised brands in Australia showcased.

Learn more about how 7-Eleven can help you achieve your goals here.