Looking at going into business for the first time? Buying a franchise is a great way to test the water with support and guidance and, without necessarily making a huge financial commitment – and those are just two of the advantages of franchising.
Many successful businesses in Australia are franchises providing a viable alternative to starting your own business or even purchasing an existing business. In fact, franchises bring approximately $146 billion into the Australian economy each year, and employ upwards of 470,000 people according to Money Magazine.
But what are the other benefits of franchising?
Low Comparative Investment
According to the study undertaken by Griffith University in 2016, the average cost of purchasing a retail franchise in Australia is around $287,500 – a very affordable amount in terms of business investment which can reach into the millions of dollars. Securing finance for a business can be a challenge however, a known brand with systems and support can help smooth the process.
Investing in a Sleepy’s franchise as an example will cost between $180,000 and $250,000 (including fit out, stock, lease security and franchise fees) with the average sales per store trading a full year in the 2019/20 financial year $1.36m.
Speed of Growth
Another benefit of franchising is that you can more effectively capture a market in your local area and be more competitive within a retail space, particularly in the range you stock. If you were to open a store individually, the time and money required to invest in marketing – whether it be via digital or other avenues, or simply word of mouth – would take time to translate into store establishment and business growth. Due to the established reputation of a franchise, shoppers will already be familiar with your brand and have a certain level of trust allowing for faster growth within your store.
Did you know that 80% of small independent businesses fail within the first five years? Compared to the failure rate of franchises which sits at around 20% according to the National Retail Association. By investing in a franchise with established roots and a good reputation among consumers, and, based on known facts, you’re more likely to see your business succeed.
As part of your initial expression of interest if necessary, Sleepy’s will assist you to choose the right location to set up a store – location being the key for many businesses). Sleepy’s also continuously searches for future location opportunities. A streamlined support system is also available to help you with staff, customers, store layout, marketing and much more.
A major cost associated with running a business is advertising – even “affordable” advertising on a digital platform such as Facebook or Adwords can impact the budgets of independent businesses.
You will pay a very reasonable amount through the Sleepy’s marketing system to get your franchise recognised locally and online.
One of the advantages of advertising however is, that you won’t need to spend many thousands of dollars to get your business name out there. An established franchise already has national advertisements allowing you to benefit from campaigns already engaged.
Having a built-in support network is definitely one of the key benefits of franchising. By becoming a franchise partner, you’ll receive assistance from your franchisor in the form of ongoing marketing, operations, training and IT support. You’ll also have help with ensuring your store has the correct levels of stock and up-to-date products to keep you competitive within the marketplace.
Wondering if you can invest in a franchise with no prior business experience? The advantages of a franchise business include training across many aspects of running a business, such as:
- Sales skills
- Product knowledge
- Retaining employees
- Book- and record-keeping.
This training should develop your competence in running a franchise, even if you’ve never had experience in owning and operating a store in the past.
Find Out More
There are many organisations within Australia that exist to inform and protect both franchisors and franchisees. The Franchise Council of Australia (FCA), the Australian government, and the ACCC all have excellent resources to assist you.
For Sleepy’s franchising opportunities, please visit our franchise page on our website to find out the benefits of franchising for Sleepy’s or contact Guy Elliott on 0434 254 154.