The State Of The Franchising Market Heading Into 2024

Franchising is a business model that allows one party (the franchisee) the rights to use the trademarks, business models, and operational methods of another (the franchisor) in exchange for franchise fees and ongoing support.

The franchise system is a long-standing model that has benefited businesses around the globe for years. Indeed, many of the most well-known food chains in Australia use the franchise model. A franchise agreement offers many benefits to both franchisee and franchisor, so if you're considering taking advantage of franchise opportunities in the new year, we have you covered.

This article will take a look at the franchise systems across Australia and what they're going to look like going into the new year. So, if you want to hit the ground running in 2024, read on!

Franchising in Australia in 2024: Trends to Look Out For

The franchise market in Australia is a strong one, with current projections suggesting the market will close in 2023 with an estimated revenue of $169.5 bn. However, recent years have been hard on the franchising sector. Many were hit hard by the COVID-19 pandemic, and some markets have yet to recover fully.

Franchises that are performing well in 2023 and look to continue this trend are fitness franchises, couriers, freight & logistic operations, and maintenance businesses. These trends reflect the changing consumer trends brought about by the months spent in lockdowns around the world.

During the pandemic, we saw a huge shift to online shopping (for obvious reasons), and as such, courier services, logistics businesses, and other franchises that handle the shipping and delivering of products are in more demand than ever before.

Additionally, the renewed focus on health and wellbeing seen across many industry sectors is more than likely a result of the pandemic, which saw many people question their own health. Health and fitness franchises are in high demand around the globe, and not only in the ways you would expect. While gym and fitness franchises are set to continue their upward trajectory, so too are the likes of beauty and spa services, medical services, and convenience services.

While these changes project an alteration in what we always knew as the franchising industry (namely, the wealth of successful QSR and other food-based franchises), it isn't to say that fast food and convenience food franchises will not do well in 2024. In fact, multiple well-known food sector franchise businesses have set their sights on growing their presence in Australia in the coming years.

In mid-2023, KFC Australia reported huge surges in revenue and set plans to open 12 more restaurants in 2024. In the same vein, Wendy's, the US fast-food group, has also set out plans to open 200 Wendy's stores in Australia by 2034. So, if you're looking for a time to invest in a QSR franchise, 2024 could be your moment.

Technological Innovations Reshaping Franchise Businesses in the New Year

While industry trends can impact which franchise agreements are most popular in Australia, there are outside factors that could also impact the market as a whole. One such trend is the increasing reliance on technology seen across nearly all sectors. In the digital economy, it makes little sense to avoid technological advancement. Here are two ways that technology may reshape the franchise systems in Australia in the coming year.

New Ways to Buy and Shop

In the post-pandemic world, consumers are looking for more and more convenience. As such, the way they shop has been altered by technological advancements. With consumers preferring online and digital shopping methods over physical ones, potential franchisees should consider the ways their franchise agreement would allow them to take advantage of technological advancements to make this happen.

Digital In-Store Experiences

In addition to new ways to shop online, more and more we're seeing the use of digital technology in-store too. With the digitisation of the in-store experience, like being able to order via touch screen, consumers are enjoying more convenient ways to shop and buy even when they go out to do so.

Legal and Regulatory Changes to Franchise Businesses in 2024

The Franchising Code of Conduct is a regulatory framework in Australia that dictates the way a franchise agreement works. The ACCC (Australian Competition and Consumer Commission) regulates the Franchising Code of Conduct for breaches of competition and consumer law.

In 2023, the Australian government announced a review of the franchising code to evaluate the code's fitness for purpose. Much of the focus is expected to be on the regulation of automotive franchises, and the review is expected as the code is due to terminate by the end of 2025.

The results of the review are expected by the end of December 2023 and could mean changes to the way the franchise system works, particularly pertaining to the running of automotive franchises. On top of this, the review will look at the end of a franchise relationship and dispute resolution.

Anyone looking to buy a new franchise in 2024 should keep an eye out for the results of the review, as it could impact franchisees in the coming years.

Franchising in Australia in 2024: Getting Started

If you're looking to become a franchisee, you might be on the lookout for some expert advice on how to get started. Franchise information out there can vary, depending on the kind of franchise you're thinking of buying. Below are a few of the key considerations you need to make before buying a franchise in 2024.

Do You Have The Funds?

Money is one of the first things you need to consider before you begin any other part of your journey to owning a franchise business. This is because franchisees are expected to buy the franchise. While it may be less money than you need to start your own business, you still need to consider whether you have the funds to do so.

Remember, you will also have to pay franchisee fees to the franchisor on a regular basis.

What Are Your Skills?

Owning a franchise is like running a business. While you do have support from your franchisor and possibly other franchisees in the area, you should consider whether you're in the position to run a business. Additionally, consider the kind of skills the specific industry you're looking at will require. For example, if you're looking to buy a pet services franchise, you will need different skills than if you were to run a QSR franchise.

How Much Control Do You Want?

Lastly, running a franchise isn't the same as having your own company. You are using the trademark and business model of your franchisor, and, as such, you will have to work within their limits. If you want to have free rein over marketing, products, and services, then franchising may not be for you.

Why Should I Buy a Franchise in 2024?

Buying a franchise has many benefits, which is why it is such a popular business model. The advantages of franchise ownership include the following.

• Brand recognition: Franchise businesses tend to be well-known brands, which means you benefit from instant brand recognition when you become a franchisee. It means customers are more likely to come through the doors when they open because they already know and trust the company.
• Proven business model: A franchise business will have a proven business model that is known to work, which means you don't have to go through the early experimental phases that are common with new businesses.
• Marketing assistance: Your franchisor will often handle much of the marketing for your franchise, which means if you're not one for branding and marketing, it's already covered.
• Support and training: Becoming a franchisee means having the support of your franchisor through ups and downs. They tend to offer franchisees training as well as ongoing support throughout the relationship.
• Access to suppliers and other resources: When you start your own business, you will need to take the time to find suppliers and other resources. When you buy a franchise, this is already available to you from the franchisor.

Eden Exchange: A New Way to Buy a Franchise

If you've decided that a new franchise is the next step for you to take in 2024, then Eden Exchange can help. Our innovative DealXchange platform allows potential franchisees to find new opportunities all in one place.

With a network of active business buyers, sellers, and franchisors, you'll be in the perfect place to find the opportunity that suits you best. Once you have found a franchise you want to buy, we can help you through the buying process by providing a secure space for online transactions and advice from our experts. We've helped thousands of people buy franchises across the globe, and we can help you, too.

Final Thoughts on the Franchise System in 2024

Franchising in Australia is a big market, and while it took a hit during the pandemic, it's finding its feet again and is set for a brighter future in 2024. Certain sectors, like health and wellness and logistics, are on track for a better-than-average 2024, and if you're looking to buy a franchise, these industries could see the best opportunities.

For more information on the support Eden Exchange can offer on your franchising journey, contact the team now.

Who we are

Eden Exchange is an integrated multi-channel platform, simplifying business buying and selling. We match, refer and connect business buyers, sellers & brokers in an ecosystem that facilitates frictionless franchise, business and finance transactions. Visit www.EdenExchange.com and connect with our engaged and multidimensional transaction network today.