Buying a Franchise in Australia: What you need to know

FAQs: December 4, 2019

What you need to know before buying a franchise in Australia

Buying a franchise in Australia effectively gives you ‘the best of both worlds’. It combines the freedom of running your own business with access to the proven products or services of an established brand. Plus, a professional franchisor will give you in-depth training and ongoing support to help you succeed, even if you’ve never run a business before.

Be aware, however, that – as with any business – there’s a lot of hard work involved, especially when you first start out. It’s also important to carefully research any franchise you’re considering to make sure it’s something you’ll be happy to spend your time working in. 

Once you decide on a franchise, you have to make a strong commitment to its brand and be willing to be a brand ambassador. 

Now, here’s what you need to know about getting started with an Australian franchise.

Why buy a franchise in Australia?

Let’s take a quick look at five of the top benefits of buying a franchise compared with starting your own business from scratch.

– Growing sector

Buying a franchise is a popular way to start a business – and it’s continuing to grow. According to the Franchise Council of Australia, franchising is a $182 billion sector with over 80,000 franchised businesses. 

It’s no wonder you see so many recognisable brands around your suburb or town!

– Comprehensive training

When you buy a franchise, a professional franchisor won’t simply throw you into the deep end on your own. You’ll receive extensive support – not only from them, but also from the network of franchisees that you can connect with. After all, your success boosts the success of the franchise brand as a whole.

Most franchisors have a training program for when you first begin. As an example, Red Rooster starts every new franchisee with a ten-week training and induction program. You’ll learn all you need to know about behind-the-scenes aspects of the business, like key policies, procedures, business planning and budgeting. Plus, you’ll get on-the-job training working in a restaurant.

The training is designed to set you up for success. It will also help you to avoid the trial-and-error and costly mistakes that many new business owners face.

– Proven formula

When you start out on your own, there’s a steep learning curve. That’s particularly true if you’ve never owned a business or worked in that industry before. 

If you buy an Australian franchise, however, you’re buying tried and tested businesses and products that an audience base (usually) already desires. That means you take less risk and gain a greater chance of success.

– A wealth of ongoing support

While you’re still your own boss in a franchise, if you’re a Red Rooster franchisee (as an example) you’ll be offered a vast amount of support and help from our head office. You’ll even have access to your own dedicated Business Consultant – someone you can contact at any time with questions or for help with any issues you’re having.

– Brand power

Buying a well-known franchise means you’re buying into an instantly recognisable brand that’s trusted and loved. That strong brand image gives you potential customers who are already familiar with your product or service, and who are comfortable buying from you. 

That gives you a major advantage over trying to establish your own brand from the ground up.

Things to consider before buying any franchise

Do your research

You definitely need to research extensively before jumping into a franchise. Aspects to think about include:

  • Look for a franchise in an industry that will suit your personality and lifestyle. You’ll need to be hands-on in your business, day in and day out – so the work has to be something you enjoy, like delicious food.
  • Run the numbers and get clear on your finances. Calculate both how much you’ll need up front, and how much you can expect to earn on your investment.
  • Talk to other franchisees about their experience with the brand. Make sure your impressions of what owning a franchise is like actually fit with reality.
  • Read the Franchising Code of Conduct to see what’s expected of both you and your franchisor. The code lays out your obligations as a franchisee, so ensure that nothing in it takes you by surprise.
  • Discover how much training the franchisor offers. Will you receive enough training and support to run your business? 

Decide whether you want a new site or an existing one

When you buy a franchise, you can either ‘move into’ an existing site, or set up a new one. While the process is generally the same, there are some key considerations that are specific to each.

Buying an existing site gives you an established team, processes and finances. You’re buying a business that already has a reputation.

Buying a new site means you have to start from scratch, but the advantage is that it gives you the opportunity to make it your own from the beginning. It lets you bring together a new team and build your reputation from Day One.

Whichever path you choose, your franchisor should offer extensive support to help minimise any potential problems.

What’s the process for buying a franchise in Australia?

First and foremost, you need to be an Australian resident to own and run a business in Australia. The interview process for buying a Red Rooster franchise can give you a benchmark of what to expect. Here are the basic steps:

– Initial enquiry

The first step is to submit your enquiry online. Once our Franchising Team receives it, they’ll contact you to see if you qualify to be a franchisee. They’ll ask you for proof of criteria, like your visa status and finance eligibility.

– Interview and in-store experience

If you meet the initial requirements, our Franchising Team will invite you in for an interview.

Then you’ll get to experience what it’s like to work in a store before you go any further. We’ll take you in-store with a trainer for 4-5 hours where you’ll get to be fully hands-on with all parts of the business.

During this time, you’ll experience what it’s like ‘back- and front-of-house’. You’ll actually prepare and make the food, and then shadow the front-of-house person on the till. You’ll see the systems for ordering, inventory control, rostering, online training, etc. and you’ll talk to customers in the dining room.

This experience gives you a great sense of what owning a store would be like in real life. You get to decide whether it’s something you want to do, while the trainer considers whether you’ll be suitable as a franchisee too.

– Interviews with the Franchise Manager, State Manager and CEO

If the trainer gives you the green light (and you’re still keen), there’ll be multiple interviews with the Franchise Manager, Red Rooster State Manager and CEO to begin speaking in more depth about becoming a franchisee. 

Before you head into this interview, you’ll need to have sought legal advice, secured your financial arrangements, created an initial Business Plan and confirm you’ve met all the necessary criteria. 

– Ten-week training program

Following a successful interview process, the final step is your ten-week induction program. This is a combination of classroom and in-store training. During this time, you’ll learn everything from management skills including business planning and strategy development, to back-of-house administration tasks and food preparation, to front-of-house customer service and team management.

If you’re considering buying an existing store, your training will also include a change management module to help you manage your new team during the transition.

This extensive training program means you can own and operate a Red Rooster franchise with no previous experience in the industry, or even as a business owner.

Find out more about buying a Red Rooster franchise

Buying a franchise fulfils your dream of being your own boss, while still letting you draw on the support of an experienced team. But, like with any business, you need to do your due diligence to work out whether the opportunity is right for you.

Interested in knowing more about buying a Red Rooster franchise? 

See what opportunities are available, or get directly in touch with our Franchising Team to know more: