What to look for in a franchise: How to tell if it’s the right choice for you

FAQs: February 11, 2020

Know what to look for in a franchise to make a smarter business decision.

At some stage in their life, most people have dreamed of swapping the drudgery that comes with their 9 to 5 job for the freedom of running their very own business. And franchising appears to be an ideal way to get started. After all, there are franchise opportunities in Australia across a wide range of industries – everything from product-based businesses like food and clothing, to service-based opportunities like lawn mowing and computer repair.

But it’s important to know what to look for in a franchise when you’re investigating the opportunities. There are pros and cons to operating a franchise that need to be reviewed with your individual circumstances in mind.

Let’s examine the factors that may determine whether a franchise opportunity is right for you.

Is franchising right for you?

Considering whether franchising is the right business model for you, and knowing what to look for in a franchise, can vary depending on whether this is your first time owning a business or not.

You’ve never owned a business before

If you’ve never run a business before, there are many questions to consider before taking on a franchise business opportunity.

  • What it’s like owning your own business? 

Talk to existing business owners and franchise owners to get an understanding of the realities of owning your own business. This may conflict with the ideal you have in mind. 

  • What’s required from you in a franchise? 

The franchisor’s Disclosure Document, Information Statement and the Franchising Code of Conduct all lay out the expectations of a franchisee. Read them carefully and get professional independent advice.

  • What does being part of a franchise means for your business operation? 

There are restrictions on how you run your business if you operate as a franchisee, particularly in a Retailer-Retailer franchise business model like Red Rooster. These will include where you can operate, the way you promote your business and the processes you follow. It’s important to understand these before you make a decision.

  • How much training and support does the franchisor offer to help you?

Operating your own business can be challenging the first time around. Consider whether your franchisor offers training and support in operating your franchise. Will that be sufficient for you or will you need to undertake other training to be successful? 

  • You’ve previously owned one or more businesses

If you have previously run a business, you will be used to working a certain way. Operating a franchise will be more restrictive than you may be used to.

  • Can you fit into a franchise partnership model? 

Operating as a franchisee requires you to follow the best-practices of the brand with little room for change. With a franchise like Red Rooster, processes, operations, brand, menu development and systems are all pre-defined. Taking all these considerations into account, if you’re happy to follow the format that’s been developed, then you’re likely to achieve success.

Is this franchise business opportunity right for you?

If you’ve determined that operating a franchise business is the right path for you, your next step will be to compare the many franchise business opportunities available in your area. 

  • Talk to other franchisees

Any worthwhile franchisor will encourage you to talk to their existing franchise operators. Ask questions like what does their day-to-day life look like? How are they travelling financially? Are they happy with the franchisor?

  • Investigate the franchise brand

You’re entering into a legally-binding agreement with the franchisor so it’s important to be able to trust them. Does the franchisor share your values? Do you feel comfortable representing the brand?

  • Examine past financial performance

The performance of the franchise brand over the past 3-5 years can give a good indication of what may happen over the next 5-10 years.

  • Determine the financial requirements

A franchise agreement will mean you will be required to pay your franchisor for the right to be part of the brand. Be clear on what you’re required to pay in set-up fees and ongoing costs. Are there any other one-off costs that may impact your bottom line?

  • Read everything carefully

The franchisor is obligated to give you an information statement, the Franchising Code of Conduct, a disclosure document and the franchise agreement. Read them all carefully and be aware of the implications. If you’re keen to get your hands on them now, get in touch with our Franchising Team. Their contact details are at the end of this article. 

  • Get professional advice

It’s important to get independent advice from various sources about your franchise business opportunity. Talk to legal, finance and business experts about the possible risks and rewards.

What does it take to be a successful Red Rooster franchisee? 

Over the decades Red Rooster have been operating franchise stores, we’ve identified some of the qualities that make a successful Red Rooster franchisee. They include:

  • Great communication skills

Being able to communicate effectively is important in several ways. Communicating within your business, for example with staff or customers, is key to operating a franchise that runs successfully and is an enjoyable place to work. Having clear communication with your franchisor helps you give feedback on how your business is progressing and how we can support you in meeting your goals

  • Business and financial acumen

It’s important to operate your business well – to constantly look for efficiencies and improve best-practice. Being financially literate and having clear goals and visions will improve your chance of success. 

  • Willingness

Successful franchisees are prepared to follow the plan, processes and operations set out by the franchisor. They also show a willingness to learn and improve their skills. 

If you have what it takes to be a successful Red Rooster franchisee, it can be a wonderful opportunity to head up a truly rewarding business.

What makes Red Rooster a great franchise business opportunity? 

There are many things that set Red Rooster apart from other franchise opportunities. Here are our top four reasons why Red Rooster is a great franchise business opportunity.

  • Efficiencies of a larger brand

Altogether Red Rooster is a team of over 9,500 people working toward one specific goal: to make and serve the best food while providing a joyful experience to our millions of customers every week. We’re part of the craveable brands business, along with Oporto and Chicken Treat. The brands cover a range of demographics and markets. As part of such a large organisation, Red Rooster franchisees have access to a Shared Services team that is efficient and more cost-effective than that of smaller brands.

The Shared Services team handles the extensive intellectual property of the three brands including restaurant operations, menu development, supply chain, IT, store design and construction, food innovation, property, marketing and customer satisfaction. That means they can leverage better supplier rates for the 600+ stores in the craveable brands family. They have more knowledge and experience of best practice across a range of store types and business set ups. They can access better deals for large purchases like tech and systems subscriptions.

All of those savings can be leveraged by you in your own franchise business.

  • Training and support

Red Rooster have an extensive 10-week training program for new franchisees, teaching everything you need to operate a franchise. The program covers everything from how to cook the food to making a business plan, so you can hit the ground running no matter your level of previous business experience.

  • Continual improvement

Red Rooster are constantly trying to improve. We’re always trying to find ways to give the extra edge in training, to negotiate lower rents, to improve our business processes.

  • Australian head office

Our main head office is based in Sydney, with regional offices all over Australia and international offices in The Philippines and Singapore. This means we’re attuned to each market and its customers and can make decisions faster.

Is a Red Rooster franchise right for you?

Knowing what to look for in a franchise lets you examine each opportunity closely and make the right business decision for you.

Want to see if becoming a Red Rooster franchisee is the perfect opportunity? 

Get in touch today! 

Our Franchising Team is here to help: