Franchise Council of Australia
John O’Brien, Chairman
Franchising in Australia represents a dynamic small business sector contributing:
– $128 billion to the Australian economy
– the equivalent of 14% of GDP
– comprises enterprising entrepreneurs as franchisors in over 1000 systems
– In over 70,000 workplaces
– employing 600,000 Australian’s.
– 5% small business is franchising
– However 50% small business GDP is franchising
– 93% of franchise systems are Australian based
– 30% franchise systems are exporting
– 60% want to export
– 7% are imported systems
– NZ is the most popular export destination because of its geographical, political and cultural alignment to Australia. Singapore (27%), China (26%) Malaysia (22%), India (16%), Indonesia (15%), UK (18%), US (16%), Europe (22%).
– 4% disputation rate
– Franchising falls under the Trade Practices Act and has been regulated by the ACCC since 1998.
– The cornerstone of Australian franchising is the Franchising Code of Conduct; created to assist the
ongoing relationship between the franchisee and franchisor. Issues covered include:
– Disclosure of the pertinent information regarding the Franchisor
– Conditions contained within the Franchise Agreement
– Complaint handling and dispute resolution procedures
The experience in Australia under the mandatory Franchising Code of Conduct provides comfort to those franchising sectors facing regulation that appropriate and balanced regulation can have a beneficial effect on the franchising sector and encourage its orderly development for the benefit of all stakeholders.
Two thirds of Australian systems have adopted master franchising arrangements.
– Supportive state and federal governments and statutory authorities including
– Australian Competition and Consumer Commission (ACCC)
– Workplace Ombudsman
– The Franchise Review
– Business Franchise
– Franchise Magazine
– My Business
– Franchising and Small Business Opportunities Expo (sponsors of the FCA)
– SYDNEY Friday 28 – Sunday 30 March 2008
Sydney Convention & Exhibition Centre
– PERTH Saturday 17 – Sunday 18 May 2008
Perth Convention Exhibition Centre
– ADELAIDE Saturday 24 – Sunday 25 May 2008
Royal Adelaide Showground, Wayville
– BRISBANE Friday 12 – Sunday 14 September 2008
Brisbane Convention & Exhibition Centre
– MELBOURNE Friday 10 – Sunday 12 October 2008
Melbourne Exhibition & Convention
– Member breakdown (as at Dec 07):
– Franchisors – 464
– Suppliers (lawyers, accountants, consultants etc) – 124
– Overseas members – 8
– The FCA is a nationally incorporated not-for-profit association with its national head office in
– It provides localised member services through five state chapters – one in each mainland state of Australia. Each state chapter elects a president, who is automatically appointed to the national board. A further
seven national directors are appointed to the board by direct election from the membership, of whom three
must be franchisor members, and two directors from any membership category, making a maximum of 12
– Our ‘pillars’ are representation, membership, education, events and services.
– We have several special interest groups, forums:
– Women in Franchising Committee
– Franchisee Forum
– Supplier Forum
– Legal and Ethics Committee
– Awards and Hall of Fame Committee
– Finance Committee
– Close ties with all WFC and APFC member organizations.
– We have an annual Convention each October which attracts in excess of 700 delegates.
– NFC07’s theme was Franchise Foundations; Building the Future Together.
– This 2 / 3 day event typically comprises plenary, concurrent and round table sessions with education
topics based on raising the level of professional and ethical behaviour of the sector.
– NFC also features a massive trade exhibition and several networking opportunities. NFC08 will be held
in Sydney on 16 – 18 October 2008.
In two years time we forecast:
– Sector to be equivalent to 16% of GDP
– Revised and improved Code
– More inclusion, participation and products and services for franchisees
– More than half of all Australian franchise systems to be members
What Do we seek from the WFC
Membership and International Liaison Officer
Franchise Council of Australia
Suite 6, 307-313 Wattletree Road
Malvern East VIC 3145
P: +61 3 9509 5100
F: +61 3 9509 5149
The current situation and future prospects for franchising in the Czech Republic
– the gradual development of franchising in the Czech Republic since 1991, with Yves Rocher
and McDonald’s among the first
– around 130 franchise systems now operating on the market
– franchising as a form of business is becoming particularly established in trade, services
(big group of real estate offices) and gastronomy
– proportion of foreign and domestic franchise concepts is 50:50, there are growing number
of domestic franchisors
– growing interest of foreign franchisor for Czech republic (German, Spanish, Portuguese
and French entrepreneurs are very interested in our country at present)
– no franchising specific legislation exist in Czech Republic
– Czech Republic is an EU member, the EU regulation applies here
intensive connection of trade with EU countries
– an “open” economy in relation to existing and new members of the EU
– the majority of foreign investments come from EU countries
The economic and political environment supports interest from foreign franchise systems
in entering the Czech market
The prospects for franchising in the Czech Republic
– the range of franchising systems is growing, particularly systems from EU countries
– demand for this way of doing business is increasing, particularly from small and medium
entrepreneurs – an alternative for further development
– for some a way to “survive”
– the possibilities and conditions for financing are improving for franchisees
– knowledge and awareness of this modern, global and dynamically expanding business
method are increasing
The Czech Franchise Association holds trade conferences and seminars, and has issued a franchising yearbook with the aim of supporting the development of franchising and small business in the Czech Republic
Franchising – selected topics in practice – March 2007
The 5th FRANCHISING FORUM 2007 – June 2007
Workshop with French franchisors – June 2007
FRANCHISE Meeting Point – October 2007
Franchising in gastronomy – November 2007
Workshop with Portugese franchisors – November 2007
FRANCHISE Meeting Point – Exhibition of Fanchise Opportunities
– project organiser: Trade Fairs Brno. Expert guarantor: The Czech Franchise Association
– venue: Brno Exhibition Centre, on the occasion of the international trade fairs INVEX and DIGITEX
– anticipated visiting attendance: 6,000 visitors
– dates: 23rd – 27th October 2007
Project visions and goals:
– specialised international exhibition of franchising in the Czech Republic
– a meeting point for supply and demand, both in franchising and for the ranges of services and goods
for franchise systems, Co-operation, SME etc
The accompanying programme:
– workshops, panel discussions, etc. on various topics in franchising and SME
The Czech Franchise Association – objectives and goals
– to inform the general public and trade professionals alike of the essence and importance of franchising
– to affiliate business entities operating in franchising
– education and other activity supporting, promoting and popularising franchising
– support for the “export” and “import” of franchise systems
– co-operation with foreign franchise associations, membership of the European Franchise Federation
– The Czech Franchise Association has issued the first yearbook of “Franchising in the Czech Republic”
The Czech Franchise Association – relationships
Czech Franchise Association is a member of the:
European Franchise Federation
World Franchise Council
Czech Confederation of Commerce and Tourism
Other cooperation with:
KomerÄní banka – KB Franchising program/special bank product for franchise business
THE CZECH FRANCHISE ASSOCIATION
Opletalova 6, 110 00 Prague 1
Tel: +420 242 444 509
Fax: +420 242 444 935
Report on franchising in Croatia 2007
Croatia is a Central and East European country with population of 4.5 million inhabitants. Croatia, actually, is both a Central European and a Mediterranean country making significant progress towards its goal of EU membership. Known to many as a tourism destination, Croatia is well-known for its ship and boat building and is achieving new success in niche manufacturing. With continuing highway construction and increased air links, Croatian distribution network is steadily improving. EU regulations will soon be the norm, and there is a concerted effort to prepare the country, especially in the agricultural and prepared food sectors, for this eventuality.
Even though franchising is present in Croatia from the end of 60’s the real development of this kind of business model still lies ahead. Franchise market in Croatia now days are growing thanks to the efforts of Croatian franchise association and the only two franchise centers in the country: Franchise centre Pro maturo in Zagreb (www.promaturo.hr) and one in Osijek. (www.fransiza.hr)
Before 2002, when Croatian association for franchise business was established, franchising was almost unknown and pioneer on the market was McDonald’s, who came on the market in early 1990’s. In next years several others companies entered the market like US franchise Subway and Hungarian Fornetti, which is now the biggest one with more then 400 franchisee all over the Croatia. According to the assessment of the Croatian association for franchise business there are currently around 150 franchises operating in Croatia from which around 30 domestic one and they operate on the near 1000 locations and employ more than 16 000 people.
As we say there are approx. 150 systems operating in Croatia. Most foreign systems operating on the Croatian franchise market came from Italy, France, UK, Germany and USA. Italian and UK franchisors are developing mostly in clothing & foot wearing sector as well as home article distribution and wellness where French ones are operating mainly in hairdressing & cosmetics. American systems are growing mostly in restaurants and fast food, clothing & foot wearing sectors, in hotel industry for now we have US companies, German and Spanish
Let’s see advantages and temptations of franchising on Croatian market
• Stable domestic currency
• Single digit inflation rate
• Respect of intellectual property rights
High potential of the market due to low saturation of franchise market
• Few market-entry barriers
• No franchising legislation
• European Code of Ethics for Franchising adopted by the national Franchise Association
• Increase of education about franchising through business colleges and higher education courses, seminars, press and SME journals
• 4 international conferences and exhibitions already organized by the Franchise Association and center for franchising PRO MATURO
One international Franchise Forum held 2007 with financial support of USAID, Croatian chamber of economy, Ministry of economy…
• Seminars organized by Center for Franchising in Osijek
3 available web sites for franchising
www.promaturo.hr, www.fransiza.hr, www.fip.com.hr
• Entering to Croatian market in most cases means entrance to regional one
• one Master franchisee can be for all region
• Croatia speaks the same language like Bosnia and Hercegovina, Serbia, Montenegro and Slovenia and Macedonia are very familiar with this language – smaller expenses for translation of franchise material
• Croatian franchise association is leader on franchising development in the region and is actively involved in development of franchise associations and consulting centers in Serbia and Bosnia & Hercegovina
• Strong tourist destination
• Lack of franchise expertise as major problem on behalf of the companies and potential investors
• Lack of trust toward consulting in general and attitude of “I know the best” on behalf
of upper management and owners of the SME
• Both, start-up and growth highly dependant on entrepreneur’s self-financing
• Lack of banks’ understanding of franchising and support
• Lack of strategic thinking in most companies
• Growth companies’ hesitation to grow through franchising model due to the lack of general knowledge
• Fear from foreign companies and management domination- prejudices
• Slow legal system
Lack of awareness of franchise as a business model in Croatian business environment is actually main problem while insufficient legal protection of franchisor’s rights stands out as the most frequently problem.
As the economy in Croatia has increasingly dynamic development Croatian franchising will be on a constant rise. However Croatian franchise market is waking up and the interest of national companies for expending through franchising is growing and general number of franchisees is daily increasing and thanks to Franchising Association and Centers for franchising in last three years, people are getting more and more education about business potentials working through a franchise.
Institutional support for franchising in Croatia
Croatian franchise association was established in 2002 with main objectives to promote and advertise franchise business in Croatia and region, to group the franchisors comparing their feedback and to establish policies and standards for franchising in Croatia.
The following institutions/companies can provide valuable assistance and expert advice to franchisers seeking potential franchisees in Croatia:
Croatian association for franchise business – Established in 2002 is doing great job in popularization and promotion of franchising in Croatia with visible and tangible results. Recently sponsored by USAID, for empowerment of the organization, in order to better suit the members and all franchise society. Association has presently 15 members and only 5 of them is active one that participates in the work of association. Recently Association organized 4th International Franchise Forum (in November 2007) where it mobilized regional forces and institutions which gathering on the regional round table during the Forum. Association is actively involved in establishment of Serbian franchise center and one in Bosnia and Herzegovina. New project is networking with Institute for Economic Promotion (WIFI) on the project of International Know-how transfer which is preparing project for Leonardo EU grant. Inside of this project together with Slovenian association, CFA plans to organize workshops and conferences on franchising. Recently, association got rights for printing book „Guide to international Master franchise arrangements“ in Croatian and Serbian from UNIDROIT, thanks to collaboration with University of economy from Niš ( Serbia). www.fip.com.hr
Pro Maturo – organizer of the Franchise Industry Fair and Workshop held annually in Zagreb. The event is still at its pioneer stage (three years of tradition), attracting about 20 exhibitors and about a thousand visitors on average. However, participating at this event, both as an exhibitor and as a speaker at the workshop, could be an excellent introduction to the market. This is also a business consulting company specialized for franchise industry. Its owner is the founder and the president of the Croatian Franchise Association. Pro maturo was the owner of a successful Croatian wellness franchise chain Body Creator but from 2007 new company was established under the name Body Creator which is working on growth of the franchise under the same name. www.promaturo.hr
The Franchise Center Osijek – a small business development center located in the eastern continental part of Croatia and specialized for promotion of franchise industry in that region. The Center is a franchisee of The Franchise Center of the University of El Paso, Texas and, twice a year, it organizes seminar “Franchising from A to Z” for potential Croatian franchisers and franchisees. Speaking at these seminars could be a great promotional tool. www.fransiza.hr
Ad hock support of the sector is given by Croatian chamber of economy (during certain events) but government in general create quit favorable atmosphere for development of the entrepreneurship by:
• Loans to small business granted under favorable conditions
• State subsidies of loan interest
• Support of entrepreneurs for employment growth
• Assistance to start-ups and early stage businesses
• Establishment and organization of centers for entrepreneurship, incubators and small business zones
• Broad promotion of entrepreneurship in general
• Support to special categories of entrepreneurs (women, youth, start-ups, traditional handicrafts, etc.)
• Support to SME participation in the international fairs including franchising
• Encouraging small business creation and growth including franchising
• Encouraging small business investments providing loans for small businesses
• issuing guarantees for small business loans
• providing financial support for loan cost reduction
• subsidizing employment generating activities
• subsidizing modern technology development
• Recently established the “one-stop shop” service for future entrepreneurs
Main institution which is the supporter of franchise events in Croatia is HAMAG. Croatian agency for entrepreneurship whose main objective is to support Small and medium businesses, individuals, crafts, cooperatives, farmers, free lancers, self employed and various organizations with permanent residence in Croatia.
The Agency’s tasks include providing a continuous support for small business development and its share in the Croatian economy by creating a stimulating business environment, developing an efficient support infrastructure on state, regional and local levels, applying new technologies, improving quality, increasing competitiveness, securing market access, creating new jobs and making connections between entrepreneurs and institutions.
Franchising is for sure the way of doing business that will conquest all Croatian market in near future. Few Croatian banks are interested in creation of the special product for financing franchising and one of the condition for getting the financing will be to be member of the association thanks to the credibility and standards that association apply and of the most important is EFF code of ethics.
FRANCHISING IN BRAZIL IN 2008:
COUNTRY REPORT FOR THE WORLD FRANCHISE COUNCIL
Franchising in Brazil:
The Brazilian franchise has grown on the average of 15% by year, a significantly rate superior of the national GDP. It is about of the fourth bigger world franchise market, according the World Franchise Council. The Brazil has 1.196 brands and more than 65 thousands of outlets, which create more than 22 thousands news employments for year, totalizing today 586 thousand works offices.
Franchising Characteristics in Brazil:
The success of the franchising segment in Brazil is due to three major factors
• The system has become increasingly professional during the past years, with the addition of more
experienced professionals bringing corporate know-how
• A growth option for companies, since the capital cost in Brazil is among the highest in the world.
• Franchising is present in all economy segments (industry, commerce and services), and in virtually
all vertical markets.
The Brazilian franchising segment started in 1960, with the Yázigi language school, and, in the next decade, with the opening of the first McDonald’s restaurant in Brazil. Until 1981, franchising operations focused on cardistribution, fuel and beverage bottling, which are traditional areas for product and brand franchising.
In 1992, the franchising industry opened to the global competition, and, in 1994, a specific law was enacted for the segment, governing the relationship between franchisers and franchisees. Throughout the 90s, the segment saw impressive growth rates.
Today, the Brazilian franchising system is an undisputable, growing reality. It’s a specific, successful business management method, also for the expansion of small and medium businesses, with high capacity to drive investments, exports, jobs and income, due to the opportunities the system provides. Out of all companies operating in the franchising system in Brazil, 89 percent are all-Brazilian companies.
The benefits of franchising to strengthen the economy are due to the better enterprise structure when linked to a network whose business is already market-proven.
Due to the benefits provided, in addition to the Brazilian socioeconomic situation during the past decades, the market saw a steady, vertiginous growth of the system, which, even during economic crisis times, showed growth rates above the GDP.
According to surveys by ABF, considering only the formatted business, the Brazilian franchising market grew 11 percent in 2006. This performance was achieved through 1.013 formatted franchising networks/brands operating in the country, accounting for 62,5 units. It’s also one of the segments that invest more heavily in training, in addition to providing first-job opportunities.
We see the franchise future as a great success. Nowadays, the Brazilian franchising has been growing on the average of 15% to the year. The tendency is that this growing keeps for the next two years.
In Brazil, we have a specific franchising legislation that conducts this system in the country. The Franchising Law (Law # 8.955) was decreed in December 15th, 1994.
The Brazilian Franchise Association integrates the “Fórum Setorial de Franquias” (Franchise Sectorial Forum), promoted by the Brazilian Government, which today works in the approval for the improvement of this law.
The Brazilian Franchise Association publishes annually a guide called Official Franchise Guide, which has a drawing of 50,000 copies by year and it is a reference publication for entrepreneurs, franchisers, franchisees and other contributors to the system.
Beside this, publishes bimonthly the “Franquia ABF” Magazine, which has a drawing of 20,000 copies and it is a reference for advertisement of Franchising, overing relevant topics on management, innovation and value for franchises, and the international Guide Franchising Brazil, which is published in English and Portuguese and has free distribution in Embassies, consulates, chambers of commerce, government bank branches, and international events.
Another press reference is the “Portal ABF”, the Brazilian Franchise Association website, which has a visitation of 100,000 users by month. It was developed in Portuguese and Spanish versions (English version soon).
The Brazilian Franchise Association organizes every year the ABF Franchising Expo, the biggest expo in the Latin America.
ABF Franchising Expo 2008, which will be held on June 25-28 in São Paulo, is the true portrait of the Brazilian franchising industry. An exclusive fair for member companies of the Brazilian Franchising Association (ABF), the key characteristic of ABF Franchising Expo 2008 is the creation of business opportunities in various industries.
In the last edition, the expo received more than 30,000 visitors and had more than 200 exhibitors, besides the business volume of 11 million dollar. An International Pavilion it counted on the present of represents of United States, France, Greece, Portugal, Spain, Arab Emirates, Peru, Uruguay, Ecuador, México, Argentina and Chile.
Attitude of banks to franchising
The Brazilian Franchise Association has many partners for the development of financial new products for the sector, as the “Banco do Brasil”, the “BNDES”, the “Caixa”, and the “Banco do Nordeste”.
Associação Brasileira de Franchising (ABF) – Brazilian Franche Association – is a nonprofit organization, founded in 1987 to divulge, defend and promote the technical and institutional development of the business model known as Franchising. ABF brings together all parts involved in the franchising activity – franchisers, franchisees, consultants and service providers – to ensure and spread good franchising practices in Brazil.
ABF provides guidance on how to properly survey a franchise; indicates oriented texts; and provides data on franchising companies in Brazil and abroad. For companies interested in expanding their business through the franchising system, ABF indicates the actions required to format the business, as well as lists franchising consultants to help in the process.
Number of Members: about 630 (80% franchisers, 4% franchisees and 16% consultants, law firms and other contributors to the system)
Activities Masters: ABF provides guidance on how to properly survey a franchise; indicates oriented experts texts; and provides data on franchising companies in Brazil and abroad. For companies interested in expanding their business through the franchising system, ABF indicates the actions required to format the business, as well as lists franchising consultants to help in the process.
In addition to providing all support services, information and consulting, ABF offers and extensive schedule of courses and events destined mainly to people who want to enter in the Franchising System as franchisees, franchisers or service providers.
Another major activity is the relationship with public and private institutions, with a view to build partnerships and open new possibilities of safe and fast development of the franchising system in Brazil, by means of funding and incentives.
Concerning about the enterprises that operate in the country, 89% are genuinely Brazilians. 56 Brazilian brands have already operations in the abroad. The tendency is that this growing keeps for the next years. The foreign brands in Brazil correspond to 11% of the enterprises in the country. Companies from United States, Argentina, Canada, Costa Rica, Uruguay, United Kingdom, Spain, France, Portugal, Italy, Switzerland and Japan make part of this portion.
The Brazilian franchising system is, today, an incontestable and crescent reality. It is about a specific form and a entrepreneur management, inclusively for the expansion of the micro, small and middle enterprises, with high capacity of create investments, exportations, employment and income in front of the opportunities that the system offer.
In front of the benefits that afford, parallels to the socio-economic country situation in the last decades, the market watched a vertiginous and constant grown of the system, that even in periods of economic crises, show a grown above of the national GDP. In consequence of this economic magnitude, the Brazilian Development, Industry and Foreign Trade Ministry has decided to support the franchise segment. Among another initiative that looking to improve more than before the sector, is the international expansion of the brands with the help of the APEX – Brasil (Trade and Investment Promotion Agency), which sustains with ABF a project of the internationalization of the Brazilian brands, taking companies to participate of the most important international expos and events of franchise.
Relationship with other franchise associations
The Brazilian Franchise Association is a member of the World Franchise Council – WFC, the Federación Iberoamericana de Franquicias – FIAF- and the International Franchise Association – IFA. For the years of 2008/09, our Executive Director, Mr. Ricardo Camargo, assumed the occupation for the General Secretary of FIAF.