Survey says franchise sector bullish
Sixty percent of respondent CEOs in the annual Franchisor CEO Survey indicated multi-unit franchising was their key growth strategy.
“Results show there are three key priorities for growth, with CEO’s focusing further on their brand and product development, expanding the number of domestic markets and expanding the depth in those markets,” said Rod Young, Executive Director of DC Strategy.
More than 70 percent of respondents listed organic growth strategies as one of their highest priorities in the coming months. As for overseas expansion, approximately 22 percent of the surveyed groups intend to enter international markets in the next three years, predominantly through master franchise models.
Young explained, “The results clearly validated the strength of a well developed franchise system. The franchise sector has succeeded in creating stronger performing and more valuable businesses. Well developed, mature and well managed franchise systems fared much better growing very quickly whilst the less mature systems were still growing at a reasonable pace.”
Forty percent of the respondents believe acquisition is a core growth strategy. “The top franchise groups are attracting more franchisees and this is likely to lead to further consolidation in the sector which will see, over time, the bigger systems engulf some of the smaller ones,” Young said.
The survey by franchise consulting firm DC Strategy sought the views from Australia’s top 150 retail, food and service franchise groups, based on number of stores and total profit.
