How well do you need to speak English to run a business in Australia?: Franchise report

An expert has highlighted some of the challenges of hiring immigrant franchisees, after Retail Food Group said more than 50% of its successful franchisee applicants over the last six months spoke English as a second language.

RFG owns an array of food brands including Donut King, Brumby’s Bakery, Michel’s Patisserie, bb’s café, Esquires Coffee House, The Coffee Guy, Pizza Capers Gourmet Kitchen and Crust Gourmet Pizza Bar.

The experience of RFG is in line with recent findings from the Franchise Relationships Institute, which said in a report most franchise systems are bringing increasing numbers of franchisees from non-English speaking backgrounds into their networks.

“159 franchisees or 11% [of the franchisees surveyed] indicated they had English as a second language,” the institute said in its Franchise Excellence Research Report.

“We suspect this is lower than the real proportion of ESL franchisees in the wider franchising sector.

“Our experience working with many Australian systems suggests the average percentage would be in excess of 20%.”

According to RFG national sales and leasing coordinator Faith Manning, the growing trend is not surprising.

“We believe the rising number of immigrants expressing interest in becoming RFG franchisees is mainly due to our proven business model, which, along with our excellent training programs and committed support system, is a great option for first-time business owners who are new to the Australian market,” Manning said in a statement.

This approach is in stark contrast to that of the Franchised Food Company, which owns Mr Whippy, Pretzel World, Cold Rock Ice Creamery and Nutshack.

Last month, FFCo founder Stan Gordon told StartupSmart he is wary of recruiting franchisees whose first language is not English.

“We’re in a retail environment. There are a lot of franchisees whose command of English is less than acceptable in Australia,” Gordon said.

“In a retail environment, you must be able to converse in English. You must understand customer service and engaging the customer.”

Jason Gehrke, director of the Franchise Advisory Centre, says franchisors face additional challenges when it comes to recruiting franchisees from non-English speaking backgrounds.

“There is the issue of ensuring there is a correct understanding of the franchise relationship and that’s not always perfectly established, even for native English speakers,” Gehrke says.

“The next thing is to customise a training and induction program that allows not just for the language challenges that might exist… but also the cultural and social differences that may exist.

“Then you have the franchisee’s interaction with customers, and the greater the level of sophistication in the customer transaction, the more important language becomes.”

Gehrke compares the customer transaction in a petrol store, for example, to that in a clothing shop, which requires a more language-intensive interaction.

“In those more language-intensive interactions, people who are not fully [fluent] in English may struggle,” he says.

“Having said that, in my experience, I have seen people who are not the best English speakers who have overcome their language limitations by demonstrating sheer enthusiasm.”

This article first appeared on StartupSmart.