New breed of franchisees being overlooked

Franchisors need to look beyond the traditional ‘mum and dad’ franchisees and recognise the changing age and ethnicity of potential business owners, a franchise research firm has claimed.

A report by 10 Thousand Feet showed that there is an increasing number of Chinese national looking to buy Australian small businesses. A third of all overseas enquiries for franchise networks came from China, followed by India and then South Africa.

Chinese people are being attracted by the success of the franchise model in Australia, as well as the country’s lifestyle, according to 10 Thousand Feet.

Ian Krawitz, head of intelligence at 10 Thousand Feet, says that many potential franchisees are being overlooked by franchisors.

“I don’t think they are doing enough,” he says.  “Franchisors were starting to get a little innovative prior to the GFC in terms of looking at those emerging groups, but then the GFC hit and everyone sat back to wait for the redundancies.”

Franchisors also need to attract and retain Generation Y franchisees, says Krawitz. He suggests developing them into multi-site owners and giving them specific responsibilities, such as social media, within the franchise chain.

“(Franchisors) need to start thinking about how they will package up franchises for these guys,” he says. “There are a lot of people in Gen Y who could teach franchisees many things about that topic (social media).”

“The thing with Gen Y is that when they are not happy, they will change what they are doing.”

Franchisees from non-English speaking countries are also missing out on cultural inductions, says the report. Just 15% of franchisors offer help in settling into the Australian way of life, the study found.

Krawitz says: “Unsurprisingly many franchisors complain that franchisees from non-English speaking backgrounds struggle to fit into the Australian business culture, particularly when it comes to customer service.”

“Some franchisors are seeing the light and are not only putting in place cultural induction programs but are employing multi-lingual support managers to help transition franchisees from backgrounds particularly in South East Asia, which have a different service culture.”