Australian Franchises

ACCC Urges Prospective Franchisees to do Their Homework

Written on the 21 January 2011 by Australian Competition & Consumer Commission

If you're thinking about a new franchise opportunity in 2011, the Australian Competition and Consumer Commission suggests prospective franchisees make the most of opportunities to learn about the business model.

"In the New Year, many people are thinking of ways to change their lifestyle and income and may see buying a franchise as one way of doing this," Acting ACCC chairman Michael Schaper said today. "As part of the due diligence process, pre-entry education programs offer significant benefits to anyone looking to enter the sector."

Since its launch in July 2010, more than a thousand people have enrolled in a free online franchise education program funded by the ACCC and administered by Griffith University.

This 'buying a franchise' pre-entry program provides prospective franchisees with the tools and resources to make better informed decisions about franchise business opportunities.

A survey by Griffith University has shown that the vast majority of participants have found the program to be useful and would recommend the program to other potential franchisees.

"By understanding more about buying a franchise business, including some of the practical issues they could face as a franchisee, prospective franchisees will be more informed before making a decision."

The program consists of five modules. Prospective franchisees learn about franchise specific issues, including the Franchising Code, franchise fees, royalties, operations manuals, marketing funds and site selection, as well as general business concepts such as cash flow, working capital and business reporting.

Dr Schaper said the program helps provide would-be-franchisees with detailed, realistic information about running their own franchise operation.

"The program can help maximise the potential for future success and minimise the chance of conflict or failure, by better understanding the system you are entering."

For more information about the program, visit

For information about the Franchising Code of Conduct, visit the ACCC's franchising webpage:

Author: Australian Competition & Consumer Commission

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