Franchising: a high performance business model

Variously described as a marketing concept, a distribution model or a HR strategy, franchising by its very nature overcomes many of the hurdles that challenge traditional business structures.

The franchise business model succeeds for three key reasons:

1. Ownership: franchising combines a committed, motivated owner-operator with a proven business.
2. Interdependence: in a franchise system the desired outcomes of both parties are much more closely linked than in the traditional employer/employee relationship and this interdependence creates a unique environment for business success. The franchisor’s success in growing the network is directly dependent on the success of each franchisee within it. The franchisees’ success delivers revenue required for investment in further growth and provides a level of confidence in the system for prospective franchisees. Growth of the network also adds asset value to both the franchisor’s and franchisees’ businesses -  a true win-win scenario.
3. Systems and processes: franchised businesses are driven by tried and tested systems and processes that have consistently delivered the desired outcomes.

Call it what you will, marketing concept, HR strategy or distribution model, the vibrant franchising sector continues to drive significant business growth in Australia and internationally.

John Di Natale

John Di Natale is a Senior Consultant at DC Strategy.

DC Strategy is the region’s leading specialist consulting and legal firm. Our specialist teams in Strategy, Franchising, International and Legal have developed the networks and brands of many of the region’s most successful businesses. Contact John DiNatale at john.dinatale@dcstrategy.com