Franchised businesses are rejuvenating regional Australia. With more franchises per capita in Australia than anywhere else in the world, franchising is becoming increasingly important to Australia's rural economy. But just what are the challenges of setting up a franchise and how do you go about it? Sally Edgar finds out.

From food and beverages to lawn mowing, mortgage broking, health care and fitness, nationally recognised 'branded’ franchised businesses are helping to breathe new life into regional Australia.

Across Australia franchising has grown over the past 20 to 30 years into an $80 billion a year industry, with 850 networks operating in almost every type of business category with varying levels of complexity and cost.

In fact there are more franchises per capita in Australia than anywhere else in the world.

"Some highly successful franchises actually originated in the bush to satisfy regional consumer demand.”

The industry contributes 5 percent of the national GDP and employs 600,000 people in about 60,000 franchised outlets.

While there are no regional statistics available, walk down a main street or shopping mall in a major regional centre and guaranteed you’ll see the same major brands that are in other regional centres and the city.

Some highly successful franchises actually originated in the bush to satisfy regional consumer demand.

For example, Fernwood Women's Health Clubs was founded in Bendigo, Victoria, in 1989 by the 2005 Telstra Business Woman of the Year, Diana Williams ‑ today it has more than 80,000 members in Australia and overseas, 2,200 employees and an annual turnover in excess of $75 million.

Eagle Boys Pizza started in Albury, NSW, in the late 1980s and has grown to 186 franchised outlets, including a new and popular drive-­through model, located mainly in regional Australia, as well as some seaboard cities.

"We were welcomed with open arms", said founder Tom Potter.

“People were screaming out for a home delivered food service so they were delighted with that opportunity and it was a recession at the time so plenty of people wanted work, which was great.”

Drew Camm established De Pot Man, a garden pot and supplies business in Toowoomba, Queensland, in the 1990s. There are now both company‑owned and franchised pot centres in Brisbane with plans to open franchise outlets in many large regional Queensland and New South Wales towns.

“I chose to franchise because I find that a motivated owner/operator who is part of the local community really helps to establish and grow the franchise in locations I just cannot manage,” Mr Camm said.

Factors driving growth of franchised outlets in regional areas include demand for city products and services from regional consumers, some of whom may have moved from the city looking for a better lifestyle and have brought with them their city tastes.

Leading franchise consultancy DC Strategy, formerly Deacons Consulting, said many franchised networks, having exhausted metropolitan areas, were now penetrating regional centres to expand market share, which was helping to reinvigorate socio-economic and employment opportunities for regional people.

Most franchises established outlets in a major regional centre with 20,000 or more people, but there were systems that had models to suit smaller country towns.

While evidence suggests unbranded businesses still dominate regional markets, as franchised networks continue to grow there is no doubt that they will pressure independent businesses in regional areas just as they have done in the cities.

"The national brands place significant pressure on independents, who are finding it harder to remain competitive and sustainable due to high fixed costs and increased pressure on supply chain costs and efficiencies," said Adrian McFedries, DC Strategy's Managing Director.

Elliots Accounting partner Tim Davis, a franchise specialist in Toowoomba, said that while franchises were the flavour of the month', they hadn't taken over from unbranded businesses yet.

"Franchises do not have a monopoly on business but they offer a complete package for people looking for something different," Mr Davis said. "An independent business could still be successful if they had the time and money to establish good systems and d good brand."

In Dubbo, NSW, with a population of 40,000, City Council Development Corporation general manager Jeff Caldbeck said although there were plenty of franchises in town, they weren't the majority of the centres 2,500 businesses.

“Franchises are good for regional centres but it's not all rosy because there'll be times when people already in business are going to probably lose market share to the point where they close up," Mr Caldbeck said.