After sailing through the downturn relatively unscathed, franchisors are predicting 13% revenue growth and 18% profit growth in the next 12 months, according to a survey by PricewaterhouseCoopers.
The survey which concentrated on 67 of the 300 franchise systems in Australia which have 20 franchisees or more, found the sector has out-performed the wider economy over the last 12 months.
Despite the downturn, franchisor and average franchisee revenue increased by 4%, while franchisor and average franchisee profit jumped by 1%. However, franchisor profit in the services sector (that is, non-retail franchise systems) fell by 8%.
Greg Hodson, PwC’s national lead partner in the franchising practice, says the results are impressive in a year when many expected the franchise sector could struggle.
“I think they are fantastic results and I think they really do prove the resilience of the franchise business model in tough times.”
Part of the reason for the solid performance was the quick action taken by franchisors to support franchisees. Three quarter of franchisors increased their monitoring of franchisee financial distress, and just under two thirds attempted to renegotiate deals with landlords and key suppliers. Read full article.