June 04, 2020
Which franchise brands are opening themselves up to be externally rated.?
It can be hard to tell a good franchise from the bad.
All franchises in Australia are required to comply with the Franchising Code of Conduct.
The role of the code, as described by the ACCC, "...is a mandatory industry code across Australia that regulates the conduct of franchising participants towards each other."
Having the Code is a good thing, but it does not remove risk.
Franchise buyer has long been on record stating, that having the code, has seemingly provided too many franchise buyers with a false sense of security regarding ANY and EVERY franchise brand they are looking at as an investment.
And to be very clear - not all franchise brands are created equal.
One layer of independent assessment
We are big supporters of an initiative to provide an independent, transparent assessment of franchise brands through an Australian franchise ratings system.
The system is called the Franchise Ratings Scale, and is being implemented by FRANdata and it's CEO, Darryn McAuliffe.
When widely adopted, this system can be another part of your due diligence tools, actions and resources that include amongst others;
- The Franchise Code,
- Independent legal and financial advice,
- The independent Franchise Ratings Scale,
- Your own assessment and judgement of the business.
Proper due diligence must be a thorough, multi-layered approach.
5 Star Rated Franchise Brands
- Quest Serviced Apartments
- Golden Casket
- Tatts
- NSW Lotteries
- SA Lotteries
- PACK & SEND
- Poolwerx
4 Star Rated Franchise Brands
- First Class Accounts
- Gutter-Vac
- FCF Fire & Electrical
- Ferguson Plarre
- Muffin Break
- Jamaica Blue
- San Churro
- Xpresso Mobile Cafe
According to Darryn, the releasing of more rated brands are to follow soon.
"The COVID Crisis certainly diverted many brands' full focus to being entirely on their franchise partners in the field, and rightly so. Thus, the ratings process took a back seat for a couple of months."
"But I'm pleased to report that currently we have around the same number of brands (15) also in the process of being rated in the market."
