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Buying a franchise can be a good way to start a small business, but how does it actually work?
As the franchisee, you will generally pay a licensing fee to a franchisor (the existing business). You can then sell the franchisor’s products or services, use their branding, trademarks suppliers and business systems.
You are obliged to follow the operating procedures set by the franchisor and you may not change the systems without the franchisor’s agreement. But, you can take advantage of an existing product or service, supply agreements and processes.
The Australian Competition & Consumer Commission (ACCC) provides regulatory protection for franchisees. The ACCC also has a code of conduct for franchisors.
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