Franchisors fail ACCC compliance checks

Is franchising right for you? If you’re planning to start a franchise business, a food franchise could be the most ideal for you. Now, this type of franchise continues to rank among the top most popular franchise opportunities on the market, making it great business ventures to cash in on their popularity and revenue-generating possibilities.

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Although running a food franchise may seem like a quick and easy scheme to get wealthy, the truth is it takes a great deal of hard work, time, and money to maintain and thrive. If you’re wondering how to purchase a franchise, or if it’s the right fit for you, take time to break down the pros and cons of ownership, as well as the compliances with the Australian Government particularly with the Australian Competition and Consumer Commission (ACCC) before becoming a franchisee.

What do you know about a food franchise? First, you need to know what it is – it is a contractual agreement, and most importantly, a relationship, between a restaurant’s corporate owner (which is the franchisor) and the restaurant’s current operator (the franchisee).

Based on the franchisor-franchisee relationship, the brand’s owner licenses out a restaurant to be owned and operated by the franchisee that pays for use. This includes the intellectual property owned by the brand, the trademark, and the marketing plan.

On this agreement, the franchisee can open a food business with an already existing business model, operating procedures, and support and management training, while the corporate proprietors succeed by instituting fees to license and expand the brand.

Perhaps, the main reason why many entrepreneurs opt to buying a franchise rather than building a business from scratch is instant brand recognition. Franchisees can instantly gain the trust of consumers that generally takes many years to build.

However, as we’ve mentioned, buying a food franchise requires certain steps especially with the government authorities. And take note: both franchisee and franchisor must abide by such requirements.