Communication the key to healthy franchising relationships

By Patrick Avenell

SYDNEY, NSW: The ACCC has today released the findings of a study it commissioned into franchising in Australia. Conducted by Griffith University, the study found that 31 per cent of franchisees in Australia experienced unsatisfactory communication with the franchisor.

"Thirty one per cent of the franchisees indicated that communication within their franchising relationship was unsatisfactory,” said ACCC deputy chairman Michael Schaper.

“Disturbingly, the study also found that 49 per cent of franchisees relied heavily on their gut feeling when deciding to go into franchising. 

 "Despite an obligation under the Franchising Code for franchisors to provide accurate disclosure documents to potential franchisees, 41 per cent of franchisees surveyed said they faced surprises after buying their franchise.

"The ACCC has and will continue to take action, where a franchisor blatantly disregards a franchisee’s right to accurate disclosure.”

According to the ACCC, 350 franchisees were surveyed for this study. Just over one quarter – or 83 respondents – were from the retail trade industries.

Key findings from the survey include:

– 52.5 per cent of franchisees think the franchisor values their contribution.
– 59 per cent of franchisees believe help is available from the franchisor if needed.
– 23.5 per cent of franchisees think the franchisor doesn’t support them.
– 30.2 per cent of franchisees said they disagreed with the statement: “Whenever I am in trouble, I know my franchisor will help me out”.
– 53.1 per cent of franchisees said their relationship with the franchisor was satisfying.
– 15.2 per cent of franchisees reported that there was “a lot of conflict” between themselves and the franchisor.
– 17.9 per cent of franchisees said they frequently disagree with the franchisor
– 11.5 per cent of franchisees said these disagreements were “quite intense”.

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