Franchising is a business model that sees an established brand in any industry authorise a small business owner to sell a product or deliver a service on its behalf. The franchisor collaborating with the business owner gives this authority in exchange for a contract fee, and usually with a revenue-sharing agreement which is based on products sold or services delivered. The contract signed between the franchisor and the franchisee is usually time-bound and performance-based and is a complex legal document.

There are multiple conditions for franchise ownership within Australia. One of the primary requirements of attaining franchisee status is owning a commercial space where products or services can be retailed or delivered.

A franchisor sets the overall conditions and a full legal contract must be entered into, contract fees must be paid on time, and miscellaneous other fees may also apply.

Few franchisors require that potential franchisees must have extensive experience in business and the best franchisors are often defined by their willingness to extend comprehensive support to a franchisee. This includes training in operations and management, employee support, product and service knowledge training, marketing support, and more. Many franchisors are also extensively involved in setting up a franchise in a given location. It’s obvious that a commercial product or service is unlikely to generate huge revenues in a saturated market or if there is the availability of the same product or service at multiple franchises close to each other. To ensure maximum profits, there is usually a territorial exclusivity component to any legal arrangement.