Overview

Disenfranchised: Negative consumer sentiment has constrained spending at franchised stores

IBISWorld’s Franchising market research report offers insightful industry analysis and research into the market at the national level. IBISWorld’s in-depth industry market research is presented in a logical and consistent format. The industry report contains key industry statistics, market size, industry trends, and growth and profit forecasts for a 5-year outlook period.

REPORT SNAPSHOT

Market Share of Companies
Industry Statistics & Market Size
Revenue
$178bn
Annual Growth
2012 - 2017
3.4%
Annual Growth
2017 - 2022
Profit
Employment
580,000
Business
1,200

Industry Threats & Opportunities

  • The industry returned to growth, enabling operators to recover earlier revenue losses
  • Operating costs and competition have influenced profitability differences among players
  • Rising incomes will benefit service-based franchises serving time-poor high-income consumers

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    Industry Analysis & Industry Trends

    The Franchising industry has exhibited steady growth over the past five years. Industry performance declined in 2011-12 due to a slowdown across the domestic market and uncertainty regarding the economy's stability. However, a recovery in economic conditions over the remainder of the five years through 2016-17 returned the industry to growth and enabled operators to recover earlier losses. As a result, revenue for the Franchising industry is projected grow by an annualised 3.4% over the five years through 2016-17. Trends in real household disposable income, average weekly hours worked and the target cash rate have also affected the industry's performance. Industry revenue is expected to post steady growth over the current year, rising by 2.6% to reach $178.0 billion...

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    Industry Report - Starting a New Business Chapter

    The industry has low barriers to entry and the trend is steady. New players require a license from the master franchise of a specific business. In general, the initial agreement among franchisor and franchisee is about five years, with franchisees often remaining as part of the franchise system for six and 10 years. Industry competition may also deter new players from entering the industry. Despite the diverse range of products and services covered by the industry, most segments compete on the basis of price, product range and brand strength. The industry’s mature life cycle may offer little growth opportunities for well-established segments that operate with little product differentiation among businesses. Ent..

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    Additional Insights for the Franchising Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Franchising Industry are

  • Having a loyal customer base
  • Having a clear market position
  • Business expertise of operators
  • IBISWorld analysts also discuss how external factors such as Real household disposable income and Consumer sentiment index in the Franchising industry impact industry performance..

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    New Zealand Special Report

    Industry Products

    What is the Franchising Industry?

    Franchising is a method of growing a business in which a franchise owner (franchisee) is granted, for a fee, the right to offer, sell or distribute goods or services under a business system determined by the business founder (franchisor). The franchisor supports the franchised business group by providing leadership, guidance, training and assistance in return for ongoing service fees.

    Industry Products
    Retail trade
    Accommodation and food services
    Administration and support services
    Personal services
    Other franchised products and services
    Industry Activities
    Franchised non-food retailing
    Franchised food retailing
    Franchised administration and support services
    Franchised rental and hire services
    Franchised education and training services
    Franchised finance and insurance services
    Franchised construction and trade services
    Franchised healthcare and social services
    Franchised information media and telecommunication services

    Table of Contents

    About this Industry
    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry at a Glance
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Industry Performance
    Executive Summary
    Key External Drivers
  • Real household disposable income
  • Consumer sentiment index
  • Cash rate
  • Average weekly hours worked

  • Current Performance
  • Trading landscape
  • Profit and competition
  • Operating structure
  • Chart: Revenue Growth

  • Industry Outlook
  • Operating landscape
  • Profitability and growth areas
  • Enterprises and employment
  • Table: Franchising Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Franchising Industry Lifecycle vs The Economy

  • Products & Markets
    Supply Chains
    Key Buying Industries
  • Consumers

  • Key Selling Industries
  • Book and Magazine Wholesaling
  • Clothing Wholesaling
  • General Line Grocery Wholesaling
  • Hardware Wholesaling
  • Toy and Sporting Goods Wholesaling

  • Products & Services
  • Other franchised products and services
  • Retail trade
  • Accommodation and food services
  • Administration and support services
  • Personal services
  • Chart: Franchising Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Households
  • Businesses
  • Chart: Major Market Segmentation for the Franchising Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Competitive Landscape
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Chart: Cost Structure Benchmarking – Sector vs Franchising

  • Basis of Competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Franchising Industry

  • Industry Globalization
    Major Companies
    Metcash Limited
  • Table: Metcash Limited - financial performance

  • Operating Conditions
    Capital Intensity
  • Chart: Level of Capital Intensity for the Franchising Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Key Statistics
    Table: Industry Data for the Franchising Industry
    Includes:
  • Industry Revenue (2008-2022)
  • Industry Gross Product (2008-2022)
  • Establishments (2008-2022)
  • Businesses (2008-2022)
  • Employment (2008-2022)
  • Wages (2008-2022)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Jargon & Glossary
    Franchise
  • Permission given to distribute goods or services under a trademark, service mark or trade name.
  • Franchisee
  • The holder of a franchise or a person who is granted a franchise.
  • Franchisor
  • A company or person that grants the use of a franchise.
  • Why buy this report?

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Franchising:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Franchising market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Franchising, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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