Getting started
New Zealand companies should have experience in developing and operating a successful business model in the domestic market before exporting the system to Australia.
Key steps include:
- thorough research of the market
- developing an appropriate business model and expansion plan
- preparation for legal issues
- intellectual property protection
- carefully choosing partners and franchisees
- testing the market
- ongoing monitoring and review of operations.
Regulations
In contrast to New Zealand, there is specific legislation in Australia that relates to franchising. All franchise businesses are required by law to comply with Franchising Code of Conduct.
The code helps franchisees and franchisors make informed decisions before entering into agreements and to provide a framework for dispute resolution. Code protection includes provisions relating to disclosure documents, cooling off periods, marketing fund audits and dispute resolution.
Depending on the product area, other areas of regulation that may need checking include labelling, taxation and occupational health and safety.
Opportunities
- There is potential for more New Zealand franchised businesses to expand into the Australian market. The relatively familiar business conditions and close proximity support the development of an international franchise model that could be used as the basis for further overseas expansion.
Challenges
- Franchising is not an easy way to expand internationally. Significant funds and time are required to set up the business, or adjust the model to a new market and then to recruit interested and suitable franchise partners. There is also a raft of legal issues and obligations that need to be addressed.
