A franchise is ‘a business system’ under the Franchising Code of Conduct 1999. In order to understand franchising, it is important to recognise that McDonald’s does not ‘franchise’ hamburgers, nor does Jim’s Mowing franchise mowing services.
What they both franchise is a business system – and it is this business system that delivers the products or services. The franchise is the entire method of doing business.
Franchising is a successful model that provides support for new business entrants while letting them run their own businesses. Most small businesses in Australia fail because of lack of money, expertise, and training. Buying a franchise is a good way to start a business because you are buying a tried and tested business.