Are you looking to buy a service franchise? If so you're in good company with statistics from a free online pre-entry franchise education program showing service franchises are the firm favourites, with food retail a close second. Interestingly 13 percent of potential franchisees were undecided about which type of franchise to invest in.

The statistics have been released by Griffith University’s Asia-Pacific Centre for Franchising Excellence which has just registered its 2000th participant in a pre-entry franchise education program launched in July 2010, developed by the Centre and funded by the Australian Competition and Consumer Commission.

Seven months ago the Centre started asking what type of franchise participants were interested in, if they were looking to buy a franchise. Nearly a third of participants indicated they were interested in a service franchise, followed by 27 percent keen to invest in a retail (food) franchise.

Easy access

Centre director Professor Lorelle Frazer said the preferences shown in the research weren't a surprise. “Service franchises are most popular at 31 percent and are less expensive to enter than retail so they often attract first-time franchisees.”

The average start-up cost of a new retail franchise is $275,000 compared with only $89,000 in non-retail franchises (including service franchises),  according to research findings in the report Franchising Australia 2010.  

“Retail (food) and the service sector are also travelling a little better in the downturn with a slump in non-food retail, which may be why people are avoiding the retail non-food sector,” Professor Frazer said.

Professor Frazer said the finding that 13 percent of participants had not yet chosen a franchise model was an interesting statistic.

“It’s positive to see a reasonable number of people ‘unsure’ of the type of franchise they’re looking to buy while undertaking the pre-entry franchise education program,” she said. “It demonstrates people are beginning to get a better grasp on franchising before deciding which franchise to buy – and are more likely to make a business, rather than emotional, decision.

“The more due diligence prospective franchisees conduct and the better informed they are before they buy means they’re more likely to invest in a franchise that suits their business and lifestyle goals.”

Other results

• Retail (non food) attracted just a fifth of participants
• Mobile franchises were bottom of the list, representing just four percent of potential franchisees
• Five percent of respondents cited 'Other’ franchise models

Pre-entry franchise education

The pre-entry franchise education program was developed after Centre research identified a major cause of franchise conflict was unrealistic expectations on the part of the franchisee when entering franchising.

For further information on the pre-entry franchise education program visit: http://www.franchise.edu.au/pre-entry-franchise-education.html