Franchising in a post-COVID world: challenges & predictions

30 Nov 22


In her role on the Franchise Council of Australia (FCA), V.I.P. director and co-founder Rose Vis has a rare and invaluable view of Australia’s franchise industry. Here, she shares some key insights on current challenges and future possibilities:

Standing strong

After more than two years of pandemic restrictions – as well as doom-and-gloom predictions about the state of small to medium-sized business in Australia – franchising has held strong.

In fact, it’s still one of the most popular ways to do business. It’s a great way for smaller operators to become established with the benefits of a larger business.

Just look at these results from FRANdata’s recent industry survey of 100 franchise brands representing 20,000 small businesses:

  • Maintenance services such as V.I.P. are among the top performing franchise businesses.
  • Hospitality businesses and those based in CBDs are facing pressure.
  • 67% of franchises surveyed were optimistic or very optimistic about business conditions.
  • Monthly revenues were up 90% in Q3 (Quarter 3), compared to the same period in 2021.
  • Over 60% of franchisees expect Q4 to be even better than Q3.

Top challenges

The survey also identified the top challenges facing franchisees as:

  • the availability of suitable employees for both franchisees and support offices
  • supply chain issues delaying plant, equipment, vehicles, and other key items
  • rising interest rates and inflation uncertainty
  • recruiting franchisees
  • franchisee and support staff wellbeing
  • employment relations


Employment outlook

Australia’s unemployment has fallen to its lowest point since 1974, with the Australian Bureau of Statistics estimating it to be at 3.4% after holding steady at 3.5% for the past few months.

This is partly due to the creation of around 32,000 jobs in October.


What’s ahead

Victoria and New South Wales are likely to experience the most rapid growth in the coming months.

Given the rising costs of food and produce and ongoing weather events along the east coast, it’s not surprising that food retailing has risen by 0.4% as consumers need to fork out more cash to afford necessities.

Interestingly, food retail was the only sector that saw a boost in consumer spending last month, with department stores (down 2.4%), clothing (down 0.6%) and household goods (down 0.5%) suffering the largest falls in spending.

Presumably, consumers are cutting back in these areas in preparation for spending big during the Christmas and holiday season.


Franchising in a post-COVID world: challenges & predictions