Australia’s $172 billion franchising industry thriving in the regions due to internal migration

A recently released report has shed light on the changing demographics of Australia’s $172 billion franchising industry, the vital role of technology, and the effect of internal migration growth on Australia’s rapidly evolving franchising landscape.

The report “Unlocking Franchise Growth in Regional Australia” was released by Australian startup and online platform for buying and selling businesses, Eden Exchange, in partnership with the Franchise Council of Australia (FCA).

According to the report, the franchising industry has undergone a significant transformation in adapting to the technological advancements of the modern era and a notable shift in the industry’s mindset has been showcased in the report, moving away from a singular focus on franchise sales towards a growth mindset that places emphasis on innovation, integration of advanced systems and a deep understanding of the Australian market.

The report also highlights that over the past 15 years, there has been a notable migration of people from capital cities to regional areas in Australia, according to the Regional Australia Institute. This trend is largely fuelled by the rise of remote working arrangements and regional Australia is also seen as desirable to set up a franchise business due to reduced cost of living, lower operating costs, and potential for higher profit margins.

A positive trend identified in the report is the achievement of gender parity within the franchising industry. Traditionally dominated by men, the market now sees a surge of women with increased purchasing power entering the franchising landscape. This shift in demographics offers exciting opportunities for franchisors to tap into new markets and cater to a broader customer base.

Eden Exchange founder and CEO Raghu Rajakumar said franchise owners open up opportunities and contribute to economic growth when they venture into regional communities. 

Eden Exchange’s CEO Raghu Rajakumar. Source: Supplied

“By venturing into regional communities, franchise owners not only open up opportunities for significant profitability but also contribute to the economic growth of small cities and towns. It’s a win-win situation where their franchise can make a positive impact, build relationships and give back to these communities provided they approach the expansion with a mindset of learning and understanding, adapting their offerings to meet the specific needs of the local residents,” he said.

“At Eden Exchange, we are committed to assisting franchisors and business owners in unlocking this untapped potential. With our sophisticated, AI-driven platform and experienced team, we provide expert guidance and support throughout the journey, helping to navigate the challenges and seize the opportunities together.”

An FCA spokesperson said there is a franchise operating in almost every type of business category across Australia.

“Small businesses represent approximately 98% of businesses in Australia. They are indisputably the engine of our economy, and franchising is the predominant business model in the sector,” said the spokesperson.

“In Australia today, there is a franchise operating in almost every type of business category.

“In a more difficult economic environment, franchising is an effective means of facilitating small business creation and expansion in regional areas. As a new franchise business owner, a franchisee is not starting alone. Their franchisor can offer support for recruitment, marketing and supply chain management. Better still, the costs of these services are manageable as they are shared across the network.”