Mortgage Choice, Best in the Mortgage & Finance Industry*, discovered that female potential franchisees see the ability to control their own time and movements as the most important aspect of running their own business. Stimulation, challenge and personal achievement are almost as important.
The nation’s largest publicly listed franchisor commissioned its second annual Potential Franchisee Survey, an independent online survey, to uncover behaviour drivers for over 500 Australians between 25 and 55 years of age, earning $60K or more per annum, who are looking to purchase a franchise in the next three years. 45% of the respondents were female.
Mortgage Choice National Manager Corporate Affairs, Warren O’Rourke said new female franchisees are more likely to enter the industry for the potential of a flexible working environment rather than the money they can earn.
“Many studies show that females are more likely to carry out the majority of home duties within a family household, so it makes sense that setting up, running and growing their own business is an attractive option. Although certainly not an easy task, especially on top of home duties, it allows them to juggle a number of important commitments around each other thanks to the more malleable nature working within your own business provides,” he said.
“Also, the concept of working to live rather than living to work continues to build in importance for Australian women. They are still working hard but place less importance on working long hours and striving for the best pay possible because they know that can mean sacrificing important aspects of their life as well as feelings of personal accomplishment”.
The top reasons female respondents put forward for wanting to run their own business were the same as with last year’s survey:
- 54.6% - Flexibility i.e. ability to control own time/movements/etc
- 53.3% - Looking for stimulation, challenge and personal achievement
- 48.9% - Improved lifestyle
- 48% - Income potential
It is interesting to note that females were less likely to give ‘break away from the corporate bureacracy’ as a reason to run their own show, at 16.2% compared to males’ 23.9%.
Female and male responses combined saw the most appealing factors of being part of a franchise system as:
- Established franchisor brand recognition
- Established business model for franchisees to follow
- Level of support provided by the franchisor
- Higher likelihood of success in compairson to operating a small business
- Supplier relationships already established
- Level of advertising that can be achieved
- Level of media coverage that can be achieved
- Working within a collaborative franchise network
The decider when choosing one franchise over another was money (cost to purchase, initial cash flow, income level to be achieved), for 47.1%. Second was brand recognition (brand repuation, quality and longevity of goods/services offered, consumer proposition, ethics, etc), third lifestyle (business portability, flexibility of office/working hours, etc), fourth ease of business management (suitability of skills, etc) and last was internal franchisor aspects (transparency of franchisor, local area marketing budgets, etc).
Money is the biggest barrier preventing females from entering a franchise system, at 62%. Power of the franchisor vs. power of the franchisee was second (43.2%), being bound by the directions and business protocol of the franchisor was third (41.5%), giving some profit to the franchisor was fourth (37.6%) and meeting minimum performance standards was fifth (28.4%).
Retail – food, restaurants and cafés (48%) remained the most popular industry being considered for both sexes, then the results veered in different directions.
Second for females was business and professional services (27.1%), followed by domestic services (23.1%), health, beauty and personal services (22.3%), tourism, leisure and accommodation (20.1%), education and training services (19.2%) and retail – other (18.8%). These results were fairly on par with last year, though domestic services overtook health and beauty in popularity and retail - fashion and accessories slipped from fifth to eighth place.
A brave 21.8% of females are going it alone with their franchise purchase, which was on par with the male responses. However, a large gap also appeared within this question - 52.8% of females will enter into it with their partner/spouse, compared to a significantly higher 61.2% of males.
Another large gap arose when respondents were asked what region they were looking to purchase within - females were more likely to make a regional move. 21.8% are looking to regional, compared to 15.2% of males, and 55.5% are considering a metropolitan region, compared to 67.8% of males.
“The reluctance for males to purchase a franchise in a rural or regional area suggests there may be a number of missed opportunities that females could take advantage of,” Mr O’Rourke said.
“However, the overall results show the majority of both sexes won’t move from their own state and region, which reinforces the reluctance of potential franchisees to sacrifice lifestyle in order to run a successful business that provides them with flexibility and stimulation. They are looking for opportunities within the area they are comfortable in and familiar with”.
Over one third of females will have no experience in the industry they enter (34.9%). 18.3% will have less than one year experience, 14.85% one to two years experience, 17.5% two to five years, 8.3% five to ten years and 6.1% will have 10+ years experience. Males were more confident than females to make their entry with no experience (41.7%).
The planned cost to purchase and set up varied widely between female respondents. 20.1% will spend less than $50K (compared to 14.9% of males), 24.9% will spend $50-100K, 18.8% will spend $100-150K, 17% will spend $150-200K, 9.2% will spend $200-300K, 5.2% will spend $300-400K and a surprising 4.8% will spend $400K or more.
It was a fairly even split between purchasing an existing franchise (46.7%) and a new one (53.2%), with females more likely than males to choose the latter (48.9% of males).
Over one third of females (37.1%) will bring less than $50K working capital to the table, 29.7% will bring $50-100K, 16.2% will bring $100-150K and so on. 5.7% will contribute $300K or more.
It was encouraging to see these female franchisees-to-be were conservative in their expected earnings in the first year. The most popular answer at 31% was ‘break even’, next was $20-50K (19.2%), followed by $50-100K (17%), $1-20K (16.2%), $100-200K (7.4%), ‘make a loss’ (5.7%), $200-500K (2.2%) and a confident 1.3% expected to earn over $500K in their first year.
* 2008 Mortgage & Finance Association of Australia Awards
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