Franchise Sales: Ray Sells His Subway Store & Common Myths About Franchises in Australia

Ray Sells His Subway Store & Common Myths About Franchises in Australia

Franchises are a big business in Australia. In 2019, there were an estimated 1200 different franchise systems in operation, employing around 460,000 people. There are plenty of opportunities available for those looking to get involved. But you need to make sure you do your own research to make sure the franchise model works for you.

Ray contacted Bonza to sell his Subway store in southeast Queensland and at the time he was concerned that franchises were not selling and if they did then it was for below market value which was not the case. After our free business appraisal was completed on Ray’s store, he was pleasantly surprised and optimistic about the sales process.

For decades, Bonza has been dispelling myths about Franchises to buyers. Here are the five most common concerns about franchises we hear:

Myth #1: All Franchises are Expensive to Start Up

Whilst it’s true that some franchises can be quite expensive to start up, there are plenty of affordable options out there as well. In fact, the cost of starting up a franchise in Australia can range from as little as $5000 to over $1 million. So, if you’re looking to get into the franchise game but don’t have a lot of capital to invest, there are still options available to you. Another option and one we always recommend is to research options for existing franchise locations. If it is a brand that resonates with you, but you want to eliminate all the start-up stress, effort and time it takes to get the business up and running then an existing franchise would be a great option.

Myth #2: You Need to be an Expert in the Field to Succeed in a Franchise

This one is simply not true. Whilst it certainly helps if you have experience in the industry that your chosen franchise operates in, it’s not a prerequisite for success. Many franchisors will provide comprehensive training programs that will teach you everything you need to know about running their business. So, even if you’re starting from scratch, you can still be successful in a franchise.

Myth #3: All Franchises are Less Profitable Than Independent Businesses

Again, this is not always the case. Whilst it is true that some franchises may have higher initial costs than setting up your own independent business, many franchises also offer greater potential for growth and profitability. So, don’t write off a franchise just because it has a higher upfront cost—it could end up being more profitable in the long run. As well as the opportunity for invaluable support on offer whenever you need it.

Myth #4: It’s Easy to Become a Franchisee

Whilst franchising may be easier than starting your own independent business from scratch, it’s certainly not “easy”. To be a successful franchisee, you need to be dedicated, hardworking, and motivated. You also need to be good at following instructions and complying with rules and regulations. So, if you’re thinking of becoming a franchisee, make sure you’re prepared to put in the hard work required to make it succeed.

Ray’s Subway was on the market for just under 12 months – Sometimes finding the right buyer and franchisee can take time but in Ray’s case, it was worth the wait. He was able to achieve a 4 x EBITDA multiple for his store at a time when the market was slowly gaining confidence again after covid.

We couldn’t be happier for Ray and wish him the best of luck for the future.

If you have a franchise and would like to discuss the sales process or are interested in buying into a franchise brand then please get in touch with one of our friendly team today to discuss the best option for you.