Customer aggression revealed as concern in first national franchisee survey

By Sarah Stowe | 22 Dec 2021 View comments

Escalating aggression by customers against staff has been highlighted as a significant concern in the first national survey of Australian franchisees.

In the survey of 1007 franchisees almost half  (49 per cent) indicated their staff were being subjected to negative or aggressive behavior when asking customers to comply with government health directives and more than 60 per cent said they were a little, or very concerned about the safety of staff.

This particularly affected franchisees of retail stores, retail food, convenience stores and fast food outlets.

These concerns not withstanding, franchisees were positive about the future, and the level of support provided by franchisors.

Almost half (49 per cent) of respondents expect a better or much better trading performance over the next
year with 14 per cent expecting a decline.

The most optimistic industries included convenience stores, retail food outlets, retail stores, pet services and home services franchises.

Franchisees revealed their biggest challenges are the risk of lockdowns, staff recruitment, and the financial performance of their businesses.

On the financial front, 66 per cent did not foresee a borrowing need over the next year; in contrast 20 per cent expect to borrow at least $50,000 in the next 12 months.

The sector can expect to see increased staffing levels, with more than 70 per cent of respondents seeking to boost employment numbers over the upcoming 12 months.

The survey was conducted by Frandata for the Franchise Council of Australia.

Darryn McAuliffe,  CEO, Frandata Australia, told Inside Franchise Business Executive, “Franchisors would be delighted to see some of the sector wide positives coming through; recognition of support from franchisors, positive forward trading expectations, intentions to renew at the end of their term and the contributions being made to local communities.”

A great majority of respondents (80 per cent) indicated they were receiving high levels of marketing support from their franchisor; 67 per cent said they were receiving good levels of technology and systems support.

About 30-40 per cent of respondents reported receiving high levels of support when dealing with landlords, vendor relationships, payroll and HR issues as well as accessing government support programs.

Nearly 60 per cent saw the advantages of being part of a franchise system over the challenges of operating an independent business. However 21 per cent of respondents disagreed that a franchise provided an advantage.

McAuliffe said “With franchisees becoming more discerning and more thorough in their research, franchisors will no doubt be trying to get a feel for their own brand’s relative positioning to optimise the strength of their own franchise system and maximise their recruitment prospects”.

The survey showed a fairly even split in the length of time respondents had been operating: 33 per cent less than five years, 30 per cent had been operating between five and 10 years, and 37 per cent had notched up 10 years in business.

Key franchisee insights

  • 69 per cent of franchisees are male, 29 per cent female
  • 57 per cent were born in Australia, more than 40 per cent were born overseas
  • Franchisees born in India 15 per cent, China 7 per cent, UK 3 per cent.
  • 76 per cent of respondents are aged 40 years or older
  • 73 per cent of franchise units are single operator-owned
  • 20 per cent operate two or three units
  • 7 per cent are multi-unit owners with at least four units
  • 18 per cent hold a tertiary degree, 27 per cent have are post-graduates