Chain reaction: Economic uncertainty and volatile consumer sentiment limit growth

Operators in the Franchising industry have faced challenging trading conditions over the past five years. Uncertainty in domestic markets has led to volatile consumer sentiment and cautious consumer spending on franchised goods and services over the period. As a result, revenue for the Franchising industry is expected to rise at an annualised 0.6% over the five years through 2019-20. Trends in real household disposable income, average weekly hours worked and the cash rate have also affected the industry's performance over the past five years. Industry revenue is expected to remain unchanged in the current year, at $184.1 billion.Modest growth in disposable incomes over the past five years has boosted consumers' spending more.

Industry Statistics & Market Size
Annual Growth 15-20
Forecast Growth 20-25
Market Share of Companies

Industry Threats & Opportunities

  • Economic uncertainty and volatile consumer sentiment have hindered industry revenue growth
  • Operating costs and competition have influenced profitability differences among players
  • Rising incomes will benefit service-based franchises serving time-poor consumers
  • Industry Report - Industry Key Buyers Chapter

    The industry has low concentration as the top four players account for considerably less than 40% of the market. The industry supports numerous large and well-established organisations. However, its size and a diverse and extensive range of products and services have limited the market share held by individual players. Barriers to entry are low and do not hinder new players from operating in the industry. Furthermore, capital requirements are generally low, but vary depending on the type of franchise segment operators are planning to enter.Segments such as retail trade and food services have been subject to increasing concentration over the past five years. Gro...purchase to read more.

    Additional Insights for the Franchising Industry

    IBISWorld has determined the most important Key Success Factors for the Franchising are:

  • Having a loyal customer base
  • Having a clear market position
  • Business expertise of operators
  • IBISWorld analysts also discuss how external factors such as Real household disposable income and Consumer sentiment index in the Franchising industry impact industry performance..

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    What's in this report

    What is the Franchising Industry?

    Franchising is a method of growing a business in which a franchise owner (franchisee) is granted, for a fee, the right to offer, sell or distribute goods or services under a business system determined by the business founder (franchisor). The franchisor supports the franchised business group by providing leadership, guidance, training and assistance in return for ongoing service fees.

    Industry Products
  • Retail trade
  • Accommodation and food services
  • Administration and support services
  • Personal services
  • Other franchised products and services
  • Industry Activities
  • Franchised non-food retailing
  • Franchised food retailing
  • Franchised administration and support services
  • Franchised rental and hire services
  • Franchised education and training services
  • Franchised finance and insurance services
  • Franchised construction and trade services
  • Franchised healthcare and social services
  • Franchised information media and telecommunication services
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Real household disposable income
  • Consumer sentiment index
  • Cash rate
  • Average weekly hours worked

  • Current Performance
  • Trading landscape
  • Profit and competition
  • Operating structure
  • Chart: Revenue Growth

  • Industry Outlook
  • Operating landscape
  • Profitability and growth areas
  • Enterprises and employment
  • Table: Franchising Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Franchising Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Consumers

  • Key Selling Industries
  • Book and Magazine Wholesaling
  • Clothing Wholesaling
  • General Line Grocery Wholesaling
  • Hardware Wholesaling
  • Toy and Sporting Goods Wholesaling

  • Products & Services
  • Other franchised products and services
  • Retail trade
  • Accommodation and food services
  • Administration and support services
  • Personal services
  • Chart: Franchising Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Households
  • Businesses
  • Chart: Major Market Segmentation for the Franchising Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Chart: Cost Structure Benchmarking – Sector vs Franchising

  • Basis of Competition
  • Internal competition
  • External competition

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Franchising Industry

  • Industry Globalization
    Metcash Limited,
  • Table: Metcash Limited - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Franchising Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Franchising Industry
  • Industry Revenue (2011-2025)
  • Industry Gross Product (2011-2025)
  • Establishments (2011-2025)
  • Businesses (2011-2025)
  • Employment (2011-2025)
  • Wages (2011-2025)
  • Wages (2011-2025)
  • Purchases (2011-2025)
  • Profit (2011-2025)
  • Depreciation (2011-2025)
  • Rent (2011-2025)
  • Utilities (2011-2025)
  • Other (2011-2025)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
  • Permission given to distribute goods or services under a trademark, service mark or trade name.
  • Franchisee
  • The holder of a franchise or a person who is granted a franchise.
  • Franchisor
  • A company or person that grants the use of a franchise.
  • Third Line Forcing
  • An arrangement whereby franchisees are forced to use specified suppliers.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Franchising market research report can be used to help you: understand market size and growth potential; major companies; draft business plans and pitch books; and conduct benchmarking and SWOT analysis. Our industry analysis highlights macro industry trends in the overall sector and micro trends faced by companies that do business in the industry. The industry report also provides key industry statistics and 5-year forecasts to anticipate future industry prospects so you can decide with confidence.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Franchising:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Franchising market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Franchising, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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