Profitability debate: to franchise or remain independent

Independent operators often wrestle with the question of whether or not to join a franchise network, with debate about which delivers higher profitability being chief among their concerns.

According to Mister Minit Australia’s CEO, the proof is in the pudding, with many of the franchisees in his business, who were long-time independent operators, reporting considerably higher profits under the Mister Minit brand than they ever managed independently.

“A franchisee we have up on the Central Coast … had his own business for 23 years. He had five shops, 23 years. We bought that business off him I think about four years ago now,” explains Mark.

After then going through Mister Minit’s technical assessment process, which all prospective franchisees are required to undertake, the man joined Mister Minit as a franchisee, and Mark says he hasn’t looked back since.

“He said to me, ‘Best thing Ive ever done.’ He said, ‘I make better returns than I ever did’.”

Mark says this is not an isolated example, but that “A number of our franchisees had previously worked for themselves”.

“We have another successful franchise here. I wont mention his name, but he had his own business for 15 years and sadly actually went into administration. It was a pretty tough gig coming out. He worked for us many years and hes now a very successful franchisee. He says the same thing.”

The reason for this, says Mark, is predominantly because operating under a strong franchise brand enables a business owner to focus their time more closely on serving their customers – and of course the more customers you can serve, the higher the incoming revenues.

“Most small business people actually dont want to talk to the landlord too much. They dont actually want to have to go through the pain of doing lease renewals and having to do fit-out things and so it goes on and on,” says Mark.

“We try to make it as simple as we can and do ... the crappy stuff that youve got to do if youre in business, but it doesnt have a whole lot of value to it.”

Hear more insights from Mark on franchising, customer attraction, adapting to digital disruption and more on the My Business Podcast below:

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