Steve Wright, executive director of the Franchise Council of Australia said that while he noted the internet could pose a concern for franchisees, it was more likely to open up new avenues for selling.
YOU spend thousands of dollars on a franchise, only to discover your franchisor is about to sell the same products or services online. How would you feel? Worried no doubt.
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It's an issue the sector is grappling with, as franchisors seek to move with the times without stepping on their franchisees' interests.
''Franchising's a classic one because over time the idea of a geographical territory could become superfluous,'' said the deputy chairman of the Australian Competition and Consumer Commission, Dr Michael Schaper. ''What happens when you've got a commodity you need to physically distribute but you don't need a face-to-face presence … what happens to the franchisees?
''Even if you sign up today and everything's OK, in five years' time the retail sector may be so different that it may not be worth being in that franchise system.''
Steve Wright, executive director of the Franchise Council of Australia, said it was becoming a significant issue for parts of the sector, particularly those in retail.
''You can't get your lawn mowed in the mail, but franchising is in most industries where there's consumer services,'' Mr Wright said.
''It's a very real issue and it's an issue that franchisors deal with and they make sure they get the buy-in from franchisees.''
While he noted the internet could pose a concern for franchisees, he said it was more likely to open up new avenues of selling, such as in rural towns where a franchise company may not have a base, but people still wanted to buy the product or service.
Pack & Send, a national company that offers postal, freight, courier, packing and removal services, is one such business hoping to expand its reach. Chief executive Michael Paul said the business, which has 106 franchises in Australia and 16 overseas, was preparing to launch its online service in November, after a year of consultations with franchisees. With the small parcel market booming, Mr Paul said the company saw a chance to capitalise.
''We needed to be able to fill the missing gap and that was to be able to handle the smaller parcels packed by customers,'' he said.
Rather than go to a Pack & Send store, customers will be able to opt to go online and check costs, pay and have a courier pick the parcel up from their house.
If the customer chooses this option, the nearest Pack & Send store gets 100 per cent of the profits - minus a ''modest'' percentage of sales to cover tech costs. If the customer chooses to pack a parcel and deliver it to an existing shop, that store takes all profits.
Mr Paul said that, as with any change, there had been some resistance, but the company had chosen to get franchisees involved.
''It [online] is a big innovation and franchisees wanted obviously to understand the strategic reasons behind it. Our process was to prepare a pretty comprehensive strategy document,'' he said.
The franchisor paid for the initial online set-up and hopes to recoup those costs over time.
Dr Schaper said potential franchisees should do their due diligence and check agreements to see if they made explicit provisions for online sales, and where that income would go. They should also conduct their own research on the potential for their sector to change markedly during the life of their contract.