Learn The Lingo

Before you start, definitely do your homework, and take the time to talk to the men and women currently franchising.

The more information you can gather, the better decision you can make.

Franchises that focus on selling just one type of product or service may have a limited customer base.

On the other hand, owning a franchise that offers multiple service types allows you to meet a variety of customer needs, which can provide you with multiple was to grow your business.

How to speak the language:

Brand
The mark, name, logo and identity of a company or business, and a franchise system’s most valuable asset.

Broker
An outside salesperson. For a fee, a broker will sell a franchise for the franchisor.

Disclosure Document (DD)
Provides information about the franchisor and franchise agreement, plus a complete description of initial investment costs. The DD is typically shared after an initial application is completed.

ACCC – Australian Competition and Consumer Commission
The ACCC is Australia’s competition regulator and national consumer law champion.

Area Development Manager
Franchisor employee whose primary responsibility is to consult with franchise partners regarding their business – growing sales and profits and building an infrastructure to support it.

FCA – Franchise Council of Australia
Industry body who represents all parties operating in the franchise sector

Franchisee (Franchise Partner)
The person that is given the right from a franchisor to do business under its brand name.

Franchise Agreement
The written contract between the franchisor and the franchisee.

Franchisor
The business that grants the franchisee the right to do business under the franchisor’s brand.

Franchise Sales Recruiter (FSR)
The person who works directly with franchise partners during the start-up period.

Gross Amount
The term refers to the total amount made as a result of some activity. It can refer to things such as total profit or total sales.

Initial Franchise Fee
This fee is the initial fee paid by the franchisee for the right to use a business’ brand name and business model, receive funding and other potential services provided by the franchisor.

It is typically paid after a franchise agreement is signed.

Initial Investment
This is the initial cost of getting into business that includes the franchise fee, licensing, permits, accounting and solicitors fees.

Multi-Unit Franchise
Franchising multiple locations within a business at one time.

Net Amount
The term refers to the amount left over after all deductions are made. Once the net value is attained, nothing else is subtracted.

Royalty Fee
A continuing fee paid by the franchisee for the use of a brand and business model.

Shared Profit Split
A franchise business model that splits gross profits between the franchisor and the franchisee.

Single-Operator Franchise
The traditional franchise model involving only one location.

Support Center
Corporate headquarters in Bundoora Vic where all functions supporting a franchise operation are housed – e.g. Accounting, payroll, merchandising etc.

Vendor
A supplier of products or services.