New Wave Of US Franchises To Hit Aussie Shores

January 23, 2013, 10:46 am Kochie's Business Builders Yahoo!7

There's a big bunch of big franchises all eyeing Australian expansions...

New Wave Of US Franchises To Hit Aussie Shores

A chain of 24-hour diners is just one of a wave of American franchises heading to Australia as massive corporate groups seek to exploit the relatively robust local economy.

Denny’s diners is currently pursuing corporate partners to help them set up in Australia , following success stories like the expansion of McDonald’s, Burger King (Hungry Jacks), KFC and Domino’s Pizza.

But the influx of big US chains isn’t limited to the traditional family dining scene, with others including fondue chain The Melting Pot, frozen dessert group Rita’s and healthcare provider BrightStar all eyeing Australian shores.

In more recent times Costco and ice cream chain Ben & Jerry's have opened to bumper demand.

StreetStrider is another to have recently rolled out a national franchise program. They sell a Californian exercise machine, a cross trainer on wheels, that supposedly combines the benefits of jogging, skiing and cycling.

Related: How To Start A Franchise

However there have been a string of unsuccessful expansions into Australia too, with global coffee group Starbucks closing nearly three-quarters of its 84 Australian stores in 2008, and Sandwich group Quizno’s coming to an ugly end before that.

The problem? Very different consumer tastes.

This dynamic is a pitfall familiar to Richard Garraway, a consultant with The Franchise Shop, which is helping brands like Denny’s find local partners.

“They have to be very mindful of the market they’re entering, you might think Australia is like America and you can just roll it out, but it really needs to be treated as if it’s an India or China, it’s a very different market.”

Even so Australia remains a very popular market with a strong record of successful franchising.

NexCen director Dan Benton, responsible for locally expanding US franchises including Maggie Moos, Great American Cookies and Shoebox New York brands, says Australia is a natural choice.

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"Australia is popular because it is well known for solid franchising. Franchising is a major contributor to GDP, and there is also more franchising per capita than any other country in the world,” Benton says.

“We've already been operating there with Athlete's Foot stores, and it's a great market for us, especially with our Shoebox New York brand."

These brick and mortar builders are great for the local job market, but definitely signal increased competition for local retailers and restaurants from proven business models abroad.

And just when you thought the online challenge from offshore was a battle enough...

But there’s no reason it can’t be countered. As Kochie advises, “make your community involvement and local profile your competitive advantage.”

Which franchise would you most like to see come to Australia? Join the conversation.