The Evolution of Australia’s Franchise Industry
Welcome to Franchising Lens, our new series exploring expert perspectives and insights on the latest industry trends, challenges, and everything franchising.
For our first edition, we’re thrilled to share insights from Rod Young, Chairman of DC Strategy, on how the franchising industry has evolved throughout his career. Rod shares his unique experiences from the early days of franchising in Australia and how the industry has developed to where it stands today.
Dive in and enjoy the first edition of Franchising Lens!
The Early Days of Franchising in Australia
My journey with franchising began in the 1970s with a US franchisor, and after coming back to Australia, I set up several franchised businesses as a franchisee. Franchising was barely known in Australia back then. KFC was one of the few US brands established here, and very few local brands were even offering franchising. The sector was totally unregulated.
I drew on both my US experience and my time as a Master Franchisee for a US brand in Melbourne to start advising Australian businesses on how to franchise. These businesses wanted to expand and needed capital to grow. In 1983, this led to the formation of what is now DC Strategy as a franchise consultancy. Over the following years, the sector grew steadily, and by the 1990s, franchising really took off, with many of today’s largest Australian brands starting to franchise.
Australia’s Need for Regulation
“The code creates a strong franchise community where franchisees generally perform better than independent businesses. ”
As franchising grew, some took advantage by making unrealistic promises to franchisees. This caused widespread dissatisfaction, leading to the first government inquiry and the introduction of mandatory regulations. In 1999, the Franchising Code of Conduct was introduced as a part of Australian law, enforced by the Australian Competition & Consumer Commission (ACCC).
Today, after several inquiries and updates to the Franchising Code, Australia has one of the most heavily regulated franchise markets in the world. These measures include pre-signing disclosures, cooling-off periods, and franchisee protections. The code creates a strong franchise community where franchisees generally
perform better than independent businesses.
Franchising in Today’s Business Climate
To succeed in today’s franchising environment, franchisors and businesses considering expansion in Australia and abroad, need to understand not only the Franchising Code and the industry’s history but also what’s required to build a strong franchise program in today’s market. With over 1,000 brands now offering franchising opportunities, prospective franchisees are comparing 5 to 7 brands before deciding where to invest.
The Growth of Value in Franchising
Franchising in Australia has matured, with brands now on national and global scales, and valuations reaching tens or hundreds of millions, and at least one Australian brand valued at over a billion dollars. Franchising is no longer just a way to raise capital but a means of creating significant enterprise value.
In the post-COVID era, franchisors are prioritising the owner-operator relationship as a central pillar of growth. Franchise programs now need to attract not only financially capable franchisees but also driven entrepreneurs ready to invest both capital and time—often over 60 hours a week. Today, the success of each franchise location and the overall network’s value depend more than ever on the quality and satisfaction of dedicated franchisee owner-operators.
Choosing the Right Advisors
Moving forward, franchisors must choose advisors carefully. With Australia’s franchise sector becoming more competitive and regulated, a strong program guided by experienced advisors is essential to navigate challenges and achieve lasting success.
About Rod Young
Rod Young is the Founder and Chairman of DC Strategy. With over 40 years of experience, Rod is widely regarded as one of the world’s top franchising experts, having served on numerous boards of franchise networks across Australasia and internationally.
This expertise is what DC Strategy brings to every client. Whether you're expanding an established brand or just starting out, DC Strategy is here to help you build a strong, sustainable franchise model for long-term success.