What motivates people to buy franchises

The top two motivating factors for Australians planning to buy a franchise before 2010 are the potential to earn and the enhanced lifestyle offered by the change of career path, a recent survey found.

In the national independent online survey, commissioned by Mortgage Choice, of people in the 25 to 55-year age group earning $60,000+ per annum, the top reason for running their own franchise was ‘income potential’. However, running a very close second was ‘improved lifestyle’.

Interestingly, the top two choices for 25-30 year olds were ‘improved lifestyle’ and ‘flexibility with the ability to control your own time/movements/etc’ — ‘income potential’ was third — while the top two for the 51-55 year group was ‘income potential’ and ‘channelling your experience into your own business’. For them, ‘improved lifestyle’ was fifth on the list of priorities.

Mortgage Choice National Manager Corporate Affairs, Warren O’Rourke said this stark contrast in responses for the older and younger generations was not so surprising. “Australian society is realising more and more that Generation Y and the younger Generation X want to work to live, not live to work,” he said.

“The objective of the survey was to determine drivers of behaviour when it comes to Australians looking to purchase a franchise. We wanted to take a good look at the current temperature of the market for potential franchisees.”

Overall, the top three reasons for respondents planning to run their own franchise business were: ‘income potential’, chosen by 47.3 per cent of respondents, ‘improved lifestyle’ (45.3 per cent) and ‘flexibility with the ability to control your own time/movements/etc’ (44.5 per cent). The next few were: ‘looking for stimulation, challenge and personal achievement’ (45.0 per cent), ‘security of being your own boss’ (40.03 per cent), ‘channel your experience into your own business’ (26.7 per cent) and ‘more time for family’ (25.0 per cent).

So which industries’ franchise numbers will we see growing as a result of these franchisee-to-be? Australians who love their food will be very pleased.

The most popular response to the question regarding franchise system industries being looked at to buy within was ‘retail — food, restaurants and cafes’. This was the most popular option for every age group apart from the 51-55 year group, whose top option was ‘business and professional services’ (chosen by 47.81 per cent).

Overall, 27.2 per cent said ‘business and professional services’, 21.2 per cent said ‘health, beauty and personal services’, 19.2 per cent chose ‘domestic services’, 19.0 per cent said education and training services’ and 18.6 per cent said ‘financial services’.

It is worth noticing how the interest in ‘white collar’ franchising continues to grow with a healthy percentage of respondents considering business and professional services and financial services as viable options.