Reducing franchise churn

People quitting fulltime employment to buy a lifestyle can end up becoming part of the churn rate in franchising if they fail to seek support, says franchise expert Tracy Eaton.

“The churn rate is the number of franchisees who sell up because it’s not working out as they’d hoped,” Ms Eaton said. “The churn rate in 2015 was between 11 and 18 per cent, depending on the industry.”

Ms Eaton, who is co-founder of Remarkable Franchises, says the people who fail in franchising are the ones who go in with the wrong expectations.

“Yes, you are your own boss and, yes, you can choose your own hours, but running a franchise is hard work often made easier by the support available,” she said. “Some people think they’ll be out on the golf course more or lunching with friends regularly, which can happen, but not right at the start.”

Ms Eaton says when the wheels are starting to fall off franchise owners will often try and ride it out, which can be the worst thing they can do – especially if they are among the one in six who take out a loan to buy the franchise.

“Franchises are a better buy than a stand-alone business because there is a safety net of support and systems in place to ensure success,” she said. “It’s the people who think they know better, or don’t ask for help, that end up juggling everything, which often leads to their demise.”

There are 79,000 franchise units in Australia and that figure is growing, with low-cost entry appealing to many people looking for a career change.

Remarkable Franchises is hosting an online seminar in late November for anyone interested in buying a franchise or wanting to boost profits in an existing one. To register interest for Franchising Unplugged, visit

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