Page 18 - CW-MAY-JUNE-2021 non-tob

INDUSTRY INSIGHT BUSINESS POSITIVE BUT CONCERNED ABOUT MORE LOCKDOWNS Despite strengthening positive sentiment, the risk of further government lockdowns remains a key challenge, with the Pulse Check survey of franchise systems finding that more than half of respondents cite this as their main ongoing concern. By Franchise Council of Australia CEO Mary Aldred. F ranchise networks have reported further recovery in revenues in the March quarter as positive sentiment strengthens, according to the latest Australian Franchise Business Pulse Check survey, which includes responses from 113 Australian franchise systems covering 21,368 business outlets. Forty-five per cent of respondents reported March 2021 quarterly revenue increases exceeding 10 per cent compared with the March 2020 quarter. This is up from 33 per cent in the previous quarter, reflecting the ongoing general recovery in trading conditions and a solid performance by many franchise networks. However, the risk of further government lockdowns and border closures was the major concern for 51 per cent of respondents, with other challenges including franchisee recruitment (33 per cent), compliance (32 per cent), wellness of franchisees and staff (32 per cent) and workplace relations issues (30 per cent). The key areas reporting stronger trading were the health, building and construction, and courier and freight related industries. Cafes, sit-down restaurants, and travel businesses continued to report comparatively weaker performance. Business recovery is steadily improving, and the Australian economy is in a strong position, which is critical boost for small business right now. As our results show, the risk of snap state government lockdowns is the number one cause for concern across most businesses surveyed. The Franchise Council of Australia is recommending a consistent national approach on agreed thresholds for snap lockdowns, to improve business and community confidence. Despite these challenges, positive forward sentiment strengthened in the March 2021 quarter with 65 per cent (up from 51 per cent) of respondents anticipating a moderate (59 per cent) or significant (six per cent) increase in revenue in the upcoming June quarter. Forty-one per cent of respondents identified Queensland as their strongest performing state or territory over the past 12 months, followed by NSW (23 per cent), Western Australia (16 per cent) and Victoria (11 per cent). Respondents indicated that in the next 12 months they were most likely to expand business in NSW (49 per cent), followed by Queensland and Victoria (both at 18 per cent) and WA (10 per cent). Overall optimism increased to 85 per cent (up from 75 per cent in the December survey) towards business conditions for the next six months. A total of 520 new units were opened across 85 brands during the March quarter. These were predominantly in the categories of retail stores and home maintenance services. For the corresponding period, 109 franchised units were permanently closed across 28 franchise networks, predominantly in the retail food (cafe) category. Notes: • The Pulse Check survey is undertaken for the Franchise Council of Australia by FRANdata to provide insights on the status and experiences of the Australian franchise sector during each quarter. • FRANdata provides brand ratings, finance access reports and benchmarking services on participating Australian franchise systems. FRANdata also operates the Australian Franchise Registry, which holds information on more than 200 brands covering 30 per cent of the Australian franchise sector. • The report of findings from the December Quarter 2020 Australian Franchise Sector Pulse Check survey is available. For further information, contact Darryn McAuliffe on 0412 789027 or dmcauliffe@frandata.com.au. About Mary Aldred Mary Aldred has been CEO of the Franchise Council of Australia, the peak body for the nation’s $184 billion franchise business segment, since April 2018, following extensive experience across government, industry and corporate sectors. As CEO, Mary has led the FCA in developing and delivering strategic priorities to strengthen its role as an effective peak business organisation. 16 CONVENIENCE WORLD MAY/JUN, 2021