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Property News

Service franchises more popular than food retail

November 17, 2011

Australian service-based franchises have trumped food retail outlets in terms of popularity amongst new business owners, according to recent research.

The Franchising Australia Report 2010 - compiled by the Asia-Pacific Centre for Franchising Excellence at Griffith University - details the plans of over 2,000 participants who have signed up to a pre-entry program.

Nearly one third of these individuals indicated that they are seeking to open a business based in the services sector - while only 27 per cent said they were interested in a food-related business venture.

Director at the centre Professor Lorelle Frazer said that the results most likely reflected the relative start-up costs faced by new business owners in the various sectors.

Frazer asserted: "Service franchises are most popular at 31 per cent and are less expensive to enter than retail so they often attract first-time franchisees."

She also said that food-retail stores - while not as popular as the leading segment - were tracking along well, stating that: "Retail (food) and the service sector are also travelling a little better in the downturn with a slump in non-food retail, which may be why people are avoiding the retail non-food sector."

The results could have an impact on a range of commercial real estate markets - as each type of business has different requirements in terms of pedestrian traffic, street frontage and interior space.

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