Franchising is often marketed as a “business-in-a-box,” offering a proven model, established brand, and ongoing support. But while it lowers some of the risks of starting a business from scratch, owning a franchise in Australia still comes with its own set of challenges.
From misaligned expectations to marketing struggles, many franchisees face hurdles that can impact their profitability and long-term success. The good news? These challenges are manageable—if you know how to tackle them.
Here are five of the most common issues franchisees in Australia encounter, and how to beat them like a seasoned pro.
1. Marketing Gaps Between the National Brand and Local Needs
Most franchises charge a national marketing levy, but many franchisees find that the centralised campaigns don’t always drive results in their local area. Generic advertising may build brand awareness, but it doesn’t guarantee foot traffic or local engagement.
How to beat it:
- Own your Local Area Marketing (LAM): Launch geo-targeted ads, host in-store events, and collaborate with local community groups.
- Track local results: Use tools like Meta Ads Manager or Google Analytics to measure campaign performance in your postcode.
- Ask your franchisor for LAM support: Many brands provide ready-to-use marketing assets and co-funding for local initiatives—you just need to ask.
Pro tip: Join or form a local franchisee marketing committee to share ideas and negotiate more tailored campaigns.
2. Staffing Shortages and High Turnover
According to ABS labour data, retail and hospitality—two major franchise sectors—are among the hardest hit by staffing shortages. High turnover leads to inconsistent service and increased training costs.
How to beat it:
- Offer competitive perks: Even small benefits like flexible hours, birthday leave, or performance bonuses can boost retention.
- Streamline onboarding: Develop a simple training system and checklist so new hires can hit the ground running.
- Build a great culture: Treat staff like valued team members, not just employees. A positive work environment leads to better service—and loyalty.
3. Cash Flow Management
Even with a well-known brand, franchisees can experience cash flow strain—especially in the first 12 months. Common reasons include underestimating startup costs, seasonal fluctuations, and rigid royalty/marketing fees due regardless of revenue.
How to beat it:
- Create a cash flow forecast: Plan for expenses, fees, and income monthly—include slow periods.
- Negotiate payment terms: Work with suppliers and your franchisor (if possible) to align payment cycles with cash inflows.
- Build a buffer: Aim for at least 3–6 months’ worth of operating expenses saved up—especially during ramp-up.
Pro tip: Work closely with a franchise-savvy accountant. Don’t rely on gut feel alone.
4. Limited Operational Flexibility
One of the trade-offs of franchising is the lack of autonomy. You must follow the franchisor’s systems, pricing, promotions, and supplier rules—even if they don’t align with your local customer preferences.
How to beat it:
- Focus on execution: Your strength lies in delivering the system better than anyone else—staffing, service, upselling, and customer experience are all within your control.
- Provide feedback: Great franchisors listen. Use formal channels or franchisee advisory councils to raise concerns or propose changes.
- Innovate within the lines: While you may not be able to change the menu, you can still create local buzz with events, influencer visits, or seasonal themes.
5. Franchisor Communication and Support Gaps
Some franchisees report receiving little support after the initial training and launch. Missed phone calls, unclear marketing updates, and delayed field visits can leave franchisees feeling isolated.
How to beat it:
- Document everything: Keep a record of your requests and follow-ups for transparency.
- Leverage your franchisee network: If you’re struggling, chances are others are too. Build relationships with fellow franchisees to share insights, tools, and motivation.
- Escalate constructively: Use formal support channels within the franchise system to raise unresolved issues. If necessary, consult the Franchise Code of Conduct or seek legal advice.
Final Thoughts: Challenges Are Inevitable—But So Is Growth
No franchise is challenge-free. Even with strong systems and brand power, it takes smart leadership, adaptability, and grit to succeed. The most successful Australian franchisees don’t avoid problems—they solve them early and strategically.
Whether you’re considering buying a franchise or already running one, staying proactive, well-informed, and connected with your network is key to thriving—not just surviving.
Looking for a franchise opportunity with real support and strong local market fit? Explore listings at Growth Hive or join our Facebook community to connect with franchisees and share insights from the front lines.
