In Australia, a franchise model is employed where the franchisor (the system's proprietor) allows the franchisee (the party interested in establishing a franchise) the permission to run a business using the franchisor's brand and methodology for a designated duration.

Franchising in Australia can offer lucrative opportunities, yet success in this business model is influenced by several factors. These encompass the selection of the franchise, its location, the demand in the market, the sustainability of the business model, the level of support provided by the franchisor, as well as the business skills and dedication of the franchisee. Australia's franchising industry is both substantial and varied, covering numerous sectors. Although numerous franchisees find profitability and success, it is crucial for prospective investors to undertake extensive research and obtain expert advice prior to signing a franchise contract.

In Australia, the regulation of franchises falls under the purview of the Australian Competition and Consumer Commission (ACCC). The ACCC oversees the enforcement of the Franchising Code of Conduct, a compulsory code of practice for the industry nationwide. This Code establishes the regulatory guidelines for franchisors and franchisees, with the goal of promoting equitable and transparent business interactions between them. It addresses issues like disclosure requirements, obligations of good faith, dispute resolution mechanisms, and conditions for termination.

Franchising is a rapidly expanding feature of the Australian small business sector because of the beneficial prospects it offers Franchisors, including:

✓ The negation of the need for capital to expand by leveraging the access to the resources of individual franchisees;

✓ Rapid, less complex market penetration;

✓ The potential to gain market share;Shared risk with Franchisees;

✓ Potentially higher return on investment;

✓ Engagement of other highly motivated owner – operators who have a real stake in the success of the franchised business;

✓ Greater reach of brands in locations where franchisees possess local industry knowledge and access;

✓ A switch form middle management to owner – operators;

✓ Increased marketing and buying power; and

✓ The ability to provide ongoing product and systems development.