Franchise systems in Australia span across many industries ranging from food and coffee outlets such as Muffin Break, Gloria Jean’s Coffee, Sumo Salad and Subway, to retail groups such as Just Cuts Hair Salons, Adair’s Manchester and trades and services like Pool Werx and Jim’s range of services.
A mix of business models and store ownership exists in the Australian market with a large portion of models consisting of a small number of corporate held stores and the balance franchised to individual or multi franchisee ownership.
According to the Franchising Australia 2016 Survey, the franchising sector in Australia employs 472,000 employees and has an estimated annual sales revenue of $146 Million. The franchise industry has 79,000 outlets operating throughout Australia.
Franchisees, especially those that historically have been profitable, attract strong competition between insurers.
What are the exposures?
The risks for franchise operators varies depending on the business type and model.
Food and beverage businesses will share similar property exposures to cafes and restaurants. Hazards in the kitchen range from cooking, deep frying, cleaning and waste management.
Personal grooming outlets such as hair salons, and beauty parlours will experience their own set of exposures, in particular, liability issues such as an undesired chemical reaction on a patron’s hair and nails, or issues resulting from Intense Pulsed Light (IPL) equipment.
A clothing retailer may experience a higher burglary exposure based on the type of goods they sell. The goods may be attractive to a potential thief such as sporting apparel like Adidas, Nike and so on.
Our team has been handling franchise business insurance since the 1990’s with experience dealing with franchisees from all the major franchise operators in Australia such as Retail Food Group, Subway and IGA. We provide a qualified and tailored insurance package online via our website www.shopinsurance.com.au. However, more importantly it is the advice we can give that is invaluable and may save you time and money.
What can go wrong?
A franchisee noticed the retail store he operated was generating less than what the sale figures showed when he purchased the business 18 months earlier.
After installing a camera in the store, it was evident the store manager was stealing cash on a daily basis.
In another instance, a hair salon operator was required to test and tag all electrical appliances in the salon on a six monthly regular basis.
When the test was two months overdue, an employee went to connect a hair dryer and suffered an electric shock.
As a result, she dropped the hair dryer and it landed on a patron’s new iPhone resulting in a cracked screen.