Growth

Public service lay-offs fuel surge in franchise enquiries: Report

Michelle Hammond /

Retrenched Queensland public servants have contributed to a renewed interest in franchising, according to Retail Food Group, which saw a 64% spike in inquiries between June and August.

RFG owns and operates major retail food brands including Brumby’s Bakery, Donut King, Michel’s Patisserie and Pizza Capers. It has more than 1,250 outlets across seven countries.

Between June and August, RFG saw a 64% spike in franchise inquiries nationally, including interest from former Queensland public servants, laid off as part of Premier Campbell Newman’s severe cost-cutting measures.

Gavin Nixon, RFG head of emerging markets, says many people are “exploring their options”, which include starting their own business.

“I know a lot of Queenslanders are wondering what to do next and we are keen to do what we can to help give these people a fresh start,” Nixon says.

“Starting out by yourself can be daunting, which is why proven franchise systems are appealing.”

“[However,] we make sure they’re ready to join the small business sector and that they’re not just buying a job.”

With regard to RFG brands, Nixon points out no previous business or in-store experience is required, insisting all training is provided.

“Our franchisees come from all walks of life… [But] once franchisees graduate from our Gold Coast training academy, they are equipped with the necessary skills,” he says.

According to Nixon, RFG’s reputation has enabled it to develop relationships with leading financial institutions. Ultimately, these relationships benefit franchisees, he says.

“If finance is required, our potential franchisees can take advantage of these relationships and are able to apply for financial assistance not normally available to small business investors,” he says.

In response to the increased demand for franchising opportunities, RFG has extended access to an assistance package for potential franchisees.

This includes providing financial assistance and fee discounts to approved applicants.

The news comes on the back of a report by Macquarie Bank, which urges Australians to brace for a “white-collar recession” by early next year, with unemployment tipped to rise to up to 6%.

It’s believed the rise in unemployment is being fuelled by recent redundancies in the financial and IT sectors.

As Macquarie Bank warned in its report, redundancy payouts “only last for so long”.

“Thus we suspect this [unemployment] pressure is likely to emerge in the second half of 2012,” the report said.

Peter Strong, who heads up the Council of Small Business of Australia, said earlier this year anyone who starts a business after being made redundant needs to keep their emotions in check.

“We hear from people who say, ‘I’ve got half a million dollars. Here’s my opportunity to do my own thing’… It’s wonderful they think that way, but be careful with your money,” he said.

Strong said there could be an increase in public sector job cuts as governments look to reduce spending – as seen by the heavy-handed approach taken by the Queensland Government.

“The other area is banking – we will start to see retrenchments happening in the banks,” he said.

This article first appeared on StartupSmart.

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