Advantages of franchising:

• Franchising is a rapidly expanding feature of the Australian small business sector because of the beneficial prospects it offers Franchisors, including: Introduction for Prospective Franchisor – Franchise Legal Page 4 of 6

• 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

• Ability to provide ongoing product and systems development.