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With relatively few physical assets involved, a courier or delivery franchise can be one of the cheapest new businesses to buy.
While industry-wide revenue fell by 2.8% between 2012 and 2016, the courier sector is forecast to grow by 2.5% annually, reaching a predicted $4.8 billion in revenue by 2021. Starting a courier business from scratch is tough, with the market share divided, for the most part, between a few big-brand names.
Buying an existing courier business gives you an established customer base to build on, allowing you to cut out a lot of the effort of starting a company from nothing. But what does a new business owner need to do to become a courier franchisee, how much does it cost and how do you apply?
To become the owner of a territory for making package deliveries for an overarching established brand, you have to become a franchisee. A franchisee effectively purchases a licence from a courier corporation, such as DHL, to use their branding, products and operational structure, and then runs the courier service as their own business, in exchange for a share of the profits.
By becoming a courier franchisee for an established brand, your business will have a steady customer base from the outset. Companies can offer franchise packages for a minimum investment, providing an established brand name, pre-contracted work and business support to increase your company's revenue.
A franchisor offers more than just a recognised name for you to trade under. It will already have a network of established contacts, meaning it can provide you with pre-arranged contract work and a steady, regular stream of income for minimal effort on your part.
The rapid growth of Internet shopping, aided by the COVID-19 pandemic, means that money previously spent in physical stores is now being spent online more than ever. This makes business-to-consumer deliveries an attractive source of future growth.
To become a courier franchisee, you can get started by simply buying a franchise, or a franchise package, from a reputable existing company.
As with any investment, it's worth doing your research to figure out which company to franchise with. Every franchise has different standards, rules and fees.
Popular courier franchises in Australia include:
Talk to other franchisees about their experiences with various companies, and ask the franchisor for financial projections to check that you are making a worthwhile investment. Ask questions such as:
Eventually, you will sign a franchise agreement, confirming your obligations and those of the franchisor. It will include details of any training you will need, your territorial rights and any fees you will need to pay the parent company. It's worth getting a solicitor to look over the franchise agreement to make sure the contract is attractive and fair.
The initial investment in a courier franchise can vary depending on the location and company size. Established couriers across Australia, such as Aramex Australia, offer franchise packages ranging from $20,000 to $50,000.
Some companies may be more flexible on the initial investment, but as with any business investment, a larger initial cost will yield a bigger reward, allowing you to break even more quickly.
Most companies will provide training after the initial investment is made, and companies operating within exclusive territory may require a larger initial investment, as would those servicing a larger area.
There are a number of pros and cons to purchasing a courier franchise, as opposed to starting your own courier business:
To apply to become a courier franchisee, call or visit the website of the company with which you are interested in opening a franchise. From there you will:
The start-up investment can provide a hurdle for an aspiring new business owner if they don't have the savings to hand. However, you can apply for start-up funding from both banks and non-banks alike.
Banks may be more likely to give a loan to a franchisee than a lone entrepreneur, as operating under an established brand name makes you much less of a financial risk.
You may consider some of the following business loans:
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
Make sure that you compare your franchise finance options carefully before submitting an application for business finance. To start a business loan application, simply click "Go to site" on our table to visit the lender's website directly and submit an application.
Bria Horne is a writer for Finder, with a specialist knowledge of personal loans, car loans and business loans. Originally from the UK, Bria has been a professional personal finance writer in Australia for over 2 years. She has an M.A and B.A in Philosophy and Literature from the University of Sussex, and previously worked on the UK’s leading hospitality publication.
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