Franchise Structures and Exclusive Franchise Agreements: Get to know the franchise industry

FAQs: March 3, 2020

Get the rights to an exclusive franchise agreement

There’s a frightening statistic that says over 60% of small businesses fail within three years. The good news is that Franchise Quick Service Restaurant (QSR) businesses continually buck that trend.

Oporto is one of three brands owned by QSR franchisor craveable brands, which operates a total of more than 570 stores across Australia, New Zealand and Asia. When you join our team as a franchisee, you will either sign an exclusive franchise arrangement or a master franchise agreement with us. Either way, we’ll support you so well that your success is almost inevitable. 

To give you an understanding of how a franchising arrangement with Oporto works, let’s look at the different franchise company structures in the Australian market.

The four types of franchise structures 

Australian franchises generally use one of four business models:

  1. Manufacturer-retailer: This is where a retailer (franchisee) can sell the franchisor’s product straight to the public. It’s commonly seen in new car dealerships, for example.
  2. Manufacturer-wholesaler: This is where a franchisee is licensed to manufacture and distribute the franchisor’s product. Soft drink companies often use this model to bottle their products.
  3. Wholesaler-retailer: In this model, a franchisee retailer buys products from a wholesale franchisor and then sells them at retail. You’ll see this type of franchise agreement in action in places like your local hardware or automotive parts store.
  4. Retailer-retailer: This is the most common model, and is what probably springs to mind when you think of franchising. 

Oporto: a retailer-retailer franchise company structure

Oporto uses a retailer-retailer franchise model with single-unit, multi-unit and master franchise agreement options. This model is used in all kinds of sectors, from QSRs to lawn maintenance, and is also called ‘business format franchising’. 

We (Oporto) are the franchisor in this model. We market our products through a network of franchisees, each of whom uses a common name and a standard set of systems and processes. 

There are then two types of franchise agreement with us that you could choose between.

Exclusive Franchise Agreement 

Once approved as an Oporto franchisee, we give you the right to operate an Oporto business in Australia. We license you to supply our goods to the public under a specific system and marketing plan that we support you to fulfill.

Read the Franchising Code of Conduct to see what we expect of you, and what you can expect of us in this franchising agreement. The code lays out your obligations as a franchisee, so ensure that nothing in it takes you by surprise.

Just briefly, the code says:

  1. Your business is associated with a particular trademark, advertising or commercial symbol that we own, use, license or specify.
  2. You’re required to pay (or agree to pay) us a certain amount before starting or continuing your franchise business. However, this excludes certain payments. You can find out more about this in our article about how much it costs to own a franchise. 

Master Franchise Agreement 

A Master Franchise Agreement offers you a great path for building wealth and a residual income source as a franchisee. It gives you more rights than an area development agreement, and allows you the right to sell franchises to other people, known as sub-franchisees, within a  territory. 

A Master Franchise Agreement with Oporto gives you exclusive master franchise rights to operate the Oporto brand in your country, as well as the sub-franchise rights. 

To date, Oporto has over 170 stores in Australia and New Zealand, and we’re expanding globally. This means there’s a growing opportunity for Master Franchise Agreements for whole countries and/or regions.

Other benefits of this Master Franchise Agreement include joining with an iconic, growing brand that’s expanding its global reach every year.

Contract terms

All of Oporto’s Master Franchise Agreements come with a minimum contract term of ten years, and a further ten-year option. Your franchisee fee per store is reduced under this agreement and ranges from US$9,000 to US$20,000. Ongoing royalty fees, set as a percentage of your net sales, are also payable.

What you get for your franchising fee

Paying a franchise fee under a Master Franchise Agreement with us gives you the right to use our brand, signage, store design, and cooking and operations manuals. It also covers:

  • the cost of your upfront training as below (excluding travel and accommodation)
  • any legal costs you incur to draft the Master Franchise Agreement
  • support from head office as you enter the market.

Supply chain

Where possible, Oporto will also help you to set up a local supply chain to lower costs, increase control and maintain quality. If your local suppliers can’t meet our specifications, however, you’ll be able to buy raw materials through us.

Training and support 

Your training will consist of a ten-week program with learning outcomes that map to Australian standards for business management and retail qualifications. 

Want to know more about Oporto’s Exclusive and Master Franchising opportunities?  

We’re looking for entrepreneurial, financially solid partners who have a strong knowledge of their local market – whether that be here in Australia or overseas. We’d prefer previous experience in the food and beverage industry, but it’s not crucial.

Want to know more about the opportunities we have at Oporto?

Our Franchising Team is here to help you – get in touch today!

QLD and TAS – Sean O’Connor – Sean.OConnor@craveablebrands.com – 0427680221

NSW and ACT – Fernanda Camerini – Fernanda.Camerini@craveablebrands.com – 0419736345

VIC, WA, SA and NT – Leisha Fontana – Leisha.Fontana@craveablebrands.com – 0408927750

International – Carl Tjandra – Carl.Tjandra@craveablebrands.com