Franchise

9 April 2026

Buying into a franchise is often seen as a faster, more supported pathway into business ownership. With an established brand, operating model and support network already in place, franchisees can avoid many of the early challenges faced by independent startups.

However, franchising doesn’t remove the realities of running a business. Once the doors open, operators still need to manage costs, plan for fluctuating revenue and maintain strong cashflow discipline.

Even with strong systems behind you, success may ultimately come down to understanding what drives profitability and keeping a close eye on how cash moves through the business.

The appeal of franchising (and the reality behind it)

As CEO of the Franchise Council of Australia, Jay Westbury has a front-row view of what draws people into franchising and what can trip new operators up early.

“Franchising appeals to newcomers because it offers the reassurance of established processes, brand recognition, and the ability to learn from a network that’s already tried and tested,” says Jay.

“A solid franchise structure is great, but at the end of the day, keeping your franchise up and running means knowing how to run a business. New franchisees can underestimate how quickly costs add up, or assume steady sales automatically translate to financial stability, which isn’t always the case.”

“Successful franchise operators don’t just focus on sales; they actively manage the timing of cash. They know what’s coming in, and what’s going out, and when,” says Jay.

This is where many new operators start to feel the pressure, not from a lack of demand, but from the way cash moves through the business.

Ourania Arnaoutis, Regional Manager, Franchise Banking at NAB, says cashflow sits at the centre of franchise success.

“Cashflow is really at the crux of being able to establish growth and profitability of your franchise, and cashflow boils down to three key pillars: knowing the basics, being able to optimise the flow of cash in and out of your business, and having the right financial backing,” says Ourania.

Cash flow basics

At its core, cashflow is how money moves through your business, from incoming sales to outgoing expenses.

“For individuals looking to start out in the world of franchising, tracking monthly cash inflow and outflow can help provide a clear picture of where you might be falling short, or where you may actually have a surplus,” Ourania explains.

“While it sounds simple, maintaining a disciplined view can help you avoid the unforeseen and plan for future growth, because you can see exactly how much cash you’ll have on hand to keep operations running efficiently.”

So how much cash do you really need on hand?

According to Ourania, the answer depends on your operating needs and the timing of income and expenses.

“One simple, but often overlooked strategy is spreading expenses like rent, wages, and utilities across the month rather than clustering together.”

“We always try to encourage our clients to have at least three months of cash set aside. Just as you would in your personal life, having an emergency fund is equally as important for your business.”

Optimising your cash flow

Beyond learning how to manage your cashflow, the next step is optimisation. Once you can see exactly how money is flowing in and out of the business, it becomes clear where the inefficiencies or opportunities may lie.

For many franchisees, small adjustments can have a meaningful impact — improving margins, easing pressure, and creating more flexibility to reinvest in the business.

“Optimising cashflow is a constant process in a franchise. We’re always helping our clients look for new ways to minimise costs and maximise revenue, whether that’s through securing bulk purchasing discounts, or introducing new systems and inventory controls.”

Ourania explains that even well-run franchise businesses can experience cashflow pressure, particularly early on when much of their capital has already been committed to upfront setup costs.

This is where having a clear view of your cashflow and understanding the options available to manage short-term pressure, becomes important.  

“Sometimes it’s about short‑term support to manage timing gaps, such as an overdraft, and other times it’s about freeing up cash within the business – for example, by financing equipment or using trade finance to bridge the gap between buying and selling stock,” she explains.

“The key is ensuring the financial support aligns with what you’re funding. The structure really matters,” she says, noting that flexibility is critical, particularly as businesses grow.

Essential lessons for franchisees

Franchising can give business owners a valuable head start, but long-term success is ultimately shaped largely by financial discipline. As Jay and Ourania highlight, franchisees who perform well over time are those who actively manage their cashflow.

That means knowing the fundamentals, planning realistically, and making informed decisions about how money moves through the business, both today and over the long term.

Looking to build a clearer view of your cashflow?

NAB’s cashflow guide for franchise businesses provides practical tips to help you forecast income, manage expenses and plan with confidence.

Franchise