Franchises brace for the downturn

Franchisors say they are preparing for the inevitable economic downturn by cutting costs and reviewing spending, but argue they are better suited to survive than other small businesses.

Several of the members of Australia's top franchise list, released on Friday and led by Greek-themed fast-food chain Souvlakihut, said they were being extra cautious as the economy slows.

Stephen Spitz, head of coffee group Xpresso Delight, says business is strong, but he is taking nothing for granted.

"You've got to look at what your costs are and trim those to be as efficient as possible. When times do get a little bit harder it gives you a chance to concentrate on your strengths and weakness.

"You've got to be careful," he says.

ANZ's head of retailing and franchising Jason Cannock is advising his franchisor clients to be extremely diligent in their spending, and trim the fat wherever possible to ensure survival.