When it comes to making a franchising business truly valuable, financial and marketing expert Dr. Maurice Roussety knows exactly where to begin. Dr. Roussety studied Economics and Accounting at Monash University, and holds a Master of Business Administration and a Master of Leadership from the University of New England in New South Wales. Throughout his life, Dr. Roussety has proven himself as one of the most renowned business analysts and strategists in Australia, where he has consulted and added value to some of the country’s premier brands, including Westpac, Optus, IAG, ACCC, Australia Post, and Coles Myer.
In terms of business success, many people look at numbers and statistics that outline a company or organization’s revenues, assets, profits, and growth. While of course these numbers are important, assessing the true value of a business is actually much more complex, especially in cases when a business unit is sold or changes ownership. Why is it that two seemingly identical businesses sell for different amounts or are valued differently? The answer lies in evaluating the goodwill associated with each business.
Goodwill in business, specifically in franchise-operated companies, is something that Dr. Roussety has extensive knowledge in. Franchising is highly developed in Australia, and many franchise models comprise a blend of innovative structures that inevitably create contractual and relational complexities. One of these complexities is franchise-operated business goodwill. In general terms, goodwill is defined as the benefit and advantage of a good name and reputation of a business, which is the driving force behind attracting and retaining customers. Goodwill plays a key role in franchising business arrangements, since a well-recognized and reputed trademark can become a business asset of immense value.
In franchising, a franchisor can create goodwill by building a successful brand through marketing plans and good advertising practice and innovation. The successful brand can then be used utilized by all franchisees to further enhance the goodwill and ad value to the network of the business. In this sense, brand development is one of the most important strategies for gaining and promoting a high level of goodwill.
Goodwill can also be protected by obtaining a trademark registration for the trading name or style and logos of the franchise, as well as the artistic work that goes along with the company’s brand. In a research paper, Dr. Roussety conducted extensive research that has greatly contributed to new knowledge and stimulating interest in the development of economic models for the valuation of goodwill of franchisee-operated businesses.