Business Franchise Aus & NZ - Nov/Dec 2016 by CGB Publishing

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f r a n c h i s e e s VOL 11 ISSUE 01 nov/dec 2016

AUSTRALIA and NEW ZEALAND

hairhouse warehouse

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passion in franchising great ways

to win in business special feature

health, beauty & fitness franchising

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From the

Editor

Joanne Tuffy | Editor Busiiness franchise magazine

BUSINESS FRANCHISE AUSTRALIA and new zealand VOLUME 11 ISSUE 1, NOV/DEC 2016

Business Franchise magazine recently attended the National Franchise Convention (NFC16) in Canberra, as part of the bustling trade exhibition taking place during the convention. This year, the theme of NFC16 was ‘Innovation meets Opportunity’ and program highlights included keynote speeches from Political Contributor for Sky News Peta Credlin, CEO of CPA Australia & The Naked CEO Alex Malley and 2016 Australian of the Year Lieutenant General David Morrison – amongst many more - who all shared their expert knowledge and motivational stories to more than 500 delegates from the franchising sector across the country and overseas. Alongside the keynote presentations, there were plenty of opportunities for franchisees and franchisors alike to network and be inspired; attending the various keynote panel and roundtable sessions. The Convention cumulated with the MYOB FCA Excellence in Franchising Award, 14 Excellence in Franchising Awards were presented to

outstanding individuals and businesses including franchisees, suppliers, support staff and franchise systems. Our front cover this issue features Hairhouse Warehouse, who take the Power of Good Hair to a new level. A leader in their field, Hairhouse Warehouse showcases their fresh, new store design, embracing the changing retail environment, see page 10 for more details. Expert advice includes the Pros and Cons of borrowing from your family by Jason Gehrke at Franchise Advisory Centre on page 24. Jason highlights why borrowing from ‘The Bank of Mum and Dad’ can be both advantageous and disadvantageous to the potential franchisee and also franchisor. Another great read is on page 66. Melissa Penn, National Franchise General Manager for First Class Capital highlights seven things that you can do today to become a better manager. The above is just a small snapshot so enjoy our expert advice articles and have a look at the numerous franchise systems profiled and featured throughout the magazine. Who knows? Maybe one of them will be the perfect fit for you! Enjoy the read! Joanne Tuffy Editor

publisher: Colin Bradbury. colin@cgbpublishing.com EDITOR: Joanne Tuffy. editor@cgbpublishing.com.au SALES DIRECTOR: Vikki Bradbury. vikki@cgbpublishing.com SALES & marketing manager: Kathleen Lennox. kathleen@cgbpublishing.com.au PRODUCTION: production@cgbpublishing.com.au ACCOUNTS: Renee Gould. accounts@cgbpublishing.com.au DESIGN: Jejak Graphics (03) 8790 8006 COVER IMAGE: hairhouse warehouse TO SUBSCRIBE: www.businessfranchiseaustralia.com.au or www.isubscribe.com.au CGB PUBLISHING PO BOX 968 MT ELIZA, VICTORIA 3930 TEL: (03) 9787 8077 FAX: (03) 9787 8499 Email: cgb@cgbpublishing.com.au

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The information and contents in this publication are believed by the publisher to be true, correct and accurate but no independent investigation has been undertaken. Accordingly the publisher does not represent or warrant that the information and contents are true, correct or accurate and recommends that each reader seek appropriate professional advice, guidance and direction before acting or relying on all information contained herein. Opinions expressed in the articles contained in this publication are not necessarily those of the publisher. The publication is sold subject to the terms and conditions that it shall not be copied in whole or part, resold, hired out, without the express permission of the publisher.

Business Franchise Australia and New Zealand 3

contents

NOVEMBER/DECEMBER 2016

On the Cover

Cover Story: Hairhouse Warehouse

Join a World-Class Team

16 Find your Passion in Franchising Ian Krawitz, 10 THOUSAND FEET 20 Great Ways to Win in Business Rowdy Mclean 42 Special Feature: Health, Beauty & Fitness Franchising

In Every Issue

What’s New! Announcements from the industry

NFC16: Alive and Buzzing

Feature: Health, Beauty & Fitness Franchising

Feature News

Feature Cover Story – Australian Skin Clinics

Hot Topics: Behind the Headlines

Professional Services Listings

Listings

A-Z Directory

Franchise Council of Australia

Jason Gehrke, Franchise Advisory Centre

Profiles 26 Leadership Management Australasia 58 Core9 70 Jim’s Antennas

78 Franchising Expo 86 Ayers Rock Resort

also in this issue: Appliance Tagging Services. .............................. 96 Cashflow It......................................................................23 Chem-Dry. ................................................................ 2, 96

Expert Advice 24 The Pros & Cons of Borrowing from Family to Buy a Franchise Jason Gehrke, Franchise Advisory Centre

Clean Green Strata...........................................83, 96 Core9 Fitness....................................................... 59, 96 Crema Espresso.........................................................97 Domino’s..................................................................77, 97 Dream Doors Australia............................................97

28 Key Success Factors for Email Marketing Theo Noel, Return Path 46 Healthy Body, Healthy Mind, Healthy Business Tania Allen, Vision Alliance

Dream Doors New Zealand. ................................97 Ecomist............................................................................ 98 Fasta Pasta.................................................................... 98 Fastway Couriers............................................. IFC, 98 FC Business Solutions............................................ 17

60 Entering a Saturated Market FC Business Solutions

First Class Capital. ............................................ 19, 99

62 Franchising VS. Licensing – Which is right for you? Ty Menzies, 9Round Australia

Hairhouse Warehouse.................................... 36, 99

66 7 Things You Can Do Today to Become a Better Manager Melissa Penn, First Class Capital

GroutPro. ........................................................................ 99

Harmans Lawyers New Zealand...................... 92 Home Sorted!.............................................................. 99 IP Partnership.............................................................. 92 Jim’s Building Maintenance. .............................100

Sharon Jurd, Sharon Jurd Events

Exclusive Franchise Territories – Do They Exist?

La Porchetta.......................................................91, 100

Raynia Theodore, MST Lawyers

Lenard’s Chicken..................................................... 101

How to Survive Your First 12 Months in Your New Business

Jim’s Pool Care.........................................................100 Krneta Building Surveyors. .................................. 92

80 Franchising on the Rise in Australia Key Findings from the Franchising Australia 2016 report

Little Kickers & Little Rugby. ............................. 101

Marsh & Maher Lawyers....................................... 92

Griffith University’s Asia-Pacific Centre for Franchising Excellence

82 Is ‘Home-Based’ the Answer? David Banfield, The Interface Financial Group

Magnetite Windows. .............................................. 101

National Franchise Insurance Brokers.......... 69 OZ Bin Cleaning. ...................................................... 101 Pizza Temptations................................................... 102 Poolwerx......................................................... 102, OBC

Focus

Redcat................................................................................. 1

31 X-Golf

Snap-on Tools................................................ 102, IBC

Smallprint............................................................. 83, 102

Soccajoeys.................................................................. 102

Franchisor in Depth 50 Just Cuts™

Spray Pave Australia.............................................. 103 Steve Costi’s Famous Fish........................ 85, 103 The Interface Financial Group.......................... 103 Theobroma Lounges, Pavilions, Bars......... 103 Thermawood.............................................................. 103 Top Snap............................................................. 89, 104

Have your say 54 Lee McBriarty Home Instead Senior Care

Tutor Doctor....................................................... 65, 104 VAST Furniture & Homewares................ 65, 104 V.I.P Home Services Fencing & Home Maintenance........................................... 104

what’snew! Survey shows franchising on the rise in Australia

Despite a relatively flat economy and retail environment, Australia’s franchise sector continues to grow in total sales turnover and employment and its franchisors are confident of further growth in the next 12 months. According to the biennial survey of franchising in Australia, the total annual sales revenue for the country’s entire franchise sector is estimated at $146 billion, up from $144 billion in the previous survey in 2014.

Amber Tiles acquired by Malaysian tile manufacturer Kim Hin Industry (KHI), one of Malaysia’s largest integrated tile manufacturers, has acquired the parent company of an Australian retailer of indoor and outdoor tiles, Amber Group Australia, trading as Amber Tiles. The move expands and strengthens KHI’s Australian presence, it’s main export market. Amber Group Australia has been trading since 1973, with a current network of 27 stores located in NSW, ACT, QLD and a distribution centre based in Blacktown NSW. The Amber Group will now have the benefit of it’s sister company Johnson Tiles (owned by Kim Hin Industry), which has operated in Australia for over 50 years in both domestic and commercial markets. With showrooms in Melbourne, Sydney and Brisbane, Johnson Tiles has a long, proud history grounded in manufacture, product development and customer service. Its global presence, conventional and cutting edge products at competitive prices will add international group research and buying strength to Amber’s offering. “This latest acquisition will help grow Amber’s retail presence in Australia and expand the business significantly,” stated Kim Hin Managing Director, John Chua. “The iconic brand also represents a unique opportunity for KHI to enter the NSW tile and paving sector, expanding and strengthening its presence in Australia.”

6 Business Franchise Australia and New Zealand

The total number of people directly employed in business format franchising in Australia also continues to rise now reaching 472,000 permanent, part-time and casual employees, up from 461,000 two years ago. These are some of the key findings of the Franchising Australia 2016 survey, undertaken by Griffith University’s Asia-Pacific Centre for Franchising Excellence and supported by the Franchise Council of Australia. The headline findings of the Franchising Australia 2016 survey were released at this year’s Franchise Council of Australia National Franchise Convention in Canberra. The full report will be available in January 2017. Mr Bruce Billson, Executive Chairman of the Franchise Council of Australia, said franchising is a robust, vibrant and exciting part of the economy, accounting for approximately four per cent of all small businesses in Australia. He said the survey results show Australia’s franchising sector has continued to perform strongly, against the backdrop of relatively slow economic growth. “The Franchising Australia 2016 survey points to a maturing sector, holding its own in a transitioning economy following the end of the mining boom,” he said. The retail (non-food) industry dominates the Australian franchising sector, with 26 per cent of brands operating in this segment, Professor Lorelle Frazer, Director of Griffith University’s Asia-Pacific Centre for Franchising Excellence said the franchising sector continues to be impacted by intense competition in retailing, particularly non-food retailing. “Food retailing has been more resilient with consumers responding well to variety and innovation in food concepts,” she said. “However, we can expect to see plenty more turbulence in the retail sector moving forward.” A real positive for the Australian franchising sector is its employment growth, which has been on a steady rise since 2012. Significantly, the proportion of people employed on a permanent, full time basis has increased, suggesting a more optimistic outlook ahead.

celebrating 30 years of expos The Franchising & Business Opportunities Expo will kick off 2017 with the Sydney show on 25-26 March, at the brand new ICC Sydney at Darling Harbour. Featuring a striking contemporary design, leading technology and multipurpose spaces, ICC Sydney is located in the heart of Sydney in the active precinct of Darling Harbour on Cockle Bay.

OPORTO ARE NOW SPOONING BEN & JERRY’S ICE CREAM The 30 year anniversary of Oporto wasn’t celebrated with cake... it was celebrated with ICE CREAM - lots and lots of legendairy Ben & Jerry’s ice cream - thanks to Oporto customers. To enhance the customer experience, Oporto wanted to partner with an ice cream brand to provide a new major dessert offering for customers – because nothing is better than flame grilled chilli chicken followed by the taste and texture of delicious ice cream. But rather than the marketing department deciding which brand to approach, through social media Oporto asked their customers what they wanted. The overwhelming response was that they wanted Ben & Jerry’s. Vanessa Rowed, Head of Oporto Marketing, said “We were absolutely thrilled that our customers wanted what we wanted - Ben & Jerry’s! From a brand alignment perspective we felt Ben & Jerry’s was the ideal fit.

The partnership marks a milestone for Ben & Jerry’s as this is the first time they have partnered with a QSR brand in Australia as the brand continues its growth in domestic popularity following its ongoing international success. Ricky Rosen, Brand Manager, Ben & Jerry’s, said: “We’re delighted to partner with Oporto as we see a lot of synergies in values between both brands and we share a similar vision. This includes living by our motto: “love your customer more than they love you”. At Ben & Jerry’s, we have a commitment to respecting the product we serve, making the most fantastic, chunkiest and swirliest ice cream around, which goes hand in hand with Oporto who have a fine tradition in making fantastic flavour-filled food! Our collaboration will mirror our business objective of “linked prosperity”, an objective in which communities, customers and both businesses will all benefit equally.”

“In 2017 we are celebrating 30 years of the Franchising & Business Opportunities Expo with a new venue in Sydney,” says Exhibition Manager Fiona Stacey. “We are also relaunching the Franchise Advice Centre to give visitors quality time with financial and legal specialists to improve or start their own business.” Stacey adds it has been a big year for the Expo, with highly successful shows in Sydney, Brisbane and Melbourne, as well as a new boutique showcase event in Perth, which was very well received by both visitors and exhibitors. Visitors at each of the Expos found a wealth of information and advice available, as well as a huge range of business ideas. Franchising & Business Opportunities Expo 2017: Sydney: 25-26 March at International Convention Centre, Darling Harbour Perth: 7 May at Crown Perth Brisbane: 22-23 July at Brisbane Convention & Exhibition Centre, South Bank Melbourne: 26-27 August at Melbourne Exhibition Centre, South Wharf

For more information go to www.franchisingexpo.com.au

Business Franchise Australia and New Zealand 7

what’snew! MYOB FCA Excellence in Franchising Award Winners Honoured in Canberra

Drive Thru Momentum Going Strong in Brisbane Zarraffa’s Coffee is pushing ahead in their expansion plans for the acquisition of key drive thru sites with the latest opportunity opening up in north-west Brisbane. The closure of the popular Kmart Arana Hills store has made way for a new convenient location within the suburb. Zarraffa’s CEO, Kenton Campbell, said the company has been looking to transition stores from shopping centre locations, with increasingly higher rents, to more accessible locations with both in-store dining and drive thru options for customers. “Arana Hills is the perfect example of our franchisees growing with the company. We provided them with an alternate location to grow their business, which enabled a move to our drive thru model and the opportunity for additional advancement”, said Mr Campbell. “Instore growth, as opposed to increasing the overall number of stores, is important to the business right now and a key part of this plan means relocating traditional stores to higher traffic sites.” Mr Campbell said the company was on track to open at least another ten stores over the next 24 months, with a number of those relocations of existing stores, and are working with franchisees to marry up expansion plans with their goals. “We are highly saturated in our store footprints in south-east Queensland but have many opportunities opening up in regional Queensland, New South Wales and Western Australia. It’s about being smart about our expansion, ensuring we are keeping our customers’ expectations top of mind.” Owners of both Arana Hills stores, Ekant and Kanan Patel, said the new Grovely location is ideal to cater to daily commuters both in their car and using public transport.

8 Business Franchise Australia and New Zealand

L-R: Bruce Billson, Executive Chair of FCA, Helen O’Brien, John O’Brien- CEO and Founder of Poolwerx, winner of Australian Established Franchisor of the year and Damian Paull, CEO of FCA

The Franchise Council of Australia honoured franchising’s best and brightest at the 2016 MYOB FCA Excellence in Franchising Awards Gala Dinner at the National Franchise Convention Centre, Canberra. The winner of the prestigious Australian Established Franchise of the Year Award was Poolwerx, with CEO and Founder John O’Brien accepting the award with a heartfelt speech. As innovation was the theme of the National Franchise Convention, which the awards were a part of, Mr O’Brien had some key messages for what it takes to be ahead of the crowd. “Having a culture of innovation is not enough, you also need a structure and strategy for innovation, having rewards for innovation, having people and the environment in which it’s pretty cool to make mistakes and to push the boundaries. Sometimes mistakes are good. If you don’t take your franchisees, or their staff or your staff along for the ride, the innovation dies on the vine. So you must really have an inclusive process on bringing people into innovation, so that they feel a part of it. Communicate it well and train them well,” he said. Jump! Swim Schools was named Australian Emerging Franchise of the Year. The inspiration behind Jump! Swim Schools business was simple. Ian Campbell, CEO and Founder opened his first purpose-built swim school in 2011 after identifying the difficulty in teaching young beginners in big busy aquatic centres. “By franchising our business, we get increased brand recognition across the market, are able to reach more consumers and help them appreciate what kids are capable of in our swim schools,” he said. A total of 14 Excellence in Franchising Awards were presented on the evening, see page 12 for more details.

Gloria Jean’s Coffees Supports Children’s Charity for Sixth Consecutive Year

Barista Trainer Melita Ferraro said the brand is proud to support the essential work the charity does for Australian children who are sick, disadvantaged or who have special needs. “Dating back to 2011 and encompassing a number of successful fundraising campaigns, our relationship with Variety is really strong, and we are pleased to assist their hard work wherever we can,” she said. This year, Gloria Jean’s Coffees’ support of Variety – the Children’s Charity included in-store collections, and a ‘Cappy Hour’ campaign. The money raised by Gloria Jean’s Coffees franchise partners and guests will go towards the charity’s three key programs: Future Kids, Freedom Kids and Caring for Kids.

Children’s Charity, following fundraising

2016 marked the sixth year in a row that Gloria Jean’s Coffees have nominated Variety – the Children’s Charity as the worthy cause for their largest annual fundraising campaign.

initiatives across all coffee houses.

Gloria Jean’s Coffees Drinks Innovation &

Gloria Jean’s Coffees franchise partners across the country have banded together to donate $45,000 to Variety – the

Variety – the Children’s Charity is committed to empowering Australian children who are sick, disadvantaged or who have special needs reach their full potential. Variety aims to ‘fill the gaps’ in support and prioritises requests for which there is little or no government support. Since 2009, Gloria Jean’s Coffees has raised more than $795,000 for its charity partners through Cappuccino for a Cause.

MELBOURNIANS TO ENJOY A TASTE OF SUMOSALAD’S GREEN LABEL OFFERING! SumoSalad has opened its first Melbourne-based Green Label store in the newly developed Chadstone Shopping Centre. Described as the Southern Hemisphere’s largest retail mecca, Chadstone shopping centre is home to some of the biggest brand names and is sure to entice ardent shoppers from all across the state. As anybody with a passion for retail therapy will know, shopping sure can leave you feeling hungry; SumoSalad’s new Green Label Chadstone store is the prefect pit stop for health-conscious shoppers to grab a nutritious and tasty bite to eat. “We are passionate about providing shoppers with a choice of healthy fast food to give them the fuel they need to get the most out of their day at Chadstone,” says Miro Sojak, SumoSalad Chadstone’s store owner. Having previously run businesses in the IT industry, Miro and his wife Nathalia, who are both very health conscious, were looking for a change in direction and Sumo’s holistic approach to healthy fast food was the perfect opportunity. “We’re really excited and eager about the new store opening. For us SumoSalad is all about offering a premium product that’s as fresh as it can be and packed with flavour. “We’re all about putting the customer first; we give a vibrant and happy service, which makes SumoSalad Chadstone a place you want to come back to — not just for the fresh, nutritious and delicious food, but for the awesome level of service and friendly vibe too.”

Business Franchise Australia and New Zealand 9

c ov er sto ry: h a i r h o us e wa r eh o us e

Hairhouse Warehouse’s new store concept takes the Power of Good Hair to a new level

Good hair just got a whole lot more powerful, with a slick new Hairhouse Warehouse store design that enhances customer experience, within a fresh new store environment. Hairhouse Warehouse has always been a leader in its field. From the brand’s attractive franchise model that offers multiple revenue streams, to its targeted regional expansion rollout, the group has led the way in Australia’s hair and beauty retail and service for over two decades. The realm of visual merchandising is no exception. As consumers adapt their shopping habits to the 21st century, Hairhouse

Warehouse has embraced the changing retail environment with an innovative store design that will revolutionise the way customers navigate the store, and interact with products and staff. “Customers are evolving,” says Franchise Development Manager, Peter Fiasco. “People are increasingly time-poor, and they want their shopping experience to be as smooth and hassle-free as possible. Our new store design will ensure that Hairhouse Warehouse continues to be the destination of choice for Australian hair and beauty retail consumers.” The old store design has worked well for the brand, but it was time to take the store design to a whole new level, and make the store environment customer centric, ensuring that customers find what they want, when they want. “We knew we needed a major update to make sure that we remain on-trend,” says

10 Business Franchise Australia and New Zealand

Co-Founding Director, Joseph Lattouf. “The new store design is all about celebrating the products we sell, and the services we offer.” In moving the brand forward, Hairhouse Warehouse conducted customer research to gauge the areas in which they needed to improve. “We went directly to the source,” says Visual Merchandising Manager, George Manikis. “We asked our customers, how do you want to shop? We asked them questions about their shopping habits and preferences. We conducted case-studies so that we could learn more about the Hairhouse Warehouse customer and how we could improve their experience.” Based on the research and customer feedback, a team of five has worked directly on this project, with input from other head office staff, directors, and franchisees, for the past year.

“The result of over twelve months’ hard work and fine-tuning is a store with a self-select, user-friendly layout that allows the customer to easily compare all of their options, offering the ultimate customer shopping experience.” “We also took into account leading national and international brands to make sure that Hairhouse Warehouse sets a new worldwide benchmark,” says Peter. The result of over twelve months’ hard work and fine-tuning is a store with a self-select, user-friendly layout that allows the customer to easily compare all of their options, offering the ultimate customer shopping experience. “A customer can’t walk into a store and be expected to understand all of the different products and how they work,” George says. “We’ve designed a three-tier system that identifies a problem and then finds a solution to it. The system educates the customer and simplifies their buying journey. “Regardless of what type of customer you are, or what problem you’re seeking a solution to, the new store design makes it easy for you to make a purchase,” George says. “Let’s say you’re looking for a haircare product to treat dry hair. You’d go to the haircare product section, which will be tiered into categories according to the solutions they provide, such as adding volume, protecting colour etc. The categories will be divided into brands, so you’ll be able to easily select your solution from your favourite brand.” Men’s grooming products will be grouped in its own section, and similarly displayed according to brand and category. To assist the buyer’s journey, electrical products such as hair dryers and straighteners will be displayed on a style tool bar, allowing customer to pick them up and feel what they are buying. The new design also enables staff members to better assist customers. Staff can show customers all the products in a section without crossing the entire store. They can offer a wider variety of options than before, and opportunities to upsell. This is great news for franchisees, who can expect the benefits of potential add on sales and encourage customer loyalty. The store’s physical appearance has also undergone a facelift. The floor space has opened up, allowing customers to explore in an intuitive way. Blue lighting surrounds the store frontage, giving the space a clean, contemporary look. For the first time, the salon signage hasn’t been an afterthought, but

rather a key part of the new store design. “Many customers don’t realise that when you walk into a Hairhouse Warehouse store you can buy products as well as get full salon service,” says Store Development Manager, Leah Evans. “Everything from the finishes to the light fittings to the placement of products in the new store design has been meticulously chosen,” Leah says. “Everything has been put in place for a reason. We’re telling a story about every product we sell – where it comes from and how it is used.” As with every change they have embraced, Hairhouse Warehouse has left no stone unturned in re-designing their stores. Joseph Lattouf says that seventy per cent of existing stores will be converted to the new design over the next eighteen months.

“Depending on the individual store, this will either be a complete overhaul or done in sections,” Joseph says. “We are always on the lookout for ways to improve,” Peter Fiasco adds. “We owe it to our franchisees to remain at the cutting edge of the industry.” The brand’s willingness to transform the face of their retail environment and respond to customer feedback will ensure that Hairhouse Warehouse remains at the very forefront of the industry for the foreseeable future. For more information contact Peter Fiasco, CFE via: 0451 370 060 franchising@hairhousewarehouse.cm.au www.hairhousefranchising.com.au

Business Franchise Australia and New Zealand 11

f r anc h i s e co u nc i l of aust r a l i a

NFC16: Alive and buzzing

Imagine the scene - over 500 delegates walk through the open glass doors with a smile, excitement and anticipation evident on their faces. The clink of coffee cups against plates hover in the background as handshakes are made and friendly laughter bubbles from a far off corner, the sound of soft shuffling feet moving past. Not far, exhibitors in the hall continue to set up their stalls and talk to their team, getting ready for the busy day ahead; meeting people from all over Australia and creating new networks for the future ahead.

Welcome to the National Franchise Convention, Canberra. The inaugural National Franchise Convention (NFC16) of 2016 was attended by over 500 delegates and held in Canberra this October with an astounding program for delegates, concluding with the MYOB FCA Excellence in Franchising Awards Gala which recognised exceptional performers within the franchise sector. Opening the NFC was Bruce Billson, Executive Chairman of the Franchise Council of Australia. “I’m incredibly optimistic about the sector,” Mr Billson said. “Never has there been a more significant opportunity for us; even with the challenges of the economy, people still have that sparkle in their eyes and fire in their belly for being in their own business. “We know that most people contemplating entering into a franchise – a quarter of them are husband and wife – and they’re looking at us to be as optimistic and ambitious as they are, and we are. But we need to keep sharing the story of why the franchise model is a great platform for enterprise success.” The joint employer liability was an important

12 Business Franchise Australia and New Zealand

topic and Natalie James from Fair Work Ombudsman provided further insight into the concept and what it means to Australia. The FCA has taken a dedicated proactive approach to informing and supporting participants in the sector during the NFC16 and Mr Billson acknowledged that the issue is one that affects and concerns the encompassing community. “It’s all about creating a more supportive entrepreneurial ecosystem, where enterprising men and women know the ground on which they stand and can make good decisions,” he said. Aptly themed ‘Innovation meets Opportunity’ the program included inspiring keynote speakers such as Alex Malley, CEO of CPA Australia and The Naked CEO, Megan Quinn, co-founder of luxury goods online fashion retailer Net-A-Porter, Dr Sam Prince, Founder of Zambrero and humanitarian aid worker, Australian of the Year 2016, Lieutenant General David Morrison as well as Small Business Minister, Michael McCormack to open the keynote sessions. Peta Credlin, Sky News Contributor and former Chief of Staff also attended and spoke to the audience receiving a great reception. Growing up in a family that owned small

businesses themselves, Peta knew first-hand the challenges and rewards of families that greatly supports the local economy and believes conferences like the National Franchise Convention are so important because it fosters a community where knowledge is transferred and experiences are shared. “I think conferences like these are really important for people in franchises because you need all the support you can get to get your businesses off the ground and make it a success, and you really have to come here to build a network and participate. Ask a stupid question, because there is no stupid question, there is someone in the room that’s gone through the same experience that you have. Come away from it with a network and a support system when you’re back in your own business.” Ms Credlin said. Catherine Monson, CEO of Fastsigns USA was delighted to be in Canberra to present to the delegation and was an enthusiastic supporter of the conference. “I’m really thrilled to be here at the FCA National Franchise Convention and here’s why – it’s an opportunity for me to learn and for me to get better, the advice I give to my friends and certainly to my team members is to be at every single session that you can, take

great notes, meet as many people as you can, collect their business cards… and the week you get back, reach out to the people that you’ve met,” she said. Ms Monson is no stranger to conventions. Speaking to thousands of people each year and inspiring them all, she speaks with the grace of a professional and the tenacity of a successful CEO at the top of her game that turned the business around when the economy was at its lowest, which is why she thinks innovation is such a topical issue. “We live in a time that’s so exciting, because technology is changing so quickly that we have opportunity to do amazing things for our brand and to serve customers better, so technology is definitely a driver…we take a look at the competitive landscape and make sure that we position ourselves way ahead of that. “When I think of the challenges within franchising to get adoption of innovation its always getting your franchisees to do that – and here’s a great example with Fastsigns. We’ve been working very hard to get our franchisees in digital signage… it looks like a big LCD board, and there’s been a lot pushback. It’s an important innovation because we’re seeing huge growth in digital signage and we’ve had to really work, push,

prod, encourage, even incentivise them with rebates to take that scary step to digital signage, so that can be the challenge…to get people to adopt those new innovations, but it can be done.” The Franchise Council of Australia also honoured franchising’s best and brightest at the MYOB FCA Excellence in Franchising Awards Gala Dinner with Poolwerx taking out two major awards, Established Franchisor of the Year and Stephen Hall winning Field Manager of the Year. Founded 24 years ago, the business has evolved from a man-in-a-van operation into a model that supports big businesses with over 106 partners operating close to 100 stores and 300+ vans. “I remember when I was nine years old and I knew in my heart that I wanted to succeed. I wasn’t sure what it was that I wanted to do, but I knew I wanted success.” Mr O’Brien said. As innovation was the theme of the National Franchise Convention, which the awards were a part of, Mr O’Brien had some key messages for what it takes to be ahead of the crowd. “Having a culture of innovation is not enough, you also need a structure and strategy for innovation, having rewards for innovation,

Business Franchise Australia and New Zealand 13

“Never has there been a more significant opportunity for us; even with the challenges of the economy, people still have that sparkle in their eyes and fire in their belly for being in their own business.“ The Franchise Council of Australia welcomed a new inductee for 2016 into the Franchise Hall of Fame, Murray d’Almeida, who formed the Retail Food Group and is Chairman of BPS Technology Limited. Murray d’Almeida has been involved directly and indirectly in the Australian Franchise sector since 1978 and became a member of the FANZ in its second year of inception. Speaking to the delegates, Mr d’Almeida said that being recognised as an integral contributor to the sector was an honour. “Being inducted into the Franchise Hall of Fame is particularly important – because it’s recognition from your peers. Fundamentally in any sector, whatever you do, peer recognition is more important than any other recognition. “I started franchising by accident when I was 15. I was in fact, franchising and I didn’t know it. I had a chain of stores, and thought I would get greater productivity by involving the stores managers in the profitability. So that developed into a system. Someone said to me, “How long have I been in franchising?” and I said, “Is that what I’m in?” It was a surprise to me.” Bruce Billson, Chairman, Franchise Council of Australia

“I think conferences like these are really important for people in franchises because you need all the support you can get to get your businesses off the ground and make it a success, and you really have to come here to build a network and participate.” - Peta Credlin having people and the environment in which it’s pretty cool to make mistakes and to push the boundaries. Sometimes mistakes are good. “If you don’t take your franchisees, or their staff or your staff along for the ride, the innovation dies on the vine. So you must really have an inclusive process on bringing people into innovation, so that they feel a part of it. Communicate it well and train them well,” he said. Although Poolwerx took home two outstanding awards, Mr O’Brien stayed

humble and acknowledged his team. “Taking out the Established Franchisor of the Year is certainly a nice pat on the back for a job well done but I don’t claim the win as my own because none of the success we have generated would be possible without the sum of all our Poolwerx family,” Mr O’Brien exclaimed. It seems like their strategy is on track, as Poolwerx continues to pave their way into international waters, with a recent expansion into the USA 18 months ago in five states.

14 Business Franchise Australia and New Zealand

Mr d’Almeida had the following tips for young entrepreneurs and those new the sector. “Work hard. Use your ears and mouth in the same proportion. Find a mentor, listen to them and never stop learning. If you keep listening to them, you will be a success.” The NFC also showcased NextGen in Franchising, a great initiative to support young entrepreneurs with a business model ripe for franchising. The Franchise Council of Australia (FCA) is uniquely positioned to play a pivotal role in attracting and developing future generations of franchising entrepreneurs. The NextGen in Franchising Global Competition provides the crucial link between future and established generations of entrepreneurs. It incentivises young people to take an active interest in the FCA business community and is a major FCA investment in creating an innovative environment for their professional development and growth. NextGen in Franchising is the beginning

MYOB FCA Excellence in Franchising Award 2016 Winners Australian Established Franchisor of the Year – Poolwerx Australian Emerging Franchisor of the Year – Jump! Swim Schools International Franchisor of the Year – Pandora Jewelry

Catherine Monson, CEO, FASTSIGNS International (USA)

Single Unit Franchisee of the Year, two or more staff – Chris Wall & Robyn Mitchell, Pizza Capers, Gungahlin, ACT

of an evolving dialogue with young entrepreneurs to understand their overall professional development needs and their business goals to empower them as business leaders for the future.

Single Unit Franchisee of the Year, less than two staff – Shaun Birley & Sam Orders, InXpress, Sydney CBD

Three finalists from Australia competed to win a chance to represent Australia in 2017 in Las Vegas, at the NextGen competition at the International Franchise Convention and be mentored by one of the FCA’s Hall of Fame members. Finalists included Roll’d and Real Property Photography, with Salts of the Earth winning the coveted prize at the MYOB FCA Gala Awards night.

Franchise Woman of the Year – Natalie Brennan, Foodco, NSW Field Manager of the Year – Stephen Hall, Poolwerx

A total of 14 Excellence in Franchising Awards were presented on the evening, which was proudly sponsored by MYOB. Outstanding individuals and businesses were recognised across a range of functions including franchisees, suppliers, support staff and franchise systems. www.franchise.org.au

Multi-Unit Franchisee of the Year – Anthony Stahl & Daniel Mesiti, Boost Juice, Chatswood, Bankstown, Eastgardens & Top Ryde, NSW

Supplier of the Year – Franchise Relationships Institute Excellence in Marketing – Specsavers Dr Sam Prince, Founder, Zambrero

Excellence in International Franchising – G.J Gardner Homes Franchise Innovation – Boost Juice Bars Franchisor Social Responsibility – Bridgestone Australia Franchisee Community Responsibility & Contribution – Ryan Kirkham, Baker’s Delight, Kawana & Maroochydore, QLD Franchise Hall of Fame Inductee 2016 – Murray d’Almeida NextGen winner – David Lindsay, Salts of the Earth

Peta Credlin, SKY NEWS Contributor

Images supplied by: www.AHCPhoto.com.au

Business Franchise Franchise Australia Australia and and New New Zealand Zealand 15 15 Business

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FIND YOUR IN FRANCHISING If you are looking to buy a franchise, the first thing you want to do is find an industry which enables you to perform a role that you can be passionate about. If you are an employee, and you fall out of love with what you are doing, you can easily hand in your resignation and go do something new. In franchising, on the other hand if you have invested a lot of money and a lot of time training, it is not so easy mentally to walk away from, even if you are not enjoying yourself. We have just conducted our latest industry wide Franchisee Satisfaction Survey as part of the 2016 topfranchise awards with over 1000 franchisees and there is no surprise that being passionate about what you do, and having family and friends believe in what you do is a critical factor when franchisees think about renewing their agreements with a franchise brand. It makes up a full quarter of their decision making, so if you are thinking long term, take the time to reflect on what you can get passionate about and feel proud about. Some prospective franchisees will take the familiar well-trodden path of looking for a

“There will be parts of every industry that you may not enjoy; it’s just about making sure your passion runs deep enough to get through those challenging moments.” Ian Krawitz | Head of Intelligence & Founder | 10 THOUSAND FEET

franchise opportunity in an industry they know and have experience in. But what if there are no suitable franchises in the industry you are familiar with? You will need to do both desktop research and get out amongst it, and see what it is like to be a franchisee in different industries. As part of a discovery process, most franchise brands will encourage you to spend time with existing franchisees. Where feasible, do as much of this as possible. For example, running a café and being a big part of your community may sound great, but you should see how you feel after a day of being on your feet non-stop. Similarly, cleaning homes might sound like a no fuss business, but you should see how you feel about working on your own each day and not having a workplace camaraderie. There will be parts of every industry that you may not enjoy; it’s just about making sure your passion runs deep enough to get through those challenging moments.

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If you don’t know where to start, here is an insight into how to find your passion and why franchisees from the brands who took out the 2016 topfranchise Awards Passion Top 10, get so excited about going to work every day.

Smartline Personal Mortgage Advisers

Smartline are in the mortgage broking business. From the outside this may not look particularly interesting, however, scratch the surface and you will find that helping everyday Australians get into their dream homes, when emotions and hope are heightened is highly rewarding.

Snooze

According to Medibank, in a recent study of 50,279 Australians, almost two million of us are affected by sleeping disorders or sleep apnoea. Whilst a complex issue,

Franchise System Setup

Franchisee Training HR Support & Helpdesk Online Operations Manuals Network Development Strategy Executive Recruitment Operational Team Support Digital Marketing Strategy www.fcbs.com.au contact@fcbs.com.au (03) 9533 0028

Quality ISO 9001

Business Franchise Australia and New Zealand 17

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having a good mattress and bed can make a world of difference in sleeping through or tossing and turning all night. Snooze franchisees get a real kick out of making a real difference to the mental and physical health of Australians.

“Some prospective franchisees will take the familiar well-trodden path of looking for a franchise opportunity in an industry they know and have experience in. But what if there are no suitable franchises in the industry you are familiar with?”

Mister Minit

Yes, fixing shoes or cutting car keys may seem everyday, but it is the culture that Mister Minit have created, to see the extraordinary in the everyday and to drive a mentality of care and service that flows through to their franchisees. Mister Minit’s motto is “Real People, Fixing Problems”, one example that was shared with me by a customer of Mister Minit is that they were desperate to find a dog leash as they needed to have their new pet on a leash when getting it registered. After being dismayed that no shops sold dog leashes, as a last resort they stopped in at Mister Minit. Mister Minit don’t sell dog leashes, but the franchisee Christine, set about making a dog leash from spare material just to help out and make a customer’s day.

Mrs. Fields

Putting a smile on a customer’s face is not hard to do when you are selling delicious cookies. Mrs Fields also offer coffee and bakery products such as Toasties and it is these everyday products that help to drive frequent customer visits, enabling franchisees to get to know their customers more and so in turn developed a connection with individual customers in their community.

Anytime Fitness

Anytime Fitness are a group of healthy franchisees, encouraging others to be active and stay healthy. Given the low staffing model, Anytime Fitness franchisees also work far less hours than the industry average for franchisees, with plenty of time off making them look very successful to family and friends.

MLC Advice

Part of the National Australia Bank, MLC Advice is a business steeped in history. It is the everyday difference that franchisees make with their clients through financial planning that provides franchisees with immense satisfaction. It is not the financial planning itself, but rather the outcome that franchisees deeply care about, in helping their customers retire with the lifestyles they want.

Choice Home Loans

Choice Home Loans is also part of the National Australia Bank stable, and once again what makes franchisees excited is not the financial transaction itself, but rather the outcome on the other side. For Choice Home Loans franchisees it is about both sides of the emotional scale, the euphoric side of helping a first home buyer into the market, which is a classic story of joy. On the other side of the coin, there are lots of stories about Choice Home Loans brokers helping families get out of financial hardship by consolidating credit card debt and other loans into a sustainable repackaged loan that relieves financial stress.

Gutter-Vac

It may seem like a straight forward service, but for Gutter-Vac franchisees it is the interaction with their customers that brings them the buzz. While customers can’t get up on their own roof to see the service in action it’s the before and after photos of a gutter that has been cleaned that brings the service and customer experience to life. Every customer receives such a photo with their job report and the testimonials flood in, giving franchisees the warm glow that comes with a job that is appreciated.

Snap-on Tools

The Snap-on Tools team is so passionate about what they do and the quality of the products they supply, that you fast find yourself entranced and ready to buy the latest set of screwdrivers and spanners, as well as a set of drawers to house them all. Most Snap-on Tools franchisees are pretty handy themselves and many have been around the automotive industry or other workshops which forms a core customer base in servicing automotive aeronautical and mining mechanics and providing the latest gadgets as well as classic tools.

Kwik Kopy

Kwik Kopy franchisees build up long standing working relationships with

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their customers. As a B2B franchise, Kwik Kopy franchisees enjoy repeat business, and with that comes years of getting to know individual clients as people as well as getting to know their print and design needs. Further being surrounded by creativity is rarely dull, Kwik Kopy franchisees get to design or print thousands of jobs each year that express the creativity of their clients. When I told my late grandfather, who was a sports tragic, that I really enjoyed fishing, he said, “Ian, every person to his own sport” and so it is with being a business owner. Remember to reflect on what you can get passionate about and go and experience a day in the life of a franchisee before you decide. To read more about the most passionate franchisees, see topfranchise.com.au and best of luck in your search! Ian Krawitz is the founder and Head of Intelligence at research house 10 THOUSAND FEET and franchisee satisfaction rankings website topfranchise.com.au. Ian has led the 10 THOUSAND FEET team through participation tracking studies, customer, client, and franchisee satisfaction projects, consumer behaviour, segmentation, usage and attitude, advertising impact, media consumption, brand repositioning, concept development, brand and market sizing research projects. Ian is also the founder of the not-for-profit 10 THOUSAND TREES, planting trees in Australia and Nepal and encouraging Australians to be more environmentally conscious in their purchasing decisions. Topfranchise.com.au rates franchisee satisfaction across key criteria see topfranchise.com.au for more details. Ian can be contacted at: 02 8080 7544 iank@10thousandfeet.com

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Great ways to win in business! Simplicity is the path to success in almost everything, particularly in the modern business world where change occurs so quickly. The lean, simple business has a greater ability to adapt, differentiate and diversify to meet the future needs of customers.

I have the privilege of working with businesses across the globe and all too often the path to success lies in finding the simple things that allow you to win at the game of business. Here are four simple strategies to ensure your business remains relevant now and in the future.

Fundamentals Rule – you can’t win if you don’t!

When we talk about the future needs of our customers we should be careful that we don’t eliminate or diminish the things they love about us right now. There is a lot of talk in business about how we need to be early adopters of the next trend, technology, latest

20 Business Franchise Australia and New Zealand

gadgets, apps and ideas. We are told that if we don’t embrace these things, our business will be left in the dark ages. Before you start to invest and implement in these ideas, you need to understand that, special doesn’t matter if the fundamentals are broken! Recent research by Esteban Kolsky from thinkJar shows that 67 per cent of customer churn occurs because of poor service, and that means their fundamental needs have not been met. There’s a hotel chain that gives you a warm chocolate chip cookie when you check in. That’s a nice addition, but it doesn’t count if the receptionist is rude or the beds are hard or the bathroom is dirty.

A company calls me to offer extra free data if I extend my mobile plan. I would love it, except it takes them two hours to answer the phone every time I have a problem. So before you get all excited about introducing the next great idea, make sure you do the fundamentals well. Know EXACTLY what the fundamental needs of your customers are, and get those right 100 per cent of the time before you step it up and Play a Bigger Game.

Why you need to get your good news in front of everyone! We live in the reputation economy. Social media has completely transformed the ability of consumers to share their thoughts and ideas on the quality of your businesses, place, product, people and performance.

“If the game is not changing you are going stale and customers can smell a stale business. They look for go-getters, the disruptors, the business that is embracing the future.” Rowdy Mclean | Leadership & Business Consultant

On the surface that seems scary, because we all know that bad news spreads like wildfire. That’s why you need to be creating and sharing your good news stories, with as many people as possible as often as possible. When people are looking at your profile on a social media site that rates a business performance such as TripAdvisor, Urbanspoon, Google Reviews and a host of others it’s important that there is plenty of good news to balance

out any complaints or bad news. Its not just social media that matters, getting the good news in front of your employees is just as important. So if you support a great cause, participate in a charity event, make a customer’s day or have the best profit week ever, tell your employees all about it. This serves two purposes: 1. It helps the employees connect with the organisation and builds

Business Franchise Australia and New Zealand 21

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pride and morale and 2. Your employees will share it with others. PACK & SEND produce a book (they have thousands of copies printed) full of the great stories of how they have met and exceeded their customers’ needs and how their employees have made that happen. Everyone wants to be in that book, and that’s the key; in business, people want to be part of the good news stories, customers want to do business with companies that are doing good, so get them out there.

The relentless pursuit of excellence – have a rigorous and robust improvement strategy Most businesses stumble from one week to the next, doing the ‘same old same old’ in the same old way. If they do think about playing a bigger game, it’s usually at the annual conference or it takes up the owners’ free time while they are taking that precious two-week holiday. It’s often said that we need to take time to work on the business, not in the business. This is so true. It’s easy to get caught up in the daily grind and before you know it another month or year has slipped by and all your best plans and ideas have gathered dust for another year! So, set aside the time and do the work, preferably weekly. When I am working with businesses we set their ‘non-negotiables’. These are the absolute must happens, without fail, to an exact standard every single time. We set them across the whole business and in all areas (just this simple concept can make a massive

Make it a game and get your team in the game. If you’re not growing, you’re going bust and no one wants that!

difference). Often the non-negotiable for the owner is to lock in (and I mean –LOCK IN) time to ask themselves two very important questions: “What’s working well?” (focus on doing more of this) and “What could work better?” (fix this) They need to be robust in the analysis and relentless in the execution. That’s how change happens.

Why all businesses need to play a bigger game for growth! In the modern business world if you are not green and growing you are probably ripe and going rotten. If you are not growing you are most likely going backwards, as your competitors streamline their businesses, adopt new ideas and new technologies, pursue new markets, new strategies and new products. If the game is not changing you are going stale and customers can smell a stale business. They look for go-getters, the disruptors, the business that is embracing the future. Growth is not just about profits. Growth can be about product margins, market share, employee engagement, customer satisfaction, product diversity, brand recognition, market penetration, community engagement, venue

22 Business Franchise Australia and New Zealand

quality and diversity, speed of service and quite a few others. The key here is to decide what needs to grow or improve and measure it constantly, report it, create a scoreboard and track it. Make it a game and get your team in the game. If you’re not growing, you’re going bust and no one wants that! Rowdy Mclean is an international Keynote Speaker, Author, Motivator, and Leadership & Business Consultant. Rowdy provides clients with the inspiration, insights, systems and strategies to Play a Bigger game – how to achieve more, be more, do more and have more than they ever thought possible. Rowdy has presented to over 250,000 people across the globe and his latest book Play a Bigger game has been published in seven countries. He is an entrepreneur and adventurer that likes to shake up the status quo and is obsessed with success. Do you have what it takes to Play a Bigger Game? Take the checklist at rowdymclean.com

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The pros and cons of borrowing from family to buy a franchise Although bank interest rates are at record lows in Australia, many potential franchisees still canâ&#x20AC;&#x2122;t raise the finance to acquire a franchise and are increasingly turning to nonbank lenders, particularly their parents and family members. The Franchise Advisory Centre estimates around 10 per cent of new franchisees are now

funded or underwritten by family finance, which it terms the Bank of Mum and Dad (BOMAD).

BOMAD financing on the other hand, is often based on emotional, rather than purely financial considerations.

BOMAD financing is very different from traditional bank lending. Banks will methodically and unemotionally evaluate a loan application, and will ultimately price their risk based on the security offered by the borrower, and their capacity to service the loan.

If the Bank of Mum and Dad underwrites a loan provided by a bank by giving personal guarantees, or putting their house up for security, they bear secondary risk if the franchise goes bad and the loan is not repaid.

The security requirement will normally boil down to bricks-and-mortar real estate (usually the borrowerâ&#x20AC;&#x2122;s home), and the servicing requirement will be assessed on the businessâ&#x20AC;&#x2122; capacity to generate enough cash to repay the loan and meet all its other obligations (as well as pay a reasonable rate of return to the operator).

24 Business Franchise Australia and New Zealand

However, if the Bank of Mum and Dad is the loan provider themselves, they bear the primary risk if the loan goes bad, which can have a flow-on effect to the relationship between the family members involved. There are a number of advantages and disadvantages of BOMAD financing for franchisors and franchisees. Here are a few:

appropriately, and understand that all help offered by parents is generally made with the best of intentions.

“Mum and Dad as proud (and invested parents) will always be more supportive and interested in the franchisee’s success than a bank.”

Lack of proper documentation

Jason Gehrke | Director | Franchise Advisory Centre

Advantages for franchisors: Access to younger, potentially more talented candidates With Baby Boomers approaching retirement age, more and more franchisees are coming from the ranks of Generation X and Generation Y. Generation X are often mortgaged to the hilt due to the rising property market, so have some real estate equity for security, but often not enough to buy a business. On the other hand, Generation Y can’t afford to enter the property market, so rarely have any real estate equity to offer. However both of these generations bring youth and vigour to franchising and are desirable candidates for franchisors. BOMAD financing may be the only way they can afford to get into business for themselves.

Disadvantages for franchisors: The loan is not treated as seriously as bank finance A franchisee risks all manner of adverse consequences if they miss repayments or default on a bank loan. These consequences are often absent for a BOMAD loan, which may not even be documented with a loan agreement between the parties. Therefore if the cost of failure to a franchisee is low, their drive to succeed may also be low. This is not a strong recipe for success and if the franchisee loses money, they may simply treat it as an advance on their inheritance, which might upset the family dynamics for a bit, but is often nowhere near as severe as what will happen if a bank doesn’t get repaid.

This form of reverse inheritance (ie. the kids passing something to their parents) is a nightmare for franchisors, and even though it might be a breach of the franchise agreement, may be tolerated in preference to shutting down the outlet altogether. The parents who end up running the business might never have attended franchise training, or fully understand the operations and culture of the business. Often for the franchisor, this makes a bad situation worse.

Advantages for franchisees: Potentially easier access to finance on more favourable terms Borrowing from the Bank of Mum and Dad may not require any securitisation, and may involve other more favourable terms (such as a lower rate of interest) compared to a bank loan. This can make life a lot easier for the franchisee, so long as they treat the loan seriously, which means at the very least they should still prepare a business plan and agree to minimum repayments over a set timeframe just the same as they would need to for a bank. Plus, Mum and Dad as proud (and invested parents) will always be more supportive and interested in the franchisee’s success than a bank.

Disadvantages for franchisees: Interfering parents

Mum and Dad might end up running the business

Just as Mum and Dad are proud of their child’s achievements in business (with their money), so too will they offer unsolicited advice, guidance and other assistance that may be counter to the franchisee’s training or intuition, and be far less helpful than intended.

If the business underperforms badly, the franchisee’s parents may become so concerned about their investment that they step in to influence the operation of the business, or are forced to take control altogether.

Often this unsolicited support will be an unhelpful distraction to the smooth operation of the business, and at other times, it will be extremely useful. The key for the franchisee is to take the rough with the smooth, filter

BOMAD loans are often undocumented, meaning they are not written down but are loosely based on a handshake or mutual understanding. If they are written down anywhere, they are rarely anywhere near the standard required for a bank loan. To eliminate the opportunity for future family arguments over money, BOMAD loans need to be documented via a formal loan agreement between the borrower and lender, indicating the principal to be lent, the term of the loan, the rate of interest to apply, and the consequences of default. Additionally, the parents should amend their wills to acknowledge the loan as an asset of their estate, and outline whether the loan should be offset against any other inheritance due to the child in the event of their passing. This helps reduce the potential for ugly disputes between siblings when dealing with their parents’ estate, or the risk of an executor calling-in the loan to settle the affairs of the estate. A franchisor would be wise to ensure that any BOMAD-financed franchisee has a proper loan agreement. It may even make it a condition of granting the franchise that it be provided with a copy of the loan agreement to ensure that the franchisee is committed to repaying the loan and that the conditions of the loan are consistent with those of the franchise.

The bottom line This is not an exhaustive list of the pros and cons of BOMAD financing, however it does highlight some key considerations for both franchisees and franchisors. BOMAD financing is expected to grow in future and those franchisors who learn how to embrace it whilst managing its associated risks wiill potentially accelerate their growth compared to those who don’t. Jason Gehrke is the director of the Franchise Advisory Centre and has been involved in franchising for more than 25 years at franchisee, franchisor and advisor level. He advises both potential and existing franchisors and franchisees, and conducts franchise education programs throughout Australia, and publishes Franchise News & Events, a fortnightly email news bulletin on franchising issues and trends. www.franchiseadvice.com.au

Business Franchise Australia and New Zealand 25

pr o fi l e : L e a d er s h i p Manag em en t Aust r a l as i a

ACHIEVE YOUR POTENTIAL with LMA Since being established in 1972, Leadership Management Australasia (LMA) has been operating at the forefront of People Development and has an enviable track record. Over these years LMA has had one unwavering focus – the delivery of measureable results. In fact, LMA uses a unique development process which guarantees measurable increases in performance and profitability. LMA has worked with over 130,000 participants throughout Australia and New Zealand to help them achieve exceptional results in their professional and personal lives. With courses in leadership, management, productivity, communications, sales skills and teamwork development, LMA is focused on developing people to become the best they can be - to achieve results that positively affect the bottom line and increase their overall productivity and that of their team. As a leader in people development, LMA doesn’t train people, LMA develops people – and there’s a big difference. Information received through traditional training methods is quickly forgotten. However, when you can actually change and improve the way people think, work, act, interact and live, their value to their organisation will continue to grow indefinitely.

availability of federal and state funding attracted several well-documented and unscrupulous operators, targeting the wrong people and not providing courses or support to generate the best results for the participant or their organisations. In the face of the reputational damage done to the industry, LMA has focused, and will continue to focus, on developing people to be the best leaders and managers they can be in their industries and sectors. Looking to the future, the challenges facing Australasian businesses are becoming more complex. Leadership and Management skills are crucial to meeting these challenges. This continues to present LMA with a great opportunity – the opportunity to provide the market with the critical skills they need to grow and thrive.

Always Developing – The LMA Way LMA is an innovator in the people development industry. With a range of leadership and management courses that are specifically aimed at developing people, the focus is always on what is of most benefit to the key partners in the learning process; the Participant, their Managers and the Organisation as a whole.

An ongoing focus on the future

With updated course material, learning resources and opportunities for customised programs to suit different industries and differing learning styles, LMA is determined to remain at the forefront of their industry so as to continually improve leadership, management and productivity throughout organisations – to push their performance and bottom line to a new level.

No question, these past number of years have been challenging for the training and development sector in Australia. The

It’s an exciting time to be a part of an industry that is building the leaders of tomorrow with the right tools and the right support to

26 Business Franchise Australia and New Zealand

ensure the results for each participant and organisation are truly extraordinary.

Join the Leaders in People Development – Achieve your Potential With a current network of 20+ dedicated and enthusiastic Licensees throughout Australia and New Zealand, LMA is now looking to attract new licensees who are determined to grow a quality business that will provide tangible professional and personal benefits. LMA is on the lookout for people who are selfmotivated, ready to run a highly rewarding business, are equipped with strong business, communication and presentation skills and are surrounded by a good network of contacts. New Licensees to LMA receive the best possible training and support to enable them to start and grow a successful and profitable business. Along with structured training, one-on-one coaching and mentoring, new licensees also receive extensive marketing support, a strong range of resources and access to various conventions throughout the year, together with opportunities to work with other licensees on local and Australasian-wide projects. With the dedicated resources and support to succeed, along with the established name and industry respect of LMA, it has never been a better time to join the industry leader in people development and allow your natural leadership abilities to lead you into a new and exciting business. For more information contact National Sales and Marketing Manager Bob McCarthy: 0417 778 030 bmccarthy@lma.biz www.leadershipmanagement.com.au

Leadership Management Australasia (LMA) Leadership Leadership Management Management Australasia Australasia (LMA) (LMA) has been creating exceptional results has been creating exceptional has been creating exceptional results results through people for over 40 years. through through people people for for over over 40 40 years. years. This is your Opportunity to Own and Grow This is your Opportunity to Own and Grow This is your Opportunity to Own and Grow Your Own Business in Australia and New Zealand. Your Your Own Own Business Business in in Australia Australia and and New New Zealand. Zealand.

Leadership Leadership Management Australasia (LMA) is a professional B2B business in the Leadership Management Management Australasia Australasia (LMA) (LMA) is is a a professional professional B2B B2B business business in in the the Leadership Management Australasia (LMA) is a professional B2B business in the multi-billion dollar professional development industry. As a leader in people multi-billion dollar professional development industry. As a leader in people multi-billion dollar professional development industry. As a leader in people multi-billion dollar professional development industry. As a leader in people development, development, LMA doesn’t just train people, LMA develops them. development, LMA LMA doesn’t doesn’t just just train train people, people, LMA LMA develops develops them. them. development, LMA doesn’t just train people, LMA develops them. LMA is looking to grow further and is on the lookout for natural leaders who are LMA LMA is is looking looking to to grow grow further further and and is is on on the the lookout lookout for for natural natural leaders leaders who who are are LMA is looking to grow further and is on the lookout for natural leaders who are determined to grow a quality business that will provide high margins and the determined to grow a quality business that will provide high margins and the many determined to grow a quality business that will provide high margins and the many many determined to grow a quality business that will provide high margins and the many personal benefits and freedoms that come with owning their own business. personal benefits and freedoms that come with owning their own business. personal benefits and freedoms that come with owning their own business. personal benefits and freedoms that come with owning their own business.

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Opportunities Opportunities are are limited limited -- Contact Contact our our New New Opportunities are limited - Contact Licensee support team directly to out more Licensee support team directly to find findour outNew more Licensee support team directly to find out more

Michelle Michelle Ioannidis Michelle Ioannidis Ioannidis Michelle ttt 03 9834 4566 03 9834 4566 e mioannidis@lma.biz 03 9834 Ioannidis 4566 e e mioannidis@lma.biz mioannidis@lma.biz t 03 9834 4566 e mioannidis@lma.biz

Bob Bob McCarthy Bob McCarthy McCarthy Bob McCarthy m 0417 778 m 0417 778 030 e bmccarthy@lma.biz m 0417 778 030 030 e e bmccarthy@lma.biz bmccarthy@lma.biz m 0417 778 030 e bmccarthy@lma.biz

Creating Creating Creating

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through through through

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e x pert a dv i c e

Key Success Factors for Email Marketing

28 Business Franchise Australia and New Zealand

When it comes to retail marketing, email reigns supreme. While it’s not as flashy or as viral as other forms of digital marketing, email still offers high return on investment. But email marketing’s impact goes beyond just revenue. It helps support business goals – increasing lead generation, improving brand awareness, improving data quality, and increasing website traffic. Though email marketing can be one of the most effective tactics for reaching these goals, many retail marketers struggle to run a successful email program. But it can be done. The basic rules are comparatively straightforward. In this article we outline seven key success factors for valuable email marketing.

Your reputation is critical to reaching the inbox Successful emailers make sure the messages consumers really want are delivered to the inbox, and unsolicited messages and spam are not. Just like banks use a credit score to make lending decisions, mailbox providers consider your sender reputation when determining whether your messages are legitimate and should be delivered to the inbox. A poor reputation will land your messages in the spam folder. There are many factors that contribute to your sender reputation. Luckily, the most

“Your email messages are not the only ones your customers receive. There is a lot of competition, so creating an engaging experience is critical not only to protect your deliverability, but also to stand out in the inbox.” Theo Noel | Regional Director | APAC at Return Path

important factors are within your ability to control and correct:

Take advantage of this enthusiasm—start engaging them right away.

• Create a reason to engage

Send a confirmation: Confirmation—or opt-in—emails not only help spark engagement, they also serve as a way to maintain a clean list. By sending a confirmation email, you are able to verify that the address belongs to an active user and ensure you have permission to continue emailing them.

• Understand and track engagement • Find the right frequency to boost ROI • List quality is essential for Inbox placement • Spam Complaints damage reputation and deliverability • Avoid Blacklists • Take advantage of Whitelists. The following factors can help you run more successful email marketing campaigns.

Create a reason to engage

Your email messages are not the only ones your customers receive. There is a lot of competition, so creating an engaging experience is critical not only to protect your deliverability, but also to stand out in the inbox. Below are four tactics to help you increase and maintain subscriber engagement. On-boarding: The easiest time to build engagement is at the beginning of the relationship. A consumer who chooses to receive your email is actively expressing interest in your brand and your products.

Welcome messages: Whether it is a simple “Thank you for subscribing” message or a multipart series highlighting the different benefits and content subscribers can expect, the goal is to start off strong. Test everything: Email allows you to test and optimise all the elements of your campaign.

Understand and track engagement

Mailbox providers determine engagement based on how a recipient is interacting with their mailbox. Do they ever access their mailbox? Do they read and take action on your messages or do they ignore your content? Worse yet, do they actively complain about your messages?

Business Franchise Australia and New Zealand 29

e x pert a dv i c e

Continuing to email subscribers who are not engaged with your program will not only hurt your engagement metrics, it will impact your reputation and therefore your deliverability. These categories allow us to help our customers identify which subscribers to focus on and which to remove to protect their program.

Find the right frequency to boost ROI

Since every email has the potential to drive sales, sending more email should result in higher ROI, right? Unfortunately, that’s not quite how it works. Your optimal sending frequency requires a delicate balance between over-mailing and under-mailing. When you mail too much, you risk subscribers tuning out and ignoring you or you risk annoying your subscribers to the point of higher unsubscribes and spam complaints. Mail too little, and you risk getting overlooked in a subscriber’s bulging inbox, your subscribers forgetting your brand, or why they signed up. Neither of those situations are ideal. To find your frequency sweet spot—just as you should for any other element of your program—you need to test.

List quality is essential for inbox placement

While every retailer would like to have a huge list of loyal, engaged customers, quality is much more important than quantity when it comes to your email list. List quality is the second major factor mailbox providers assess when deciding whether to deliver your messages to the inbox or the spam folder. To protect the quality of your email list, you need to constantly monitor your list to identify and remove any unknown users, spam traps, and inactive subscribers.

Spam complaints damage reputation and deliverability

Poor email reviews, in the form of complaints, can be damaging to both ROI and your brand’s overall image. Receiving a complaint from a user not only damages that customer relationship, but it also impacts a brand’s reputation as a sender. Complaints begin to impact your sending reputation if your email complaint rate exceeds 0.1 per cent. It is crucial to have a strategy in place to immediately handle complaints when they occur. One of the best ways to do this is by using feedback loops. Feedback loops provide a way to identify and remove subscribers who complain about email they receive via the “This is Junk/ Spam” button. Subscribers can complain for a number of reasons at different points in the sales cycle. If complaints happen early in the subscriber relationship, it could be that they didn’t intend to sign up for your email program, or don’t remember doing so.

Avoid Blacklists

A blacklist is a list of domains and IP addresses reported to be known sources of spam. Retailers can land on a blacklist for many of the same reasons that cause damage to their reputation—spammy behaviour. To prevent your brand from landing on a blacklist: • Collect clean data. Avoid buying and renting email lists. • Monitor and remove spam traps. • Remove any inactive subscribers who have not responded to a re-engagement campaign, as these have the potential to become recycled spam traps.

30 Business Franchise Australia and New Zealand

“Your email messages are not the only ones your customers receive. There is a lot of competition, so creating an engaging experience is critical.”

Take advantage of Whitelists

A whitelist is a list of senders that have proven themselves to employ best practices, and as a result, are rewarded with a few perks. The perks differ depending on the whitelist and the mailbox provider, but typically they include less stringent spam filtering and consequently higher inbox placement rates. In addition to whitelist services for specific mailbox providers, there are a few deliverability companies that offer a whitelist service that provides enhanced benefits across multiple mailbox providers. While senders with great sending reputations do see high inbox placement, whitelisting services help increase and protect inbox placement— particularly around crucial times like the holiday season. Return Path analyses the world’s largest collection of email data to show businesses how to stay connected to their audiences and strengthen their customer engagement. Our data solutions help analysts understand consumer behaviour and market trends. We help mailbox providers around the world deliver great user experiences and build trust in email by ensuring that wanted messages reach the inbox while spam doesn’t. +61 2 8188 8700 www.returnpath.com

Fo c u s Fe at u r e : X- Go l f

X-Golf:

A CLASS OF ITS OWN Managing Director Ben Styles decided early in his professional career that an office-based business life was not for him.

Using the most advanced and accurate software and hardware, the X-Golf golf simulation experience is out of this world. State of the art ball tracking technology delivers astounding realism through an innovative and market-leading combination of camera systems, infra-red lasers, impact sensors and gaming software.

corporate events and more. Ben says, “Our golf simulators have a very diverse customer base and can be installed in a wide-ranging type of facility: from shopping centres, golf shops, RSLs, taverns and individually in residential or commercial properties. With five types of simulators - with a liquor licence and food offering - there is no ‘one size fits all’!

After studying a Commerce and Management degree, Ben then shunned the corporate life and became a top-level amateur golfer; touring the globe for seven years.

Ben, after witnessing first-hand the increasing challenges to the traditional golf clubs and members, has brought one of the world’s oldest and most loved sports into a new era for Australians and New Zealanders.

“This means that we also appeal to a broad spectrum of potential franchisees. Whether you are looking to start your own business as you’re fed up working for someone else but want the support of a franchise system or you’re a hands-off investor looking for a retirement plan, we welcome enquiries from anyone and everyone. We don’t have a preferred type of franchisee but we do love it when the person is an entrepreneur and go-getter!”

After travelling the world and during his subsequent involvement and investment in a franchise chain of golfing shops, Ben recognised there was a hole in the market and a large number of potential customers – with disposal income but time poor - ready and waiting for a quality indoor golf facility.

PIONEERS Seeing the popularity of indoor golf simulators around the world, Ben became the first overseas franchisor for X-Golf. Since then, the franchise has spread throughout the Middle East, Japan, USA and Russia, along with 450 centres in South Korea, cementing its position as a truly global company.

FRANCHISE OFFERING Since opening the first Australasian indoor kiosk in Malvern, Victoria, the X-Golf franchise network has steadily grown. Along with numerous sites in Victoria, kiosks are now open in South Australia, Queensland, New South Wales as well as Christchurch, New Zealand. With nine more scheduled to open within the next six months alone, now is the perfect time to join this growing franchise network. X-Golf appeals to all ages and demographics, from beginners to experts; young and old; men and women, school groups, bucks groups,

32 Business Franchise Australia and New Zealand

The X-Golf Head Office team work closely with each franchisee. Once the machines have been ordered - taking approximately 60 days to arrive - support is given with site selection, negotiation of any leases with landlords and fit-out. A Franchise Development Manager sets up a geographical model around the particular area and helps with local area marketing and sales

“We’re breaking down the barriers and pre-conceptions of people that have played other golf simulators as our X-Golf simulators are the best in the world and draw the customers in.”

support and training; identifying the customer base within the local area and providing any necessary support for the Grand Opening. Each franchisee is granted an exclusive territory with defined boundaries, ensuring that no other franchisee is able to operate within that area. Ben says, “We are constantly reviewing and developing new trends, product ranges and marketing and IT strategies. This includes integrating a new Point-of Sale software system and completely overhauling our website and social media policies. Recognising that once an outlet is opened it quickly gains a cult following with its weekly leagues, professional lessons, and competitions, X-Golf have introduced a new and never seen before online games element. This allows regular players to create an online profile which records their statistics, rounds of golf played, lessons taken, training received and is transferable to any X-Golf simulator around the country. X-Golf are pioneers in the marketplace. “There are other golf simulators out there but no other franchise network like ours,” Ben says. “Other companies simply sell the simulators - if you buy one of them, you are really just buying the hardware and then you have to set up your new business from scratch. We’ve found the majority of this type of operator fail. “We’re breaking down the barriers and preconceptions of people that have played other golf simulators as our X-Golf simulators are the best in the world and draw the customers in.”

EMBRACING THE FUTURE In a recent Nielsen report Meet The Modern Golf Industry Customer golf clubs are perceived by some as expensive, exclusive and with too many rules and regulations placed upon their members. X-Golf changes that view. A fun and social atmosphere allows players to connect with others and allows a clear pathway for learning and developing their game.

The report also highlighted the potential market for golf participation that is currently being missed by traditional methods. Australians that play regularly number 1.15m, however the real opportunity lies in the 6.9m that have not played in the past 12 months, but have shown interest in the game. X-Golf provides the drivers to capture this customer. Shorter games available – rather than the traditional 18 holes – mean players can fit golf into their ever-busy lives plus there are no restrictions on tee-off time as each centre is open from 9am – 11pm.

raising the level of interest and participation in the game of golf, Golf Australia - the governing body for golf within Australia - is installing an X-Golf simulator within their Head Office in December. Also embracing this new era of technology in the world of golf is The PGA of Australia. Established over 100 years ago, the Professional Golfers Association provides education opportunities for those looking to start, advance or consolidate their career in the golf industry and as part of a Roadshow this year, will be taking an X-Golf simulator around the East Coast of Australia to hold an interactive hole in one competition.

Official suppliers to the Australian Olympic Team and a testament to the quality of the X-Golf experience is the recent inclusion of an X-Golf simulator at The Edge, located within the Australian Athletes Village during the Olympic Games in Rio.

The future of golf is here!

Forging relationships with various golfing bodies, X-Golf are truly cementing the quality of the X-Golf experience. Committed to

0428 524 382 sales@xgolf.com.au www.xgolf.com.au

If you would like more information about joining this growing network, contact National Sales and Marketing Manager Mark Wilkinson at:

Business Franchise Australia and New Zealand 33

Donâ&#x20AC;&#x2122;t miss an issue

Get the App

www.businessfranchiseaustralia.com.au

VOL 11 ISSUE 01 nov/dec 2016

health, beauty & fitness

AUSTRALIAN SKIN CLINICS

a franchise like no other

Healthy Body, Healthy Mind, Healthy Business.

Feel Good franchising

Business Franchise Australia and New Zealand 35

FRANCHISE OPPORTUNITIES

NOW AVAILABLE Australia’s leading

hair and beauty brand.

The future looks bright for Hairhouse Warehouse, with careful product curation, outstanding professional services and stylish, contemporary brand positioning ensuring it’s the go-to place for good hair, wherever you are in Australia.

“By joining Hairhouse Warehouse, you not only become part of a recognised brand, but you also have a huge amount of resources at your disposal in the form of training, systems and support.

”

- Michael Godbee, Tamworth Franchisee

What you get: A proven profitable turnkey operation Support with leasing, store design and setup Induction program and ongoing training A full retail marketing program A strong team culture Exclusive stock of the world’s leading hair and beauty brands

For more information about franchising with Hairhouse Warehouse contact Peter Fiasco on 0451 370 060 or email franchising@hairhousewarehouse.com.au

hairhousefranchising.com.au 36 Business Franchise Australia and New Zealand

Contents On the Cover Image: Australian Skin Clinics

40 Cover story: A Franchise Like No Other

Australian Skin Clinics

42 Feature: Feel Good Franchising: Health, Beauty & Fitness 46 Expert advice: Healthy Body, Healthy Mind, Healthy Business

Tania Allen, Vision Alliance

36 Hairhouse Warehouse 38 What’s New! Feature news 50 Franchisor in Depth: Just Cuts™ 54 Have Your Say: Health Care – A Growing Sector

Lee McBriarty, Home Instead Senior Care

58 Profile: Core9 60 Expert Advice: Entering a Saturated Market

FC Business Solutions

62 Expert Advice: Franchising VS. Licensing – Which is Right for You?

Ty Menzies, 9Round Australia

A regular of Business Franchise Magazine, our special supplement in franchising showcases a different industry each issue To share your specific expert industry advice or to feature your franchise in the next issue, please contact: Kathleen Lennox, Sales & Marketing Manager Phone: 03 9787 8077 Email: kathleen@cgbpublishing.com.au Business Franchise Australia and New Zealand 37

what’snew! Hairhouse Warehouse: Exclusive Products, Exclusive Guests.

Soul Origin Partners with “The Nude Nutritionist” Lyndi Cohen Rapidly expanding healthy fast food brand Soul Origin has announced its partnership with well-known Australian dietitian and nutritionist Lyndi Cohen, AKA The Nude Nutritionist. A regular nutrition consultant on Channel 9’s Today Extra and a non-believer in “diets”, Lyndi’s mantra of “everything in moderation”, eating mindfully, incorporating wholefoods and eating foods you enjoy is perfectly aligned with Soul Origin’s own food philosophy. “As a dietitian, I don’t believe you have to miss out on the foods you love to be healthy. Eating well is about filling up on plenty of fresh, healthy food and eating mindfully,” says Lyndi. “Soul Origin makes eating well convenient, easy and stress-free. I’m delighted to come on board as Ambassador and Nutritionist for Soul Origin - a fantastic Australian company that I feel really proud to be aligning with. Their commitment to serving up fresh, Australian produce makes the partnership between Soul Origin and The Nude Nutritionist a no-brainer for me.” Soul Origin General manager Chris Mavris says he couldn’t be happier to welcome Lyndi into the Soul Origin family. “We’re looking forward to starting our partnership with Lyndi with some very exciting new products we are launching soon. Soul Origin shares Lyndi’s belief in the health benefits of fresh, nutritious, simple food and know that she will be extremely valuable in helping us communicate this message to our customers.”

38 Business Franchise Australia and New Zealand

The Hairhouse Warehouse House of Hair Annual Franchise Conference was held at the RACV Royal Pines Resort in Queensland, hosting world exclusive visitor– John Paul DeJoria, American billionaire and co-founder of Paul Mitchell Hair Products which are found within all 140+ Hairhouse Warehouse locations across Australia. The four-day conference was attended by over 300 delegates with a key focus looking to the future and building on the brands strong fundamentals. John Paul DeJoria travelled to Australia to exclusively share his story and passion with the Hairhouse Warehouse conference delegates. DeJoria, often mentioned on Forbes rich lists, shared his rags-to-riches story, inspiring delegates to bring out their inner hero each and every day. For two and a half hours DeJoria shared his trials and tribulations from being born to immigrant parents, to working as a janitor and living on just $2 per day. The conference ended with the Annual Gala Dinner, where the best performing franchisees and staff-members were acknowledged for their contribution and commitment to the brand. Hairhouse Warehouse is currently going through the most exponential growth period in the brands history, having acquired Ella Rouge Beauty which subsequently merged with Australian Skin Clinics in July 2016 to further expand its dominance on the hair and beauty industry. “It’s a testament to the strength of our brand that each year we continue to grow, when many of our competitors are struggling.” said Peter Fiasco, National Franchise Development Manager for Hairhouse Warehouse. “It’s the strength of all franchisees working together to continue to prosper and we are blessed to have such a great dynamic group of franchisees.”

LEADING PRIVATE EQUITY FIRM BUYING BIG Following on from its acquisition of Goodlife Health Clubs, private equity firm Quadrant has recently acquired Fitness First, HYPOXI and 24/7 gym franchisor Jetts - making Quadrant the largest combined gym group in the country. According to media reports, the deal was agreed with PWC Australia having advised Jetts and Ernst & Young and King & Wood Mallesons advising Quadrant. Founded on the Gold Coast by Brendon Levenson and Mark Stocks in 2007, Jetts has 270 clubs across Australia, New Zealand and the Netherlands – and more than 200,000 members. Shortly after launching Jetts, Levenson explained “what we have created is the ultimate exercise experience for today’s market – never closed, with easy, close to home access, no crowds, no contracts and memberships at half the rate of traditional operators.” Research conducted by the group prior to the launch of its franchised-clubs model indicated that many members at other clubs simply did not have time to use pools, steam rooms and

the other services that members paid for oftern didn’t use. On top of that, Levenson saw that lengthy contracts and high pricing points created barriers to entry, limiting penetration rates and membership uptake in most metro and suburban markets across the country. He explained “what we provide is the equipment that most people use on a regular basis, such as resistance machines, treadmills, bikes, cross trainers and free weights. “The club atmosphere is fresh and in line with

market expectations, creating a truly enjoyable and valuable exercise experience.” Quadrant had set up a holding company Fitness Lifestyle Group to purchase Goodlife and to make other acquisitions in the sector. The private equity firm’s Executive Chairman Chris Hadley said he was expecting the $2 billion national gym sector to grow at 6 per cent a year for the next five years. Jetts is currently embarking on an expansion of its European operations.

QUEENSLAND MULTI-UNIT OWNER TAKES OUT JUST CUTSTM TOP GONG A Queensland Franchise Owner has taken out the top gong at the Just CutsTM Franchise Awards held during the company’s Annual International Conference in Queenstown, New Zealand. Yvonne Salisbury took out the award for Franchisee of the Year, as well as the Local Area Marketing Award. Yvonne is the proud Owner of four Just CutsTM salons; one in Bundaberg, one in Mackay and two in Rockhampton, all located in Queensland. Yvonne was awarded for her outstanding operational performance, successful local area marketing initiatives and her ongoing commitment to the Just CutsTM brand and franchise system and took out the top spot ahead of over 90 other Just CutsTM franchisees. Working closely with the Just CutsTM Academy head office Team, Yvonne regularly organises and implements her own local area marketing initiatives to actively engage the local community and has established a large and loyal Client database. Her salons

are also avid supporters of local sporting clubs, giving back to the communities that help them thrive. Yvonne is humbled by the acknowledgement, which she will be celebrating with all her salon Teams. “I feel so honoured to receive these awards and can’t wait to celebrate with all our amazing Team Members,” she says. “And I couldn’t have done it alone – I’m only here thanks to these fantastic Stylists and because of the ongoing support of the Just CutsTM Academy head office,” she added. “Yvonne has been a standout amongst our network of Owners over the past 12 months. Her commitment to and passion for the Just CutsTM way of being is contagious and she really is an embodiment of everything we stand for – quality, excellence and positivity. Yvonne is also an active member of her local communities and regular contributor to charity, something we are very passionate about as a brand”, says Denis McFadden, CEO and founder of Just CutsTM.

Business Franchise Australia and New Zealand 39

FE ATURE : h e a lt h, b e au t y & fi t n ess fr anch isi ng

c ov er sto ry: Aust r a l i an Sk i n C l i n i c s

A FRANCHISE LIKE NO OTHER! Australian Skin Clinics was established in 1996 and commenced into a successful franchise business in 2011 thanks to the vision and leadership of Managing Director, Deb Farnworth-Wood. It has grown rapidly into an award winning business that is passionate about making customers look and feel fantastic. The growing demand for Australian Skin Clinics services further proves the success of their business model and strategy.

With Deb at the helm driving the company with an unwavering passion, there is no surprise Australian Skin Clinics have firmly cemented their position as industry leaders. As Australian Skin Clinics and Hairhouse Warehouse announced their joined forces in August, Business Franchise magazine were keen to catch up with Deb and find out about this exciting new development.

Thanks for catching up with us today. Can you tell us how many franchisees you currently have? We currently have 32 franchisees from our original 26 clinics, but we are currently merging with the Ella Rouge Beauty franchise, which was acquired by HairHouse

40 Business Franchise Australia and New Zealand

Warehouse. So, 24 more franchises will be converting to the Australian Skin Clinics model.

What type of person â&#x20AC;&#x2DC;fitsâ&#x20AC;&#x2122; your franchisee profile? This has actually changed over time. During the past five years the industry has grown considerably, along with the competition. We firmly believe our franchisees need to work on their business and be actively involved. They need to develop their teams, maintain brand culture, demonstrate strong people skills, monitor their KPIs and drive the business. We look for tenacious people with a desire to succeed and develop a strong business over a number of years.

Warehouse at all - in fact they only came up on our radar before Christmas 2015. We didn’t commence serious discussion until after that Christmas period. In truth, the due diligence process for the merger may have slowed us down somewhat. It sapped resources and key team members were tied up in extra projects, but despite all this we managed to stay on track.

What is the short/medium/long term plan for this partnership? We have many synergies with Hairhouse Warehouse. We service the same demographic, we share a passion for beauty and we both focus on affordable, quality services. This partnership is about utilising our combined skills and knowledge to develop the biggest and best hair and beauty group in Australia. The merger is also about longevity and sustainability as we have ambitious plans for the future.

You previously announced an aggressive growth plan for 2015/2016, has that been realised and how? Our five year growth has been phenomenal and we are currently experiencing a record number of enquires. According to my initial business plan, we would have had 18 clinics by the time we reached our fifth birthday this October. I’m thrilled to see we have more than surpassed this figure.

Any new products or services recently launched? Yes, in December last year we started working on another merger with a niche skincare range. As this is now complete, we launched Balense, which is our new range of 15 highly active cosmeceuticals products this October. It’s incredible because at the start of negotiations, we envisaged our Balense range would launch into 26 clinics; it will now be launching into 53 clinics. Naturally, this meant our initial production run doubled, further increasing economies of scale. Our new Balense skin care range will provide franchisees with a point of difference with our competitors and increase profit margins. It also guarantees we will not offer something available to discounted online shopping sites.

How are you different to your competition?

How does this affect existing Australian Skin Clinics and Ella Rouge Franchisees? What are the benefits that you foresee will be felt by the franchisees within the existing networks?

We are very much focused on being a medical model and this is reflected in everything we do. Our look, feel, presentation, standards and treatment protocols are all medical, yet we also try and incorporate a sense of fun and “can do” which really exemplifies the Australian approach to business.

The merger has brought significant value to the two brands. At the time of the merger both companies had 24 clinics, so we literally doubled in size overnight. This brought about incredible economies of scale, strengthened resources and increased buying power in all areas.

We are not about short-term client relationships; we are about longevity and sustainability. The children of our original client base in our first Ashmore clinic are now coming in to be treated for acne concerns. We look forward to treating generation after generation which is why our “here forever” culture sets us apart. It is important to the brand we retain our integrity, honesty and our high standards.

Australian Skin Clinics had been slow to break into the NSW shopping centres, so the acquisition of the 24 Ella Rouge clinics in prime Sydney locations was really the driver behind the merger.

Was a part of this growth plan the ‘joining forces’ with HHWH and how did it come to fruition?

We now have the opportunity to tap into the knowledge and skills of Hairhouse Warehouse, who are a more established franchise system. This provided the ability to form a shared services agreement where leasing, franchise recruitment and finance departments work for both businesses. This has strengthened our team and provided economies of scale which translated into a reduction in franchise fees.

The original plan did not include Hairhouse

We also incorporated the Ella Rouge

Where are locations or territories available? We are receiving a record number of enquires for sites and availability every week. We are targeting all major shopping centres and welcome enquires to our franchise recruitment office. If you would like to learn more about joining this award-winning franchise visit: www.ozskin.com/franchise

Business Franchise Australia and New Zealand 41

FE ATURE : h e a lt h, b e au t y & fi t n ess fr anch isi ng

“According to my initial business plan, we would have had 18 clinics by the time we reached our fifth birthday this October. I’m thrilled to see we have more than surpassed this figure.”

management team into ours and they brought some hard-to-find skills, due to their longevity in the industry. Again with the economies of scale, we have been able to restructure our national office and this has poised Australian Skin Clinics for the next stage of growth.

FE ATURE : h e a lt h, b e au t y & fi t n ess fr anch isi ng

Health, Beauty & Fitness:

Feel Good franchising

Health, fitness and beauty franchises are attractive businesses that are guaranteed to make you feel good! Whether you simply want to join these booming industries for the financial returns or you enjoy a healthy lifestyle and keeping fit, then look no further than franchising to provide you with a multitude of exciting business opportunities. Franchising has proven to be a fantastic format for successful businesses across these growth areas. People are becoming more aware of the benefits of maintaining a healthy lifestyle, and have the desire to take better care of themselves than ever before.

The health, fitness and beauty industry covers an enormous choice of businesses, ranging from gyms to spas, to hairdressers and a wide range of beauty services including nails, hair removal, and male grooming.

The 2014-15 Australian Health Survey â&#x20AC;&#x201C; the largest check up on the nationâ&#x20AC;&#x2122;s health ever undertaken - found that nearly two-thirds (63 per cent) of the population are now classified as overweight or obese.

Keeping in shape, being healthy and wellgroomed can make you feel vibrant and attractive, on the inside and out. Fit and healthy people radiate happiness, selfconfidence and vitality. Likewise, owning a customer-focused franchise that helps to promote a sense of wellbeing and happiness can be just as rewarding, not to mention lucrative!

Men are more likely to be overweight or obese (70 per cent) than women (56 per cent) while one quarter (25 per cent) of our children are overweight or obese.

Expanding waistlines The number of people who are overweight in Australia continues to rise according to the Australian Bureau of Statistics.

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With these staggering figures, itâ&#x20AC;&#x2122;s no wonder that fitness franchises have experienced rapid growth over recent times.

Improving your bottom line One such franchise, showcased within this feature is Core9. Founded by power duo Craig Arnold and Jason Dolan in 2013, Core9 was developed as a training framework with the foundations of

kickboxing training’s three-minute high intensity workout, resulting in the ‘lane based’ 31-minute program. Members can visit Core9 without a booking and know that there is a personal trainer on duty, and that they will finish their workout in 31 minutes.

Check out the figures

Many franchised gyms, in varying formats, have experienced similar success in recent years.

• about $1.7 billion on gyms and personal training;

In recent years, franchised gyms have experienced outstanding success as people become more and more aware of the importance staying active and looking after their physical wellbeing.

• about $292 million on dietary supplements; and

Added to the mix are 24 hour gyms – catered specifically for our busy lives, single sex gyms and more - and you have a sector of franchising that has boomed across the country and the world.

A report released by IBISWorld states Australian fitness industry revenue of $2.9 billion and estimated to reach, over the next five years, $3.4 billion. Australians are expected to spend:

• about $380 million on weight-loss services;

• about $121 million on surgery. The Australian Fitness Industry Report 2012 (by Deloitte Access Economics for Fitness Australia) highlights some key statistics: • Among Australians, aerobics, fitness or gym workouts are now the second most

Business Franchise Australia and New Zealand 43

FE ATURE : h e a lt h, b e au t y & fi t n ess fr anch isi ng

“Fit and healthy people radiate happiness, self-confidence and vitality.”

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“These days, people are spending more money on beauty than ever before, and the industry is constantly growing and evolving.”

popular physical recreational activity after walking. • Over four million Australians participate in fitness industry activities. • Users are typically female (42 per cent) and younger (25-34 years). • The biggest increase in users was from the 45-54 year age group. • Looking forward, participation will continue to increase exponentially with total demand increasing to 7.15 million users by 2020.

Big business The beauty business is big business. These days, people are spending more money on beauty than ever before, and the industry is constantly growing and evolving. Women have always loved to be pampered and preened, and now with ‘man-scaping’ rising in popularity it’s men too who like to be buffed and waxed – not just their cars! Just about every aspect of the beauty industry is covered by franchising. From teeth whitening to cosmetics, hairdressing, manicures and pedicures, massages, waxing, tanning, and all the beauty products to keep you looking great, there’s a business opportunity out there for you. Perhaps you have been a beauty therapist working out of a salon for many years; now may be the right time to build your own business based on a tried and tested successful formula offered by a franchise. Australian Skin Clinics (ASC) was established in 1996 and commenced into a successful franchise business in 2011 thanks to the vision and leadership of Managing

Director, Deb Farnworth-Wood. It has grown rapidly into an award winning business that is passionate about making customers look and feel fantastic. The growing demand for ASC services further proves the success of their business model and strategy and with Deb at the helm driving the company with an unwavering passion, there is no surprise Australian Skin Clinics have firmly cemented their position as industry leaders. ASC are currently undergoing the process of merging with the Ella Rouge Beauty franchise chain, after joining forces with Hairhouse Warehouse (HHWH) in August 2016. HHWH has huge plans for the next few years to expand with 20 new stores planned to be opened around the country. Becoming a household name, the proven business model continues to evolve and generate strong returns for franchisees. According to an IBISWorld report (Hairdressing, Beauty Salons Market Research Report) key success factors for operators in the industry include: • Having links with local health professionals. Beauty salons can benefit from client referrals from local doctors and dermatologists. • Use of specialist equipment or facilities. Having specialist equipment enables salons to provide value-added, higher-priced services.

satisfied clients, to ensure repeat visits and attract new customers through good wordof-mouth. • Ability to control stock on hand. Controlling stock levels, particularly haircare and beauty products, is important to maintain the liquidity and cashflow of the business. • Superior financial management and debt management. Financial and business management skills are vital to ensure cashflow and the survival of the salon. • Access to highly-skilled workforce. A salon depends on the skill of its hairdressers and/or beauticians. Maintaining and updating skills is important to stay abreast of new hair styles and beauty treatments. • Marketing of differentiated services. Salons can move away from price based only competition by offering quality, value-added and higher priced services. Offering a fixed franchising fee, with flexible finance options and ongoing support, Just Cuts ™ have recently announced a kiosk option, with only 49 sites available Australiawide. This is in addition to their hairdressing network of outlets, that service over 90,000 clients each week.

An alternative approach

• Proximity to key markets. It is an advantage to be located in a high profile, preferably wealthy area with significant passing pedestrian traffic and easy parking.

Alternative health therapies are also becoming increasingly popular among people searching for alternatives to prescription medicine, which has resulted in an increase in the popularity and use of herbal remedies in recent years.

• Having a loyal customer base. It is important for a salon to build up a base of

Financial figures showed the sector, which includes Chinese medicine, acupuncture and

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According to the Australian Trade Commission; “The Australian natural (complementary) healthcare industry has domestic sales of over $1 billion per year. Market research shows that the popularity of natural healthcare products is increasing with a growth rate of seven per cent year on year. Three-quarters of Australians, including 92 per cent of women aged 2024, take at least one dietary supplement and a quarter of the population visit complementary healthcare practitioners each year. The Australian industry continues to grow to meet these requirements. Already attuned to alternative approaches to health, discerning baby boomers (Australia’s largest population group) increasingly demand greater choice and adopt a preventative healthcare approach to maintaining healthier lives. In Australia, the fastest growth areas are nutritional oils, men’s health and eye health.

Making the right choice The decision to purchase a franchise is no doubt a difficult one, and with so many successful offerings out there on the market, how do you decide which one is right for you? Passion for the industry is an obvious must. Franchisors are looking for people who are passionate about what they will be committing a large part of their lives to. If you already love to spend time at the gym, enjoy exercising and living a healthy lifestyle, then that passion for the industry will be a great backbone for building a successful business.

“In recent years, franchised gyms have experienced outstanding success as people become more and more aware of the importance staying active and looking after their physical wellbeing.” Becoming a franchisee could be a great step towards improving your lifestyle. Once you’ve done the hard yards in establishing the business it could give you more opportunity for flexibility to work around family life, or other commitments.

Is the price right? Once you have made the decision about which industry is right for you, the next step is working out whether you can actually afford it! You must then get with your franchise banker and put together a realistic sum of money you can afford to put into this new venture. This will most likely weed out some systems quite quickly – as the larger, more well-known fitness names come with a hefty price tag. They are strong, tried and tested and have proven success stories – but you must truly be able to afford to buy into them. Once you have an amount in mind, you can begin to shop around. You will be able to narrow down your search, but don’t rush. If you get to your shortlist, it is time to direct all your attention to the franchise system and the franchisor.

Know your franchisor The franchisor holds the key. The management system, the operational procedures, the leasing agreements, the contracts, and the fees have been generated

by the franchisor. Check the franchisors background – is it solid? Meet with him or her. Do they seem to be a person of integrity? Do they answer all of your questions openly and honestly? Do they invite you to do your own investigations into the company? Are they eager for you to talk to existing franchisees? If at any point you feel pushed, rushed, bullied or even ignored by the franchisor – it is time to consider walking away. Hopefully though, the franchisor will be professional, honest and open. The next step is to meet with existing franchisees. While it’s fine to have all the manuals in place and have the franchisor tell you how great and successful the business may be, it’s the franchisees that have the real story. Visit them in their place of business, ask questions, and ask their employees if they enjoy working there.

The hard work begins! Once you have made the decision to purchase your franchise then the hard work really begins, and that’s where your passion and drive to succeed will be vitally important. So if being healthy, looking great or keeping fit is something that will get you out of bed every day, ready to work hard at growing your business then perhaps a franchise from one of these exciting growth areas is the one for you!

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other therapies to grow by around six per cent per annum over the next five years.

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e x per t a dv i c e

Healthy Body, Healthy Mind, Healthy Business. â&#x20AC;&#x153;Be sure you are thinking the right thoughts, and are taking the right actions in the right order at the right time so you create the results and outcomes you want.â&#x20AC;? Tania Allen | Founder | Vision Alliance

Most small business owners I come across are working harder than ever before and not getting the results they want. They are time poor, experiencing slow or no real progress because there is just so much to do and many are in a state of stress, overload and overwhelm in general. What I know to be true is we can always make more money but we can never get

back our health and our time. It is therefore critical that as we build our businesses, we design our business to serve and support us personally rather than the other way round.

by that is they prioritise building a healthy mind and a healthy body, which enables them to easily and effortlessly build a healthy business.

Sadly for many business owners, running a business comes with far too much sacrifice. They are trapped spinning on a hamster wheel going around in circles, often times doing the same thing over and over, yet expecting a different result.

Before I continue, please allow me to share with you, very briefly, my story.

Since 1990 I have been building and growing 6, 7 and 8 figure businesses. Some my own, and some owned by my clients. Iâ&#x20AC;&#x2122;ve had the absolute privilege to have spent time with and learn from business greats like Richard Branson and John Assaraf just to name a couple. One thing that stands out among all the high achievers in the world is they know how to put themselves first. What I mean

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I started in business at the age of 20 with my late husband Simon. The year was 1990. We were married young and as Simon was an electrician we embarked on the journey of establishing, building and growing an electrical contracting business. Our formula for growth and success was fairly simple. Attract the type of customer we wanted to serve, in other words our ideal customer. Lead and build an amazing team, provide an excellent service and keep the customers coming back for more or send referrals our way.

Developing a healthy mindset is much easier than you think if you know what to do and when to do it. It’s important to look at your self-talk, your limiting beliefs, change your language patterns and make a commitment to meditating and re-training your brain every single day.

Shifting your beliefs A belief is a way of seeing the world. It is what we believe to be true. Our own beliefs, both negative and positive, cause us to perceive and act in a certain way. Whilst some beliefs allow our businesses and lives to function smoothly, other beliefs can hold us back. Keeping us stuck and unable to make the shifts and the leaps we so truly desire. Through a lifetime worth of events and experiences, we actually learn what to expect whether it happens or not. Because we naturally expect things, we often achieve what we anticipate. This is why it is so important to hold positive expectations in the mind. The good news is no matter where you are right now, your beliefs can be changed and you can bounce forward and break through.

New beliefs lead to new actions The formula pretty much worked for us, well the business that is. We doubled the business year after year. It certainly didn’t serve and support us personally or emotionally. Working 70 - 100 hours per week, we were stressed out and burnt out. We genuinely thought that was how business was meant to be. Work hard now and enjoy the fruits of our labour later was our philosophy.

Does something need to change? If so, what?

Sadly, later never came and in 1999 my husband, business partner and father to my children tragically died.

So let’s dive in to how you can build a healthy mind, healthy body, and healthy business.

You may be reading this with a heavy heart and on some level I hope so. As it is with a heavy heart we somehow are instantly drawn in to reflect on our own lives. Take a moment right now to reflect on your business and your life. Is it looking good or could you do with a little more support?

I am confident to say change starts with acknowledging that something must change and then making a commitment to doing whatever it takes to make that change. I know too closely the cost of success however, I have now realised it is possible to balance your focus and create a successful business and more importantly, a great life.

Transform your thinking! Thought is the seed of creation for everything we create in our lives. If you look at your current results and then analyse your past thoughts and beliefs you will more than likely find a connection.

Take a quick look at the thoughts you have regularly each day. Are they helping you move closer to where you want to be or further away? Do they empower action or contribute to procrastination. Empowering thoughts inspire you to act. Disempowering thoughts lead to you doing things that move you further away or doing nothing at all. The key point here is your current reality is as a result of the consistent thoughts you think and the actions or lack of action you take.

Thoughts + Actions = Results Be sure you are thinking the right thoughts, and are taking the right actions in the right order at the right time so you create the results and outcomes you want. If a disempowering thought comes your way, make it a habit to quickly replace it with an empowering one.

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“When you’re in good physical, emotional and spiritual health – the hard things are easy. When we’re not in good physical, emotional and spiritual health – the easy things are hard.” - John Assaraf.

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e x per t a dv i c e

Make an effort to meditate. Meditation is one way to practice mindfulness. Current research suggests that meditation sharpens your skills like attention, memory and emotional intelligence. Meditation also builds resilience and performance under stress. Meditation boosts emotional intelligence, enhances creativity, improves your relationships and helps you focus. Importantly, meditation is not just “one more thing to do”. Adrianna Huffington said this so well, we don’t ‘do’ meditation; meditation ‘does’ us. The only thing to ‘do’ in meditation is nothing and this type of doing nothing can have real results. If you’re not sure how to get started with meditation, there are plenty of resources on YouTube. Some will guide you through the process. The key is to find something that suits you best.

Mind and body intrinsically connected The mind and body are intrinsically connected. First you must change your mind, then you must maintain physical fitness in order to experience an increased level of clarity and energy to take the right actions and get things done. “When you’re in good physical, emotional and spiritual health – the hard things are easy.

When we’re not in good physical, emotional and spiritual health – the easy things are hard.” John Assaraf Let’s face it; we have all taken our health for granted at some stage in our lives. We all say we are too tired, too busy, have too much on to take time out to exercise, take a break away or even just go for a quiet walk. Studies have now shown – I’ve proven it with my clients and with myself. The more we work on creating a healthy mind and the more we commit to getting and staying healthy, the more things flow in business and in life. Exercise is one of the things most successful people do. It helps build confidence and enhances clarity and is one of the most important habits you can develop to transform your life. I know myself my revenues are much higher in the months I exercise and meditate more often. It is a proven fact now that working out can make you healthier. When you are healthy, you sleep better, your mental sharpness is increased and you have more energy to get things done in less time. So get exercising as often as you can and see your results shift in the right direction. Before you think I’m about to say reduce your alcohol and your carbs, I won’t be. Well at least I won’t be telling you to reduce your alcohol. A leading cardiologist at a CPD seminar held in the Sydney CBD only

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“One thing that stands out among all the high achievers in the world is they know how to put themselves first. What I mean by that is they prioritise building a healthy mind and a healthy body, which enables them to easily and effortlessly build a healthy business.” recently confidently reported that two glasses of red wine a day was in fact very good for you. Thank goodness for that. We may not be able to have our cake and eat it too, but a daily dose of meditation and mindfulness coupled with some regular exercise and good eating habits can achieve a healthy business that serves and supports us rather than the other way around. Tania Allen is the founder of Vision Alliance & TaniaAllen.com. A transformational leadership coach, business growth and franchise expert, she helps business owners create a business and life they love. You can contact Tania at: 1300 76 49 20 tania@taniaallen.com www.visionalliance.com.au

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FR A NCHISOR IN DEPTH : j ust cu ts™

YOU DON’T HAVE TO BE A HAIRDRESSER TO OWN A JUST CUTS™ Mark Nagyivan

When you join the Just Cuts™ Franchise Owner community, you’re never on your own! Experts agree that franchise businesses have a better chance of success than independent small businesses.

The reason is simple – with a franchise like Just Cuts™, you’re partnering with a well renowned brand and retail product offering, in addition to being provided with all the systems and processes you need to drive your business to success. Coming to the end of another successful year, Just Cuts™ has continued to grow at a rapid rate and bring in a few more salon Grand Openings before the year closes. We celebrated the third birthday of our exclusive haircare and styling range, JUSTICE Professional™ and introduced three new products to the

50 Business Franchise Australia and New Zealand

growing range. But behind all the numbers and achievements is just a great story; it’s about one man with a simple idea that would change the hairdressing industry forever.

JUST A GREAT STORY Just Cuts™ was the brainchild of Denis McFadden, who, back in 1983, turned a simple idea into a business concept that would change the hairdressing industry forever. Always ahead of the curve, McFadden decided to run a promotion at his humble Sydney salon to boost business

“Owning my own business has given me the freedom to work when I want, so I have more time to spend with my children. I have never looked back in the 25 years that I have been a Just Cuts™ Franchise Owner.” - Lynne Ryan, Owner Of Three Just Cuts™ Salons Across NSW

TAKE HOME HAIR COLOUR

JUSTICEhair.com

“I opened my first Just Cuts™ franchise seventeen years ago and it’s been so successful that I now own eight salons! I’ve never had a better work/life balance and now I work when it suits me!” - Oliver Adams, Owner of Eight Just Cuts™ Salons across NSW

DRY SHAMPOO

and offered all Clients a “no appointment, $6 Style Cuts™ cut”. The response was outstanding and the idea of Just Cuts™ was born. In 1990, the first Just Cuts™ franchise opened in the suburb of Engadine, in the south of Sydney. And we’ve continued to expand ever since, with over 190 in Australia and New Zealand now open. That’s an average of one new salon every six weeks! Just Cuts™ has grown to be the largest hairdressing company in the southern

hemisphere, and we perform over 90,000 Style Cuts™ cuts each week. We believe that this success comes down to our franchise model, which has been tried, tested and refined over the past 26 years of business.

with hair experts worldwide to create a line of products made by hairdressers, for our Clients, so they can now experience a professional salon finish from the comfort of their homes.

THE DETAIL’S IN THE RETAIL

GET ALL THE SUPPORT YOU NEED

In 2013, we answered the calls of our Clients and launched JUSTICE Professional™ – a range of salon quality, paraben free haircare and styling products available exclusively in all our salons at a competitive, affordable price. Our line has something for everyone, including every day shampoos and conditioners, antidandruff and dry scalp treatments, toning products, nourishing leave-in treatments and a range of hair styling waxes and sprays. And this month we launched the brand new take home Hair Colour range. We scoured the globe for the finest ingredients on offer and have consulted

With a long and successful history in the franchising sector, Just Cuts™ is well positioned to take the guesswork out of opening your own business. We provide our Franchise Owners with a proven, successful system that will guide you through every step of opening your salon - we’ve tried, tested and refined this system over 26 years of business in franchising – that’s why it just works and is continuing to work. As a Franchisee, you’ll enjoy the ease of the Just Cuts™ business model, which has already been set up for you with operational, ordering and marketing systems all built into

Business Franchise Australia and New Zealand 51

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COLOUR

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FR A NCHISOR IN DEPTH : j ust cu ts™

THE JUST CUTS™ SMART CHOICE CHECKLIST At Just Cuts™, it’s all about you. We believe in making things easy, comfortable and convenient for all our Franchise Owners. Check out some of the benefits of becoming a Just Cuts™ Franchise Owner: • Enjoy the stability of fixed franchise fees so your earning potential is never restricted • Become a part of an established homegrown brand with greater brand public awareness • No hairdressing experience necessary – just a love of people and eagerness to learn • Share a common pool of resources, ideas and information

At Just Cuts™, it’s all about you. We believe in making things easy, comfortable and convenient for all our Franchise Owners. We have grown to be the largest hairdressing company in the southern hemisphere,and we perform over 90,000 Style Cuts™ cuts each week.” it. The model has also been fully digitalised with a range of support available online, including an e-learning platform, print marketing ordering system, retail reward program and Point of Service (POS) tools. Our dedicated Academy Team will also guide and support you throughout the whole process of opening your salon, including training, pre-opening assistance, management advice, a comprehensive Operations Manual and a bespoke Grand Opening marketing campaign. On top of this, you’ll get all the ongoing support you need from the Team, who will provide you with any business, operational and marketing guidance that you need once we’ve got you up and running. As a business owner, this means you don’t need to worry about how to best develop a system to ensure your Clients leave satisfied. You don’t need to worry about creating training programs for your team, or nailing down operational processes for accounts and stock inventory. All this is packaged up for you for you when you move into your salon, providing you with the fundamentals you need to get your business up and running smoothly.

THE JUST CUTS™ KIOSK SALON The Just Cuts™ Kiosk salon is the latest innovation to traditional salon formats and designs. Designed as smaller compact sites, Kiosk salons are positioned in prominent, high foot traffic flow areas within shopping centres. They can also act as satellite sites to an existing salon. All Kiosk salons are designed to the same high standards as regular Just Cuts™ salons, however with the added benefits of shorter term leases, plus they require less regular maintenance and upkeep. They also require a significantly lower initial investment from Franchise Owners. In fact, you can get your own business up and running from just $85,000! Want to find out more on how to become your own boss? Contact our Business Development Team for a friendly, obligation-free chat today. 02 9527 5444 0439 130 499 justcuts.com/franchising Follow Just Cuts Franchising to stay up-to-date with the latest Just Cuts™ corporate news.

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• Benefit from shared marketing costs • Potential to easily expand into multiple salons – in fact, over half of our Franchise Owners own two or more salons • Increased flexibility and work/life balance - the average Just Cuts™ Franchise Owner spends less than 30 hours working on their business • Grow your salon by tapping into an existing network of suppliers, Clients and contacts • Combine security with independence • Receive ongoing training and operational support • Save time, effort and money with the guidance of our marketing experts • Take time to work on your business, not just in it

“I’ve always dreamt of running my own business and within six months of opening my first Just Cuts™ Franchise, I knew my dream had been realised.” - Brooke Edmonds, Owner Of Just Cuts™ Rockdale, Nsw

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h av e yo u r s ay: Ho m e In st e a d S en i o r Ca r e

HEALTH CARE: A GROWING SECTOR

Mark McBriarty, a Human Resources Director for Hilton International for 20 years, and Lee McBriarty, an experienced palliative care nurse, were disappointed with the home health care options available to Lee’s elderly mother.

“The services available in her area were limited, and she lacked control over the health services she received,” Lee said. “Fifteen minute check visits and fortnightly house cleans simply weren’t enough to keep her living independently and healthily at home.” This was the catalyst for the establishment of their Home Instead Senior Care franchise in Adelaide, South Australia, in 2008. The service is based on a personalised model of home health care that coordinates caregiver teams to provide care for older people in their homes.

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“Our tailored approach to home health care is poles apart from the typical one-modelfits-all scenario that we encountered,” Mark said. “We meet with clients and families, we get to know their needs and interests, and we match them with a team of skilled CAREGivers and a dedicated Client Care Manager who coordinates all aspects of their health care. “It’s a simple approach that recognises every client is unique – the health care needs of older people aren’t homogenous, and as Australia’s population continues to age, we

Lee McBriarty, Franchisee, Home Instead Senior Care

workforce are aged over 50 and four are aged over 70, many having been recruited after a long career, a period of caring for a loved one, or following retirement. “Our mature CAREGivers bring a wealth of experience from their personal and professional life which enables them to easily connect with clients,” Lee said. “The quality of the connection between our clients and our CAREGivers is a key component of our personalised service delivery and a real differentiator for our business.” There is no doubt that the quality of the care older people seek is increasing. Access to digital information, experience as consumers and greater personal expenditure on health care have paved the way for higher expectations. “The ageing population won’t just increase demand for health services, it will change the way these services are delivered,” Mark said. are going to see a more diverse range of care needs than ever before.” Australia’s ageing population is a dominant driving force behind the health care sector’s ongoing growth. In 2013, 1 in 26 Australians was aged 80 and over. By 2030, this number will rise to 1 in 18. The ageing population brings with it an increase in chronic health conditions, such as diabetes, dementia and Parkinson’s disease, all of which require much more than physical assistance. “Maintaining independence and having a

sense of purpose are the top priorities for many people as they age, especially in the face of a chronic condition,” Mark said. “Carers need to provide meaningful interactions and encourage clients to participate in tasks as much as they are able to – independence and purpose simply cannot be achieved when carers do it all. “This is where our dedication to matching our CAREGivers with the diverse personalities and needs of our clients really matters.” More than 65 per cent of Mark and Lee’s

“They want more options, more information, more input and higher standards of care, and government policy will support them. “They will no longer accept being told what they need – their opinions and preferences will need to be part of the dialogue, and this is the way it should have been a long time ago.” From February 2017, funding for Home Care Packages will follow the consumer so they are free to select any approved provider to deliver their care. “These legislation changes will revolutionise the delivery of home health care services in Australia,” Mark said.

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“Australia’s ageing population is a dominant driving force behind the health care sector’s ongoing growth. In 2013, 1 in 26 Australians was aged 80 and over. By 2030, this number will rise to 1 in 18.”

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h av e yo u r s ay: Ho m e In st e a d S en i o r Ca r e

“I would encourage those who are new to the industry to attend as many conferences, meetings, presentations and exhibitions as they can.”

“Undoubtedly, we will see new, innovative entrants popping up in the market, but those providers who fail to deliver choice, control and flexibility will find it difficult to thrive.”

“It can be overwhelming trying to navigate the industry in the first few months, but at the end of the day the work that we do is incredibly rewarding and meaningful.

According to Mark, the key to ongoing success for a business in the fast-paced home health care industry is the recruitment of and investment in suitable staff members.

“It’s a gratifying feeling knowing that we play a big part in encouraging older people to live the way they want to live, while reducing worry and stress amongst family members.

“Hire for the qualities you can’t teach,” Mark said. “Understand the qualities required of each role in your business, and hire people based on those qualities. You can’t train people to be compassionate or client-driven – but you can invest in people with these qualities and support their professional development.” Lee adds that, for people new to the health care industry, there is a lot to learn about systems and processes. “I would encourage those who are new to the industry to attend as many conferences, meetings, presentations and exhibitions as they can,” Lee said.

• Sufficient capital: Have enough in reserve to allow for start-up/cash flow issues that will inevitably keep you awake at night. With 5 years’ experience as a palliative care nurse and a carer for her own Mum, Lee McBriarty established the Home

“We have no regrets establishing ourselves in this industry, and we know that we will be growing in line with our ageing population.”

Instead Senior Care Adelaide East office

Tips for Health Care Franchisees:

ageing in South Australia.

• Understand the language: If you are new to the health care industry, there is much to learn. Attend conferences, meetings and presentations and ask lots of questions.

Home Instead Senior Care is an

• Recruitment is the key: Understand the required behaviours for each role in your organisation and focus on developing your recruitment skills to identify the right people.

care services to older people such as

56 Business Franchise Australia and New Zealand

with her husband, Mark, in 2008 with the very clear intent to change the face of

international network of independently owned and operated franchises. The network provides non-medical home personal care, meal preparation, light housekeeping and transport. www.homeinstead.com.au

Business Franchise Australia & New Zealand is part of the global network of CGB Publishing

With over 30 years’ experience in providing high quality business information, with a particularly strong focus on franchising, our global presence allows opportunity for international franchise marketing solutions.

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pr o fi l e : co r e9

CORE9: No Boundaries

Core9 was founded by power duo Craig Arnold and Jason Dolan in 2013. The vision was clear – to develop a fitness philosophy that would be able to improve the health and wellbeing of Australians. The Core9 training framework is built on a strong passion and experience for health, fitness and well-being. Craig, an elite world series adventure racer and national level gymnast alongside Jason’s military service within the Australian Defence Force and over two decades of Muay-Thai kickboxing training. These attributes bring together the perfect combination of experience to build a unique training program that people enjoy every day. The business was born from the two mates being inundated with requests from friends and family wanting to exercise in a way that was easy to implement into a busy lifestyle

whilst also keeping up the intensity for an effective workout.

9 checkpoints. 31 minutes. No boundaries. With the foundations of kickboxing training’s three-minute high intensity workout followed by 30 seconds rest, the concept was blended with gymnastics, military and extreme sports training techniques to create the current ‘lane based’ programs where a member can work through a series of cardio, weight and resistance stations in a 31-minute period whilst being coached by a physical training instructor. “We identified a unique gap in the fitness industry,” Craig says. “The majority of people are paying $15-25 per week for a gym membership, or upwards of a $100 for a personal trainer and not taking advantage of their investment.” This is why Core9 thrives in a busy environment. Bookings are not required. You show up, a personal trainer is on duty and you start immediately – you’ll be finished in 31 minutes. This model allows there to be a personal trainer (PT) available when they need one

without having to pay the high price of a one-on-one PT session. They also undertake a workout that can be adjusted to their level of fitness and their personal goals. The discipline in Craig and Jason’s respective careers has led them to excel in everything that they have set out to achieve, living by the motto of ‘no boundaries’ the guys want to unleash the best out of Core9 members. “Core 9 is a seriously addictive boutique gym. The more you go, the more you want to go! The 9 stations are designed to give you a total body work out in just 31 minutes.” Core9 Member.

Outperform Yourself As the new kids on the block, they’re not trying to revolutionise the industry, they simply want to partner with franchisees that are hungry for success, hungry to connect with people and hungry to make a difference in other people’s lives. Having identified franchising as the best vehicle to share their passion for the fitness industry, Core9 gives personal trainers an unparalleled brand and business model that helps grow their business, ultimately sharing the passion to help thousands of Australians improve their lives through health and fitness. By building the foundations right from the outset, and developing the best possible tools, such as a member management system and robust franchise operations manual, the Core9 model is well placed to support franchisee success. The business model is simple - the branding, marketing and business back end are all taken care of. The franchisee’s key focus is to be the face of the business, and the go-to fitness guru within the local community. “At Core9 it is not just about the workout and fitness, it is also about fun and friendships together with the fantastic structure of every workout - you always want to go and it is never a chore.” Core9 Member.

“Having identified franchising as the best vehicle to share their passion for the fitness industry, Core9 gives personal trainers an unparalleled brand and business model that helps grow their business.” 58 Business Franchise Australia and New Zealand

If you’re passionate about improving the health and well-being of all Australians and would like more information on joining this unique franchise brand, contact Craig Arnold at: 0417 214 917 franchise@core9.com.au

AVAILABLE NOW

F I T N E S S

Contact Craig Arnold 0417 214 917 franchise@core9.com.au www.core9.com.au

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e x per t a dv i c e

Entering a Saturated Market

One of the most difficult aspects for any business owner is getting new customers through the door. We’ve all heard the 80-20 rule where 80 per cent of your sales come from 20 per cent of your customers, but that doesn’t stop business owners from wanting more…

probably has a handful of personal training groups on any given morning. As a new entrant to the industry, or even someone who’s been around the block for a while, this can be daunting – is a competitor’s service better than mine? Are they going to poach my members? How am I going to sell my business better than my competitors?

When it comes to the fitness industry there is a key problem that a business owner needs to address on day one. How do you deal with the market saturation? It seems like there is a new gym popping up at every shopping complex, yoga studios around every corner, and then your local park

Saturation

Saturation vs Education

The first path way to explore is entering a saturated aspect of fitness, such as 24/7 gyms. Your customers will know what to expect from your service – but will you be able to compete with all of the other 24/7 gyms? Will you be able to get your customer to drive past the three other gyms on their way home from work, just so that they can train at your gym?

A common issue facing in the fitness industry is that of Saturation vs Education – should I setup a business that will be easy for my customers to understand, or should I setup a business that differentiates itself and nurtures the market place to understand what we are doing?

According to the IBISWorld Gym and Fitness Centres Australia report there are over 3,300 gym/fitness businesses in Australia, in conjunction to increasing annual growth and the consumer health consciousness index – the saturation of the industry will continue over the next five years.

There’s no right or wrong answer, as a business owner you will face challenges in both scenarios – that’s why it’s important to develop a detailed business plan that outlines all of the potential challenges you can foresee, and how the business will overcome them.

To sparkle in a saturated industry, you need to make sure that your marketing initiatives are one step ahead of your competitors. Chances are that you will be unable to compete on pricing, so being a local area marketing and engagement guru is key. Building community awareness to your

60 Business Franchise Australia and New Zealand

Common Ground Regardless of the industry you are in, the fundamentals of marketing your business do not change. You need to engage with your local community to make sure that they know who you are and what you have to offer. You have to make sure that all of your marketing initiatives have a purpose and result in a positive return on investment. A gym or fitness studio is often more than just a place to exercise – it becomes a hub within the community that attracts people to socialise rather than just a destination. For a franchisee or business owner it’s important to ensure that you and your business are constantly in the spotlight so that the community is aware of who you are and what you are doing – this will make them want to be a part of your hub.

The Perfect Solution There’s no perfect solution – being a business owner is difficult work. Ask yourself these questions before buying a business in any industry. 1. What are your competitors doing? Will you be able to realistically compete with them?

business via sponsorships, community programs and advertising campaigns will help you succeed.

customers about why your business is different, and the advantages that you offer in comparison to your competitors.

As a franchisee you will most likely be paying a marketing royalty – but that’s not where the buck stops. The best performing franchisees will invest a further 5-8 per cent of gross revenue into marketing.

A key component of any successful business is having a unique selling proposition (USP) – without a clear USP it becomes difficult to build loyalty and repeat customers with your business. In comparison to a saturated business such as a 24/7 gym, a business that has differentiated itself from the pack will often find it difficult to convert customers because they are unaware of the services and benefits that the business will provide them.

With a highly saturated market you will also find that it becomes increasingly difficult to retain your members for long periods of time. Customers do not build an emotional relationship with the brand because likebusinesses are a dime a dozen. So how are you going to make sure that you are able to retain your customers from month-tomonth?

Education The second pathway is to educate your customers. It’s not about educating your existing customers as to the service that you provide and how they can improve their health – it’s about educating your potential

Marketing your services or products may seem like one of the fundamentals any business owner does, but when you have something that is unique and potentially never seen on the market before – how are you going to convince the audience that your offer is better? how are you going to market your business? how is your target audience going to react to offer? how are your competitors going to react to your offer? are they going to copy you?

2. What are the hurdles that you will need to overcome? Do you have a plan how to overcome the hurdles? 3. What is the USP? Is your USP better than what your competitors are offering? How will you sell it? 4. How will you promote the business in the local community and engage with your target market? FC Business Solutions is an integrated consultancy firm specialising in developing, growing and marketing franchise systems. A professional team provides expert service exclusively to the franchise community, in system development, marketing and communications, business health checks, and business operations. They also offer solutions in documentation, training, and human resources. Contact: 03 9533 0028 contact@fcbs.com.au www.fcbs.com.au

Business Franchise Australia and New Zealand 61

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“To sparkle in a saturated industry, you need to make sure that your marketing initiatives are one step ahead of your competitors.”

Having a unique selling proposition over your competitors is highly desirable, but if your proposition is too unique – you may find it difficult to attract enough market share from the saturated sectors.

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e x per t a dv i c e

Franchising vs. Licensing

– Which is right for you?

“When it comes to choosing the right investment model, there’s no one size fits all approach.” 62 Business Franchise Australia and New Zealand

While the prospect of becoming a Franchisee or Licensee may be daunting, it can be an exciting and potentially prosperous endeavour when pursued in the right way. There are several benefits and disadvantages that need to be weighed up before entering into any kind of business agreement. We asked 9Round Australia National Sales Manager, Ty Menzies to share his key insights into the two business models.

FRANCHISING The franchising model is heavily adopted in the fitness industry, as it enables franchisees to have access to a well-known brand and reputation with support from the franchisor to guide them every step of the way. Some of the notable brands who utilise this model in Australia include Snap Fitness, 9Round, Anytime Fitness, Jetts and Genesis Fitness.

The Pros 1. Offers a set and exclusive territory to operate your business within. This one is likely to vary based on the specific franchise contract, but the majority of franchises do grant exclusive territory to their franchisees. This enables the franchisee to have a set geographic area which they can market to, without threat from another franchisee. 2. The independence of being a business owner with the support of a large successful organisation. Franchisees are provided with significant corporate support from the franchisor, which includes tried and tested systems and suppliers that they can lean on in getting the franchise up and running. This support really helps in the early stages. Franchisees can enjoy this security, while still having a feeling of independence from owning their own business. As well as this, the franchise model gives you access to a well-known brand and reputation, which typically means less time and resources will be required for marketing.

“As the franchisee you are bound by your franchise manual and the actions of the franchisor. So if the franchisor decides to introduce new products, branding or pricing – you are obliged to follow suit.” Ty Menzies | National Sales Manager | 9Round Australia

3. Minimal experience is required and significant training is usually offered to new franchisees. You don’t necessarily require business experience to own a franchise (although it definitely helps). The franchisor will usually provide you with the training necessary to operate the business. 4. Finance can often be easier to secure due to proven track record. If the franchise is well known with a proven track record and a good degree of accuracy in sales projections, there will be a lower perception of risk which will assist with financing. Significant research is still required by the franchisee before making an investment. 5. Franchises have a higher rate of success than independent small businesses. Depending on the strength of the brand and guidance of the franchisor, opening a franchise will typically create a more impactful impression when first establishing your presence in a local market.

The Cons 1. Lack of flexibility in running the business the way you want. As the franchisee you are bound by your franchise manual and the actions of the franchisor. So if the franchisor decides to introduce new products, branding or pricing – you are obliged to follow suit. This often also relates to site location and fitout. 2. Poor performance or actions from other franchisees can negatively affect your business. As the reputation for your business’s brand is in the hands of a number of franchisees, the franchisor must enforce compliance standards across the whole network to avoid the actions of one franchisee negatively impacting the business of all. 3. You must comply with all of the franchisors rules and regulations for operating the business.

It’s important to remember that when it comes to franchising, you are in business for yourself but not by yourself, so you will still be required to follow direction from the franchisor. 4. You will be required to pay an ongoing fee or percentage of turnover to the franchisor. As well as paying to join a franchise group, franchisees are required to pay an ongoing fee on a periodic basis for the life of the business. 5. When selling your business the franchisor has the right to refuse any potential buyer if they are not a good fit for the brand. Although this may delay the process, the franchisor does have the right to be selective about their franchisees to ensure the long-term integrity of the brand.

LICENSING The licensing model is again very common in the fitness industry as the IP of fitness training is unrestricted, creating an opportunity for the licensee to develop a point of difference whilst operating under a branded license agreement. Some of Australia’s most well-known fitness brands that adopt this business model include; World Gym Australia, F45 Training and CrossFit.

The Pros 1. Licensing often allows you to be more flexible in the delivery of the product or service. Typically, licensing has fewer barriers to entry with the licensor retaining little to no control over how the licensee choses to operate the business. This leaves the licensee with significant flexibility to make their own business decisions. 2. Typically the upfront and ongoing fees with licensing are lower. After the initial purchase of a licensing agreement, there is often very low to no further financial obligation between the licensor and licensee.

Business Franchise Australia and New Zealand 63

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A career as a PT can present more opportunities than just training clients, with many of the major Australian fitness brands opening their doors to owner operators through franchising and licensing arrangements.

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e x per t a dv i c e

“Above all else, the franchise you are looking to invest in must be something you are passionate about and can see yourself being a part of for the long term.”

3. Often a licensed product or service can be sold alongside other products and services you might have. As part of the flexibility and control of a licensee, they are often able to sell their own products alongside the branded ones of a licensor. 4. Licensing offers faster growth potential in the beginning. As licensing requires very little capital outlay, it should provide faster growth and a high rate of return on the initial capital invested. 5. Much easier to on-sell a license agreement onto someone else. As the licensor has lessened control over the individual licensees, you can sell a license agreement onto someone else without the considerations required when selling a franchise.

The Cons 1. No set and exclusive territory to operate your business. Often licenses are sold with no set exclusive territory between each other and can be sold to competing businesses, depending on the style of license. 2. Often minimal training and ongoing support is supplied to the licensee. With minimal training and support provided by the licensor, prior business experience and an understanding of business practices is a must. Especially as product development, inventory management and store replenishment are usually the responsibilities of the licensee.

3. Licensees are not protected by a governing body. Where franchisors are regulated by the ACCC, there is no governing body to regulate licensing in Australia. 4. There is less credibility with licensed models and it can be more difficult to secure finance. Having an established and proven business model to present to the creditor will allow for a far smoother process when looking to secure finance. When a franchise grows to more than 20 they can apply to their main banking institution to become a lender of choice allowing for an even easier access to finance for the franchisee. This option often isn’t available for licensees. 5. Licensing a product or service can be more expensive for the licensor. By licensing you lose out on the buying power that comes with franchising purchase deals. You will likely also pay premium for the most part when it comes to the supply of stock as this is controlled in a franchise setting and is continuously reviewed by purchasing experts. When it comes to choosing the right investment model, there’s no one size fits all approach as Ty’s comments demonstrate. Ultimately it comes down to personal choice and previous experience. Those who have run their own business before may find more freedom and room to be innovative by operating under a licensing agreement, as those same people would likely become frustrated under the brand or operations control of franchising. If you’re looking for training, support,

64 Business Franchise Australia and New Zealand

structured and measurable marketing, purchasing power and brand power then franchising is likely a more ideal business model for you. Before investing, however, make sure you do your homework to ensure that the business is viable long term and that ROI can be reached in a reasonable timeframe (generally between 1 - 3 years). Asking all the right questions of your franchisor and of their franchisees to ensure you are comfortable making the investment and finding out what an exit strategy looks like is extremely important. Above all else, the business you are looking to invest in must be something you are passionate about and can see yourself being a part of for the long term. Starting his fitness career as a personal trainer in Melbourne, Ty Menzies moved quickly into roles within sales and club management before opening his first of four health clubs at the age of 22. After selling and moving to Queensland, Ty completed an MBA before stepping back into the industry as the National Sales Manager for Lift Brands Australia. Lift Brands is the world’s largest franchised wellness company occupying more than 3000 facilities across the globe, and with its latest addition - 9Round taking the industry by storm they are continuing to grow here in Australia, with 100 9Round clubs planned to open across Australia in the next 3 years. www.9round.com.au

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7 things

You Can Do Today

To Become a Better Manager “The best way to have satisfied employees is to actively include them in the success of your business.” Melissa Penn | National Franchise General Manager First Class Capital

66 Business Franchise Australia and New Zealand

When you’re the manager of a business, you may think it’s your job to run the show. In a roundabout way, that may be true, but it’s certainly not the full picture.

“A great manager will see the integral worth of every business position, and will treat each position equally. If you treat all employees with the same amount of respect, you will see increased personal satisfaction in all areas of your business.”

The best manager doesn’t run the business; they organise others to run the business for them. When it comes down to it, management isn’t about numbers, or money, or task delegation, it’s about people. Unless you’re a solo operator, your business relies on others for its ongoing success. The most successful businesses are those that have satisfied employees. In turn, the best way to have satisfied employees is to actively include them in the success of your business. To help you be the best manager you can be, here are seven tips that will make your management position enjoyable, effective, and exceptional.

Don’t raise yourself above others

Unfortunately, on occasion, managers let their positions of increased power go to their heads. While it’s true that, as a manager, you will be taking on more responsibility, and you may become more integral to the organisation, this does not make you more important than people in other positions. Every position in a given business is important. If it wasn’t, it would become redundant. Every person in your organisation, from the cleaner to the CEO, is a valuable human, that has been employed to fulfil a specific task. A great manager will see the integral worth of every business position, and will treat each position equally. If you treat all employees with the same amount of respect, you will see increased personal satisfaction in all areas of your business.

Listen to everyone

As a manager, you are not expected to know how to do every job in your organisation. An intelligent manager employs people who have expertise and training in a specific field, and utilises the inherent skills of each person, to fulfil specific tasks. As a manager, it is important to listen to the opinions of employees in every position. Their life skills and previous experience may give them insights that can increase productivity for your company. It is also important to actively listen when your employees are dissatisfied with aspects of their position. If you are seen by employees as taking a proactive role in improving their working life, you will gain both respect for yourself, and loyalty for your company.

Be generous with your time

As a manager, one of your key responsibilities is to be available to your team. The malleable nature of any organisation means that people who work for you will always come up against new challenges. They will then require your expertise in order to discover the best way forward. A great manager will never make their staff feel rushed, or less important than other tasks,

and will make time to assist their staff in all relevant business processes.

Delegate intelligently

Delegation is key to the role of an effective manager. However, there is the potential for delegation to be approached poorly, which will result in decreased performance, and disgruntled workers. It is important in delegating tasks to mold the role to the employee, and not the reverse. By offering tasks that utilise an employee’s existing strengths, you will not only increase efficiency, but will give your employees a sense of responsibility and importance within your organisation. If you frequently assign tasks that your staff are unfamiliar or uncomfortable with, though, you not only run the risk of a decrease in productivity, but can also foster self doubt and dissatisfaction among your employees.

Lead by example

Leading by example is one of the best ways to get the most out of your staff. You don’t need to do every job, but if you show that you are working just as hard as the people you’re managing, you will be more likely to garner their respect.

Business Franchise Australia and New Zealand 67

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“An intelligent manager employs people who have expertise and training in a specific field, and utilises the inherent skills of each person, to fulfil specific tasks. It is even more important to lead by example when it comes to attitude. If you show negativity towards your workplace, employers, policies, and staff, all of the people who look to you for guidance will feel it too. Even if you feel these things, consider the greater good of your company, and keep your team’s spirits up.

Be transparent

You will get much more out of your staff if you tell them why they are performing particular tasks, than if you just ordered them to perform those tasks with no explanation. Trust in the intelligence of the people that work for you, and treat them as equals when

it comes to project information. If possible, let them know budgets, timeframes, and results of meetings, as this will allow them to be much more invested in their jobs. Further this by giving your staff ownership and accountability over their jobs. You will find that people will often rise to the challenge, if they feel that the things they are doing are of importance to the overall company or project.

continue to elicit quality performance from your employees. The most important thing to remember, as a manager, is that your management style should not be one fixed thing. Your management styles should reflect the personalities and responsibilities of your employees, and should be tailored individually to fit each one. By being an adaptable manager, you will achieve greater success for yourself, your team, and your business.

Recognise a job well done

All too often, staff are only approached by management to be informed of their failings, as it is assumed that doing a good job is just part of the job. While that may be true, the acknowledgement of excellence will motivate your staff much better than reprimands and negativity. It is a very small thing for a manager to take a minute to offer words of encouragement and appreciation, but it will make a world of difference to your staff. Financial incentives are also an amazing motivator, and if you are in a position to offer this, it will serve to improve staff morale if it is given when deserved. It is the recognition, though, more so than the money, that will

68 Business Franchise Australia and New Zealand

Melissa Penn is the National Franchise General Manager at First Class Capital, one of Australia’s most progressive lenders, and supporters of small business. She has more than 20 years’ experience in management, media, and marketing roles, as well as extensive experience as a creative entrepreneur. Taking great pride in helping others succeed, Melissa is motivated to share her extensive knowledge on all aspects of business, management, and personal growth. Find out more at: www.firstclasscapital.com.au

pr o fi l e : J i m ’s A n t ennas

BECOME THE MASTER OF YOUR OWN DESTINY For the first time since 1999, a unique opportunity has become available which allows you to become the master of your own destiny. Jim’s Antennas, one of the Jim’s Group premium divisions, established and run by Andrew Parke, has grown into Australia’s largest antenna installation company and are now seeking Master Franchisees for the first time in 17 years. With seven Master Franchisees already established across the country, Jim’s Antennas are looking for people who want to become their own boss and who are searching for something new. “Our Master Franchisees are a mix of personality types but the overriding attributes found in all are that they are entrepreneurial in spirit as well as possess great communication and people skills. Master Franchisees need to coach and support their network of franchisees and they bring different and unique skills to the Group. Some are successful Jim’s Antennas franchisees that have excelled and taken the next step by becoming a Master Franchisee, but we also have people from outside of the industry who join and run their Master Franchise successfully as a business investment,” says Andrew.

Asked if the Master Franchisees are still on the tools, Andrew says, “It depends how big their franchise region is. If they have a larger region, it becomes a full-time job - looking after the franchisees, fulfilling training and marketing requirements and supporting and coaching them. There are though a few Master Franchisees we have that look after smaller regions and therefore may only be looking after 4 or 5 franchisees; so they have the time to be out running their own franchise as well.”

TRAINING AND SUPPORT No previous business ownership is necessary as full training is provided. Initial franchise training is completed at the Jim’s Group National Training Centre, located in Melbourne and this covers topics such as bookkeeping, customer service and sales techniques as well as the Jim’s Group ethos. Once the classroom training is completed, training is then offered both initially and ongoing by the National Franchisor and includes the Jim’s Antennas specific training (covering the technical aspects of antenna installation) and the necessary marketing and coaching skills required of a business owner. Master Franchisees in turn provide training seminars and monthly meetings with their own franchisee network which includes smaller training sessions, incorporating technical and sales training, customer service skills and Local Area Marketing. This provides

70 Business Franchise Australia and New Zealand

the necessary sales and marketing skills that franchisees require to work directly with local businesses which can include Real Estate Agents, Builders, and Electricians etc – thus building up their client base.

DOES THIS SOUND LIKE YOU? Achieving double-digit growth in Australia over the last 12 months and with 165 franchisees across all states and territories in Australia, Jim’s Antennas are seeking Franchisees, as well as Master Franchisees, who share to join a common drive and passion for business to this ever-expanding group. “When we are looking for a new Master Franchisee or Franchisee, we don’t necessarily look for someone with a business or technical background. We actively seek people that have exceptional customer service and communication skills, with an interest in antennas or home theatre and TV. We can teach the business and technical skills but require our Master Franchisees and Franchisees to be self-motivated and possess a drive to succeed,” says Andrew. If this sounds like you, contact Jim’s Antennas today to find out more. 131 546 getstarted@jimsantennas.com.au www.jimsantennas.com.au

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How To Survive The First 12 Months In Your New Business Now that your business is successfully up and running it doesn’t mean you can relax. You have just begun my friend! And the journey can sometimes get tougher the longer you are in business. We all have this vision that as soon as the ribbons are cut during the opening, everything is going to be just like we dreamed it would be. Unfortunately, success is not a guarantee. Just because people came rushing through your doors during the opening does not mean they’ll come back the next day or the day after that. Well yes, there are businesses that do make it, lucky for them, but there are also so many businesses that don’t. It is your job to make sure that you don’t belong to the latter. Business can sometimes be brutal, that is why you need to gear up so you can survive even the toughest of times. In my business, I’ve experienced the lowest of lows but that did not stop me from chasing after my dreams. One of the biggest setbacks in my business was when I had an unexpected stroke. If I had not found ways to establish a great foundation in my business, I am one hundred and one per cent sure that it would not have survived. But because I incorporated proven strategies I came out even more successful than before and this is what I’m going to share with you. Here are my five tips on how to survive the first 12 months of your new business. I hope that after reading this you will integrate these tips in your own business as well.

“One of the wisest decisions you can make for yourself and for your business is choosing the people you surround yourself with.” Sharon Jurd | Sharon Jurd Events

Tip 1: Do Not Be Lazy

• What do I want to achieve?

No one became successful by being lazy. It took some blood, sweat and tears to get me to where I am now. And so I am telling you that if you ever decide to venture into a new business you should not be lazy. Not being lazy means you need to do your fair share of marketing. You should take advantage of the franchise tools available to you. In addition, you need to continually educate yourself about the business. Educating yourself can come in many different forms. I suggest you attend events and conventions that are related to your industry to widen your knowledge about your industry. You can also do your own research as well by listening to podcasts or watching videos and presentations arranged by coaches and mentors in your industry.

Go back to your goals. Before you started your business I am pretty sure you had goals in mind. The actions and the decisions you take in your business have to be in line with your goals. If things aren’t going right, ask yourself what you want to achieve.

Furthermore, it’s a big no-no for business owners to expect that their franchisors will do everything for them. At the same time if you are a franchisor, don’t expect your franchisees to do it all for you.

Tip 2: Know Your Why One of the most common mistakes business owners make is forgetting their whys. In my tip number two I want you to recall your whys. Ask yourself these questions:

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• Who do I want to help? This is about knowing who your ideal clients are. Go back to this question when you can’t seem to find new prospects so you can refresh your list and focus on the people who you intend to help with the products and services your business has to offer. • How can I help people the most? By asking this question you can improve your products and services to suit the needs of your customers. • What do I want to share with people? Again, when things are in awry go back to this question, what do you want to share with people? Highlight the strengths of your business. Let your clients know what problems you can solve for them. • What am I passionate about? Whenever you feel uninspired go back to what you are most passionate about.

“The actions and the “We always encourage decisions you take in your partieshave to communicate business to be in line clearly to goals. the other side with your If things and provide sufficient aren’t going right, ask information for the person yourself what you want to understand the dispute and achieve.” how to resolve it.”

Finding your passion will always motivate you to do more.

Tip 3: Get Good People Around You One of the wisest decisions you can make for yourself and for your business is choosing the people you surround yourself with. I always say this to my private coaching clients over and over again; get good people around you. When you are starting out with a new business I suggest you get yourself a dependable business coach. If you can’t afford to get one, that’s okay. Don’t be discouraged. There are so many ways for you to get wisdom from mentors, social media specialists and business coaches. You can read their books, listen to their podcasts, watch their videos or simply subscribe to their educational newsletters. All these can help you in your business.

Tip 4: Be True To Yourself Tip number four is to be honest and true to yourself. This is probably the most neglected area in your business and I totally understand why. More often than not, new entrepreneurs

spend all of their time and energy focused on the business side without looking within themselves and truly knowing what they are capable of. So I want you to ask the following questions: • Identify the hours you want to work – when are you most productive? • Know your strengths and your weaknesses – take advantage of your strengths and identify your weaknesses so you can improve them. • Do you enjoy customer contact? • Do you want a team or work alone?

Tip 5: Keep Good Documents & Records All successful businessmen and women keep good documents and records in their business. If you want to make it during the first 12 months with as few problems as possible I suggest you keep email confirmation of conversations and keep copies of all the documents in your business. You should also know your franchise document. And I also suggest you keep a timeline or due dates to

keep track of all the activities in your business ensuring that you are hitting your deadlines. Surviving the first 12 months in your new business is a milestone you should cherish forever because not all businesses make it this far.. Always know that you need systems and processes in place. I always tell business owners this: People run the systems, and systems run the business. If you intend to open a business, I believe you should find the right systems that work for you. Sharon is a highly respected international best-selling author and a seasoned Entrepreneur, Growth Strategist and Success Coach. She is passionate about helping people grow their business fast by giving them financial freedom, and the choice to live the life they deserve. Sharon Jurd Events is committed to changing people’s lives. Being the founder of the 12 Week Business Academy, they provide an opportunity for everyone to benefit from real life business strategies. 0428 164 154 manager@sharonjurdevents.com.au

Business Franchise Australia and New Zealand 73

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EXCLUSIVE FRANCHISE TERRITORIES â&#x20AC;&#x201C; DO THEY EXIST? Many franchise networks promote that their networks offer franchisees â&#x20AC;&#x153;designated or exclusive territoriesâ&#x20AC;?. An unsuspecting prospective franchisee who has their heart and mind set on being their own boss and buying a franchise may neglect to fully appreciate the difference between an exclusive and non-exclusive territory and that the existence of a territory does not necessarily provide the degree of competitive protection that they were hoping for.

a competing business or allow another franchisee to establish a competing business within a defined territory.

negotiate a restraint that prevents a landlord from granting leases of nearby premises to competitive brands, but this is rare.

This is often a good selling point for a franchisor because a franchisee will be attracted by the fact that he or she will have the franchise brand to themselves within their territory.

Whilst it is common to see franchise agreements containing exclusive territories, it is equally common to see these territories narrowly defined. For example, in a retailing context, the territory might be limited to a strip retail shopping precinct or a particular section or level of a shopping centre.

Exclusive Territory

It is important to note that this does not necessarily mean that the franchisee will have no competition! I do not know of any franchise network that has no competitors and, whilst a franchisor may promise not to compete with a franchisee within its territory or allow another franchisee to do so, the franchisor cannot prevent a competitive brand opening business nearby, even next door! This is a normal risk that every business owner must assume.

It is quite common to see franchise agreements where the franchisor agrees not to establish

National franchisors with some clout with shopping centre landlords may be able to

In this article we explore the different types of franchise territory provisions contained in franchise agreements.

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Some franchise agreements limit the territory to the site at which the franchised business is located. Whilst there is nothing legally wrong with these types of agreements, they can easily mislead an unwary franchisee. Generally, a franchisor will not want to limit its opportunity to sell franchises by making territories too large. Despite this, some franchisors are happy to do so, but protect themselves with provisions allowing them to split or reduce the territory if the franchisee

“The existence of a territory does not necessarily provide the degree of competitive protection that they were hoping for.” Raynia Theodore | Principal, Corporate Advisory & Franchising Team MST Lawyers

Marketing restrictions usually also prohibit franchisees from maintaining their own website and social media sites.

Non-Exclusive Territory A non-exclusive territory is one where other franchisees or the franchisor may conduct business within the franchised territory. Some of the service-based franchise systems will allocate a territory to a franchisee and when allocating work (usually coming through a call centre) will give the franchisee in the territory where the work is to be performed a first right to the work. If the franchisee is too busy or is unable to perform the work within the territory, the franchisor is permitted to allocate the work to another franchisee.

is not meeting pre-determined performance criteria. Franchisees faced with these types of territorial provisions must consider the location of their likely customer base and factor into their assessment of the franchise the impact on sales of another franchise opening just outside the territorial boundary (just as they should consider other competitive factors such as a rival brand opening within the territory). Exclusive territory provisions also often restrict the ability of a franchisee to market outside the territory. This sometimes causes problems where a franchisee might want to place an advertisement in a publication that circulates in many franchised territories. Usually, in such a case, a franchisor would not permit such advertising, unless the other franchisees within the territory agree to be part of the campaign.

Service-based franchise systems also often contain provisions whereby the customer’s wishes are honoured. For example, a customer may use a particular franchisee for its garden maintenance and form a good relationship with a particular franchisee. The customer may move to outside the territory but insist that the same franchisee maintain their garden. Rather than losing the customer, the franchise agreement may allow the franchisee to continue to service the customer even though that customer is in another franchisee’s territory. Where a franchisee is granted a non-exclusive territory he or she will usually be permitted to work outside the territory, within the rules and guidelines contained in the franchise agreement and/or the Operations Manual. In addition, such franchisees will usually not be restricted in performing work in areas which are not the subject of existing franchises.

Territorial Encroachment Territorial encroachment arises where the territorial rights of a particular franchisee are infringed by a neighbouring franchisee working or conducting business within the territory of the first mentioned franchisee. This causes anger and discontent within the network and usually a huge headache for the franchisor.

Some franchise agreements define territories by reference to municipal boundaries or postcodes. When the municipal boundaries or postcodes change the territory will change and this may mean a franchisee can no longer service some customers. The internet also does not sit well with territorial provisions. The ‘world wide web’ is truly worldwide, meaning that a franchisor or any franchisee could theoretically market to the whole world through the internet. How would a franchisee with an exclusive territory feel if another franchisee or even the franchisor was effectively competing through internet sales? Many franchise agreements now reserve the right of the franchisor to sell via the internet. Prospective franchisees should consider these clauses carefully and try and incorporate into their franchise agreement some form of benefit to them arising from internet sales by the franchisor or other franchisees in their exclusive territory. Franchisees should also bear in mind that unless the franchise agreement reserves this right to the franchisor, it will be breaching the exclusive territorial rights of franchisees by selling goods or services online or allowing other franchisees to do so in the exclusive territories of those franchisees. Franchise agreements may contain other provisions that water down a franchisee’s exclusive territory. For example, a franchisor may be allowed to sell the products available in the franchised business from non-branded retail outlets in a franchisee’s exclusive territory (e.g. supermarkets). A franchisor may also be permitted under the franchise agreement to operate or allow other franchisees to operate mobile or temporary franchises inside a franchisee’s exclusive territory (e.g. at sporting events). It is critical that franchisees obtain legal advice in relation to the territory provisions so that they understand what rights are provided to them and what exceptions there are to any exclusivity offered. The Franchising Code of Conduct (‘the Code’) requires franchisors to give a

Business Franchise Australia and New Zealand 75

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prospective franchisee a ‘Disclosure Document’ in a prescribed form and the franchise agreement in the form in which it is to be executed by a franchisee at least 14 days before the franchisee enters into a franchise agreement or pays any non-refundable money. Although the legal position in respect of a territory is ultimately governed by the terms of the franchise agreement, the Code requires franchisors to disclose in their Disclosure Document certain information about territories in order to assist franchisees to better understand their rights. The information required to be disclosed is as follows: 1. Whether the franchise is for an ‘exclusive’ or ‘non-exclusive’ territory or whether the franchise is limited to a particular site. 2. Whether, within the territory the subject of the proposed franchise agreement: (a) other franchisees may own or operate a business that is substantially the same as the franchised business; (b) the franchisor or an associate of the franchisor may own or operate a business that is substantially the same as the franchised business; (c) the franchisor or an associate of the franchisor may establish other franchises that are substantially the same as the franchised business; (d) the franchisee may operate a business that is substantially the same as the franchised business outside the territory of the franchise; (e) the franchisor may change the territory or site of the franchise.

3. The policy of the franchisor or an associate of the franchisor, for the selection of the territory in which the franchised business is to operate. 4. Details of whether the territory (or site) to be franchised has, in the previous 10 years, been subject to a franchised business operated by a previous franchise granted by the franchisor and, if so, details of the franchised business, including circumstances in which the previous franchisee ceased to operate. 5. Details of whether the franchisee, the franchisor or an associate of the franchisor or other franchisees may make goods or services available online. It is evident from the above disclosure obligations that regulators of the franchise sector see prior disclosure of matters pertaining to territories as critical.

Conclusion When assessing a franchise network (in particular the price the franchisee is paying), there are many factors that a prospective franchisee must consider to determine whether they will be getting value for money. One key factor is the territorial protections, if any. Even if an exclusive territory is granted, franchisees should not place much value on this, because this does not prevent all competition. Franchisees must initially carefully read the franchisor’s Disclosure Document, particularly Items 9 and 13, however, the Disclosure Document does not define the relationship with the franchisor - the franchise agreement does. Franchisees must therefore:

76 Business Franchise Australia and New Zealand

• read the franchise agreement carefully; • determine whether territorial protection is essential for the business venture and be prepared to walk away if it is essential and the franchise network does not offer adequate protection; • look at the territorial boundaries and be satisfied that they are accurately defined, so there can be no argument in the future; • understand what territorial restrictions are imposed on the franchisee (for example, marketing outside the territory); • understand what forms of encroachment might be reserved to the franchisor (for example, internet sales or an ability to split the territory or re-define boundaries). Territorial protection is the ultimate protection from competition. Clearly if a business concept is a successful concept, others will copy and this cannot be legally prevented, however, in a franchise network it is important to understand what competition will come from within the network itself. MST Lawyers has over 25 years’ experience in franchising, representing clients throughout Australia and internationally in a variety of industries. Written by Raynia Theodore, Principal, in the Corporate Advisory and Franchising Team at MST Lawyers, please contact the Corporate Advisory and Franchising Team for assistance or further information. +61 3 8540 0242 +61 3 8540 0202 www.mst.com.au

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FR A NCHISING EXPO

New venue, new features

at Sydney Franchising Expo

The Franchising & Business Opportunities Expo will kick off 2017 with the Sydney show on 25-26 March, at the brand new ICC Sydney at Darling Harbour. Featuring a striking contemporary design, leading technology and multi-purpose spaces, ICC Sydney is located in the heart of Sydney in the active precinct of Darling Harbour on Cockle Bay. “In 2017 we are celebrating 30 years of the Franchising & Business Opportunities Expo with a new venue in Sydney,” says Exhibition Manager Fiona Stacey. “We are also relaunching the Franchise Advice Centre to give visitors quality time with financial and legal specialists to improve or start their own business.”

Stacey adds it has been a big year for the Expo, with highly successful shows in Sydney, Brisbane and Melbourne, as well as a new boutique showcase event in Perth, which was very well received by both visitors and exhibitors. Visitors at each of the Expos found a wealth of information and advice available, as well as a huge range of business ideas. Steve Caleo came all the way from Adelaide to meet with Jeff Rankin from Portermark at the Melbourne Franchising Expo. “There’s no doubt that meeting face to face is the best way to do business. That’s why I drove over from Adelaide to meet Jeff, and it’s been very worthwhile,” he says. “You want to know who you are dealing with,” Steve explains. “Investing in a business, you are taking a risk, so you want to be sure. I think the fact that Jeff is exhibiting here sets him apart from other businesses that you only find on the internet.” Steve says he found it useful to compare the franchises on offer and listen to the seminars. “I enjoyed the FCA franchisee panel session, I thought the moderator asked some really good

78 Business Franchise Australia and New Zealand

questions of the panellists and I was interested in their answers,” he says. Fiona Stacey says the seminar program is always a popular aspect of the Expos. “It’s an incredible opportunity to hear from people at the top of their game, to learn from them and to see what drives them,” she explains. “I’m very excited about the program we are planning for the shows next year, it’s all part of adding value and that ‘wow’ factor for our visitors.” For more information go to www.franchisingexpo.com.au

Franchising & Business Opportunities Expo 2017: Sydney: 25-26 March at International Convention Centre, Darling Harbour Perth: 7 May at Crown Perth Brisbane: 22-23 July at Brisbane Convention & Exhibition Centre, South Bank Melbourne: 26-27 August at Melbourne Exhibition Centre, South Wharf

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Survey shows

franchising oninthe rise Australia Despite a relatively flat economy and retail environment, Australia’s franchise sector continues to grow in total sales turnover and employment and its franchisors are confident of further growth in the next 12 months.

According to the biennial survey of franchising in Australia, the total annual sales revenue for the country’s entire franchise sector is estimated at $146 billion, up from $144 billion in the previous survey in 2014. The total number of people directly employed in business format franchising in Australia also continues to rise now reaching 472,000 permanent, part-time and casual employees, up from 461,000 two years ago. These are some of the key findings of the Franchising Australia 2016 survey, undertaken by Griffith University’s Asia-Pacific Centre for

80 Business Franchise Australia and New Zealand

Franchising Excellence and supported by the Franchise Council of Australia. This year’s survey marks the 10th instalment of this definitive benchmarking study of Australian franchising. The survey dates back to 1998 and has been updated every two years since. The headline findings of the Franchising Australia 2016 survey were released at this year’s Franchise Council of Australia National Franchise Convention in Canberra. The full report will be available in January 2017. Mr Bruce Billson, Executive Chairman

of the Franchise Council of Australia, said franchising is a robust, vibrant and exciting part of the economy, accounting for approximately four per cent of all small businesses in Australia. He said the survey results show Australia’s franchising sector has continued to perform strongly, against the backdrop of relatively slow economic growth. “The Franchising Australia 2016 survey points to a maturing sector, holding its own in a transitioning economy following the end of the mining boom,” he said. “Total sales turnover for the sector has risen slightly, while employment has steadily risen and created more permanent full-time jobs. Franchisors are also predicting growth in franchise numbers over the next 12 months.” According to the Franchising Australia 2016 survey, there are now an estimated total of 1,120 franchise brands operating in Australia, compared with 1,160 in the 2014 survey. Professor Lorelle Frazer, Director of Griffith University’s Asia-Pacific Centre for Franchising Excellence, said this gradual reduction in franchise systems is expected as the sector continues to mature.

“Franchise brands have continued to merge and consolidate to remain sustainable and to grow,” she said. “Whilst the number of brands has declined, individual franchise systems have grown internally with modest increases in the number of franchise units.”

more turbulence in the retail sector moving

The 2016 survey shows a total of 79,000 units operating in business format franchises in Australia. Whilst the number of franchised units has slightly increased and companyowned units decreased, there has been no net overall change in the number of franchise units since the 2014 survey.

the proportion of people employed on a

The retail (non-food) industry dominates the Australian franchising sector, with 26 percent of brands operating in this segment. Behind this, 19 per cent of franchise brands are found in accommodation and food services, 15 per cent in administration and support services, and 10 per cent in other services such as personal services, automotive repairs and IT. Professor Frazer said the franchising sector continues to be impacted by intense competition in retailing, particularly nonfood retailing. “Food retailing has been more resilient with consumers responding well to variety and innovation in food concepts,” she said. “However, we can expect to see plenty

forward.” A real positive for the Australian franchising sector is its employment growth, which has been on a steady rise since 2012. Significantly, permanent, full time basis has increased, suggesting a more optimistic outlook ahead.

Headline Findings of the 2016 Franchising Australia survey: * $146 billion in total sales revenue * 1,120 franchise brands * 79,000 business units * 472,000 people employed The Executive Summary of the 2016 Franchising Australia survey is available here: https://www.griffith.edu.au/ franchise/home/research/franchiseaustralia/?a=916486

Business Franchise Australia and New Zealand 81

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Is ‘Home-Based’ the Answer? As franchising grows, with growth around the world, so does the range of brands. Many people still associate franchising only with ‘fast food’ and ‘auto supplies/repairs’. Those days, however, are gone and will not be returning. It is true that fast food helped build the foundation to the franchise industry, but much has changed since the foundation was cast. Franchising today embraces a plethora of brands covering everything that you can think of. It seems almost anything can somehow be turned into a franchise with whatever success is appropriate. As the brand options expand dramatically, so does the franchise format. With fast food we all knew where we stood - it would be a highly visible location with suitable recognition symbols to make it stand out from the crowd.

“Just not everyone can accommodate working from home - it is after all your home and not your office, and dedicated space needs to be acquired.” David Banfield | President | The Interface Financial Group

Times have certainly changed and the location, location, location mantra for success has passed. Franchise business formats now still embrace the highly visible street location, but they also embrace everything from a single serviced office and a virtual office, to a strip retail outlet, to a mobile facility, and even a home-based office concept. There is much excitement around home-based franchises, as they offer something viewed

82 Business Franchise Australia and New Zealand

as very enticing to entrepreneurs that have a long career built around commuting for several hours a day. The opportunity to ‘roll’ out of bed and literally be in the office in five minutes has considerable appeal if you have been used to an hour plus commute every day. Not only does a home base cut out the physical commute, but it also cuts down on the cost of commuting - an ever-growing element in the budget.

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Reduced cost and reduced time have to be significant factors when considering a franchise that can be home-based. But are you as an individual well suited to such an environment? The usual and expected answer is always, ‘yes’. Usually offered without much thought about the underlying aspects of a home office. Many new entrepreneurs working in a homebased environment have had a long and successful career - quite often with a major corporation. In that employment atmosphere they were well versed in how the business operated, who reported to them, to whom they reported, deadlines, customs, dress code and the all-important social aspects of employment. Now entrepreneurship is the course of action they are pursuing, so it becomes a leap of faith to go from the confined employment arena to a home-based venue. There also comes a second leap of faith in that many home-based entities represent a one-person operation - the incumbent has traded the large scale employment situation for a home-based single employee/owner status. Maybe not just a leap, but a quantum leap of faith. For entrepreneurs seeking a home-based franchise opportunity, it is crucial that

“The biggest challenge is going to be temperament and selfdiscipline. As an individual, can you set out a plan of action and follow that plan?”

they really weigh the pros and cons of their proposed venture. Not everyone can accommodate working from home - it is after all your home and not your office, and dedicated space needs to be acquired - home and office do not co-mingle well, so there needs to be a clear separation of where one starts and the other stops. Creating space may be one of the easier aspects, as is obtaining appropriate equipment and furnishings. In most home-based situations there are no ‘outside’ visitors, so the economy level of equipment may work well. The biggest challenge is going to be temperament and self-discipline. As an individual, can you set out a plan of action and follow that plan? In a former life it was probably very easy, as there was a deadline involved and a designated standard to uphold. Now you are the ‘boss’ and you set the rules - notwithstanding it may be a franchise model - and you certainly set the time table. Are you disciplined to get it done today, or will tomorrow be fine? Sometimes looking

84 Business Franchise Australia and New Zealand

into your own personal resources is not a rewarding function if results show that you are not really entrepreneurial material and you really prefer not to take charge, and being #2 has certain merits as far as you are concerned. Self-analysis, before the event is crucial to any measure of success in a home-based model. Don’t be lulled into the quick commute and the monetary savings involved - make absolutely sure that you can run a business on your own, in your own home. David Banfield is President of the The Interface Financial Group, a position that he has held for over 20 years. He has been instrumental in starting Interface as a franchise opportunity and building it to its current international status. Prior to his involvement with Interface, he worked extensively in the banking, credit and factoring financial service areas. www.interfacefinancial.com.au

Steve Costi and his family have been in the seafood business since 1958, and after years of success have decided to franchise the Famous Fish business. Coupled with the strength of the Costi Brand, our franchisees will benefit from our comprehensive training, business, marketing and head office support. Set sail in one of Australiaâ&#x20AC;&#x2122;s most successful retail sectors!

SEAFOOD REMAINS THE #1 TAKE-AWAY food item sold by independent take-aways in Australia.

Serving authentic, original and accessible seafood, and delivering an efficient, manageable franchise business.

Join our franchise family! We take an instant liking to committed, hardworking individuals who have a dream of working for themselves and strong ideals about quality, because people that hang onto those ideals always make it! For more information regarding the Famous Fish Franchise opportunity, please contact Sal El-Houli:

P: 0425 786584 E: franchising@famousfish.com.au W: www.famousfish.com.au Business Franchise Australia and New Zealand 85

pr o fi l e : ay er s r ock r eso rt

let there be light

Ayers Rock Resort is hosting its most ambitious event, Field of Light, adding extra sparkle to any event. Delegates can delve into the experiential artwork in a number of different ways with a special Field of Light sunrise experience. Hot tea, coffee and pastries is available on arrival at an exclusive dune top, followed by a walk-through the Field of Light as a guide provides insights and background to the installation. After sunrise, delegates are invited to an outdoor dining site adjacent to the Field of Light to extend their sunrise experience and choose from either a light breakfast of bacon and eggs or a freshly cooked buffet breakfast.

In addition to Field of Light, delegates can enjoy other unique experiences, including camel rides over the red sand dunes, Indigenous cultural experiences and guided tours around the base of Uluru. The Uluru Meeting Place, Ayers Rock Resort’s conference centre has won two consecutive Australian Tourism Awards in the Business Events category, in recognition of its state-of-the- art facilities and range of unique dining and touring options. The conference complex itself includes two main conference spaces which can host 306 delegates and 420 delegates respectively with theatre style seating. The rooms can be sub-divided with acoustically rated walls, or opened up to become one common space for exhibitions or trade shows. A light-filled pre-function area adds more flexibility to the complex while an outdoor amphitheatre

86 Business Franchise Australia and New Zealand

can host up to 350 guests. Advanced audiovisual equipment is seamlessly integrated throughout. With easy access from all east coast capital cities, Ayers Rock Resort encompasses a diverse offering of accommodation, from 5-star Sails in the Desert through to the authentic 3.5-star Outback Pioneer Hotel. This diverse offering ensures all conference markets are accommodated. Outside the Resort’s four hotels, lies a collection of resort and community style facilities that add depth to a delegate’s overall conference experience. For more information contact 02 8296 8067 conferences@voyages.com.au www.ulurumeetingplace.com.au

R • • • • • Business Franchise Australia and New Zealand 87

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Behind the

headlines Pharmacy merger to create 500store chain The Terry White and Chemmart pharmacy chains are set to merge in a deal that will result in a 500-store group with an annual turnover of around $2 billion and around 12.5 per cent market share, according to media reports. The proposed merger will involve the Chemmart business being sold by its listed parent EBOS to Terry White in exchange for equity in the merged entity, and additional investment to to take EBOS’ stake in Terry White to 50 per cent. The deal remains subject to approval by Terry White’s 422 shareholders.

Terry White CEO Anthony White says the merger will help the group’s franchisees retain a foothold in a highly competitive market

Pizza Hut buyer considers Eagle Boys Private equity firm Allegro Funds, which recently bought the Australian operations of Pizza Hut from its parent company Yum! for an undisclosed sum, is understood to be moving forward in its consideration of rival chain Eagle Boys, which is currently in administration. Allegro has appointed three former McDonald’s executives to operate Pizza Hut who will seek improvements in the brand’s

88 Business Franchise Australia and New Zealand

speed of delivery and ease of ordering. Many Pizza Hut franchisees were previously engaged in a class action against their former franchisor over declining profits following a price war with market rival Dominos.

How to get franchisees to run more effective local area marketing campaigns Real-life case studies highlighting successes and mistakes in marketing campaigns by leading Australian franchise brands will be featured at the annual Franchise Marketing Forum, to be held in Brisbane on November 18.

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The program will feature case studies from award-winning retail brands Lenards and Shingle Inn, as well as RAMS Home Loans, and include a special discussion session on how to get franchisees to run more effective local area marketing campaigns. The Forum is an essential professional development opportunity for all marketing personnel in franchise networks, and includes a unique Open Exchange session in which participants actively discuss key marketing issues, share experiences and learn from one another, in addition to formal presentations and case studies. The Forum is jointly organised by the Franchise Advisory Centre and Griffith University’s Asia Pacific Centre for Franchising Excellence. Registrations from $495 are now available. For program details go to www.franchiseadvice.com.au/franchisemarketing-forum.

Make all franchisors pay for franchisee wage abuses: 7-Eleven Embattled convenience retailer 7-Eleven has called on the federal government to require all franchisors to be liable for wage underpayments by their franchisees. In a remarkable move given its ongoing criticism in the media and by its former Wage Panel chairman, Professor Allan Fels about the time taken to process claims, 7-Eleven has urged the government to reform franchising laws so that franchisors are held accountable for wage underpayments by franchisees. While 7-Eleven’s position aligns with preelection policy statements made by both major political parties prior to the federal election, those very policies were announced because of widespread wage fraud in 7-Eleven. As possibly the only franchisor in Australia to charge royalties on franchisees’ gross profits, rather than noting the uniqueness of its model sets it apart from the franchise sector at large, 7-Eleven instead is supporting the notion that the entire sector should face further regulation based on 7-Eleven’s circumstances.

Former Kleenmaid director sentenced to nine years jail A former director of failed whitegoods retailer Kleenmaid has been sentenced to nine years jail for his role in knowingly operating the company while it was insolvent, and for defrauding the Westpac Bank of $13 million. Bradley Young was sentenced in the Brisbane District Court after a jury found him guilty in

the marathon 71-day case, which is the second longest trial in Queensland criminal history, and which heard evidence from a total of 60 witnesses. Young is one of three former directors to be charged over the fraud and insolvent trading, and is the second to be sentenced to jail. Director Garry Armstrong pleaded guilty to fraud late last year, and was a prosecution witness at the trial. Young’s older brother Andrew Young was initially tried jointly with Bradley, but will now be tried separately after Andrew’s barrister withdrew and could not be replaced in time, according to a media report. In addition to charges of fraud and insolvent trading, Andrew Young is also charged with stripping $330,000 cash from Kleenmaid immediately prior to placing it into administration. Kleenmaid collapsed in April 2009 with debts of more than $100 million and left more than 6,000 customers empty handed after they paid deposits for whitegoods that were never supplied, making it the highest-profile collapse of a franchise system in a decade. The Kleenmaid brand has since been sold to new owners.

Proposed competition law changes could impact franchising Proposed changes to the Competition and Consumer Act 2010 could impact franchising by improving supply chain efficiencies and harmonise prices across a network, but would also result in greater penalties if franchisors failed to provide documents when requested by authorities. The exposure draft of the Competition and Consumer Amendment (Competition Policy Review) Bill 2016 includes broader proposals to change current laws, but specifically draft laws dealing with supply chains, pricing and penalties may impact franchisors if they are adopted. Under the proposed new laws, conditions around third line forcing (ie. where a franchisor requires a franchisee to purchase supplies from a specified supplier) will be eased. Currently third line forcing is illegal across the board (ie. per se), and franchisors need to lodge a notification with the Australian Competition and Consumer Commission to apply for an exemption. This process is proposed to be simplified, but will still be subject to a “substantial lessening of competition test”. Additionally, laws regarding resale price

90 Business Franchise Australia and New Zealand

Jason Gehrke | Director Franchise Advisory Centre

maintenance are proposed to be modified, to allow a notification process to occur if a supplier requires its products not to be sold or advertised at a price lower than it specifies (which is currently prohibited), and that related bodies corporate such as franchise networks may not be considered as subject to resale price maintenance laws. However, penalties for failing to produce documents under compulsory Section 155 orders when an entity is being investigated by the ACCC will increase to two years imprisonment (up from 12 months) and 100 penalty units (up from 20 - penalty units determine the size of financial penalty to be applied).

ACCC seeks penalties against franchisor for disclosure omission The Australian Competition and Consumer Commission (ACCC) has instituted proceedings in the Federal Court against Western Australian-based food franchise Pastacup and its former director Stuart Bernstein for not disclosing Bernstein’s involvement in two failed former franchisors of Pastacup. The ACCC is seeking declarations, injunctions, penalties, findings of fact, and costs against Pastacup and Bernstein, who cofounded Pastacup in 2008, and which in 2014 was placed into administration. This is the first time the ACCC has sought penalties for breaches of the Franchising Code of Conduct since the Code was overhauled to encompass penalties for breaching key provisions. The ACCC alleges that Bernstein’s directorship and management of two previous Pastacup franchisor companies that became insolvent should have been disclosed by Pastacup to potential franchisees. www.franchiseadvice.com.au

OWN A SLICE OF LA PORCHETTA! Join the largest Italian restaurant chain in Australia and New Zealand. You will love taking part of serving our guests quality Italian food, to order, using fresh ingredients.

WHY LA PORCHETTA? t " QSPWFO QSPÃ½UBCMF PQFSBUJPO t 8F IBWF TUSPOH MPDBM BSFB NBSLFUJOH support and advice. t #F QBSU PVS EZOBNJD BOE FOHBHFE GBNJMZ PG SFTUBVSBOUT UIBU MPWF QFPQMF t 8F BSF B NVDI MPWFE BOE SFDPHOJTBCMF OBUJPOBM CSBOE t +PJO PVS UFBN PG SFTUBVSBOU PXOFST XIP love getting together and share ideas. t 8F PGGFS B Ã¾BU GFF TUSVDUVSF UIBU BMMPXT ZPV UP CVJME ZPVS CVTJOFTT GBTUFS

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Visit: www.laporchetta.com.au/franchising Email: franchising@laporchetta.com.au OR call (03) 9460 6700.

Business Franchise Australia and New Zealand 91

pr of ess i ona l s er v i c es l i st i n gs

HARMANS LAWYERS

IP | partnership

485 Papanui Road, Christchurch

Level 6, 64 Marine Parade (Po Box 10857) Southport Qld 4215

P +64 3 352 2293 F +64 3 352 2274 Contact Mark Sherry or Alan Prescott E mark.sherry@harmans.co.nz www.harmans.co.nz If you’re considering buying a franchise you need the legal confidence that the agreement is fair and ethical. Getting the right legal advice early is essential, and that’s where the knowledgeable Harmans team of franchising experts can help. Our extensive experience in all aspects of franchising, across a wide range of industries, will provide you with the advice you need to more forward with confidence. We have acted for franchisors and franchisees over many years and know the advantages of franchising and pitfalls to watch out for. Our Franchising Team can assist with a full range of franchise related services, including: - Legal rights and obligations under franchise documentation - Business structures and asset protection structures - Financing issues - Employment issues and health and safety - Lease arrangements and agreements - Terms of trade - Dispute resolution

P 07 5591 2522 F 07 5591 2511 Contact Peter Thelwell E pt@ippartnership.com.au www.ippartnership.com.au A specialist Franchising and Intellectual Property legal and consulting firm, providing comprehensive advice for Franchisors from conception through to recruitment of Franchisees and ongoing management of the franchise. Clients receive expert, cost-effective advice on a collaborative basis with the firm taking great pride in its long term relationships with Franchisors. Expert advice and assistance is also provided to Franchisees buying & selling businesses as well as in relation to disputes.

We are members of the Franchise Association of New Zealand

Krneta Building Surveyors

MARSH & MAHER LAWYERS

Lvl 2 100 Wellington Parade, East Melbourne VIC P 03 9604 9400 F 03 9419 7735 Contact Robert Toth E rxt@marshmaher.com.au Marianne Marchesi E mim@marshmaher.com.au www.marshmaher.com.au

Suite 5, 39A Glenferrie Road, Malvern VIC 3144 P (03)9509 3176 F (03)9509 2146 Contact Nathan Krneta E nathan@krneta.com.au www.krneta.com.au Krneta Building Surveyors is a national consulting firm, consisting of specialist certifiers and compliance advisors providing a range of professional services in a variety of sectors to assist in the delivery of successful projects. The services for Franchisors consist of obtaining building permit approvals, certification and liquor licence assessments for tenancy fitouts and new developments nationally.

92 Business Franchise Australia and New Zealand

30 YEARS OF FRANCHISE INDUSTRY KNOWLEDGE AND EXPERIENCE ACTING FOR LOCAL AND INTERNATIONAL FRANCHISES Members of: Franchise Council of Australia (FCA) International Franchise Lawyers Association (IFLA) Marsh & Maher Lawyers Provide fixed fee services to franchise clients for most aspects of work. Marsh & Maher Practice in the following areas: • Commercial and Corporate Law • Corporate Reconstruction and Insolvency • Discrimination, Employment Law and Industrial Relations • Media Law • Litigation and Dispute Resolution • Trade Practices and Competition Law • Intellectual Property • Retail Licensing and Distribution.

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