Business Franchise AUS & NZ May/June 2017 by CGB Publishing

T h e

m a g a z i n e

VOL 11 ISSUE 04 may/june 2017

f o r

f r a n c h i s e e s

AUSTRALIA and NEW ZEALAND

clark rubber build your future with a retail icon

women in franchising how to

get the best

from your best

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b us i n ess f r an c h i s e m ag az i n e aust r a l i a an d n e w z e a l an d

AUSTRALIA and NEW ZEAL AND

AUSTR ALIA and NEW ZEAL AND

BUSINESS FRANCHISE AUSTRALIA and new zealand VOLUME 11 ISSUE 4, may/jun 2017 publisher: Colin Bradbury. colin@cgbpublishing.com EDITOR: Joanne Tuffy.

From the

Editor

editor@cgbpublishing.com.au SALES DIRECTOR: Vikki Bradbury. vikki@cgbpublishing.com SALES & marketing manager: Kathleen Lennox. kathleen@cgbpublishing.com.au publisher’s assistant: Jorgia Rice. PRODUCTION: production@cgbpublishing.com.au ACCOUNTS: Renee Gould. accounts@cgbpublishing.com.au GRAPHIC DESIGN: Jejak Graphics - Michelle Quinn jejak@bigpond.com COVER IMAGE: clark rubber TO SUBSCRIBE: www.businessfranchiseaustralia.com.au or www.isubscribe.com.au CGB PUBLISHING PO BOX 968

Welcome to another fantastic issue of Business Franchise magazine. As the end of financial year end approaches, now is the ideal time to take stock of your future financial goals. Having recently attended the Franchising & Business Opportunities Expo, held at the brand new ICC Sydney at Darling Harbour, it was great to see the eager crowds of potential franchisees and the positive energy generated among the exhibitors and visitors alike!

This award winning franchise, in business for over 70 years, has three individual business models available, providing flexibility to potential franchisees. Now is the perfect time to join this Australian retail icon. Our feature this issue showcases some of the top food and beverage franchises available today. According to the 2016 Franchising Australia survey completed by Griffith University’s Asia-Pacific Centre for Franchising Excellence, 19 per cent of all franchise systems focus on accommodation and food, which includes fast food and coffee shops, with only retail franchises higher at 26 per cent. Put simply, we love our food and in terms of franchising, the options have never been more prolific.

Following on from the success of Sydney, May 7th sees the second of the four shows around Australia arrive in Perth. Business Franchise readers once again enter FREE into the Franchising & Business Opportunities Expo being held at Crown Perth. Simply go to www.franchisingexpo.com.au and enter BFM when purchasing your tickets. Exhibition Manager Fiona Stacey says, “Grab your tickets now, it’s really time to stop dreaming and start doing!”

As always, there is a great selection of articles throughout this magazine from leading franchising experts including bankers, lawyers, accountants and consultants. Plus franchise news and updates from the Franchise Council of Australia.

If you’re looking for a retail franchise, check out Clark Rubber’s cover story on page 8.

Joanne Tuffy Editor

If this magazine has whet your appetite, after downloading your FREE ticket, why not come along to the Business Franchise stand at the Franchising Expo in Perth! Enjoy the read.

MT ELIZA, VICTORIA 3930 TEL: (03) 9787 8077 FAX: (03) 9787 8499 Email: cgb@cgbpublishing.com.au www.businessfranchiseaustralia.com.au www.businessfranchisenz.co.nz

SUPPLIER FORUM

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

maY/JUNE 2017

On the Cover

Cover Story: Clark Rubber

Build Your Future with a Retail Icon

54 Enabling High Achievers, How to Get the Best from Your Best Karen Gately, Ryan Gately 66 Women in Franchising Nina Rosace, Home Sorted!

In Every Issue 6

Whatâ&#x20AC;&#x2122;s New! Announcements from the industry

A Letter to Our Readers

Special Feature: Serving up the Best

Hot Topics: Behind the Headlines

Professional Services Listings

Listings

Franchise Council of Australia

Consumers are Hungry for More

Jason Gehrke, Franchise Advisory Centre

100 A-Z Directory

Profile 16 National Franchising Insurance Brokers 52 Boost Juice

76 Franchising Expo

Snapshot 24 Trent Driving School 56 Franchise Retail Brands 64 The Cash Back App

Thermawood

also in this issue: Expert Advice

7-Eleven........................................................................... 29

How to Ensure Your Business has the Right Meeting Rhythm

Appliance Tagging Services. ............................100

Lessons from 2016 Franchising Cases

Matt Malouf, Business Strategist

Esther Gutnick, MST Lawyers

22 It’s Who You Know: Networking that Works Janine Garner, LBDGroup

Aircoat Australia. ......................................................100

Bakers Delight...........................................................100 Begin Bright................................................................100 CashflowIt. ........................................................................ 2 ChemDry. ............................................................ 65, 101 Cibo Espresso........................................................... 101 Clark Rubber...................................................... 71, 101

30 A New Standard for Australia Jason Daniels, BDO

Crema Espresso...................................................... 101

48 Buying a Food Franchise? What You Should Know Masao Watanabe, LegalVision

Ecomist Australia..................................................... 102

54 Enabling High Achievers Karen Gately, Ryan Gately 58 Want to Murder Your Boss? Matt Manzie, Burger Urge 60 Turn Your Money Tap On Tania Allen 66 Women in Franchising Nina Rosace, Home Sorted! 68 Cash Flow is King Steve Seddon, Westpac 74

How to Read Your Franchise Agreement James Irving

78 What is Diversity and How Do You Embrace It? Corina Vucic, FC Business Solutions

Degani................................................................... 34, 102

Fasta Pasta.................................................................. 102 Fastway Couriers.......................................... IFC, 102 FC Business Solutions............................................ 15 Franchise Infinity Operating System. ..............73 GroutPro. ...................................................................... 103 Hairhouse Warehouse............................ 103, OBC Jejak Graphics. ............................................................73 Jim’s Building Maintenance. ............................. 103 Jim’s Pool Care......................................................... 103 Just Cuts....................................................................... 104 Kwik Kopy. .......................................................... 63, 104 La Porchetta....................................................... 47, 104 Lenard’s Chicken..................................................... 104 Little Kickers & Little Rugby. ............................. 105 Magnetite Windows. .............................................. 105 Midas. ............................................................................. 105

84 Franchise Territories, Do They Make Sense? Peter Buckingham, Spectrum Analysis

National Drones........................................................ 105

86 Are We Making Ourselves Redundant? Dr. Jenny Brockis, The Brain Fitness Doctor

Oz Bin Cleaning........................................................106

88 Back to Basics: What is a Franchise? David Banfield, The Interface Financial Group 90 Owning Your Marketing and Social Media Joe Papadatos, Icon Visual Marketing

Novus Auto Glass.................................................... 105

Pizza Temptations...................................................106 Redcat................................................................................. 1 Rice Workshop. ............................................... 45, 106 Salsas Mex Frescas!..............................................106 Snap-On Tools...............................................106, IBC SoccaJoeys................................................................ 107

Have Your Say 26 Avoid the Pitfalls and Make Franchising a Great Opportunity for You Small Business Commissioner David Eaton 82 The Power of Ones Can Make the Difference David Campbell, Avatar Consulting

Spray Pave Australia.............................................. 107 Thailander. .......................................................... 45, 107 The Energy Alliance...................................................25 The Interface Financial Group.......................... 107 Theobroma Lounges, Pavilions, Bars......... 108 V.I.P Home Services.............................................. 108 Yarra Valley Farms...................................................108

what’snew! JUMP! open second international site in Brazil participation and skill levels throughout Australia, in Singapore and now Brazil. “Children in Brazil will now be able reap the benefits of JUMP! Swim Schools’ tailored, highly-personalised program delivered in a fun and safe state-of-the-art swimming facility.” The Brazilian site is in Moema, an upscale neighbourhood in Sao Paulo city. Franchisee Fernanda Bernardi is a registered architect who studied project management in Australia and worked for a year designing JUMP! Swim Schools facilities at its Gold Coast headquarters.

Little Aussie swimmers are leading the global expansion for multi award-winning company JUMP! Swim Schools, which recently opened its second international site in Brazil. From running a single Grafton swim school in an old converted brewery just a few years ago, Gold Coast entrepreneur Ian Campbell has created the world’s fastest-growing swim school franchise and the nation’s leading learn to swim school for babies. Australia’s

largest national infant swim school is on track to open its 100th site in 2017 as the multi award-winning franchise company continues to expand rapidly. JUMP! Swim Schools managing director Ian Campbell said JUMP!’s international presence was motivated by reputation, demand and a simple and financially secure business model. “Every child deserves the chance to learn how to swim. JUMP! Swim Schools is increasing

After seeing the exponential growth of the franchise in the Australian market firsthand, upon her return to Brazil, Ms Bernardi was driven to address the region’s lack of specialised children’s learn-to-swim facilities. “Brazilians and Australians share the same love of the water and beach lifestyle. But although Brazil may have many swimming facilities, there is a real lack of specialised swim schools for babies and young children. This is the same gap Australia had before JUMP! Swim Schools exploded into the market.

Franchising Expo celebrates milestone year in style The Franchising & Business Opportunities Expo is celebrating its 30th year with a reinvigorated show at ICC Sydney in March, and an upcoming boutique event in Perth, followed by Brisbane and Melbourne shows in July and August. Exhibition Manager Fiona Stacey says the Sydney show was a triumph. “I think the Sydney show in March demonstrated just how relevant the Franchising Expo is to everyday people wanting to get into their own business, but with the support of a strong franchise brand,” she says. The event included a great diversity of business opportunities, with recognised brands, new concepts, and international brands making their Australian debut. The seminar program was again a highlight, with presentations from

high profile experts and CEOs. Now in its second year, the Perth Franchising & Business Opportunities Expo will be a boutique event on 7 May at Crown Perth. Stacey says, “Crown is a stunning venue that offers easy access, free parking and onsite accommodation. Visitors will be able to see all the franchising and small business options, talk to the names behind the brands and attend the free business seminars.” The Perth event will offer visitors a forum to compare and research a diverse range of franchise opportunities. There will also be comprehensive advice for setting up a franchise, and the Franchise Council of Australia (FCA) will be on hand to provide valuable information. “It’s always important to research online,

6 Business Franchise Australia and New Zealand

but nothing can replace the value of meeting someone face to face to discuss your dream business,” Stacey explains. “We also find that exhibitors benefit from networking at the show with like-minded people, and from getting a good feel for the market in each state.” Franchising & Business Opportunities Expo 2017: 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 Reader special: Get FREE tickets by entering the code BFM at www.franchisingexpo.com.au

Swapping the heels for gumboots Fleurieu Gifts director and ex-executive recognised as top small business in Australia by PACK & SEND An ex-executive who dreamed about leaving “the 9-5 grind” to sell sustainable mini-gardens has been announced as the overall winner of the inaugural PACK & SEND Small Business Logistics Grant. Fleurieu Gifts, based in South Australia, provides eco-friendly alternatives to cut flowers, sourced from the Fleurieu Peninsula. Since its inception in 2014, founder and director Charlene Maney has used the power of e-commerce and online marketing to bring in six figures of annual sales – literally growing her business from the soil up. Charlene was one of eight entrepreneurs selected as finalists for the Grant, beating out over 130 entries across the nation from small businesses spanning health and wellbeing, electronics and technology, food and beverage, art and culture, recreation and fitness, and fashion. Women led the charge in an all-female final. A desire to spend more time with her family drove Charlene to swap her successful corporate job for more muddy ventures in 2014. “I was working long hours and commuting into the city for work and just wishing I could see more of my family. In the end I decided to leave my corporate gig, combine my love of gardening and beautiful things, and create my online business – making mini-gardens.” Charlene receives a prize pack that includes $10,000 worth of parcel and freight services from PACK & SEND, a three-month business mentorship with Hannah Staples, co-founder of Peppermint Grove Australia, and parcel courier and freighting advice from a PACK & SEND account manager for a year.

Zambrero hits franchise milestone nutritious meal to someone in the developing world for every burrito or bowl purchased. Similarly, for every retail product purchased a meal is donated to someone in an underprivileged Australian community via Australia’s largest food relief agency Foodbank. Queensland has been a strong growth market for the brand, with 32 restaurants launched in the last two and a half years alone. Zambrero CEO, Karim Messih said “As it sits at present, we are seeing a growth of 40+ restaurants each year and with further customercentric innovations in the pipeline and a strong team of partners around us, we expect this growth rate to further increase over the coming year.” Healthy quick service restaurant franchise Zambrero has opened its 50th Queensland restaurant, cementing the company’s position as Australia’s largest Mexican Franchise. The 50th Queensland site, located in Robina brings the brand’s national restaurant total to 146, a growth rate un-tainted by the 13,000,000+ meals the company has given away as part of its Plate 4 Plate initiative. True to their tagline - Mexican with a Mission, Zambrero is determined to tackle world hunger one meal at a time. Through their Plate 4 Plate initiative, each restaurant donates a highly

Despite the competition that exists in the QSR marketplace, Zambrero continues to lead the way with their innovation and commitment to nutritious, fresh Mexican inspired food. “Not only were we the first Mexican QSR to introduce a drive-through restaurant back in 2015, but we were also the first QSR in Australia to introduce the game changing black-rice gluten free tortilla in late 2016 as part of our superfoods range.” “Our customers are the most important part of our business. So with every innovation we make, their wants and needs are always at the forefront,” Mr Messih said.

Business Franchise Australia and New Zealand 7

c ov er sto ry: c l a r k r u bb er

build your future with a retail icon

With a proud retail history over the past 70 years, Clark Rubber is a recognised Australian Retailer. Having an award winning national franchise network of 65 stores throughout Australia, and two individual franchise models plus a mobile pool service territory franchise, there are many great opportunities and reasons to join this Australian Retail Icon. Started in 1946 by two men, Charlesworth and Clark, the initial partnership was known as Clark Matting and Rubber. The business grew quickly and, in 1951 the business was

listed on the Australian Stock Exchange. In 1961 the name was changed to Clark Rubber stores. In 1982, Clark Rubber was purchased by the Adsteam Group, which continued to operate the business until 1994. At this point the Clark Rubber name and logo were sold to Vita Pacific, a wholly owned subsidiary of Pacific Dunlop, and the network of retail stores were closed. It was at this time that Chris Malcolm, a veteran of Australian retailing, stepped in. After lengthy negotiations, Chris licensed the Clark Rubber brand from Vita Pacific. Deciding that a franchise model was the best way to grow an already established and recognised brand, the first franchised Clark Rubber store opened in Nunawading in 1995. By 1998 the 50th store had opened and Clark Rubber was once again one of the best recognised brands in Australian retail. In 2000, Chris Malcolm bought the Clark Rubber brand from Pacific Dunlop. The store network continued to grow and, in 2003,

8 Business Franchise Australia and New Zealand

Clark Rubber was recognised as the Franchise Council of Australia’s Franchisor of the Year in the ‘Entry Capital over $200,000’ category. In the same year, Chris Malcolm was inducted into the Franchise Council of Australia’s ‘Hall of Fame’. Three years later, Clark Rubber was awarded the Franchise Council of Australia’s highest honour, Franchisor of the year.

Great Products – Strong Marketing Clark Rubber franchisees enjoy the combined stock buying power that only comes from being part of a large national network. Our dedicated merchandise team works closely with suppliers to build product ranges across our key categories of pools, foam and rubber. In addition, we source products, develop promotional offers and negotiate terms and pricing. Making sure that products meets the needs of our customers and the market, no matter which model you choose, you will benefit from the knowledge and expertise relevant to your business.

Marketing and advertising are key to the ongoing success of any retail business. At Clark Rubber, each year we invest in brand development and national retail advertising campaigns, across all relevant and current channels, to ensure that we are continuing to drive customers and business to you. We also work closely with all Clark Rubber franchisees to develop and execute effective local area marketing at a local store level.

An ongoing commitment Clark Rubber franchisees benefit from a proven franchise system. Not only providing our franchisees with the knowledge and skills they need, but also ensuring that they have tangible business tools and support needed to help them run their business. Weâ&#x20AC;&#x2122;re with you every step of the way, whether you are taking over an existing store, starting up a new location or territory. We provide support in the areas of site selection, lease negotiation, store development and in-store merchandising. Clark Rubber franchisees and their staff benefit from a comprehensive initial and ongoing training program. Covering product knowledge, customer service, retail operational and compliance topics, training is delivered through a combination of individual, group and online programs. You will also receive the IT infrastructure required to manage every aspect of your business including stock control, POS, financial reporting and benchmarking. Our IT helpdesk is on hand to assist you with any system related issues, keeping your business operating ongoing.

National Strength, Local Support In addition to the national support team, all Clark Rubber franchisees benefit from the ongoing relationship with a dedicated Regional Sales Manager. Their role is to spend time with you, in your store, working with you to achieve your goals and provide regular feedback and support on all aspects of store performance.

Clark Rubber Franchise Models There are three individual models that make up Clark Rubber, designed to provide flexibility to potential franchisees and markets, whilst capitalising on the strong brand reputation gained over the past 70 years.

Clark Rubber Stores Including a unique product mix of pools, foam and rubber, these stores provide strong customer appeal and income potential

across all seasons. Products include modular pools, pool accessories, equipment, rubber matting, extrusions and hoses as well as being Australiaâ&#x20AC;&#x2122;s largest retail supplier of cut foam including an in store foam cutting service, supported by a great range of Sleepmaker innerspring mattresses and foam mattresses. Clark Rubber stores also include their own mobile pool van, providing you with the opportunity to build a strong local market.

Clark Rubber Pool & Spa shops Leveraging the Clark Rubber brand and reputation in pools, the Clark Rubber Pools & Spa franchise model has been developed to allow for a complete focus on pools and spas sales and service. All our Pool & Spa franchises operate a pool service van, allowing you to service your customers through both the store, and at their home.g. Being a part of the national franchise network you will also benefit from the great advantages of group buying, marketing and support.

Clark Rubber Pool Care Service Territories Understanding the needs of the pool and spa industry, included as part of the Clark Rubber franchise group is the opportunity to own your own mobile pool service territory. With the ability to market and service your own area, the flexibility to work from home, and the hours that suit you and your customers, this low-entry business model is a great way to run your own business yet with the support of a national brand and franchise network. At Clark Rubber, our commitment to customer service and providing our customers with solutions helps us to differentiate us in the market and with our customers. Coupled together with our extensive product range,

you have the opportunity to build a strong business and retail destination within your local market. All of these franchise models benefit from being a part of a national franchise group. With the initial training program, ongoing support and business development across all areas of the business as outlined above, the national support team is available to assist you in achieving the best results and grow a profitable and successful Clark Rubber business. The national marketing program is developed to help drive traffic and sales for your stores and is to ensure market presence throughout the year, and for all seasons. Products are sourced to ensure the best product mix to meet customer demand and changing trends within the market. Our online shop is designed to drive business direct to your store. The uniqueness of Clark Rubber stores, with a product range across Pools, foam and rubber, provides a strong market position supported by a well-recognised and reputable brand. Customer service is a key focus â&#x20AC;&#x201C; and is a differentiator of Clark Rubber to many of its competitors. With a strong vision for growth now and in the future, including three franchise models in Clark Rubber store, Clark Pool & Spa shop and Clark Pool Care franchise territory, you can choose the opportunity that suits where you want to go. For more information and to enquire about current opportunities, contact Dirk Heinert on: 03 8727 9999 dirk.heinert@clarkrubber.com.au www.clarkrubber.com.au

Business Franchise Australia and New Zealand 9

f r an c h i s e c o u n c i l o f aust r a l i a

Dear Readers,

can deliver real economic and social capital at local, national and international levels.

Welcome to your latest edition of Business Franchise magazine.

As a model of doing business, franchising is successful. We know that we have successful franchise systems delivering over $146 billion in annual turnover, through a network of over 72,000 small businesses that employ over 460,000 mums and dads, sons and daughters.

Franchising is a unique way of doing business and its success can be measured by the diversity of the brands and industries where franchising occurs. As recently stated by our Chair, the Hon Bruce Billson at the recent IFA Convention, “the USA may be the home of franchising, but Australia is the capital of franchising”. Our members have chosen to use franchising as a way of growing their business and we see our role as making sure that franchising is the best way for entrepreneurs to build a great idea into a successful network – a network that

The recent compliance events of the Fair Work Ombudsman together with the continuing coverage in the media around exploited workers and underpayment of lawful entitlements ensures that there will be a political response through legislative reform. Over the past quarter, we have been engaged with the Government, advocating that as a business model franchising should be supported and encouraged, not burdened by additional liabilities that undermine the fundamental benefit of a franchising system.

10 Business Franchise Australia and New Zealand

Through the efforts of the Chair, the Hon Bruce Billson and the members of a small subcommittee of key subject matter experts led by Director Stephen Giles, the FCA has been working to ensure your voice is heard and that franchising as a business model is understood and valued. These efforts have been effective in educating the Minister and the Department as to the threats and unintended consequences of the proposed reforms and we achieved a number of changes that improved the Bill for members. The Fair Work (Protection of Vulnerable Workers) Amendment Bill 2017 (‘the Bill’) was tabled in Parliament on 1 March 2017 and it is fair to say that the Government’s attempts to protect vulnerable workers through this piece of legislative drafting has fallen well short of anything workable for those businesses that use franchising as their business model.

“The FCA has been working to ensure your voice is heard and that franchising as a business model is understood and valued.” Damian Paull | CEO | Franchise Council of Australia

The compliance with the Fair Work Act is an industry wide issue and it seems unreasonable that the Government’s focus and attention has centred on franchising, where franchisors are at arm’s length to the work place practices of their franchisees. This is a workplace issue and targeting franchising potentially leaves thousands of workers at risk because the underlying behaviours of employers more broadly has not been addressed. The FCA will continue to engage constructively with the legislative process with the aim of improving meeting the intent of the Bill while not undermining the franchise sector and model of enterprise which contributes between 8-10 per cent of Australia’s GDP. It is now our focus to advocate improvements to the legislation, that: • reflect reassurances about ‘right sizing’ the law for the diverse and small business nature of franchising; • use a trigger for liability being substantial control over workplace relations; • require Courts and regulators to take account of a system’s size and resources; • clarity about what ‘reasonable steps’ actually means; As a fundamental principle, no-one in the franchise community wants to see an employee underpaid or knowingly taken advantage of, in a franchise setting or any other kind of workplace. The real issue here is that the risk of worker underpayment exists across the economy. The Bill deals with several matters and the key issue for franchising is that with the additional risk and liabilities it may have the effect of stifling a value contributor to the Australian economy as franchisors assess their liabilities and perhaps consider other business models. Franchising generates almost one in every 10 dollars in the economy, employs over 460,000 mums and dads, sons and daughters, and has been growing at a healthy rate of 2.8 per cent over a five year average. This Bill has potentially threated that employment and growth.

• focus of underpayment not paper work and technical judgements; and • provides for an approved compliance program as a clear defence against prosecution.

International Franchising Association – Convention In January 2017 over 50 FCA members headed over to the IFA Convention in Las Vegas to be inspired, informed and engaged with over 4500 franchising colleagues from around the globe. This was our largest delegation and the highlights for me was our three Australian finalists in the IFA Next Gen competition, and watching a group of our 2016 CFE graduates get the opportunity to graduate with the international class of 2016. I’d like to take this opportunity to congratulate them all

for pursuing excellence in their field. The NextGen competition was amazing with 18 international finalists (three from Australia) competing for the final three places and a share of the competition prize money. The competition was tough as they were all great business concepts and ideas. Many of them could be described as social franchises, where the business model sustained a social outcome or provided a social benefit. One example was the program from Africa where a $20,000 investment purchased a solar powered cool store that extended the life of fresh produce for up to 21 days. This increased food management, reduced wastage and had a forecast ROI after seven months based on the overnight storage cost of a food basket which was around $1.00 per basket. Bao Hoang (Rolld), Nik Leigh (Real Property Photography) and David Lindsay (Salts of the Earth) were all winners on the day. The NextGen program was comprehensive with all the finalists being guided, mentored and coached through three days of workshops and events. These experiences are at the heart of the NextGen value proposition. The three Aussie presentations were compelling and met the brief. Bao, Nik and David all presented well, told their stories and represented their franchise systems proudly. When the dust settled and after 18 presentations, three finalists were announced and it was great to see that David Lindsay made it to the finals. In the final adjudication, the audience casts the final vote and David was a very worthy runner up to MakerKids, a Canadian-based educational creative concept. On behalf of the FCA, I would like to congratulate all our entrants and finalists in the Australian aspect of the NextGen competition. It is a great concept that celebrates the very best in franchising and I am pleased to announce that we will be doing it all again this year. Regards, Damian Paull. www.franchise.org.au

Business Franchise Australia and New Zealand 11

e x pert a dv i c e

How to ensure your business has the right meeting rhythm

The key to great management, whether your staff are local or overseas, virtual or in your workplace, is regular communication and a good meeting rhythm. You need to think of these meetings like the pulse of your business. If itâ&#x20AC;&#x2122;s not beating regularly and rhythmically, then inevitably youâ&#x20AC;&#x2122;ll get an unhealthy system.

12 Business Franchise Australia and New Zealand

This keeps the energy high and will help you to avoid extending the conversation - people don’t want to have to stand for too long.

“Most meetings are poorly run, demotivating and, to be frank, a waste of everyone’s time. If run properly, your meetings will be inspiring and positive and enable the business to grow at a faster rate.”

Participants

Matt Malouf | Business Strategist

In the 15 years I’ve spent working in or with growing companies, the companies who are consistently growing and achieving their goals are those that have established a routine and rhythm of having meetings. The faster they are growing, the more meetings they have. Now while this may sound counterintuitive and even crazy to you, I need to clarify that I’m not talking about having a meeting for the sake of having a meeting. I’m talking about having short meetings that are run to time, with a specific structure and agenda. Most meetings are poorly run, demotivating and, to be frank, a waste of everyone’s time. If run properly, your meetings will be inspiring and positive and enable the business to grow at a faster rate. A big key to running successful meetings is to prepare for them properly. This is why the daily, weekly and monthly reports are so important. The reports are designed to give you the information required to run a short and productive meeting. This way the meeting can cut through the information-gathering stage that often takes up the majority of most meetings and get straight into constructive discussions and/or sharing. A great meeting rhythm that I have implemented with many companies is: • daily meeting (or sometimes referred to as a daily huddle); • weekly meeting; and • monthly meeting

Daily meeting (huddle) – A must in growing companies A daily meeting or huddle is a short meeting (five to 15 minutes) designed to support discussions around tactical issues and provide short updates. This is a great way to bring

everyone together, keep everyone focused and build a culture of camaraderie and teamwork. While this may seem like overkill and not necessary, this is a practice that many fast-growing companies around the world have implemented and are practising on a daily basis. You may feel like you don’t have the time to conduct such a meeting, or feel you are having enough interactions already so you don’t need another meeting. In my experience, when implemented well, the daily huddle will save you time, reduce impromptu conversations and increase the efficiency of information sharing. I have worked with many organisations that have implemented this well and the results are immediate. Your team will be more aligned, and you will be able to control the internal energy together with accelerating the growth of your company. Let me delve a little deeper on the structure and limits that lead to a successful daily huddle.

Timing It is recommended that you set the start of the daily huddle at an odd time, such as 10.10 am or 12.12 pm, to make it memorable. Starting at an odd time often leads to people being on time, believe it or not. As this is quite a short meeting you don’t really have very much time to waste. So it is important to the success of the huddle that you start and finish on time (ideally the meeting shouldn’t go for longer than 15 minutes). In the beginning I recommend getting someone to time the meeting and to end the meeting regardless of whether the agenda is finished or not.

Setting In order to keep the meeting short, it is best to conduct the daily huddle standing up.

Verne Harnish, author of Scaling Up and one of the leading pioneers of the daily huddle concept, says, “In general, the goal is to have more people in less meetings, not more meetings with less people.” It is for that reason that I recommend you involve the maximum number of staff members. The ideal number to keep the meeting short and allow a good exchange of information is 10 to 20 people. In larger companies, I would recommend you create a daily huddle in each department, and another daily huddle with the heads of the departments.

Agenda The last point to consider is the heart of the daily huddle; the questions. The agenda should be the same every day, and is only three items long (allowing up to five minutes per item). An agenda that has worked with many of my clients revolves around the following three questions: 1. Did you achieve your primary focus yesterday? 2. What is your primary focus today? 3. What obstacles will keep you from completing it - where are you stuck? The meeting rhythm will depend on the role and on the organisational culture. Depending on what other meetings are scheduled, I usually have a daily meeting with my personal assistant. That daily meeting is critical to her role and her ability to support me in what I’m doing. Those meetings are pre-booked in my diary, one month in advance. It’s a 15-minute meeting, and the conversation starts with ‘How can I help?’, and my assistant will give all the updates for the day. The meeting shifts when she says ‘Matt, how can I help you?’ and then I update her on what I need done. While hosting this meeting, we use Asana (our project management tool). We both have it open and make changes in real time, so we can both see the capture of those tasks and make sure they get managed properly.

Business Franchise Australia and New Zealand 13

e x pert a dv i c e

“It is recommended that you set the start of the daily huddle at an odd time, such as 10.10 am or 12.12 pm, to make it memorable. Starting at an odd time often leads to people being on time, believe it or not.”

Weekly and monthly meetings The second meeting type is the weekly meeting, which is a 50-minute meeting with a clear agenda that talks about the critical progress updates within a business. It engages conversation to help people understand, and gathers feedback from the team on what the business should keep doing, stop doing and start doing. When it comes to one-on-one, team, weekly or any other meetings that follow an agenda, culturally it’s good to start with: • What are your wins for the week and why do they matter? • What has been your biggest challenge and why does it matter? • What have you learnt in the past week and how can you apply it? This helps set a positive mood and tone for

the meeting, providing a chance to celebrate individual victories as a team and praise individuals in front of the team. ‘Wins and positives’ for the week could be the first item on your meeting agenda. From there, move on to the remaining items. I always end my weekly meetings with these two questions: 1. As an organisation, based on the past seven days, what should we STOP doing? 2. As an organisation, based on the past seven days, what should we START doing? These two questions allow people to voice their concerns or frustrations as well as

14 Business Franchise Australia and New Zealand

provide ideas or solutions that can enhance the business. Monthly meetings follow a similar agenda to the weekly meetings, except you need to add a strategic layer to it. By this I mean you should check in with the company’s goals and solve any major challenges to enable you to continue moving forward. Edited extract from The Stop Doing List (Wiley $27.95) by business strategist Matt Malouf, now available where all good books are sold. For more information on Matt Malouf visit: www.mattmalouf.com.au

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INTERNATIONAL EXPANSION If you are planning to expand internationally do you have best practice policies and procedures for each market you plan on entering?

HUMAN RESOURCES Is your head office team equipped to adequately deal with cultural and non-cultural differences?

SYSTEMS AND PROCESSES Are your sytems, policies and procedures robust and easy to understand?

INTEGRATED STRATEGY Have you developed a strategy to embrace diversity within your business to stay ahead of the curve?

LEARN MORE (03) 9533 0028 www.fcbs.com.au Business Franchise Australia and New Zealand 15

pr o fi l e : N at i o na l F r an c h i s e In su r an c e B r o k er s

Why Centralising your Franchise Insurance is a Great Idea “National Franchise Insurance Brokers (NFIB) is a company that specialises in insurance designed specifically for people working in the Australian franchising sector.”

The driving factor behind most decisions made by successful franchisors is centralisation. Brand uniformity, the streamlining of business procedures and the constant maintenance of company values form the general ethos of the most decorated Australian franchise groups. Ensuring that these factors are kept the same across your franchisee base amounts to a more close-knit group of likeminded individuals working towards the same goals – to boost your brand, and to promote the continued success of individual franchisees. To create a franchising model that works for both franchisor and franchisee alike, certain elements must be integrated – partly for monitoring purposes (giving the franchisor a glimpse into the general dealings of individual franchisees), and partly to make the system more accessible and approachable for potential and current franchisees. Standardisation of everything from payroll activities to staff training procedures creates a situation where, as long as regulations and guidelines are followed, your group can go from strength to strength, and rarely move backwards. One of the most important aspects for groups to monitor is insurance – as any successful

franchise group will tell you, it’s important that all franchisees have a level of cover that complies with their industry and their franchisor. Insurance models that specialise in group-standardised insurance packages allow for franchisees to be safe in the knowledge that they’re properly covered, and enable franchisors to be confident that their brand won’t be unavoidably affected by a negative situation in the future. Not only does this make life easier for the franchisee – leaving more time for them to run other aspects of their business - it also allows the franchisor to achieve a certain level of control over group insurance matters, without seeming overbearing. National Franchise Insurance Brokers (NFIB) is a company that specialises in insurance designed specifically for people working in the Australian franchising sector. Their basic premise is simple, to provide a centralised space for franchisors to easily monitor and regulate the insurance affairs of their franchisees. Following on, a secondary benefit comes to fruition – franchisees gain access to pre-determined covers tailored to their particular franchise group and industry. Making the (often tedious) process of purchasing insurance much simpler. The group-pricing structure available to companies such as NFIB (using ‘people-power’ to negotiate a better overall premium) acts as a major advantage – often providing clients with premiums considerably lower than if individuals were to insure elsewhere. Just Cuts, The Cheesecake Shop, Car Care and Hire a Hubby – some of Australia’s most accomplished franchise groups – all insure through nfib, and use them to standardise the cover of their franchisees. As Franchisors, they can keep track of their franchisees’ certificates of currency, insurance renewal dates and levels of cover taken out. This way, the franchise groups can ensure all their franchisees are properly covered and compliant with their insurance guidelines.

16 Business Franchise Australia and New Zealand

Mike Stringer – Franchisor of Car Care, when asked what the main benefits of NFIB’s system are, said,

“We switched to NFIB a couple of years ago mainly for the 24/7 access to documentation and the transparency with the reporting of claims. From our Franchisees’ perspective the biggest benefit has been having a single point of contact and the way the claims are managed. This also helps us stay at arm’s length from these individual issues whilst maintaining control.” NFIB’s program is the culmination of ideas designed to make it easier for franchise groups to optimise their insurance matters. The National Training and Development Manager at Hire a Hubby, John Harley, outlined the benefits of his company’s association with NFIB.

“We see our relationship with NFIB as a partnership. The benefit we derive is one of single point of contact for all the insurance needs of our franchise network. Being a national brand we need our insurance coverage to reflect the local needs of our franchisees. NFIB provide the products, the advice, the access and all the necessary communication needed so we can concentrate on the things we do best.” NFIB offer the advantage of an easy to use system and provide insurance packages designed to support franchisors aiming to further streamline their franchising model. To find out more contact National Franchise Insurance Brokers on: 1800 776 747 info@mynfib.com.au.

National Franchise Insurance Brokers Pty Ltd is an authorised representative (ARN 445168) of Morris Group Investments Pty Ltd (AFSLN 245374)

e x pert a dv i c e

Lessons from 2016 Franchising Cases 2016 was an interesting year in the franchising and business sector, with the introduction of new unfair contract terms laws, high profile scandals regarding employee underpayments and the collapse of several large and previously successful retail brands. This article provides a summary of some of the interesting franchising court cases decided in 2016 and the lessons to be learned from them.

Civic Video Case1 This case involved a franchisee purporting to sell its franchised businesses to a third

party (Paterson), and ceasing to operate the businesses without first seeking the franchisor’s consent, which was found by the Court to constitute a repudiation of the franchise agreements. In addition to discussions regarding the tort of inducing breach of contract (which will not be addressed in this article), the Court considered the principles applicable to assessing damages for repudiation of contract.

Key learning points Although considered by some to be a somewhat harsh decision in relation to assessment of damages, this decision reminds franchisors that they are entitled to: • enforce the franchisee’s contractual obligations to pay all fees due under a franchise agreement; and

The Court of Appeal held that the franchisor was entitled to loss of bargain damages to restore its position to that which it would have been in if the franchisee had performed the franchise agreements.

• seek damages, following the unlawful termination of the franchise agreement, for monies the franchisor would have received if the franchisee had performed the franchise agreement for the remainder of its term.

The Court did not consider it relevant that, as argued at the initial trial, the franchisee had at the time of the repudiation fallen behind in its payment of fees due under the franchise agreements and that the franchisee may not have been financially able to perform the franchise agreements for the balance of their terms.

This case also serves as a reminder to franchisees that failure to comply with the terms of their franchise agreements can be severe. The franchisee in this case would likely have had a better result had it complied with its obligation to seek the franchisor’s prior consent to any proposed transfer of the business.

18 Business Franchise Australia and New Zealand

TSG received notice from some of these franchisees stating their intention to terminate their franchise agreements and requesting pay-out figures. The franchise agreements did not include any right for the franchisees to terminate by notice.

“In order to succeed in a misrepresentation claim, a franchisee must be able to show that it in fact relied on the specific representations made at the time of entering the franchise agreement.”

The claim included allegations that Freechoice had engaged in:

Esther Gutnick | Senior Associate | MST Lawyers

Guirguis and Michel’s Patisserie Case2 In this case, the former franchisee of a Michel’s Patisserie franchise in Townsville brought a claim against the franchisor for misleading and deceptive conduct. The franchisor counterclaimed for breach of the franchise agreement (and related occupancy licence) and sought payment of royalties, occupancy costs, lease surrender costs and fees for removal of plant and equipment. The franchisee had abandoned the franchise business on 18 July 2013 and sought to terminate the franchise agreement on 22 July 2013, although the term of the franchise agreement was not due to expire until 2022. On 25 July 2013, the franchisor issued its own termination notice on the grounds of the franchisee’s abandonment. Prior to entering into the franchise agreement, the franchisee had signed a Deed of Prior Representations and Questionnaire, which asked the franchisee to write down full details of any verbal or written statements, representations or warranties which may have been made to it and which influenced its decision to enter into the agreement. Apart from some representations regarding lease terms, skills and ongoing support, the franchisee had not listed any other representations alleged to have influenced its decision to enter into the franchise agreement, despite the franchisor sending a follow up letter after the franchise agreement had been entered into, querying whether there were any other representations on which the franchisee had relied.

agreement. The franchisor was awarded $650,552.24 in damages against the franchisee and its guarantors.

Key learning points This case made it clear that, in order to succeed in a misrepresentation claim, a franchisee must be able to show that it in fact relied on the specific representations made at the time of entering the franchise agreement. The case also highlights that thorough risk management practices by a franchisor prior to entry into a franchise agreement can assist in defending future claims made by a franchisee. Franchisors should also take this case as a reminder to: • ensure that any promises and statements made to franchisees are accurate; • include appropriate warranties and disclaimers in franchise documentation to minimise risk and to displace potential reliance on any representations that may have been made; • actively encourage franchisees to seek independent advice and undertake extensive research prior to entry into the franchise agreement; and • consider using documents, such as prior representations statements, to provide an opportunity for the franchisee to record any representations which it believes have been made and which influenced its decision to enter into the franchise.

Tobacco Station and Freechoice case3

This Deed of Prior Representations and Questionnaire was central to the Court’s finding that that the franchisee had not relied on the representations (if they had indeed been made). Accordingly, the franchisee’s claims failed.

This matter involved tobacco product franchisor TSG Franchise Management Pty Ltd (TSG) and its market competitor, Cigarette & Gift Warehouse (Franchising) Pty Ltd, trading under the business name “Freechoice” (Freechoice).

The Court found in favour of the franchisor on the counterclaim. The franchisee did abandon the franchised business and its purported termination of the franchise agreement was unlawful because it did not comply with the terms of the franchise

TSG initiated proceedings against Freechoice after it made several approaches to high performing TSG franchisees, offering them financial incentives to persuade them to end their contractual relationship with TSG and join the Freechoice network.

• the tort of procuring or inducing breach of contract by inducing TSG franchisees to terminate their franchise agreements before the fixed term contracts had expired; and • misleading or deceptive conduct by making false representations to TSG’s franchisees to induce them into entering into new franchise agreements with Freechoice. The Court found that: • Freechoice was aware that the TSG franchisees could not terminate their franchise agreements without TSG’s consent; • Freechoice and the relevant terminating franchisees had been given formal notice by TSG’s lawyers that TSG did not consent to the franchisee’s purported early termination attempts; • Freechoice persisted in signing up terminating franchisees, arranging fit out of shops with the new branding and other interfering conduct until interlocutory injunctions were sought from a court; and • Freechoice had calculated the net benefit of inducing these franchisees to move to Freechoice and incorporated the costs of doing so into its model and was not deterred from its strategy by the threat of legal proceedings. The Court ordered that Freechoice be permanently restrained from inducing or attempting to induce TSG franchisees to terminate their contracts, and also ordered that Freechoice pay TSG’s costs of the proceeding. The Court also made declarations to the effect that Freechoice had made a number of misleading or deceptive statements to TSG franchisees in seeking to procure them, thereby contravening the Australian Consumer Law, and that Freechoice had knowingly and intentionally induced the owner of two franchised stores to breach the terms of her franchise agreement with TSG.

Key learning points Franchisors must beware of the risks of aggressive expansion tactics, and should ensure that its growth strategies do not involve: • actively seeking to poach franchisees of

Business Franchise Australia and New Zealand 19

e x pert a dv i c e

“Fixed term franchise agreements oblige franchisees to keep the franchised business operating and remain in compliance with the franchise agreement for its full term. Franchisees cannot simply terminate a franchise agreement or exit the business without the franchisor’s consent unless the agreement provides a right to do so.”

their competitors in circumstances where doing so may cause those franchisees to breach existing contracts; or • making promises which the franchisor cannot fulfil or making any inaccurate or deliberately misleading or deceptive statements. For franchisees, this case emphasises that fixed term franchise agreements oblige franchisees to keep the franchised business operating and remain in compliance with the franchise agreement for its full term. Franchisees cannot simply terminate a franchise agreement or exit the business without the franchisor’s consent unless the agreement provides a right to do so. Such conduct will, in most cases, constitute unlawful abandonment of the franchise and will ordinarily give the franchisor a right to sue the franchisee for damages.

Yogurberry Case4 This case arose in the wake of the muchpublicised Fair Work Ombudsman’s (FWO) investigations into underpayment of employees in the 7-Eleven and Caltex franchise networks. The case centred around multiple contraventions of the Fair Work Act 2009 (Cth) by the employer and franchisee, Yogurberry World Square Pty Ltd (YWS), including underpayment of workers and breaches of other provisions relating to minimum shifts, record-keeping and pay slips in respect of four employees at its frozen yoghurt franchised store in Sydney’s CBD. The Federal Court ultimately fined YWS $75,000 for those contraventions. In addition, the Court also found accessorial liability and imposed the following penalties on three further respondents:

20 Business Franchise Australia and New Zealand

• YBF Australia Pty Ltd (YBF), the Master franchisor of the Yogurberry chain in Australia who had also previously operated the store in question, was ordered to pay a $25,000 fine; • CL Group Pty Ltd (CL Group), an associated company of YBF which performed accounting, payroll, operational and logistical functions for Yogurberry stores in Australia, was ordered to pay a $35,000 fine; and • Ms Soon Ok Oh, the sole director and secretary of the company which owns YWS and an officer of all three of the corporate respondents, was fined $11,000. In finding secondary liability, it was significant that each respondent had specific involvement in, and knowledge of, the contraventions.

Looking forward to the year ahead:

franchisor is actively involved in functions such as: • establishing pay rates and conditions for employees of their franchisees; • the day-to-day conduct of their franchisees’ businesses; • performing payroll functions on behalf of their franchisees; • determining hours of work and leave entitlements; and • more general dealings with employment matters.

As 2017 gears up, the franchising sector will also be watching with interest to see:

The Yogurberry case is a reminder that franchisors should: • do what they can to ensure that all members of the franchise network comply with employment laws; • keep and retain adequate records relating to employment matters; and • co-operate with the FWO where relevant, including responding appropriately to any warnings and requests for information received from the FWO. In doing so, however, franchisors should seek appropriate legal advice to ensure that any responses provided do not prejudice their legal position.

The Yogurberry decision highlights the importance the FWO attaches to accessorial liability for breaches of workplace laws. In fact, the FWO’s annual report for 2015–20165 shows that the FWO sought penalties against accessories in over 90 per cent of the litigations it commenced.

Key learning points Both franchisees and franchisors can suffer substantial brand damage as a result of FWO actions, in addition to the actual costs incurred in paying any penalties imposed, rectifying any breaches and legal costs. Franchisors should bear in mind that they are very likely to be held liable as accessories to violations of workplace laws by their franchisees in circumstances where the

Interestingly, the ACCC’s latest Small Business Report, released on 25 January 2017, showed a trend of steadily declining numbers of franchising complaints received by the regulator since the commencement of the new Code in January 2015. Members of the franchising community will be paying attention as to whether this trend continues and whether it also translates into fewer disputes and litigation in the industry.

In determining the level of involvement they intend to have in the employment activities of their franchisees, franchisors must balance their desired level of control, which may increase their risk of accessorial liability for any breaches, against the possibility of significant reputational damage that may be suffered even where the franchisor is not found liable.

Pastacup Case6 In September 2016, the Australian Competition and Consumer Commission (ACCC) instigated its first litigation under the revised Franchising Code of Conduct (Code), seeking penalties, declarations, injunctions, findings of fact and costs. The proceedings allege breaches of the Code by Morild Pty Ltd (Morild), the franchisor of the Pastacup food franchise system and its former director Mr Stuart Bernstein, for failure to disclose that Mr Bernstein had been a director of two prior franchisors of Pastacup that had become insolvent. The case is currently ongoing and its outcome will be reviewed with interest by members of the franchising sector.

1. the outcome of various cases instigated in 2016 which have yet to be finalised, in particular the Pastacup case, being the ACCC’s first action seeking penalties under the revised Code; 2. how the introduction of the new Unfair Contract Terms regime manifests in its application to franchise agreements and related documents; 3. the form and effect of the implementation of the Harper Review recommendations, which proposed several changes to the Australian Consumer Law7; and 4. the progress of the Coalition Party’s policy to “protect vulnerable workers” which involves, among other things, proposed amendments to the Fair Work Act that will impose liability on franchisors and parent companies who fail to deal with exploitation by their franchisees. Esther is a Senior Associate at MST Lawyers, a law firm renowned for its franchising expertise. Located in Melbourne’s industry heartland, MST Lawyers has strong commercial law skills and provides clients with sensible solutions. For more information contact Esther at: 03 8540 0200 esther.gutnick@mst.com.au www.mst.com.au Civic Video Pty Ltd v Paterson [2016] WASCA 69 (27 April 2016) Guirguis Pty Ltd & Ors v Michel’s Patisserie System Pty Ltd & Ors [2016] QDC 117 (27 May 2016) 3 TSG Franchise Management Pty Ltd v Cigarette & Gift Warehouse (Franchising) Pty Ltd (No. 2) [2016] FCA 674 (8 June 2016) 4 Fair Work Ombudsman v Yogurberry World Square Pty Ltd [2016] FCA 1290 (2 November 2016) 5 The report can be accessed at: https://www.fairwork.gov.au/annualreport/02-performance-report/enforcement-outcomes 6 Australian Competition and Consumer Commission v Morild Pty Ltd ACN 601 446 306 & Anor (Federal Court file number WAD436/2016) 7 For more information see: http://www.australiancompetitionlaw. org/reports/2014harper.html 1 2

Business Franchise Australia and New Zealand 21

e x pert a dv i c e

It’s Who You Know – Networking that works

Networking is essential for business growth and personal success.

Sure, networking still matters – but it’s the NETWORK leaders build around themselves that matters more.

Yet the adage “it’s not what you know, it’s who you know” seems to have significantly more weight in this 21st century world of busyness, where jobs are filled before they are advertised and previously unthought-of collaborations appear out of nowhere to create new and competitive markets and steal market share.

The Harvard Business Review article Managing Yourself, A Smarter Way To Network found that, “The executives who consistently rank in the top 20% of their companies in both performance and well-being have diverse but select networks… made up of high-quality relationships with people who come from several different spheres and from up and down the corporate hierarchy.”

Individual talent, previous performance successes, educational achievement or even good old self reliance is no longer enough to survive in the fast-moving business landscape in which continued relevance, agility and innovative thinking are key.

Building a network that works is both an art and a science. It is an art in that it requires basic human skills in communication, connection, authenticity and the ability to be ‘in the present’ and engaged with people and conversation.

22 Business Franchise Australia and New Zealand

It is a science in that building a network strategically requires an ongoing analysis and audit of the people within the network and a sustained curiosity around the levels of diversity and connectivity within the group. It’s about seeing the lines that connect people and ideas to create opportunity.

Identify the critical few British anthropologist Robin Dunbar said there was a limit to the number of relationships humans could comfortably maintain – 150, to be precise. He suggested this was the amount with which we could maintain stable relationships, remember each other’s names, keep in contact and do each other favours. Anything larger than this, he said, results in the creation of other subgroups and tribes.

“Successful networking is about understanding the connections that should be made, as opposed to those that are being made.” Janine Garner | CEO | LBDGroup

of skills and thought as currency is something that is only going to increase in a future where knowledge means money. Make connections that matter, share information that matters and foster a pay-it-forward relationship.

It’s time to sink a few Knowing who to cut from a network is as important as knowing who to keep. Sometimes hard decisions have to be made to sink the energy zappers, the under miners, the dream stealers. The antithesis of networking, these people zap positivity and don’t add constructive thoughts thinking, ideation of strategic planning. They dampen the collective conversation, instead stealing ideas and snuffing them out - or worse stealing them for themselves.

Be brave and diversify Be brave enough to seek out new individuals, be brave enough to connect. Strategically expand networks by diversifying connections, exploring other people, businesses and experiences. Successful networking is about understanding the connections that should be made, as opposed to those that are being made. Momentum, however, starts with a significantly smaller circle of influence. Engage with a smaller group of people who providing quality thinking and behaviours. Individuals that can push and stretch thinking, that can open doors and teach mastery and knowledge. Identify the quality of people and stop obsessing about the quantity.

• Company, market or wider industry information;

Undertake a network audit

Value exchange is key

The ideal is a balanced and integrated network that bridges smaller diverse groups and is cross-hierarchical, cross-functional and crossorganisational. A balanced, interconnected network enables diversity of learning, reduces bias in decision-making and increases opportunity for personal growth and success. Successful networks provide;

Value exchange, the cross-fertilisation of intelligence and sharing of skills and knowledge, is the new currency. Each party involved gains knowledge, information and eventually perhaps even financial reward for their involvement, but the priority is the sharing of information, the connection that is made and the network that is built. The use

• Influence through sharing insight, experience and connections; • Mentoring to accelerate personal growth; • Accountability for action; and • A sense of purpose, of balance and worth.

It was Richard Branson that said, “Nobody can be successful alone” and in our fastmoving business world a network that works is critical to fast-track personal and business success. Choose to network wisely, building a circle of influence that allows transformational connections to be nurtured and business growth opportunities to be fostered. Janine Garner is a Fortune 500 mentor, partner at Thought Leaders Global, and CEO of the LBDGroup. She is also the author of It’s Who You Know: How a network of 12 key people can fast-track your success (Wiley) and From Me To We: Why Commercial Collaboration Will Future Proof Business, Leaders and Personal Success (Wiley). www.janinegarner.com.au

Business Franchise Australia and New Zealand 23

sna ps h ot: T r en t D r i v i n g Sc h o o l

DRIVE YOUR OWN FUTURE A family owned business which has been teaching new drivers the safest methods for almost 50 years, Trent Driving School is now also a growing franchise. Trent Driving School franchised their business in August 2016, and are already seeing the benefits. Currently, Trent only have franchisees in New South Wales, but they are looking to expand on a national level now that franchising has made it possible. Victoria and the Australian Capital Territory are the immediate focus over the next couple of years. Long regarded as the nation’s leader in driver training, working for a strong brand with loyal customers makes it easy for franchisees to focus on teaching safe driving. Driver training also allows flexibility and an excellent worklife balance, since it is not a typical nine-tofive job. As a driver trainer, you have flexible hours , ongoing professional development and mentorship, a proven system to support you, and a huge earning potential. Trent Driving School instructors report a high level of job satisfaction from creating safer drivers. Trent have 67 franchisees so far, each of them as individual driver trainers with a passion for road safety and changing people’s lives. The

business is predominantly looking for people that are new to the industry, and can offer an official Certificate IV in driving instruction at a discounted price for franchisees, through their own registered training organisation. Trent Academy and Masterclasses run for franchisees cover internal skills training across the business such as selling, completing assessments correctly, and designing driving routes. Trent also organise franchisee social events, the most recent being go-karting and yachting! Plus they hold an annual conference. Trent likes their franchisees to come together and enjoy being part of a family environment. Trent pride themselves on continual improvement, particularly in their support systems. Services provided to franchisees include a centralised phone and sales team, and an administration team for assistance. They have an industry-best website with an online booking system, and an in-car, real-time mobile electronic diary with merchant facilities to receive direct credit card payments. The business supplies all signage and completes all local and national marketing, including social media, and provides books for the students. The Trent Method has been developed to produce safer drivers through curriculumbased training. This systematised training program makes teaching more straightforward for instructors and learning more effective for new drivers. As a franchisee, this proven

24 Business Franchise Australia and New Zealand

system makes it easy to produce great results you can be proud of. Community minded programs from Trent Driving School include a Schools Program aimed at increasing student awareness of common hazards and crash types, and how their decisions interact with their driving. However, Trent doesn’t only teach young drivers or even only new drivers. Trent Driving School also offers corporate lessons for business looking to improve their employee driving safety, particularly for organisations with fleet drivers. This involvement across all aspects of the community, as well as having the most qualified instructors in the industry, has given Trent Driving School an excellent reputation in local communities, industries, and regulators. Over the last 12 months, Trent have been focussed on launching the franchise system. Now, the near future will focus on developing their registered training organisation and truck training, as well continuing their road safety presentations within schools and in local communities. If you’re looking to get out of the house and help our roads become safer, not to mention enjoy the best remuneration package in the industry, contact Peter Hales today on: 02 8748 4500 peter@ltrent.com.au www.ltrent.com.au

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h av e yo u r say

Avoid the pitfalls

and make franchising a great opportunity for you

Franchising can be an excellent way to ‘be your own boss’, but it’s not a guaranteed recipe for success. The advisory team at the Small Business Development Corporation (SBDC) works with small business franchisees as well as business owners who wish to become franchisors. Franchising is an exciting concept that has proved to be very popular in Australia.

As a business model, franchising allows a business to operate under the established brands, systems and procedures of another business and sell its products and services for a specified time period, for a fee. In the 1980’s franchising flourished in Australia with international organisations such as McDonalds, Kentucky Fried Chicken and Pizza Hut leading the way. Since then, Australians have embraced the franchising model and many Australian-owned franchises are now successfully operating here and overseas. There are more franchise systems per capita in Australia than in any other country

26 Business Franchise Australia and New Zealand

with approximately 1,200 franchise brands covering more than 79,000 franchise units and employing more than 460,000 people. According to the Franchise Council of Australia, 86 per cent of the most successful franchises in Australia are home-grown, and the sector is reported to be worth more than $146 billion to the Australian economy. The advantages of buying a franchise include having the independence of being a business owner but with the benefit of support from an established business network and brand. Franchising your own business can also be an opportunity to open ‘branches’ of your business around the world with more of a hands-off approach than if operating the

“In purchasing any business, it is imperative to check that the figures being offered are realistic and achievable. Most franchisors are honest and genuine in their dealings with franchisees, but some are not.” - David Eaton franchisees but the onus is still on both parties to be willing and able to meet their obligations under the franchise agreement and the code of conduct. “The code includes an obligation for parties to act in good faith in their dealings with one another and for franchisors to provide prospective franchisees with information on the risks and rewards of franchising. “The code also provides for court ordered fines and penalties in the case of breaches. “Whether you’re starting a business from scratch or buying a franchise, you must research thoroughly before investing any money. “With a franchise, the cost is not only the upfront purchase price but the ongoing costs of running the business, including royalties, percentage of sales payments and, in many cases, being required to purchase supplies through the franchisor or related entity. “Another important element of due diligence is talking to as many past and present franchisees as possible, and checking what customers are saying about them in online reviews,” Mr Eaton said.

Avoiding business disputes Disputes can be crippling to any business, so having the opportunity to resolve disputes quickly and inexpensively, without the need to go to court, is often a life-saver for businesses in trouble. outlets yourself. Carefully detailed systems and processes need to be in place to franchise your business. You will need the assistance of lawyers and accountants to set up your franchise plan and ensure it complies with the Franchising Code of Conduct. SBDC Chief Executive Officer, David Eaton, says potential franchise buyers should also engage a lawyer or accountant as part of their due diligence to ensure they know exactly what they’re signing up for when purchasing a franchise. “The Franchising Code of Conduct, most recently updated in 2015, sets the groundwork for fair dealings between franchisors and

The SBDC provides a dispute resolution service for business to business disputes, including between franchisees and franchisors. Mr Eaton says the SBDC dispute resolution team works with both parties to find a mutually acceptable solution to the dispute. Current results show more than 80 per cent of business disputes raised with the SBDC, are finalised without the need for formal mediation or court proceedings. Leon decided to buy his local café franchise when the owner was looking to sell. Leon paid a $10,000 deposit to a business broker and started discussions.

Small Business Commissioner David Eaton

He then gave the franchise agreement and the café’s lease agreement to his lawyer and accountant to review. The lawyer advised against signing the lease agreement, as it contravened provisions of the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) which applied to the café. The accountant advised that he had been unable to obtain full details of the franchisor’s financial position, as required by the Franchising Code of Conduct. Leon decided not to proceed with the purchase of the café based on the advice from his accountant and lawyer, but the broker refused to return the $10,000 deposit. Through its dispute resolution service, the SBDC assisted Leon to negotiate with the broker and his deposit was returned.

Supporting your own idea or someone else’s? Starting your own business requires a good idea of your own. As the owner of the business, you also have sole responsibility for choosing the business model, registering the business, leasing or purchasing commercial premises (if required), designing marketing material, implementing a marketing strategy and employing and training staff. In short, you make all the decisions concerning your business and you are therefore solely responsible for the success or failure of the business. Buying a franchise means taking on someone else’s business idea, adopting their business model and working to their business plan.

Business Franchise Australia and New Zealand 27

h av e yo u r say

“The Franchising Code of Conduct, most recently updated in 2015, sets the groundwork for fair dealings between franchisors and franchisees but the onus is still on both parties to be willing and able to meet their obligations under the franchise agreement and the code of conduct.” - David Eaton Being a franchisee often means meeting the franchisor’s business targets and following the franchisor’s marketing strategy. Franchisors may also be involved with site selection and shop fitting, outlet design and equipment purchasing, market research, advertising and merchandising, and/or securing finance. If you haven’t run a business before and have limited business experience, this involvement may be very welcome, but depending on the conditions of the individual franchise agreement and your own personality, you may feel restricted by the established business model and the limited opportunity to operate outside set boundaries.

In purchasing any business, it is imperative to check that the figures being offered are realistic and achievable. Most franchisors are honest and genuine in their dealings with franchisees, but some are not. Sophie was a hairdresser who had been told about a mobile hairdressing franchise. She met the representative who provided her with a copy of the franchise agreement, a disclosure document and some information about the average earnings for the franchisees. Sophie’s brother told her to read the disclosure document carefully and contact some past and present franchisees to talk about their experiences working with the franchisor, and to verify the earnings information. Too excited about the prospect of working for herself, Sophie signed the documentation, without speaking to other franchisees or checking the earnings. Two weeks into her new business, she realised her profitability was limited as she had to buy all shampoo, conditioner and colour from her franchisor at his prescribed prices (more expensive than

28 Business Franchise Australia and New Zealand

her usual supplier) and she couldn’t charge more than his price list for her services. She also discovered that ten former franchisees had reported the franchisor to the Australian Competition and Consumer Commission for his misleading behaviour.

Try before you buy Knowing what’s involved with franchising before deciding which franchise to buy, or whether the model is right for you, is a sound course of action. For current and potential business owners in Western Australia, the SBDC can provide free, independent and confidential advice and guidance on all aspects of buying, starting and running a franchise or other small business. Call 13 12 49 or visit: www.smallbusiness.wa.gov.au. The Griffith University Asia-Pacific Centre for Franchising Excellence offers a range of free online courses on choosing and evaluating franchises: www.franchise.edu. au/home/education/for-franchisees/how-tochoose-a-franchise-that-is-right-for-you

Be the

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FRANCHISING

e x pert a dv i c e

A NEW STANDARD FOR AUSTRALIA The move to Single Touch Payroll Reporting (STPR) sets a new standard for payroll reporting in Australia.

From 1 July 2018, businesses that employ more than 20 people will be required to align with the Australian Tax Office’s (ATO’s) Single Touch Payroll Reporting (STPR) requirements. The change means the ATO will be collecting payroll data in real time. As an employee receives a payslip, that information, including

tax and superannuation payments, will also be electronically transmitted to the ATO at the same time. It’s a change that will have particular implications for the way a large number of franchises manage their payroll requirements. The threshold for mandatory participation includes businesses with 20 employees of any sort, not just full time staff. Franchises are often above this level due to the nature of their workforce, one that is made up of casual and part-time workers. Thankfully, the change is something franchises can start to prepare for now starting with a review of their current payroll system and processes.

30 Business Franchise Australia and New Zealand

Why this change is so important The move to STPR sets a new standard for payroll reporting in Australia. Most businesses will be used to form filling at the end of the month, quarter or year, but now the ATO will have access to real-time transactional data. This then means their compliance activities will be completed in real time, which we think will begin to change the way they engage with taxpayers when issues do arise. The change could also affect the way this information is shared between other agencies, as it aligns with the ATO’s current information sharing agreement. This means, for example, the ATO will potentially be able to share real-time payroll data with an agency

“Our advice is to prepare your payroll systems early for the change. Use the 2018 financial year to review internal processes and implement whatever changes are required to be fully compliant come 1 July 2018.” Jason Daniels | Partner - Business Services | BDO

your payroll systems early for the change. Use the 2018 financial year to review internal processes and implement whatever changes are required to be fully compliant come 1 July 2018. An important piece of the internal review process will be to ensure your current software provider has the capability to transmit the required data each pay cycle.

Why is it so important for the franchise market? There have been statements made by both the Fair Work Ombudsman and Office of State Revenue revealing that, in the wake of the 7-Eleven case, authorities are particularly keen to review the franchisor’s systems and processes to determine whether these controls are adequate when it comes to ensuring franchisees are compliant. Frequently, they’re finding there aren’t adequate controls in place in the payroll and HR areas of a business. When regulators don’t find these controls in place this is a red flag for both the franchisor and franchisee. With the Office of State Revenue in particular, if they find problems in one or two of the individual franchisees, it is likely the will audit the whole network, which is an incredibly expensive process to go through.

like Centrelink, instead of continuing to do it a year after the fact. Superannuation payments will also be affected by the new STPR system. For the first time, the ATO is going to be able to match an employee’s payment to a superannuation fund to an actual real-time payslip, rather than waiting for an annual report from an employer with no guarantee the money has actually made it to the individual superannuation account.

Start early and be prepared While the mandatory start date is 1 July 2018, there is an option to join voluntarily from 1 July 2017. Our advice is to prepare

Human resources controls will make the difference In our experience, there are two different ways franchisors approach their HR oversight and ensure the people their franchisees employ are treated fairly and paid correctly. On one side, there are franchisors who like to be really involved in these processes and how they’re rolled out across their network. On the other, there are those that take a more hands-off approach and trust that their franchisees are doing everything correctly. Our concern for the franchisors that are currently taking this hands-off approach is what they may be exposing themselves to. Because of this real-time information reporting, the ATO are going be very wellinformed before they investigate a business.

It’s a fact that should really spur the franchising industry into action. While there are a number of positives with franchising arrangements, such as that their processes are systemised across individual entities, these same systems can allow bad habits to replicate within them. This opportunity for stricter compliance that’s on the horizon should encourage franchises to start getting everything in order now so they’re prepared for the enforced changes.

What are the next steps? Our advice is to review your current internal processes early to ensure you are ready come 1 July 2018. Consultation with your software provider will play an important part of the review to confirm they have the capability to interface with the ATO’s systems. Equally important will be the consultation with your accountant and business advisors to ensure your current business practices are compliant with the various federal and state taxes that will be under the spot light like never before. It is anticipated that the ATO will start reviewing real time data from 1 July 2018, so those businesses that have planned early will be well placed to avoid any unwanted attention from the ATO. Jason Daniels is a partner of Business Services at BDO in Brisbane. He is a qualified accountant, financial manager and business leader with more than 20 years’ experience. His expertise lies in all areas of financial management, especially mergers and acquisitions, business planning, forecasting, restructures, systems as well as process and operational improvement and software development. He holds a Bachelor of Commerce Degree, is a Member of Chartered Accountants Australia and New Zealand. Contact Jason via: +61 7 3237 5823 jason.daniels@bdo.com.au www.bdo.com.au @BDOAustralia

Business Franchise Australia and New Zealand 31

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VOL 11 ISSUE 04 may/june 2017

bakers delight

delivering on the delight

serving up the best

consumers are hungry for more

buying a food franchise?

what you should know

WHAT ARE YOU WAITING FOR?

live your cafe dream today Franchise Opportunities available now VIC, NSW, QLD, WA

To ﬁ n d o u t m o r e h e a d t o c a f e d r e a m . d e g a n i . c o m . a u & d o w n l o a d o u r F R E E E - B o o k .

Franchising & Business Opportunities Expo’S 2017: Perth: 7 May

Crown Perth, Burswood

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FRANCHISING & BUSINESS OPPORTUNITIES EXPO’S FOR BUSINESS FRANCHISE READERS! 34 Business Franchise Australia and New Zealand

Don’t pay at the door, entry is free for readers by entering the code BFM when purchasing tickets online.

“Grab your ticket now, it’s really time to stop dreaming and start doing!” For more information go to

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Contents On the Cover Image: Bakers Delight

40 Cover story: Delivering on the Delight

Bakers Delight

42 Feature: Serving up the Best, Consumers are Hungry for More 48 Expert Advice: Buying a Food Franchise? What You Should Know

Masao Watanabe, LegalVision

34 Degani 34 Franchising and Business Opportunities Expoâ&#x20AC;&#x2122;s 36 Whatâ&#x20AC;&#x2122;s New! Feature news

45 Rice Workshop 45 Thailander 47 La Porchetta 52 Profile: Boost Juice 54 Expert Advice: Enabling High Achievers, How to Get the Best

from Your Best

Karen Gately, Ryan Gately

56 Snapshot: Franchise Retail Brands 58 Expert Advice: Want to Murder Your Boss?

Matt Manzie, Burger Urge

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 35

what’snew! Red Rooster enters new territory with shopfront restaurants As a part of their transformation, iconic Aussie food brand Red Rooster, well known for its drive thru restaurants, has launched a new look shop front format enabling them to move into more urban areas. The new small formats known as ‘Reggies’, are named after the brand’s rooster mascot and are the next step to transforming the iconic Aussie brand. Spearheading the new brand direction is CEO Chris Green: “We launched Red Rooster Delivery and our own online platform last year which was a vital move to ensure our brand stayed relevant in an era of technology and convenience. The next step-change is ‘Project Reggie’, with the aim to open twelve shopfronts in 2017, the smaller footprint of Reggie will enable us to secure more urban, main street sites. We see these business changes as an integral

part of the transformation of Red Rooster and pivotal in our goal to make our delicious roast chicken even more accessible for more Australians.” The design of each Reggie shop front restaurant is contemporary and modern. There will be stores as small as 42m2 with the primary focus on delivery and pick-up; through to the larger shop front restaurants with interiors offering the warmth and

authenticity of a dine-in restaurant whilst also focusing on providing the community with a delivery service. The first Reggie shop front to open is in the NSW town of Goulburn and was quickly followed by Ashgrove QLD, North Ward QLD and Northbridge WA. With the Reggie stores, Red Rooster’s roast chicken offering will enter new territories and prove even more accessible to all Aussies.

From the RAAF to Ristrettos RAAF veteran Scott Penrose, along with wife Nicole, recently opened the first Zarraffa’s Coffee store for 2017 in West Ipswich. Returning from his fourth deployment to the Middle East, Scott - who has served a combined 17 years as both a full time and reservist for the RAAF - is cheering wife Nicole on as she launches this new chapter in their lives. “We’ve been a part of the Ipswich community for 15 years and we are ready for something new in our careers and to build a business that suits our family,” said Scott. “Nicole has done the heavy lifting of late, with loads of phone calls and emails flying back and forward across the globe, but since my return in April we are very much a husband and wife team, dealing with the demands of running a busy Zarraffa’s drive thru store.”

Nicole Penrose

Scott said it was not an overnight decision and one that has taken three years to reach fruition.

36 Business Franchise Australia and New Zealand

“Zarraffa’s is very thorough in their selection process of franchisees and this meant that we really had a full understanding of what it takes to own and operate one of their drive thru stores, protecting everyone in the long run.” The new store is located in an industrial area in West Ipswich, which will be handy to the working industries. “Having spent a large amount of time in the area we have watched it change and grow and could see there was an opportunity to expand the retail offering and convenience for locals.” Zarraffa’s CEO Kenton Campbell said that West Ipswich is the first of a number of store openings this year, with the priority on drive thru locations. “We know our customers want great convenient coffee and our drive thru operations are designed for just that,” said Kenton. “Combine this with hard working, local franchisees and it’s a recipe for success all around.”

Zambrero launches home delivery Perth’s favourite Mexican, Zambrero, is on the move with a home delivery arm recently launched. Stage one of the launch is rolled out to six trial stores across the Perth metro area with customers able to order by dialling 1800 ZAMBRERO or through Menulog.com.au from the Joondalup, Midland, Canning Vale, Ascot, Hillarys and Spearwood stores. Stage 2 will widen the radius, with more stores scheduled to join the home delivery revolution. Zambrero’s popularity in WA has exploded over the past three years, with the number of

stores expanding from 14 in 2014 to 33 stores in 2017, and another 8 due to open this year.

“For a long time, people have been restricted

WA Area Developer, Gordon Bain, sees the expansion into the home delivery market as a natural progression by the brand to meet the current market demand.

by offering a home delivery service, Zambrero

“From the reaction we’ve had, we think Mexican home delivery is going to be a bit of a game changer,” Bain said. “When we announced our plan to launch home delivery on our Joondalup store’s Facebook page we received overwhelming support from our customers with over 6,000 responses in the first 24 hours.

by a delivery market dominated by pizza, so is giving its customers the convenience of having fresh, healthy take away food delivered to their door.” Delivery will be free to customers on orders over $30. Delivery locations initially includes the Joondalup, Ascot, Canning Vale, Midland, Hillarys and Spearwood suburbs and will expand as demand increases.

SumoSalad hires Chief Customer Officer to support strategic vision SumoSalad, Australia’s largest healthy fast food restaurant chain, has appointed Lawrence Mitchell to the role of Chief Customer Officer. Mr Mitchell will be responsible for enhancing the experience of customers when they engage with SumoSalad in store, via the app or online. SumoSalad Chief Executive Officer Luke Baylis said: “This new position reflects SumoSalad’s focus on enhancing our customers’ overall experience and maintaining our position at the forefront of developments in the healthy fast food industry. Lawrence Mitchell

“At SumoSalad we are completely focused

on deepening our understanding of how technology, health and food intersect.” Mr Mitchell will be responsible for improving the way SumoSalad engages and interacts with its customers across Sumo’s 115 stores, app, web site and other touch points. “SumoSalad provides healthy, tasty and affordable food,” Mr Mitchell said. “My role will be to deepen our knowledge of our customers, and create strong offerings and experiences that enable them to easily access great tasting, nutrition-rich food and drink. I’m excited to join the Sumo squad at such an exciting moment in the journey.”

Business Franchise Australia and New Zealand 37

what’snew! A NEW ITALIAN DINING EXPERIENCE AT MERCURE PERTH Mercure Perth has officially opened Cucina on Hay restaurant, the city’s latest Italian eatery which will showcase authentic Italian fare through shared dining experiences 7 days a week. The restaurant design incorporates traditional elements, refined for today’s context. The interior creates a courtyard dining space internally, having been transformed with a full-ceiling skylight, angled wooden beams, tumbled terracotta tiles and picnic style benches. The menu shines with authentic, housemade ingredients, imported Italian treats and outstanding local produce from West Australian suppliers and growers. Signature dishes include an 18-hour slow cooked Lamb Osso Buco, Duck Cappelletti and Zambagilone Semifreddo – Cucina on Hay’s take on the traditional creamy Italian dessert. Italian breads will be baked daily by Il Panino Bakery, olives and extra virgin olive oil from Gin Gin and charcuterie from Mondo Doro Smallgoods. Breakfast begins with fresh barista made coffee served from the dedicated Cucina Coffee Window for those on the go, and a

dine-in breakfast menu showcasing traditional morning favourites with unique Italian twists will be available. By day, café-style Italian food is a mix of grabto-go and dine-in lunch items, all made fresh daily. Afternoons extend to an impressive charcuterie and Italian share menu, alongside

classic and rustic pizzas which can be enjoyed with wine and beer pairings. By night, Cucina transforms into a vibrant bar and restaurant, focusing on authentic Italian share plates and specialty Italian cocktails, with apertivo hour from 5pm to 6pm daily.

Griffith Donut King Franchise Partners Celebrate Platinum Anniversary From Windows to smart phones, disco to dubstep and everything in between, a lot can change in twenty years; but for Donut King Franchise Partners David and Julie Murray, the more things change, the more they stay the same. The couple are celebrating their twenty year anniversary as Donut King franchise partners and are using the occasion to reflect on a successful franchising ‘marriage’ that has spanned two decades and 1.4 million cinnamon donuts - enough to feed the population of Griffith 71 times over!

David and Julie Murray receiving a commemorative gift from Retail Food Group CEO, Gary Alford.

“Like any relationship, it has taken dedication, compromise and passion to reach our platinum anniversary,” said David. “It’s not always easy, but if both parties are supportive of one another then it can make for a wonderful relationship; and we couldn’t be

38 Business Franchise Australia and New Zealand

happier that we chose Donut King all those years ago for what has been an amazing journey so far.” In 1997, David and Julie made the brave decision to sell their rice farm and open a Donut King in the new Griffin Plaza Shopping Centre, in the small town of Griffith, six hours west of Sydney. “It was a hard decision to make at the time, and we did a lot of research into different franchising businesses before deciding that Donut King could offer us the lifestyle that we were looking for,” said Julie. This positive working relationship with the brand led David and Julie to open their second Donut King store in the area – Donut King Griffith Central, which will be celebrating its ten year anniversary in October; another significant milestone for the Murrays.

WORLD FIRST – BOOST JUICE DRIVE-THRU Boost Juice recently announced it will be opening its very first drive-thru store in Ballarat, Victoria. Known as Australia’s favourite smoothie and juice bar, the new drive thru store will add to Boost Juices growing footprint in Australia with over 260 stores nationwide and 450 internationally. CEO of Boost Juice, Scott Meneilly said “From day one the Boost Juice has endeavoured to offer a healthier alternative in a market that was once saturated in fast food outlets. Similarly, the convenience of a drivethru up until now has been dominated by fast food chains.” “We know our customers are time poor and we also know that health is of growing concern to them, which is why a drive-thru felt like the natural next step. It really takes convenience to another level.” The opening of its first drive thru will bring the total count of Boost Juice stores in regional town Ballarat to three, with the first store opening back in 2014.

We are being approached by many landlords that are looking for a healthier drive thru alternative and our property department are working hard to find locations that suit our model and will provide customers with a more convenient way to get a Boost,”

“Regional Australian towns are experiencing population and employment growth and we believe Boost Juice can grow with them.

“Not only have we seen great success in Ballarat but it’s also the quintessential roadtrip destination. Hence why we jumped on the

opportunity to open our first drive-thru store in Ballarat,” added Meneilly. Sitting under the Retail Zoo umbrella, the new venture will also feature coffee by hugely popular South Australian coffee bar, CIBO Espresso. Boost Juice said the opening of the new concept store would help pioneer further expansion plans as the brand continues to expand both in Australia and abroad.

Muffin Break takes coveted title of Coffee Shop of the Year years of experience in collecting objective, independent information on consumers, results were calculated using 12 months’ worth of responses to the Single Source surveys to determine which businesses have most impressed the Australian public and business sector with their excellence in customer satisfaction.

With over 260 stores in Australia and New Zealand Muffin Break owned by Foodco Group has been declared Coffee Shop of the Year, beating competition from McCafe, Gloria Jeans, Coffee Club, Starbucks Coffee, Michel’s Patisserie, Hudsons, and Donut King to cement itself as leader in its category. The Roy Morgan 2016 annual Customer Satisfaction Awards ceremony, now in its sixth year is widely considered to be the most accurate, reliable measure of customer satisfaction in Australia. With over 75

Consistently scoring higher than competitors EVERY month of 2016, Natalie Brennan, Muffin Break Head of Corporate Brand Support says, “We are thrilled to be recognised by such a trusted figure in the retail space and be recognised for our focus on customers’ needs in every part of our business. I believe much of our success lies in reflection of the investment into our new customer 360 Program, which includes ongoing store specific training both online and in-store, mystery shopping and staff incentives. This training combined with each of our bakery café owner’s passion to give their customers the best break possible would be the key factors to our recent acknowledgements.” 2016 has been a strong year for Foodco’s premium bakery-café with the announcement of a national strategic partnership with Croc’s playcentres and the release of a new rewards app offering customers the opportunity to go card-less for loyalty. Foodco Group was founded in 1989, along with the Muffin Break brand, which now has over 300 retail outlets in 3 countries around the world.

Business Franchise Australia and New Zealand 39

FE ATURE : Foo d & B e v er ag e

c ov er sto ry: Bak er s d el i g h t

Q&A with Bakers Delight

DELIVERING ON THE DELIGHT Q

Starting from a single store in 1980, Roger and Lesley have grown the business into a 700+ store, successful global business. What is the initial shortterm focus for you both now that you have taken the helm?

Elise Gillespie and David Christie

Following a ‘changing of the guard’ at Bakers Delight, which saw founders Roger and Lesley Gillespie stepping down from their roles, while daughter Elise and her husband David Christie step up to become CEOs, Business Franchise magazine were keen to find out what the future looks like for this large, family owned franchise.

A. Identifying the opportunities for future growth, setting in place the plans to achieve it, and building the team to deliver it. We have three key areas of focus: - Franchise recruitment to enable us to open more bakeries and facilitate more bakery changeovers; - Becoming more relevant and loved by the next generation of shopper, our marketing and product strategy will specifically target young families and young couples; and - Underpinning this is the constant focus on always improving our standards in every bakery, so that we always deliver on the delight.

since 2004 and have experience working in all countries that the business operates in. The transition from leading the Canadian business to executive roles in the Australian business hasn’t always been smooth but it has given us the confidence and experience to take on this big challenge.

What individual skillsets do you both bring to the business as CEOs?

A. We’re actually really good bakers! Aside from that we have years of operational experience in all markets that we operate in, a passion for retail and in-depth understanding of the franchise network.

How have the existing franchisees reacted to this ‘changing of the guard’ and how will this affect them? A. Ask them! Most of the longer serving franchisees seem to be positive about the transition. They like the continuity of ownership. But change is required to keep our position as a market leader and change is always unsettling.

David and Elise, you have both been involved in the family business for a number of years but how has the transition been from Management to CEO?

A. We’ve both been working in the business

A. To be the favourite bakery in every

40 Business Franchise Australia and New Zealand

What is the long-term objective for Bakers Delight, both at a corporate level and as a franchise network?

FE ATURE : Foo d & B e v er ag e Craig Bruty - Owner Flinders Lane Melbourne

community. Grow the network in Australia and internationally while growing the profits for our franchisees.

Finally, after leading the business for over 35 years, will Roger and Lesley now enjoy a well-deserved break? A. Definitely not! They still play a very important leadership role in the business on the Bakers Delight board. They will also become more involved in some other investments that the family has, as well as the many philanthropic causes that the family supports. In their spare time they’ll be visiting bakeries! In line with David and Elise stepping up to become joint CEOs, Bakers Delight is stepping up its growth strategy and looking for its next generation of franchisees. So what are the qualities that Bakers Delight looks for in a franchisee? When we are looking for franchisees to join our network, we are looking for people who share our values, are passionate, motivated and have a strong work ethic. It is essential for us to have franchisees who believe in and respect our brand as much as we do. If you are interested in learning more about becoming a franchisee with us, contact our Franchise Recruitment team via: 1300 309 759 www.bakersdelight.com.au/franchise

After David and Elise’s suggestion to ask a franchisee their thoughts regarding the recent changes, Business Franchise magazine contacted franchisee Craig Bruty. Craig has been a Bakers Delight franchisee for the last seven years, owning the Flinders Lane Melbourne outlet and currently looking into purchasing his second store.

Craig, what motivated you to buy into the Bakers Delight franchise brand?

A. I always knew that one day I wanted to own my own business but after completing a Bachelor of Commerce degree, and spending a year working at a farm, I was struggling to find a Graduate position due to the start of the Global Financial Crisis. Lacking management and corporate experience, I started to investigate the possibility of buying into a franchise system, although I was still relatively young, having only finished university 12 months prior. After talking to a few small business owners and knowing that a lot fail within the first 3-5 years, I approached two Bakers Delight franchisees that I knew, who are still with the franchise today - one is a friend and the other a distant relative - and after speaking with them and conducting my own research, I made the decision that buying a franchise would be great starting point in my business ownership journey. Now, seven years later, I am looking into buying my second.

What is it about the Bakers Delight brand that gives you the confidence to now become a multi-site owner? A. I love the fact that it’s a family owned and run business. Bakers Delight stores also play an important role within their local community, which I really like. Coming from Echuca, in country Victoria, that sense

of family and community is very important to me. Each store has a relationship with their local area and is very involved with charity work, both at a local and national level. Our charity work includes sponsorship of community groups and charities as well as donating leftover bread to local not-for-profit groups. On a national level, Bakers Delight has donated over $15 million to Breast Cancer Network Australia. It’s also very rewarding, leading a team of 10-12 people and watching them flourish and work within their own community. With strong procedures in place, Bakers Delight has gone from strength to strength over the years and I, in turn, would now recommend becoming a franchise owner to my family and friends.

And finally, what are your thoughts regarding the ‘changing of the guard’?

A. From my point of view, I think it’s the best and only decision that could have been made. Both David and Elise have Bakers Delight running through their blood; Elise is a fifth generation baker. Roger and Lesley have mentored them both to take this step, and I feel that’s what makes Bakers Delight unique, special and strong – the family atmosphere and the enthusiasm shared between them. In recent years, both David and Elise have worked within the store network, here and overseas, and also at different levels of management within the Support Office; they have experienced the business as a whole and in my view, they are the right people to take the whole company to another level, bringing youth and enthusiasm to an already dynamic brand. I am excited to see what the future holds for Bakers Delight!

Business Franchise Australia and New Zealand 41

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Serving up the Best

Consumers are Hungry for More Australians spend over $130

The First Bites

billion on food and beverages

Franchising was virtually an unknown concept in Australia until the early 1970s with the arrival of the golden arches and two all-beef patties forever changing the suburban landscape. KFC and Pizza Hut soon joined McDonaldâ&#x20AC;&#x2122;s, and so began the story of Australian franchising.

every year, and drink over one billion cups of coffee in cafĂŠs, restaurants and take away outlets. Now is the time. Join the world of food franchising!

Since these early days, franchising has grown in leaps and bounds to include almost every industry, and covers almost every product and service imaginable. However, the food sector of franchising continues to thrive and grow, with

42 Business Franchise Australia and New Zealand

According to the 2016 Franchising Australia survey completed by Griffith University’s Asia-Pacific Centre for Franchising Excellence, 19 per cent of all franchise systems focus on accommodation and food, which includes fast food and coffee shops, with only retail franchises higher at 26 per cent.

Our Love of Food Put simply, we love our food. In terms of franchising, the options have never been more prolific. From the early days of burgers and pizzas, we are now being served up more options than ever, and with growing concerns over our increasing waistlines healthy options have become popular in recent times. In addition, more and more people are raising a long list of concerns such as gluten intolerance, lactose intolerance, nut allergies, high cholesterol, diabetes, processed sugar… As food retailers, being able to cater for all kinds of food preferences is becoming increasingly important. Responding to consumer desires is vital for sustainability in the food industry.

Boost Juice is an Australian franchise success story. Founded by adventurer and Australian entrepreneur, Janine Allis, the brand has taken its winning combination of healthy fresh fruit, blended and squeezed into delicious smoothies and juices to open over 440 stores in 13 countries. The concept is not only about providing customers with healthy and great tasting products, it’s about creating an entire in-store experience. Steve Costi’s Famous Fish have recognised there was a niche available for a quality seafood based franchise. The number one take-away food item sold by independent stores, Australia’s appetite for seafood has increased by 27 per cent per capita since 1997 and is increasingly seen as the appropriate fast food by governments, health agencies and consumers alike. La Porchetta has over 60 restaurants in Australia and New Zealand, and are the market leaders in cooking quality Italian food with fresh ingredients, with no signs of slowing. With the first La Porchetta Restaurant open in Melbourne’s Italian hub in 1985, they have been part of the Australian food landscape for over 30 years.

Given the growing and changing food industry, the customer demand, and availability of so many systems to choose from… Which one do you go with?

Business Franchise Australia and New Zealand 43

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food franchises still representing a large proportion of the franchising industry.

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come at a higher price point, successful franchise owners will tell you that people are happy to pay more for a top quality product that is made exactly how they want it. Of course, if we go back to where franchising first began in Australia, the fast food sector of franchising remains as strong as ever. With fast food outlets providing tasty, quick, and cheap food in all locations, from highways to malls and on the high street, the appeal for consumers remains high, and with many now providing healthy alternatives these businesses remain highly competitive in the industry.

Rules and Regulations

Café Culture Coffee culture has swept Australia in a big way. For many people, a trip to the shops must include stopping for a coffee, a hard day at work always involves a take away coffee cup on the desk, and a long drive simply wouldn’t be possible without a coffee stop! The coffee market has continued to grow considerably in Australia in the last few years, and has proved to be a booming business for many franchisors. The ever expanding list of franchise opportunities for those interested in a coffee franchise provides a wide variety of options for potential franchisees. Famous for their food offerings as well as coffee, Degani has been the independent Melbourne Café Franchise since the late 90s, and has its sights set on national expansion. As one of the fastest growing café franchises, they offer a unique and flexible business model as well as ongoing operational support, relevant to franchisees experiences, lower royalties,

business mentoring and continuous learning and training programs. Alternatively, there are a wide range of coffee shop franchise opportunities where coffee is served in stylish, relaxed and friendly surroundings, with most also providing a takeaway option for customers. If you love café culture, then this could be the option for you.

Global Cravings Australia and New Zealand have always been proud of their multi-cultural heritage. Our multicultural appetite reflects this too, with our cravings for food from all over the world. Australians love all types of food including Indian, Thai, Spanish, Italian, Chinese, Middle Eastern and many more. Potential franchisees can choose from a variety of retail food options covering all kinds of cuisines. And whilst premium quality international food offerings often

Potential franchisees can choose from a variety of retail food options covering all kinds of cuisines.

44 Business Franchise Australia and New Zealand

As with any industry it’s important to understand the rules and regulations associated with the business, and this is extremely important when working in food retail. Janine Allis, Founder of Boost Juice and Managing Director of Retail Zoo, gave this advice for Business Franchise readers thinking of getting into the food industry: “First of all you need to fully understand what it means to be in food, particularly healthy food. You need to be aware of the FSC (Food Standards Code), TGA (Therapeutic Goods Association) and the Health Authority. Then you need to consider what the ACCC rules are and of course if you get into franchising there is also the Franchising Code of Conduct. These are just a few of the governmental and industry bodies that have specific requirements when it comes to the food industry. “This can all be very daunting and confusing, particularly when many of these bodies do not give you a clear answer on a question regarding the rules. But business always has its challenges. You need to just keep going, becoming a sponge and soaking up all the information you can possibly absorb. Information is key, because making a mistake in regards to any of the above Codes and Associations can not only cause massive fines, but can be terrible for the public relations of your business.”

Choices, Choices! Given the growing and changing food industry, the customer demand, and availability of so many systems to choose from… Which one do you go with? First, decide that you are interested in the food retail business. Then get together with your family and make sure they are interested in the food business – this is important not to overlook, as you will be spending a great deal of time in your new business.

OF THE BEST ASIAN FOOD FRANCHISES

HAVING TAKEN MELBOURNE BY STORM, RICE WORKSHOP IS NOW OPENING NEW STORES AROUND AUSTRALIA – WHICH ONE WILL BE YOURS?

AUTHENTIC THAI STREET FOOD SERVED FRESH AND FAST. THAILANDER IS OFF TO A FLYING START AND POISED TO BE THE LEADING BRAND IN THE THAI FOOD SECTOR.

• • • • • •

Contemporary Japanese rice bowl menu Eat in and takeaway store formats 12 stores opened in 2 years Strong ﬁnancial performance New stores from only $320,000 – full turnkey package www.riceworkshop.com.au

Thai street food menu – Everyone loves it! Eat in and takeaway store formats Strong ﬁnancial performance of existing stores New stores from only $320,000 – full turnkey package Franchise opportunities now in Melbourne, Sydney & Adelaide. www.thailander.net.au

Looking for a food business that offers a big future but it is still early enough to beneﬁt from low establishment costs and the pick of the best sites? Then call us now.

Contact Robert Graham on 1300 764 484 or email robert@ceoconsulting.com.au

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You must then get with your franchise banker and put together a realistic sum of money you can afford to invest in this new venture. This will most likely weed out some systems quite quickly, as the larger, more well-known food 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 this.

Once you have an amount in mind, you can begin to shop around. Are you looking for a particular location? Are you looking for a particular type of food or drink? Are you looking for a premised based business, or a mobile unit? You will be able to narrow down your search, but don’t rush. If you get to your short list, it is time to take the focus away from the product and direct all your attention to the franchise system and the franchisor.

Get to 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

t away. Hopefully though, the franchisor will be professional, honest and open.

can gain the knowledge to know if you are making the right choice at the right time.

The next step is to meet with several 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.

So if it’s making coffees, flipping burgers, or carefully crafting international cuisine which whets your appetite for the exciting world of food franchising, you will most likely find that you have started on a fantastic path to success.

One of the great things about researching food franchises is that you can simply drop in and eat. Be a random customer, visit several locations. Is the food good? Is the service good? Is it consistent from one location to another? Do the employees seem happy? Do the customers seem happy? By doing as much research as you can you

46 Business Franchise Australia and New Zealand

Bon appetite!

Look out for our next special feature: fixed vs. mobile franchises

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

0QQPSUVOJUJFT OPX BWBJMBCMF "VTUSBMJB XJEF JO LFZ NFUSPQPMJUBO BOE SFHJPOBM BSFBT

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

Business Franchise Australia and New Zealand 47

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e x pert adv i c e

BUYING A FOOD FRANCHISe?

WHAT you SHOULD KNOW

The franchise model is popular in the food and beverage industry, with brands such as McDonald’s, Starbucks and Boost Juice demonstrating its success. Although brandname franchises can be enticing, potential franchisees should still thoroughly conduct their due diligence. Potential franchisees should inspect all equipment, understand their obligations relating to the premises, obtain food based business licences and undertake any relevant training for safely

48 Business Franchise Australia and New Zealand

handling food. We unpack each of these points below.

INSPECTING THE BUSINESS’ EQUIPMENT As with any business, it’s essential to inspect the business’ equipment. This is especially important for a food-based franchise where specialised equipment can cost a significant

Masao Watanabe | Franchise Lawyer | Legalvision

organises this before the sale (or seek a discount on the purchase price based on the value of upgrades the franchisor requires). It’s not unusual for a franchisor to expect franchisees purchase new equipment to take into account new food offerings. A number of franchise networks have upgraded systems or equipment and required franchisees to spend significant money as a result. Although the franchisor should explain this in the disclosure document as part of the purchase process, it is important to be very clear on the timing of such upgrades to budget for these expenses (or negotiate a lower price).

LEASING OBLIGATIONS You will likely operate your franchise from a premises (unless it is a mobile franchise), in which case it is essential that you understand your obligations under the lease. When considering the lease, it is important to think about the following: Term and Duration of the lease: Ensure that the lease including the option(s) to renew are as long as the term of the franchise agreement. Rent and outgoings: Assess this against your business plan to ensure you can comfortably pay the rent and outgoings, even if the business isn’t going so well. Also, make sure to project into the future as your rent will increase. If you intend to operate in a shopping centre, there are a number of additional costs that you should confirm with the lessor (or franchisor), such as promotional levies and outgoings.

amount to replace or repair. The last thing you want to discover is that the storage fridge needs a new condenser one week after you become a franchisee! Before engaging a professional to assess the equipment, speak to the franchisor. Some major franchises provide assistance to the incoming franchisee (i.e. you) by conducting an inspection of the existing franchise and can point out any issues with

the equipment. It is usually the existing franchisee’s responsibility to repair or replace the equipment before you come on board. This is important because once the purchase is finalised, you accept all responsibility for the repairs (and the potentially significant costs associated with upgrades that the franchisor may require). If the franchisor expects to make any improvements, you should ensure that the outgoing franchisee

Refurbishment clause: Most shopping centres require refurbishment to the premises before they will renew a lease. This can easily exceed hundreds of thousands of dollars as you will likely be required to restore the premises to base building standard. Make good obligations: What will be required for you to reinstate the premises at the end of the lease? Given the huge financial commitment a lease requires, we advise that you seek legal advice on the lease in addition to the franchise agreement.

Business Franchise Australia and New Zealand 49

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“Potential franchisees should inspect all equipment, understand their obligations relating to the premises, obtain food based business licences and undertake any relevant training for safely handling food.”

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e x pert adv i c e

“It’s not unusual for a franchisor to expect franchisees purchase new equipment to take into account new food offerings.” Ensure that you clearly understand what you are committing to before commencing the process. You may realise that you don’t have the capacity to undertake six months of training or cannot afford to forfeit any income during this time.

FAMILIARISE YOURSELF WITH THE FRANCHISE AGREEMENT Irrespective of what type of franchise you purchase, the franchise agreement will be the central document governing the relationship between you and the franchisor. Take the time to clearly understand your obligations under the franchise agreement, for example: • initial and ongoing fees; • each party’s obligations under the franchise agreement, including upcoming equipment upgrades, obligations for ongoing training, and obligations to purchase from particular suppliers for particular goods (such as special sauces and food supplies you are required to purchase from the franchisor); and • exit provisions (both for selling and terminating the franchise agreement).

OBTAIN FOOD BASED LICENSES Another important clause in the franchise agreement is the requirement to obtain all applicable licenses before you start operating. In the case of a food franchise, this clause refers to the State or Territory and local regulations that govern the right for you to operate a business that serves food. For example, in NSW you will require local council approval to operate, as well as to hold qualifications related to food preparation. If you fail to obtain the necessary approvals, qualifications and licences, you could be prevented from becoming a franchisee. Also, if you lose your qualifications during the term of the franchise, you will be considered in breach of the franchise agreement, and the franchisor could terminate the relationship. Before rushing off to secure the relevant qualification and obtaining council approval, first speak with the franchisor. If you are taking over an existing food franchise, then it’s more likely the approval is already in place (although it never hurts to have your lawyer confirm). As to your qualifications in professional franchise systems, the

franchisor will provide very clear guidelines regarding what they require in their system. Generally, their standard training processes will cover off the licences and qualifications required (after all, this is one of the benefits of purchasing from an established franchise system). It is important that any licences are transferred to you on purchase. You can confirm this with your legal advisor. Franchisees should also check that the existing business is compliant with current food safety regulations and have no reputation-damaging fines or adverse findings by the regulators. Most states have a register of penalty notices from food authorities, and if you are buying a business that has recently been publicly named and shamed on the schedule, you could be in for an unpleasant surprise. We recommend checking this register and of course, search online for reviews and any associated news regarding the business before purchase.

TRAINING Food-based franchises can require extensive and lengthy training of their franchisees (and their employees). McDonald’s are well known for requiring franchisees undertake between 9 and 12 months of job training.

50 Business Franchise Australia and New Zealand

KEY TAKEAWAYS Buying a food based franchise is an exciting venture. But before you commit to a franchise term, consider the issues unique to the industry and conduct your due diligence. This means checking your equipment, reading through your lease agreement, obtaining any licences and qualifications and assessing whether you have the resources to commit to training. Finally, always remember, if you have any questions - speak with your franchisor and legal advisor. Masao Watanabe is a franchise lawyer at LegalVision. During his time with the team, Masao has worked closely with a number of high profile franchisors and has assisted them with drafting franchise documents and resolving disputes, as well as advising on a broad range of general commercial matters. Through this work, Masao has developed an in-depth understanding of franchise law in Australia and a strong appreciation of how to apply it in a commercial context. 1300 544 755 www.legalvision.com.au

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pr o file : B o ost J u i c e

A FRUITFUL EVOLUTION The Boost Juice story is now legendary. A concept that derived from a work trip to the US where the smoothie and juice options were easily accessible, founder Janine Allis had an idea. An idea that has now translated into over 260 stores in Australia and over 450 stores worldwide, Boost Juice is one of Australia’s true success stories. Boost Juice first squeezed into the smoothie and juice scene in 2000, with the first store opening on King William Street, Adelaide SA. The vision was simple for Boost Juice, it was to do retail differently, a value that is still at the heart of the brand. Boost Juice is built on offering customers more than just a transaction and great products. It’s about a personalised customer experience where staff call-out customers not by a number but by their name and giving each Boost Juice customer a reason to smile. The brand’s concept built on their ‘Love Life’ ethos is still as relevant today, now more than ever. A milestone for the brand was opening their 250th Australian store just over 12 months ago. CEO Scott Meneilly said, “250 stores here in Australia is a massive milestone. Casting my mind back only six years ago,

we always believed that Boost would max out at around 200 stores due to so many factors including flexibility of the model, store build costs, leases, ROI etc. “As we sit here today, we can honestly say that we will expand beyond 350 stores in Australia and that isn’t just due to the brand strength, it is also due to the people we have working for us; their focus and drive to help the business find a better way. This has created a whole world of new opportunities and the future of this beast is really exciting,” Mr Meneilly stated. Over the years, Boost Juice have become known for being in shopping centre locations and this expansion strategy has allowed for a 95 per cent brand awareness in the first five years. Now that Boost Juice have a loyal following, it’s opened up the opportunity to bring the convenience of smoothies and juices to customers in a range of different store formats. This has made Boost Juice more accessible with new stores rolling sites in regional service stations and other store models to follow. “Regional Australian towns are experiencing population and employment growth and we believe Boost Juice can grow with them. Our property department are working hard to find locations that suit our model and will provide customers with a healthy, fast food alternative,” said Mr Meneilly. Further to this Boost Juice are also opening their first drive thru store in Melbourne’s regional town of Ballarat, which has been

52 Business Franchise Australia and New Zealand

the number one request from customers Australia-wide. The model will see specifically tailored menu offerings, with a wider range of not only the beloved smoothies and juices, but also complemented by mouth-watering, grab and go food and coffee. The international platform is also in high demand, with operations launching in multiple countries in 2017. Boost Juice’s Franchising Development Manager Sally Nathan confirms the opportunity for international expansion is limitless, “Boost is now a globally recognised brand and we continue to experience an influx of enquires coming through from all over the world. We are excited to see the Boost Juice brand splashed across the globe and we are well on our way towards recognising our goal of being the world’s most loved smoothie and juice brand.” 17 years on from the first store opening, Boost Juice continues to conquer with exciting opportunities to expand domestically and internationally. Boost Juice’s mission is clear according to founder Janine Allis, “We believe that there is still room for growth and innovation and have no plans of slowing down.” For more information: 03 9508 4409 boostinfo@retailzoo.com.au www.boostjuice.com.au/franchising

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e x pert adv i c e

Enabling high achievers:

how to get the best from your best Reflect for a moment on how well you engage, develop and leverage the capabilities of the high achievers on your team? Do you deliberately support these people to learn and grow with your business? To what extent are you focused on enabling these people to ultimately realise their full potential? Enabling high achievers to be at their best,

takes a deliberate and focused approach. Success depends greatly on leaders taking a â&#x20AC;&#x2DC;hands onâ&#x20AC;&#x2122; approach to inspiring and coaching people to succeed. Working closely with your high achiever is essential to supporting them; to take the steps needed to ensure they not only excel today but thrive with your business in the future. The most important steps you can take include these:

1. Articulate a compelling vision Share a vision for the future that inspires people to want to be a part of making it

54 Business Franchise Australia and New Zealand

happen. Allow insight to why you have confidence in your teamâ&#x20AC;&#x2122;s ability to succeed. Help high achievers to understand the critical role you need them to play. Ensure they understand the impact their capabilities can have on the success of the team. Guide high achievers to maintain a clear view of their own professional future. That is, not only the goals they want to achieve over the long term, but also the milestones of success along the way. Help them to recognise the skills they need to develop and the experience they need to gain in order to succeed.

FE ATURE : Foo d & B e v er ag e 2. Create a high performance culture A high performance culture is reflected in the commitment people bring to deliberately striving to achieve ambitious goals. Creating an environment in which people are inspired and enabled to be at their best, and win, as a team is essential to getting the best from your best. Start by defining values and behaviours that reflect the organisations desire to excel. Clearly articulate what it takes to be regarded as successful in your business. Value not only what people achieve but also equally how they go about it. In other words, make behaviour matter and hold yourself and others accountable to the expectations you set.

3. Set meaningful goals and enable learning The high achievers on your team are most likely to be motived to achieve goals that are meaningful to the success of team, business or their career. Start by understanding what they hope to achieve both now and in the future. Understand also how these aspirations align with the needs of your business and how you are able to provide opportunities for learning.

4. Recognise and reward excellence Unsurprisingly high achievers like to know when they have achieved, and to be recognised for the standard of their contribution. Most place importance on

“The fundamentals of funding a franchise business have not changed over the years however the financial management tools and information available from the internet and other sources have expanded.” Karen Gately | Founder | Ryan Gately

knowing how they are tracking relative to agreed targets. They want to know how they are going and will typically adjust their approach if necessary to ensure they get there.

5. Manage poor performers A common reason high achievers decide to leave a business is frustration with poor performing team members getting away with substandard contributions. Disgruntled high achievers often complain that they are expected to pick up the slack for those who aren’t doing their fair share. Take a disciplined and courageous approach to addressing poor performance. Act with compassion, but never hesitate to have the honest conversations needed to address issues. Give underperformers every opportunity to succeed and then hold them accountable for the standard of performance they are able to achieve. Getting the best from your best requires that you act as not only a manager but also coach and mentor. Get to know your high

achievers; what they want, what they are good at and how they can still learn and grow. Understand how their mind, emotions, skills and experience each influence their potential and success. Build strong relationships built on a foundation of trust and respect. Aim to influence the choices they make and success they are ultimately able to create. Karen Gately is a leadership and peoplemanagement specialist and a founder of Ryan Gately. Karen works with leaders and HR teams to drive business results through the talent and energy of people. She is the author of The People Manager’s Toolkit: A Practical guide to getting the best from people (Wiley) and The Corporate Dojo: Driving extraordinary results through spirited people. For more information email or visit: info@ryangately.com.au www.ryangately.com.au

Business Franchise Australia and New Zealand 55

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sna ps h ot: F r an c h i s e r e ta i l b r an ds

franchise retail brands

growing brands

Franchise Retail Brands is establishing itself as the home for growing franchising brands within the Café, Bakery and Dessert and Quick Service Restaurant segments. Their goal is to continue to build iconic brands that people trust and advocate.

Launched in 2016, Franchise Retail Brands is primarily interested in small to medium sized brands that have a long runway within the sector. They are now the proud home of brands such including New York Slice Pizza, Hombre Street Food Cafe & Bar, 1582 Coffee, Crave Ice Creamery, The Dessert House and Sabatini’s. They are also planning to unveil several other brands in the Café and Quick Service Restaurant markets as they move towards an initial prospectus offer this year. Franchise Retail Brands are evolving their brands to be more relevant, engaged, connected, and caring in the Australian market. Franchise Retail Brands accommodate their network so as not to have overlapping brands. That is, they do not want six café brands which operate within a shopping mall setting. Instead, they look for brands with clear points of difference. In instances where brands do share similar attributes, they

will have different target markets or run in different environments.

Through the purchase of a Brisbane-based coffee roasting facility, Franchise Retail Brands has access to 1200 tonnes of coffee each year. This allows them to leverage supply chain operations to franchisees within their network. Soon they will also have a specialised bakery to supply a range of both savoury and sweet baked goods. This specially designed model gives Franchise Retail Brands more power to survive and grow in their industry. Franchise Retail Brands invest in franchises sure to show profitability, sustainable growth, and a model that delivers underlying profitability to both the franchisor and the franchisee. The key to these outcomes is that the business is not relying on new franchise sales and fees alone. Instead, Franchise Retail Brands have crafted their system to also provide other valuable deliverables including food items, sauces, coffees, as well as other products. This design offers them more flexibility and stability in a changing profit environment. For the brands, there are many advantages. Franchise Retail Brands offer support services from professional personnel that brands wouldn’t otherwise have access to outside of their network. They also assist with marketing and promotional activities, with increased traffic resulting from opportunities for cross-promotion. This reduces both marketing as administration costs for the brands, resulting in big savings and higher profit margins overall. Their

56 Business Franchise Australia and New Zealand

focus is on sharper brand position and insight-driven marketing programs that will concentrate on product customisation, leading innovation, and more engagement. As a parent company, Franchise Retail Brands provides financial strength and assistance to its brands in gaining new sites in many centres. This also helps their franchisees in gaining accreditation with financial institutions. Synergies in procurement of both sites and products lead to lower costs. Franchise Retail Brands offers heavily discounted coffee from their roaster, again improving profitability. They also remain focused on three keys to driving shareholder value: new-unit development, same-store sales growth and generating high returns on invested capital. Franchise Retail Brands aim to acquire brands who will add to the earnings of all brands within the network, so that any new brand will be an overall benefit for the whole group. This will either be through becoming a customer of their existing brands, or by offering a position in a new market that aids in offsetting the cyclical nature of the Quick Service Restaurants and Café segments. Franchise Retail Brands are constantly on the lookout for suitable applicants to expand their brand networks. To enquire about investing in Franchise Retail Brands, or about plans for the upcoming initial prospectus offer, contact them on: 07 3999 8950 info@frb.com.au www.frb.com.au

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FE ATURE : Foo d & B e v er ag e

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Want to murder your boss?

Sick of working for someone else, day-in and day-out without seeing benefit from your hard work? Want to break free but not confident enough to risk it all and build a business from the ground up?

Owning within a franchise business could be the solution – it’s time to take control and be the boss!

While there are benefits in working for an employer, the benefits of being able to manage your own time, money, team and be the one to make the crucial decisions far outweighs them.

• You get to be the boss: Probably the most appealing part of owning a business is that you’re the one in charge. You’re responsible for your own success and don’t have to report into anyone else on a daily basis. • You can manage your own time: Whether you want to work full time or part time, start your day late or finish it early, you have complete control over hiring staff to fit in with your schedule and the hours you want to work.

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• You know exactly what you’re spending and earning, and can actually do something to change it: As an employee, working hard to improve the business often doesn’t result in more money in your pocket. Investing your time, energy and creativity into improving your own business, more often than not will result in increased profits that you actually receive. • You get to build your own team: Everyone has worked with a boss or colleague who doesn’t pull their weight, doesn’t understand the brand, or they simply don’t get along with. As a business owner, you can select your staff based on their work ethic, whether their personality

Matt Manzie | Head of Franchise & Property | Burger Urge

• They have a passion and determination to get the job done, no matter what.

• You’re going into business for yourself, but not by yourself: As the business owner, you are the leader and controller of your store, but you also have the opportunity to draw on experience from a leadership team who have assisted franchisees all over the country and helped set up a number of successful business. You also have the opportunity to speak with and learn from other franchisees within the organisation.

When it comes to career progression and increased earning potential, the process tends to be more black and white as an employee – you work hard, you deliver results and you are considered for a promotion. However, for many employees, their hard work and contribution to a company goes unnoticed, leaving them dissatisfied and unwilling to give more than the bare minimum.

• You can choose the location: You can work with the company to open a store within an area you understand and are confident in.

fits your team and ensure their passion aligns with your business. You may be thinking that this all sounds like a lot of responsibility for someone who has never owned a business, but the perks are even greater within a franchise business because the company has done most of the groundwork for you such as market testing, initial research, branding and marketing. • You get to run a small business with operations that have been tried and tested with proven results: One of the biggest risks in opening your own business is not knowing whether your product/ store look and marketing is going to work. As a franchise owner, you are given a product that is proven to be profitable such as a launch plan, training, marketing packages, and most importantly, support every step of the way.

A good franchisee will be eager to learn from others within a brand and approach business with an open mind.

• You don’t need business experience: Most new franchisees have little to no background in business or management. Fear not, you’ve got a whole company behind you who provide training and support along the way to build your business and deliver the best possible results for your business and the brand as a whole.

Over the years, the most common questions that I have received from people looking to buy within a franchise are around the personal qualities and skills it takes to own and run a successful business. While there is no ‘one size fits all’ approach to what makes a good franchisee, there are some key characteristics that go hand in hand with being a good business owner. • They are risk averse: Every new business involves some element of risk, but a good franchisee will do their research and ensure risks are as small and controlled as possible. • They can work with established systems and processes: As a franchisee, while you have control over most aspects of your business, you will need to comply with systems and operations that have been established by brand. Being able to learn quickly and operate successfully these is essential. • They are eager to learn from others:

• They have strong people skills: Being able to develop trust and loyalty with customers and staff alike is critical to a business.

Owning within a franchise business opens up a whole host of opportunities to further challenge your skills and increase your earning potential. Managing a business challenges you every day, and you don’t know what will be thrown at you next. Whether it’s managing staff, rolling out a new brand menu or trying to reach new customers within your community, the learning never stops. Brands are constantly on the lookout to expand and establish themselves within new areas – so if you are managing a successful business and are satisfied with what you are earning, why not re-invest the profits into another business and challenge yourself in a new market? So what are you waiting for? Find a brand you are passionate about and start the process. You could be managing your own team, choosing your own hours and earning more than you ever imagined! Matt Manzie is the Head of Franchise & Property at Burger Urge, one of Australia’s leading burger franchise concepts. For franchise enquiries, visit www.burgerurge.com.au/franchise or email matt@burgerurge.com.au

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“Owning within a franchise business could be the solution – it’s time to take control and be the boss! ”

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TURN YOUR MONEY TAP ON 60 Business Franchise Australia and New Zealand

If you’re like most business owners I speak with, you would love a more predictable path when it comes to the flow of customers and the flow of money into your business.

“You started in business because you wanted to make more money, and you wanted to have more time to do the things you love but instead you’re probably working harder than ever before.” Tania Allen | Founder | VISION ALLIANCE

In fact, I would have to say that eight out of ten businesses today, especially service based businesses, feel like they just can’t seem to get that breakthrough they’ve been looking for.

When there is a system to automate your income and to make sure money is coming in consistently, it gives you a degree of confidence and certainty.

You started in business because you wanted to make more money, and you wanted to have more time to do the things you love but instead you’re probably working harder than ever before, perhaps your staff get more time off than you do and sometimes getting a JOB seems a much more attractive option.

Most business owners don’t know what it’s like to have a consistent stream of clients and income coming into their business, and if they do they seem to be leaking profits all over the place and leaving money on the table.

This not only describes the many business owners I speak with before they dive into one of our business growth programs, but this describes how my business used to be. That was until I learnt how to control eight key metrics in my business and turn my Money Tap On. So, how do you bust through the invisible barrier in your business in regards to your income and everything you want to accomplish and more specifically, how do you turn the money tap on so you have a constant stream of leads and customers coming into your business? In short, I’ve discovered there are eight essential elements or key metrics you’ve got to have in your business to ensure the money tap is flowing. These are critical to ensuring the pipeline feeding the tap is not blocked. When you turn your money tap on, you will put an end to the ‘feast and famine’ cycle in your business and have customers search you out rather than you operating in huntergatherer mode. You will also have more consistency of income, create leverage through automating the many repetitive processes and tasks in your business and you will maximise your time so you are in complete control to do what you want, when you want. Imagine having a business where you will have a dependable consistent flow of leads and clients and where marketing and automation takes care of all the heavy lifting for you. No matter how far along your entrepreneurial path you are, one of the things we all want and dream of is an automated way for money to come in.

This is the critical key - ensure you have a clear pipeline to your tap, and you know how to turn the tap on and off when you need it. Also, ensure there is a solid bucket to capture what comes through that tap so that nothing falls through the cracks. Let’s explore these eight key metrics and how you can make incremental shifts in each area. This will literally take your business to the next level with less stress, overwhelm and more clarity and confidence. My personal business journey has been a very interesting one and over the period of time building my own and other six, seven and eight figure businesses, I’ve discovered that implementing a few metrics consistently can help you build momentum faster. The first metric is ATTENTION. Essentially this is the number of people coming to your website, walking into your store or engaging with you on social media. They may not be opting in with you, or becoming a prospect, they are simply in your community but not yet a customer. You know you have someone’s attention when they take an action toward you. They walk into your store or office; they call you or have a conversation with you or they click an ad, a link or engage with you in a Facebook group.

FREQUENCY OF PURCHASE - in other words the number of times a customer will buy from you throughout the course of one month or one year. It’s also important to look at your PROFIT MARGINS and the two most overlooked areas: REFERRALS and LIFETIME VALUE OF A CUSTOMER. These metrics are relevant for all businesses regardless of whether you operate offline or online. To be honest, if you are not using these metrics online you are missing out. Whatever business you are in, it’s impossible to only have offline leads. Regardless of how you are getting leads today, an online component of being there when the customer is looking for you is going to increase your chances of building momentum and being successful. Take a look at your current business right now. What element are you more focused on in your business? Is it sales? Is it profit margins or is it your pricing? Some people want more leads, some want more sales, some are focusing on just doubling sales, which can put a lot of unnecessary pressure on you and make your efforts feel like a constant uphill battle. When I look at most businesses they say “we need to make more money, we need to make more sales or we need to get our customers to buy more”. It’s a common theme and if you were to choose to double one area, most business owners would want to double sales. Let’s face it we only want to double leads because ultimately we want to double our revenue.

The second metric is LEADS. Someone moves to becoming a lead when they raise their hand and express an interest in your offer. The third metric is CONVERSION RATES. In order to acquire a new customer, you must first capture a lead and then convert that lead into a customer.

The challenge however is many businesses rely on just one method of generating income and doubling just one element is incredibility hard, especially when it comes to doubling sales. What enables businesses to double their business consistently with less effort is having a consistent focus on all key elements and not just one. When you focus on all key areas, doubling your business becomes an easier and more systematic process because you are focusing on increasing all elements of the business.

The next two metrics that you must be aware of are TRANSACTION VALUE and the

Let’s explore the scenario above and see how you can influence growth in your business

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simply by achieving a 10 per cent increase across each metric.

“Your money tap consists of your lead attraction system, your lead capture systems and your lead conversion system. When you put these in place and working seamlessly and automatically in your business, you will have a constant stream of customers and money coming into your business; one that you are in control of, not the other way around.”

When you increase all the key elements by 10 per cent, you are ahead of the game and it’s not hard either. Most people have a ZERO at any one of these elements. When you have a ZERO at any of these, you just can’t take your business to the next level. When you are in control of these numbers, you are in total control of where you can take your business. This is because you MUST be committed to directing a certain percentage of your profits to buying your leads. If you don’t understand what a customer is worth to you and how to influence an increase in profits, you won’t be directing the correct percentage of profits to your marketing, and we have all heard the statement that the one who is willing to spend more to acquire a customer, wins. Of course, there are marketing metrics you must be aware of too but we will leave that for another time. If you don’t have the ability to spend on your marketing - the competition will. Remember, marketing is an investment; it’s not something you spend money on. If your marketing just isn’t working for you, it’s time to make some changes - review the metrics, review the message or review who you are targeting. So we can confidently say the first step to turning your money tap on is to understand the eight key metrics. When you understand the metrics, you can then move onto building and turning on your money tap.

What is a money tap? It is the flow of the right people into your business. So the first step of the money tap is target market. This is in direct alignment with the first key metric of Attention. It’s so easy to get

in front of the right people when you know who your target market is. Let me repeat that, you’ve got to know WHO your target market is. Who do you serve, whom do you help, whose problems do you solve? There’s no point grabbing the attention of 10,000 people when only 1000 people want what you sell or offer. So the question you must ask yourself is “How do I get more of the right people into my business and WHO am I targeting?” The next is traffic source. Where do they hang out? So be sure you are asking yourself “Who are they and where are they?” This is the first place you can get your leads. It’s like fishing, first you have to find the right pond, then you have to have the right bait (a lead magnet); you’re almost guaranteed you will catch something if the fish are there. These days however, you don’t ever have to wonder if you’re at the right pond, you can select your pond. Let’s move to the next step in the money tap, your lead magnet. A lead magnet is a high value giveaway; think about what can you give away that’s of high value. When I see a tap not working well, it’s usually because there’s no bucket in place to capture the leads. If you’re giving something away and you’re not capturing their details in some way, shape or form, you are leaving money on the table. This means it’s an absolute must to have a Lead capture system in place. This allows

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you to build a relationship with them, which over time will lead them to becoming a customer. A great lead capture system must also be able to handle your follow up actions, automated messages and touch points. Let’s face it, we would never expect to be asked for our hand in marriage on the first date, so it amuses me as to why businesses expect prospects to make a decision to move forward at the first touch point. Tools like Infusionsoft or Active Campaign are sales and marketing CRM tools that can help you capture your leads and do the ‘behind the scenes’ education and nurturing to move your prospect down the tap into your bucket of high paying customers. Your money tap consists of your lead attraction system, your lead capture systems and your lead conversion system. When you put these in place and working seamlessly and automatically in your business, you will have a constant stream of customers and money coming into your business; one that you are in control of, not the other way around. Tania is the founder of Vision Alliance, a business growth consultancy. If you would like to learn more about how you can build and turn on the money tap in your business, Tania would be delighted to offer all readers of Business Franchise a free 30 minute business growth roadmap session. Please call Tania on: 1300 76 49 20.

Join one of Australia’s top rated franchises.

Owning a Kwik Kopy franchise is your chance to be part of the success story.

WE CAN TAKE YOU FURTHER.

As a member of the Kwik Kopy family, you get to tap into a highly established and recognised brand that gives you plenty of leverage in the market. What’s more, you’ll have an extensive support network all focused on your success.

For more information call 1800 251 680 or visit kwikkopy.com.au/franchise

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sna ps h ot: THE CASH BAC K A PP

more time for family The Cash Back App is an Australian-owned and operated company which has been helping their members reduce the cost of living, as well as supporting local business, since 2013. In March this year they started franchising activities, with their app launch planned for September. The Cash Back App was founded on a fourfold mission: 1. To help consumers reduce the cost of living; 2. To assist merchants to attract more customers with a universal loyalty offer; 3. To disrupt the banking industry by introducing instant zero transaction fee mobile payments; and 4. To help local charities by means of a direct donation every time a consumer shops at a participating merchant. In the past year, The Cash Back App have successfully developed the world’s first zero transaction fee mobile wallet, conducted beta trials of the app with 150 merchants which resulted in the viral spread of the app to 22,000 consumers who purchased $1,000,000 in goods and services, and have made the business franchise ready.

The Cash Back App serves three categories of users: 1. Franchisees 2. Consumers 3. Business Owners They believe their success is quantified by how they help each of the people in these categories to “Live the Life You Love” According to the NAB anxiety Index, the top concern for Australians is the cost of living. Everyday Australians are feeling the strain of rising costs. For consumers, the app provides instant cashback and discounts on goods and services from National brands and local retailers. More opportunities for cash back include finance, insurance, telecommunications, electricity, travel, superannuation and investments. Consumers can also receive referral payments for sharing the app with friends and family, and donations are made to consumers’ charity of choice every time they shop. Small business owners, too, are struggling with hefty bank fees, and most don’t know how to get their message directly to their target consumers. The app provides a host of benefits for partnering retailers. They gain access to a loyalty program, powerful data and analytics, direct and targeted marketing in the app, a zero transaction fee payment platform, and passive income through referral payments for joining customers to the free loyalty program. The ideal Franchisee is a confident individual, preferably with a sales or business background that can comfortably list local businesses on the app. They would also have a hunger to

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build a strong residual income, as there is unlimited earning potential in line with the viral growth of the app. Every local franchisee for The Cash Back App comes under a Master Franchisee, who is responsible for the training and support of the local franchisee. Company support is also provided, through periodic Franchisee best practice sessions, trainings, field assist visits, and phone call accessibility. Over the next 12 months, The Cash Back App aims to become Australia’s fastest growing new franchise. They intend to list leading national retail brands on their app, alongside thousands of small businesses. By the end of this period, they expect over one million active users on the app, and over $10 million donated to charities. To get involved, contact The Cash Back App today on: 07 3010 9755 info@thecashbackapp.com www.thecashbackapp.com

Are you looking to clean up? Build your future with Chem-Dry Chem-Dry is the world’s largest carpet cleaning franchise, and has been helping Australian’s realise their dream of business ownership since 1986.

Franchises available in all capital cities & regional centres

Our unique, hot-carbonated water extraction method, combined with best in-class products and services, and unparalleled training and support, make it impossible to find a better cleaning franchise opportunity. No experience is necessary, as Chem-Dry provide comprehensive training on all aspects of the business. Our on-going marketing and operational support will ensure that you are able to enjoy the flexibility and lifestyle benefits that owning your own successful business can provide.

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If you’re looking ready totomake cleana up clean withbreak your with own your Chem-Dry own Chem-Dry franchise, franchise, simply fill simply out thefillinformation out the information form on our formwebsite, on our website, or call our or franchise call our franchise businessbusiness info line info on 1800 line on 243 1800 637.243 637.

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Women in Franchising “Women are powerful independently, but once joined as a force they will set a new standard of unstoppable and bring their families along for the ride.” Nina Rosace | CEO | Home Sorted!

Investing in a franchise offers women a platform to take control of their careers, creates job security and most importantly offers the ultimate work/life balance. There are a range of benefits to owning and operating your own franchise, and for women the benefits tick all the right boxes, enabling women to create a strong successful career and still be home in time to pick up the kids, if needed. Women are ambitious, strong and independent and for many, regardless of the success of their careers, once they have children they need to look at options to accommodate their growing family. There are many options available, do they simply cut back on their hours - therefore sacrificing their salary - or do they look for a new job in a whole new industry to find a more suitable role? It can be a difficult time adjusting to the new changes, what works for the boss or industry, may not exactly work for them and their new commitments. Women are also highly committed, it’s not unusual to know of women that have worked for years at the same job, have climbed the corporate ladder and achieved their set goals on a regular basis. Once they’ve reached the top, they then become complacent and are left

feeling unchallenged and unmotivated in their career. Sound familiar? Women possess the key skills required to run a successful business, they can multi task, delegate, co-ordinate and manage their time well. Many hold the dream of being their own boss and for some it would be their ultimate career change to run their own business and say ‘I quit’ to their day job. However, many hold doubts on where to start, what capital will they need and have no idea where to even start with the set-up of their new business, let alone how to market or promote themselves when ready. This is where investing in a franchise offers a platform for maximum growth. Today, we are spoilt for choice, depending on your preferred career path the industry is flowing with fresh and unique business opportunities for consideration. The great part is that regardless of the industry, women will be provided with a full set of tools, training, support and a complete business model for them to add their personal touch and to make it their own. A woman will personalise the brand, whilst abiding to the brand’s uniformed guide, this is a natural trait that women hold and their success within their designated district will shine as a result. In a male dominant industry, more and more women are coming on board and starting to shine through as smart business savvy individuals. This is also evident in not only women investing in a brands franchise, but

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also for women who have decided to franchise their own small business, taking it to new heights. It is very common for women to consider franchising their own successful business as a means of reaching out to assist similar, like-minded women to replicate their success. When women recruit women to represent their brand, they look for a particular skill set and will find that once they’ve found the right candidate they will be committed and be a part of the bigger picture. This not only forms a unique bond, but a team of determined and strong women. A powerful force guaranteed to succeed through their joint hard work, dedication and commitment. Women are powerful independently, but once joined as a force they will set a new standard of unstoppable and bring their families along for the ride. The family support of a woman is paramount to their growth and balancing their many roles. Although women are usually the family member most likely to juggle a full schedule within their professional and personal life, the full support of her family will make the process much smoother. A franchise system offers endless support, and when backed with family support the franchisee and business will go from strength to strength. Here are some of the reasons why more women should consider becoming a franchisee as their next career change:

Variety Regardless of where a career began, within the franchising industry there are many businesses available to women across a full range of industries. Women will simply need to evaluate their strengths and find an industry to match. Researching each individual company within an industry will offer a greater insight of the business model and requirements for success.

Security Job security is a huge concern for many women, by investing in a franchise job security is almost guaranteed. Women will be able to take charge of their careers and to create a stable income with the backing and support of the brand they represent.

Flexibility Working the 9-5 grind can make it difficult to find a suitable work/life balance. Women can choose to run their business on a full-time, part-time or even casual basis if preferred. They can recruit staff and create a greater balance with a flexible roster to suit. The great part is that women are not restricted when they are their own boss and once backed by a skilled team of staff, their business will continue to succeed without the requirement of a full time commitment from the business owner.

Growth As the brand grows, so does the franchised business. A well recognised brand promotes trust and familiarity from consumers. Potential clients will research a brand and tend to lean towards the companies that are well recognised in the media and the likes. They will place their trust in the brand and this will ensure the growth of each franchised territory.

Training and Support Women will adapt to their new environment and feel confident once theyâ&#x20AC;&#x2122;ve received their training. The ongoing support to their new business model will ensure the ongoing success of their business and keep their finger on the pulse at all times. For women that are ready for a new challenge and are committed hard workers, perhaps consider pouring all of the energy of working for a boss into your own franchise and reaping the full rewards of being a strong, independent franchise business owner in your preferred industry. Nina Rosace is the founder and CEO of Home Sorted!. When peopleâ&#x20AC;&#x2122;s homes are organised, they are more productive and feel in control. She has made it her business to sort homes for over 14 years and has recently franchised the business as a means of helping busy families Australia wide. For more information, contact Nina via: 1300 30 11 77 info@homesorted.com.au www.homesorted.com.au

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w o l F Cash g n i K is

Cash Flow Management Education - helping businesses succeed and grow Don’t get me wrong, profit is important. It is why people go into business, however, it’s also important to understand that profitable businesses can and do go broke!

We have all seen recent examples of business failures. Almost weekly, the media report of yet another high profile business closure. Some of these businesses are sold however a large number just disappear, leaving employees, suppliers, customers and owners out of pocket. All too often we see examples of business owners not considering or understanding the financial consequences of their actions.

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Financial decisions can and do have long term consequences and lessons which we can all learn from.

Don’t pay too much for the business Before buying a business it’s critical to understand what the business is really worth. Purchasers should seek experienced independent advice to support their assessment. Just because the vendor is asking a given price doesn’t mean the business is worth that amount. Undertaking a due-diligence study is critical.

“Before buying a business it’s critical to understand what the business is really worth. Purchasers should seek experienced independent advice to support their assessment.” Steve Seddon | Senior Business Development Manager | Westpac

the depreciation values to either additional debt repayments (to provide a capacity to re-borrow to replace the assets) or set up a separate bank account (known as a sinking fund) to set aside funds to meet these costs. All too often business owners see the depreciation as a never ending cash resource which is often directed towards non business related expenditure. Examples include using the depreciation value to repay a loan for an upgraded house or luxury car, neither of which add anything to the productive capacity of the business.

Consider the future Business owners need to keep a close eye on the business environment on both a local and national basis. Interest rates may increase, unemployment levels may change, and costs will increase. Understanding how these will impact their business will assist owners plan for the future. Reviewing budgets and undertaking some sensitivity analysis will also assist. This means looking at cash flow budgets and plugging in different assumptions to reflect what could happen in the future. As an example, what would the impact be if interest rates increased by 2 per cent, or what would happen if a supplier closed and goods had to be sourced from a more expensive provider?

Understand the financial statements Take into account the business’s future maintainable earnings, lease terms, term of the franchise agreement, condition of plant/ equipment, condition of fixtures/fittings and future refurbishment requirements (cost, timing and impact to the business). Also consider the life cycle of the product or service to be sold. The amount paid for the business together with ingoing costs, working capital etc. will impact funding costs and loan repayments. Your accountant and lawyer will be able to assist.

Don’t spend the depreciation Most business returns are quoted on a earnings before interest, tax, depreciation and amortisation basis (EBITDA). Take time to understand what this means. Depreciation is a non-cash expense charged against the business profit. It is used to reflect the ongoing use and declining value of plant, equipment, fixtures and fittings etc. In time these items will need to be replaced. Most franchisors have specified refurbishment and replacement guidelines. To fund these replacements, business owners should apply

Business owners must take time to have a detailed look at their financial reports. Learning how to analyse profit and loss statements and balance sheets is time well spent. Undertaking regular analysis with the assistance of business advisors should be a normal part of the business planning process. Understanding key success factors and how to calculate a break-even point are valuable business tools. Without this business owners are flying blind. The local TAFE or websites like Westpac’s Davidson Institute (www. davidsoninstitute.edu.au) are ideal starting points.

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“Business owners must take time to have a detailed look at their financial reports. Learning how to analyse profit and loss statements and balance sheets is time well spent.”

Plan for the good times as well as the bad Economic times continually change and it may be a surprise to hear that business failure rates in strong economic times are almost as high as those in tough times. In good times business owners can make decisions that restrict the business as conditions deteriorate. Lease costs that are too high, excessive reliance of a small number of customers, commitment of cash flow to non-business related purposes are some examples. Keeping a close eye on business results and not being afraid to react quickly can reduce any negative impacts. For example, the reason for a drop in turnover needs to be quickly understood and the business expenses adjusted accordingly. Staff hours may need to be reduced, labour mix changed or the business owner may need to spend additional time working in the business.

Seasonality and other issues impacting cash flow It is rare to see a business which is not impacted by some level of seasonality or other distortions which impact a steady cash flow. Taxes (GST, Income, PAYG etc.) need to be paid, equipment replaced, stock ordered and paid for. All of these factors need to be considered in the businesses cash flow cycle. The slower the cash cycle, the higher the working capital requirement.

Fall-back position Expect the unexpected! What if the local council decided to upgrade a road or temporarily restrict street access? What about

weather events, long term power outages etc.? It is always prudent to have some financial resources in reserve. This reserve should be in addition to the normal working capital allowances. A recent example of an unexpected event was a business owner who on day of settlement had their roof cave-in due to excessive rain. The business was closed for over a fortnight and while there was some insurance coverage in place, it took several months for the owner to get paid. Meanwhile, they had to meet their overhead costs, wages and loan repayments. These stories are not isolated and have a significant and immediate impact to business cash flow

Don’t be afraid to ask for help Business owners who find themselves with cash flow problems should ask for help early. The earlier any issues are detected, the greater the options that will be available. Engaging with the franchisor and establishing a time bound and measurable action plan is a starting point. This plan will examine and monitor outcomes closely adjusting actions as required. Involving advisors such as accountants, lawyers and bankers will ensure all understand what the business needs to do to get back on track. This action may include the business owner selling personal assets to return capital to the business. Owners are best advised to take charge of the situation and make the hard decisions early.

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It’s not all doom and gloom Taking the above into account, being a business owner can be one of the most rewarding things people will ever do. This is reflected in the large number of Australians that continue to aspire to become business owners. Additional free information is available at Westpac’s Davidson Institute, visit www. davidsoninstitute.edu.au. Steve Seddon is Westpac’s, Senior Business Development Manager – Franchising, Western Australia, Queensland and South Australia. He is a CPA and a member of the Franchise Council of Australia’s Western Australian committee. Westpac continues a long-term commitment to the franchise sector in Australia. The bank has a national network of franchise specialist business bankers who are able to deal with the specific needs of the franchise sector. Contact Steve at: 0407 401 892 sseddon@westpac.com.au www.westpac.com.au/business-banking/ industries/franchising/

The information contained in this article is intended as a guide only and is not intended as an exhaustive list of matters to be considered. Persons entering into franchise agreements should seek their own independent legal, accounting and other advice.

BUILD YOUR FUTURE WITH A RETAIL ICON

As one of Australia’s iconic retail brands, with a proud history over the past 70 years, we now have 65 stores nationally. Our award winning franchise model commenced in 1995 and offers a vibrant product range providing you a great platform to start your own successful business in the pool and spa industry.

Our industry knowledge will help you build a strong business, becoming the local pool specialist in your territory and helping you work in a lifestyle environment. Our franchisees benefit from: •

Unparalleled national and local support

Our business development and support teams will assist you in building your successful business. We have three exciting franchise models where we are looking for new, motivated and business orientated franchisees for:

•

Proven marketing and business strategies

•

Group buying power

•

No franchise renewal fees

•

Turnkey development and set up

•

Retail brand celebrating 70 years

•

Multi Award winning franchise system

•

Unsurpassed initial training and ongoing support

•

Clark Rubber Retail Stores Starting from $420,000 plus

•

Clark Pool & Spa Shops Starting from $147,500 plus

•

Clark Rubber Pool Care Service Territories Starting from $49,500 plus

If you would like to hear more about franchise opportunities in your area, please contact Dirk Heinert for a confidential discussion on (03) 8727 9999 office or mobile 0400 922 493 or dirk.heinert@clarkrubber.com.au

clarkrubber.com.au

sna ps h ot: T h er m awo o d

ENJOY LIFE WITH

THERMAWOOD Established seven years ago in New Zealand, Thermawood Retrofit Double Glazing system, with trading history and systems in place, are now looking to add to their existing franchisees in Victoria and South Australia, with opportunities available in both New South Wales and Queensland. Thermawood uses a unique patented dry glazed drainage system for double glazing, and can install draft and sound seals into existing timber windows and doors. The Thermawood system is designed to fit any wooden joinery and can be used in a number of configurations. Thermawood also has a drainage system designed for new timber joinery available to the market to avoid the inherent problems of installing double glazing into wooden frames with no drainage. Thermawood Retro-fit Double Glazing keeps your house warmer in winter and cooler in summer, and reduces noise and drafts, thereby also reducing energy costs. The original character aesthetic of the home is preserved, while adding value to the property.

glazing on projects large and small throughout New Zealand and has been adapted to Australian market conditions. The specialised tools and equipment, that are patented and unique to Thermawood, are subject to exclusive supply arrangements with Thermawood NZ. This specialised equipment is a vital component in the effectiveness of the Thermawood System and available only to franchisees. With franchising in mind, Thermawood have also developed and documented comprehensive management and operating systems. These are designed to help franchisees quickly learn the required systems and techniques. New franchisees joining the network receive comprehensive induction and training in workplace safety requirements, including both operational and practical training. Training is also tailored to each franchiseeâ&#x20AC;&#x2122;s needs and existing skillset, including on the job training with an existing franchisee. Thermawood provides franchisees with comprehensive support and ongoing assistance, including technical advice and a well-structured field support programme.

Sharing the Same Goal

Training and Support

As a franchisee, Thermawood will teach you everything you need to know about the techniques required to start your business. Using their industry experience, they will teach you about avoiding the costly mistakes often made by new franchisees and show you how to identify and market to target customers.

The Thermawood business system has been developed following years of practical experience with the techniques of double-

You will receive a complete franchise manual, comprehensive management and operating systems, and other support services designed

72 Business Franchise Australia and New Zealand

to help you to run a successful Thermawood franchise business. By being part of the growing Thermawood network, you will benefit from group promotional activity, work referrals, and support resources, as you optimise your sales in your franchise territory. You can choose to run your franchise business from commercial premises or from home. All you will need is sufficient clean storage space for a trailer, some stock tools, and equipment. Additionally, standard office equipment including a telephone, computer, printer, fax capabilities and internet access are required.

Continued Innovation Thermawood are continually developing new products with some exciting new products due for launch in 2017 to keep all Thermawood franchises as the industry leaders when it comes to retrofitting timber windows in Australasia.

Are You a Potential Thermawood Franchisee? Successful franchisees need to be well presented, fit, energetic, innovative, and passionate about a Thermawood franchise opportunity. You must be determined to achieve excellent results and high levels of customer satisfaction with every project, taking pride in your work and valuing the satisfaction of effective results and great achievements. Thermawood are looking for people who share their vision and their passion, if this sounds like you contact Graeme Clarke at: 04 555 55 330 info@thermawood.com.au

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PERFORMANCE | COMMUNICATION | COMPLIANCE | LEARNING MANAGEMENT

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e x pert a dv i c e

How To Read Your Franchise Agreement I have both franchisors and franchisees as clients in my legal practice. Although there is much more work involved in setting up a brand new franchise agreement than in reading one, it can be difficult to give advice to a prospective franchisee. They may be under pressure to sign up, and may lack experience. Maybe they have never

run a business before, or attempted to read a complex contract like a franchise agreement. They have a lot to learn, and have to do it quickly. Together with the franchise agreement, they will also have to read the franchisor’s disclosure document, and possibly also a lease and a disclosure document for the lease. They show me these and ask: “Can you tell me if there is anything dangerous in these?” Where shall we begin? The approach I take with my franchisee clients, and which I am passing on here, is this: you can’t afford to be ignorant. You have to come to grips with the franchise agreement and understand how to comply

74 Business Franchise Australia and New Zealand

with it. The wrong time to find out what you were supposed to do is when you are having a costly dispute with the franchisor a couple of years later. The same applies to your lease and indeed to every contract you sign. The disclosure document is a helpful summary, in plain language, of the major provisions of the franchise agreement, packaged together with other important information. But it doesn’t always match up precisely with the franchise agreement. And, the disclosure document is almost always excluded from being part of the franchise agreement. Basically, you can’t avoid learning what the franchise agreement says.

“So you have your franchise agreement sitting in front of you. What’s the best way to study it? Go get a pack of coloured highlighters. Pick four themes to review the agreement for, and give each one a colour.” James Irving | Commercial and Business Lawyer | Irving Law

become less mysterious. Patterns may emerge. Its structure will make more sense. Then, make a list of all the clauses that require you to do, or not do something. For example, you have to get permission to use the franchisor’s trademark. You aren’t allowed to distribute marketing material without prior franchisor approval. You must have a minimum amount of stock on hand. You must keep the operating manual confidential. Once all of these things have been highlighted, you can assemble them into a list. The list doesn’t have to be complex. All you need is a few words and a reference to the relevant clause. When you need to find out what the agreement says about the topic in question, you can go look it up in the agreement.

Be Proactive

Take It Apart So you have your franchise agreement sitting in front of you. What’s the best way to study it? Go get a pack of coloured highlighters. Pick four themes to review the agreement for, and give each one a colour. Let’s say; Pink is for penalties and default clauses. Yellow is for things the franchisee has to do. Green is for things the franchisor has to do. Blue is for things that cost the franchisee money. Next, go through the document and highlight its parts using this colour scheme. Watch it

Having a franchise agreement highlighted in fluoro colours and a list of the important clauses is a good start, but not enough. To avoid breaches, you need to be proactive. If you have to keep the operating manual confidential, you need to identify how to make that happen. Maybe it will require you to keep the manual under lock and key, limit the number of employees who have access to it, and make anyone who uses it check it in and out like a library book. You should also ask every employee to sign a written confidentiality undertaking. Looking at each obligation placed on the franchisee by the franchise agreement, the franchisee needs to identify the measures that can be implemented to avoid breaching the obligation, and set up a smart system to do that.

Ask Questions Most franchisors want new franchisees to come into their franchise system with a correct understanding of how the franchise business works, and are very happy to provide information and explanations. Once you have reviewed the franchise agreement, ask the franchisor to explain anything you don’t understand.

The other persons you should be speaking to are your advisers, especially your accountant and your lawyer. Unless you have experience reading contracts, much of the franchise agreement’s language will be strange. How do “indemnities” and “warranties” work? Most franchise agreements have indemnity and warranty clauses. What about the guarantee clauses? Are they normal or extra harsh? If you are the director of a company and are becoming a franchisee, you will probably be putting your personal assets on the line by signing a personal guarantee as part of the franchise agreement. How much risk are you taking? Business involves taking risks. But there is a big difference between taking risks with your eyes open and taking risks without knowing what they are. Think of your legal and accounting advice as an investment. Yes, you will spend some fees at the beginning of the franchise relationship, but if this saves you from a serious problem in future that would have cost you much more, then you have saved money. Like most lawyers, I have seen awful examples of people who have naively signed documents without understanding them, and who have serious problems later. In a lot of cases, this could have been avoided if the right advice was obtained at the beginning.

Knowledge Brings Confidence A franchise agreement can be a fairly daunting document. But if you approach it in a systematic way, and get assistance with the parts you don’t understand, you can become familiar and comfortable with its contents. Lawyers like to say that good fences make good neighbours. Knowing what is in your franchise agreement, and setting up a plan to make sure you comply with it, is a great step towards making sure you have a good and productive relationship with your franchisor. James Irving is a commercial and business lawyer in Perth. For more information visit his website: www.irvinglaw.com.au This article is not intended as legal advice for any particular person.

Business Franchise Australia and New Zealand 75

PR OFI L E : FR A N C H I S I N G E X P O

Franchising Expo celebrates milestone year in style Franchising Expo is to everyday people wanting to get into their own business, but with the support of a strong franchise brand,” she says. There was a great diversity of business opportunities at the Sydney event, from recognised brands such as Godfreys, Clark Rubber, Solahart, Gloria Jean’s and Signwave to new concepts like Sabatini’s, Crave Ice Creamery and Mongrel Joe’s mobile coffee. International brands making their Australian debut at the show included NHance, Photography for Little People, Streamsmart and a wide range of brands from Taiwan. ‘The Retail Doctor’, Brian Walker shared his Steps to Business Fitness at the Sydney Franchising & Business Opportunities Expo.

The Franchising & Business Opportunities Expo is celebrating its 30th year in 2017 with a refreshed and reinvigorated show at ICC Sydney in March, and a boutique event in Perth this month, followed by Brisbane and Melbourne shows in July and August. Exhibition Manager Fiona Stacey says the Sydney show was a triumph, returning to Darling Harbour with a show bursting with exhibitors and visitors at ICC Sydney. “I think the Sydney show in March demonstrated just how relevant the

As always the seminar program was a highlight of the show, with keynote presentations from Poolwerx’s high profile CEO John O’Brien, the Franchise Council of Australia’s Damian Paull and expert Brian Walker, also known as ‘The Retail Doctor’. Other popular speakers included Richard Maloney founder of Engage & Grow, Love Pollo and Lenard’s Chicken CEO Chris Caldwell, Suzanne Jarzabkowska and her team from DC Strategy, and Todd McGregor from New York Slice. Now in its second year, the Perth Franchising & Business Opportunities Expo will be a boutique event for one day only on 7 May at Crown Perth. “Crown is a stunning venue that offers easy access, free parking and onsite accommodation,” says Fiona Stacey. “Visitors will be able to see all the franchising and small business options, talk to the names behind the brands and attend the free business seminars.” Exhibitors ready to meet franchisees at the show in WA include Endota Spa, Houseproud Cleaning, Bakers Delight, Spudbar

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International, Mailboxes Etc., New York Slice, Experimac, Minuteman Press International and many more. Like its sister Expos in Sydney, Brisbane and Melbourne, the Perth event will offer visitors a forum to compare and research a diverse range of franchise opportunities, with investment levels from under $10,000 to more than $500,000. There will also be legal and financial advice to buy and set up your new business or franchise and the Franchise Council of Australia (FCA) will be on hand to provide information and answer any franchising queries. “It’s always important to research online, but nothing can replace the value of meeting someone face to face to discuss your dream business,” Fiona Stacey explains. “We also find that exhibitors benefit from networking at the show with like-minded people, and from getting a good feel for the market in each state.” For more information go to www.franchisingexpo.com.au Contact Fiona Stacey for more information on exhibiting via: 03 9999 5464 or fiona@specialisedevents.com.au.

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What is diversity and how do you embrace it? “As with most things in life: communication is key. Whether it’s face-to-face, phone, email, or advertising - it’s the first stepping stone to making sure that everything else works as expected.” Corina Vucic | Director | FC Business Solutions

78 Business Franchise Australia and New Zealand

A common misconception is that diversity is restricted to age, gender or culture. But there are many other categories of diversity: ability, beliefs, location, finances and experience to just name a few.

In my twenty years of working in the franchising industry, still to this day I am surprised about the sensitivity of the topic, the not wanting to recognise the differences, the impact and the lack of business strength to talk about it, address the issues and shift how we do things to accommodate the current and the future workforces which will lead small business enterprise. Diversity is one of the constants that we all encounter, we are all different and work in very different ways and we must embrace our individual skills and characteristics so that we don’t fall behind the curve. The way we choose to work varies from person to person; how we work, where we work, when we work and even who we work with ranges depending on who you ask. Yet we all have an underlying mission: to provide value and to have a purpose in all that we do. The Australian Bureau of Statistics reports that one in four of Australia’s 22 million people were born overseas, one in two have a parent born overseas and in 2013 overseas migration accounted for 60 per cent of Australia’s population growth. The numbers don’t lie, they support the notion that we as individuals and businesses need to adapt to the way things are moving and unfortunately many business fail to see the need.

Franchising: I’m going to be selfish and focus on the industry that I live and breathe, franchising. Franchising continues to be a business model of choice in Australia with approximately 1,180 different systems according to IBISWorld. Franchising is no longer just an easy way for a company to raise funds for growth, it’s an option for Australians to be small business owners with the support of national and international systems. Franchising is a business method which succeeds as a result of its systems which drive replication, the financial model being achievable both for the franchisor and the franchisees and finally the relationship between franchisor, franchisees and the community which binds all parties to the brand and its long term success through the offer and the innovation which keeps it relevant and wanted; it is not exempted from the diversity conversations. The franchising industry already embraces diversity through equal opportunity – but we need to focus on how we are using diversity to better our businesses for franchisors,

“The way we all choose to work varies from person to person; how we work, where we work, when we work and even who we work with ranges depending on who you ask. Yet we all have an underlying mission: to provide value and to have a purpose in all that we do.”

franchisees, and for the end user. Franchisors and franchisees are better off increasing their understanding of how diversity impacts their day-to-day business - it is a growing aspect of the business and social environments within which we exist and within which relationships are built. As with most things in life: communication is key. Whether it’s face-to-face, phone, email, or advertising - it’s the first stepping stone to making sure that everything else works as expected. Get this wrong and there is no relationship or business outcomes. “When dealing with different cultures who have different operating systems, nothing should be assumed,” says Beth Pocklington, Systems and People Champion for the Back in Motion Health Group. “Franchisors need to adapt their conversations, processes and systems to facilitate consistent outcomes with franchisees irrespective of cultural nuances.” The mentality of a one size fits all franchise system no longer exists in the market place – and ensuring that systems are able to support both franchisees and customers on all levels is key to the future longevity of Australian franchise systems.

Customers: Never assume you know everything about your customers. Don’t assume that the customers know your brand, don’t assume that the customers are seeing your advertisements, don’t assume that someone won’t buy your product or service simply because they are too old, too young, or not in your target market. The most iconic of Australian brands with the catchiest of jingles are always advertising to new customers and re-advertising to their existing customers. Why? Brand Awareness. If your potential customers don’t know who you are or that you’re a key player in the market place, they aren’t going to consider you as an option when it comes down to making a decision.

As an iconic household brand, do not assume you are known! Just because your current offering and delivering is how it’s always been done, doesn’t mean that it’s the best or only way. Phone calls, emails, direct messaging, advertisements are all valuable techniques – but ensuring that you have a multitude of active campaigns will ensure that you aren’t missing out on potential customers. Your business needs to go above and beyond to look for a point of difference, what is your brands unique selling proposition? What sets you apart from your competition?

Franchise Recruitment: Stereotypical franchise recruitment has been thrown out and replaced with a modern approach attracting quality franchisees who are right not only for the brand, but also for the system. Sara Pantaleo, La Porchetta CEO says, “In recent years we’ve found that during the recruitment process, some potential franchisees agree to most things and then once they take over the business, they do things differently from what they committed to. This is not because they set out to deceive us, but because in their culture this is accepted behaviour.” Many franchisors are scared to share what they think is intellectual property with prospective franchisees, and in-turn they receive ‘yes men’ who will do anything to get through the door. By oversharing as many details as possible in early discussions you will learn where different franchisees have different concerns and be able to address them accordingly. Sara continues, “We are developing new online training platforms and reviewing our processes to ensure that our on-boarding and training is more tailored so that we can all understand what is not negotiable and what is flexible.”

Business Franchise Australia and New Zealand 79

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“The most iconic of Australian brands with the catchiest of jingles are always advertising to new customers and re-advertising to their existing customers. Why? Brand Awareness.”

English is not always the first language of franchisees, in some cases it may be the second language. We all know how easily things can be lost in translation.

q Is the diversity helping you grow your brand or is the lack of acceptance and understanding of diversity creating road blocks?

As we seek out our franchise partners, being aware of this is of great advantage. Establish this early, identify the competency of the English language and consider how you will grow the trust and respect through your relationship. Will it require a translator or will it require your own upskilling in understanding the culture and the drivers to wanting to be a part of a franchise community.

q Is your workforce trained in diversity?

Checklist:

q Have you assessed your practices to accommodate the diversity of now and the future in all business and communication practices?

There’s no ‘one size fits all’ approach when working with a diverse range of people. By putting into place training and systems to effectively address diversity and communication, you are setting up your brand and franchisees for success. q Establish if diversity is of importance to your franchise brand. q What diversity are you aware of within your franchise brand and the community within which your business operates?

q Is your workforce aligned to the strengths of differences brought through diversity? q How does your brand’s culture stack up when measuring diversity from a HR perspective? q Are your Franchise Recruitment team geared up for leads and how are they facilitated into your franchise community if different?

q Have you assessed your people, their selfknowledge of what ‘different’ means and how you do not tolerate non acceptance of diversity? q Are the systems manuals written well, supported by training methods which help English as a second language business owners and their teams in being the best they can be?

80 Business Franchise Australia and New Zealand

q Are you respecting diversity within the communities that your franchisees are a part of - by making changes to the product offer, the service offer and your establishments to embrace the local demographics? q Are the front-facing team members fully accepting of all the differences they encounter in their work? q Is your digital media performed with ‘diversity etiquette’ at all times? q Do you take time to learn the changes in diversity and how it will strengthen the brand and all those connected within it? q Are you prepared to be different? We would like to extend our thanks to the members of the Franchise Diversity Panel event held in March: Barbara West – Culture Works; Beth Pocklington – Back in Motion Health Group; Chris Mavris – Soul Origin; David Ridgeway – Quest Apartment Hotels; Julia Hewagama– Bakers Delight; and Sara Pantaleo – La Porchetta for their contributions to this topic. www.fcbs.com.au

Resources at your fingertips!

CURRENT TITLES INCLUDE: Business FRANCHISE Australia and New Zealand magazine The Magazine for Franchisees, Bi-monthly publication The Australian and New Zealand Business FRANCHISOR magazine The Magazine for Franchisors, Quarterly publication Australian and New Zealand Business FRANCHISE DIRECTORY Annual publication The FRANCHISE GUIDE Annual publication CGBâ&#x20AC;&#x2122;s website also provides an additional advertising and information format and complements our publications.

www.businessfranchiseaustralia.com.au Business Franchise Australia and New Zealand 81

h av e yo u r say

The ‘power of ones’ can make the difference Franchisee profitability is undoubtedly one of the hottest topics in franchising today. In an environment of ever increasing competition across all markets in which franchise businesses operate, there is great value in recognising the many small things that franchisees can do that can add up to a big difference in their financial performance. David Campbell of Avatar Consulting is a renowned franchise profitability expert who hosts regular financial workshops at Griffith University’s Asia Pacific Centre for Franchising Excellence.

Known as ‘the metrics master’ for his more than 30 years of hands-on experience in working with franchisees to boost their bottom-line performance, David uses many practical tools to demonstrate the little actions that can deliver big gains in profitability. At his regular Franchisee Financial Essentials Workshops, this includes highlighting the ‘power of ones’ via the following three questions: 1. Could you increase sales by one per cent? 2. Could you improve your margin by one per cent? 3. Could you reduce operating expenses or increase efficiency by one per cent? David says he has never had a franchisee say no to any of these questions, but they

82 Business Franchise Australia and New Zealand

are shocked when he explains that these three little ‘ones’ combined can increase a franchisee’s profitability by an impressive 26 per cent. This is just one highly-effective example of the way that David engages with franchisees to improve their understanding of the key financial figures underpinning their business. With this invaluable knowledge on board, franchisees are empowered to move forward on a successful path of ongoing profitability and growth. According to David, boosting franchisee profitability can also be as simple as improving their understanding of the key profit indicators of their franchise business using the four forces method, comprising of: Thrust (Sales); Lift (Cost of Goods Sold + Margin);

“If cost and inefficiency equal sales and margin, you’re breaking even and if sales and margin are greater than the impact of costs and inefficiencies then you’ll make a profit.” - David Campbell

Weight (Operating Expenses); and Drag (Labour Efficiency). “You need thrust in business to get off the ground. Thrust is what we’re able to generate through sales,” David says. “Lift in business comes from our margin. Too often people make sales but with low margin and it doesn’t work. The gross margin needs to be right. “The weight in business is the costs (operating expenses) and drag is the labour efficiency or lack of productivity (inefficiency). When cost and inefficiencies are greater than the impact of sales and margin the business will make a loss. “If cost and inefficiency equal sales and margin, you’re breaking even and if sales and margin are greater than the impact of costs and inefficiencies then you’ll make a profit. The more sales and margin gets above cost and inefficiency the profit growth is exponential.” Unfortunately, too many franchisees are consumed with confusion around basic issues of financial management and the number one equation that they usually don’t know is their breakeven point. David says the breakeven formula is one of the most powerful financial management tools for any franchisee. Not only will the breakeven formula calculate the sales required to cover a certain level of fixed costs it can be used to calculate a specific range of targets in order to release the sought profit required. How to easily calculate, understand and set your breakeven is a key topic covered in the Franchisee Financial Essentials Workshop, where participants receive practical explanations on the crucial figures that will drive their bottomline profitability. Central to this is the ability to understand a Profit and Loss Statement, Balance Sheet and Cash Flow Analysis. Participants will walk away with a deeper understanding of the essentials of financial management for their franchise and the practical tools to immediately apply to their own business. The workshops are very handson and tailored to attendees, both single and multi-site franchisees. Many franchisees enter the franchise sector for lifestyle reasons and to be in control of their own business destiny. But ultimately, it is a clear understanding of financial management

David Campbell | Avatar Consulting

fundamentals that will have the biggest influence on reaching these goals. Through its unique financial workshops, the Asia Pacific Centre for Franchising Excellence aims to demystify the complexity of working with numbers for franchisees in order to put them in control of their finances and future business success.

Finance Training for Franchisees: Franchisee Financial Essentials Workshop 27 - 28 April 2017 14 - 15 September 2017

As part of its commitment to promoting best practice standards throughout the franchise sector, the Asia Pacific Centre for Franchising Excellence is at the forefront of providing franchise-specific financial education to help create more successful and sustainable franchisees and franchise systems. The Centre offers a wide range of franchise courses, both online and face-to-face, professional development events, online seminars, research reports and more. It is completely independent and impartial, there are no vested interests or selling of franchise systems. The focus is solely on education and professional development in franchising, including the foundation stones of knowledge for new entrants to the industry.

Finance Training for Franchisors (Management): Franchise Financial Sustainability Masterclass 1 - 2 & 21 - 22 June 2017 5 - 6 & 25 - 26 October 2017

For more information contact the Asia-Pacific Centre for Franchising Excellence at: 07 3382 1401 www.franchise.edu.au

Business Franchise Australia and New Zealand 83

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Franchise Territories…

Do they make sense? Territory Planning is an area extremely important to you as a franchisee, but does the franchise system and the franchisor of the system give it the importance you need it to have to ensure your future?

A couple of large clients we work with have started their working relationship with us by showing us a series of paper based maps, and saying they have all their territories worked out, and just need a few ‘minor’ issues sorted out, and all will be fine! In these cases our first week(s) of work is to copy all the individual territory maps into our GIS – Geographic Information System or mapping system, to see what we are dealing with. The first problem inevitably is overlaps, where some areas are in more than one territory, and the second problem is small slivers of land

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that are in no one’s territory. What level of confidence does this give the franchisees when not only are they competing in the market to grow their business with their competitors, but fighting with their neighbouring franchisees and the franchisor just to understand their territory? These problems arise over time as the franchisor’s staff (who have probably changed over time), do their best to represent the current geographies, and map out territories. What many do not realise is:

1. Postcode boundaries can be moved by Australia Post to suit the market.

“We are at a GREAT time for a franchisor to fix their territory issues at present. Once every five years we have the full release of the Census, giving us reasonably fresh information to work with.”

2. New postcodes can be added (normally new developing areas), and whole postcodes can be removed or combined (normally in some country areas). 3. Unless you have a very good overall recording system, such as an electronic mapping system (or someone who is keeping track of all this), these post code changes will escape you. 4. In many franchise systems, it simply is not given the importance or horsepower to be kept up to date. 5. The potential problems it may cause in franchisee confidence and potential legal issues in the future. 6. The inconsistency in the business potential of different territories – why some work really well, and why some franchisees may be starving for business.

What should be used to make up territories? We are at a GREAT time for a franchisor to fix their territory issues at present. Once every five years we have the full release of the Census, giving us reasonably fresh information to work with. The 2016 Census of Population and Housing cost us (the taxpayer) around $470 million according to the Australian Bureau of Statistics (ABS) – and we should be using it! The Census data allows us - once we have mapped a system’s territories into a GIS (refer above) - to then measure each territory in many ways. We can count the number of people, number of households, cars, computers and many other things you told the ABS you had in your house, and then we can understand the internal components of the households in each area in terms of average income, ethnicity, language spoken at home, employment and many other factors. Australia’s base geography (2011) is now 54,805 Standard Area 1’s or SA1’s, each with a population of between 200 and 800 people. SA1’s then fit into 2,214 SA2’s, each with a population of between 3,000 and 25,000 persons (fairly similar to postcodes in size), then 351 SA3’s and finally 106 SA4’s. What is important is that nearly every territory that has been drawn manually can be electronically copied, and unless the franchisor has used minor streets and lanes

Peter Buckingham | Managing Director | Spectrum Analysis

as the boundaries, most main roads serve as the boundaries between SA1’s. Once drawn accordingly, all the Census factors can be measured. If the franchise system is more a Business to Business (B2B) type of operation, then there is similar data available through the ABS to count the number of businesses and business types in any specific area. For a Home Based or Mobile franchise, it is very important that you start off by knowing these basic parameters, and then you think in terms of what is good or poor for your business concept, and make adjustments to the territory accordingly. The aim is never to make every territory equal in its base number of households or population, but to make each territory similar in the amount of potential business it should offer each franchisee.

Reality check If going into a franchise system, stand back and understand the long term numbers. There are a couple of numbers I want to quote to you for this section: 1. Australia has a population 24,357,000 (according to the population clock on the ABS website on the evening of 9/2/17). 2. Australia has around 2,171,532 businesses (2016 ABS Business Data). 3. Australia has around 852,629 businesses that actually employ someone (2016 ABS Business Data). If a franchisor says they want to give each territory 10,000 persons, then you are looking at over 2,000 territories Australia wide. For a point of reference, Jim’s Mowing is reported to have around 1,600 territories, and probably the most of any service business in Australia. By comparison most of the lending institutions such as Mortgage Choice and ANZ Mobile Lending have around the 100 – 200 territories. Similarly, if a franchisor says all you need is 1,000 businesses in an area to be successful,

then theoretically you could have 2,200 franchisees! Maybe their long term strategy is to only have 200 or 300 franchises, but then why cut the areas to be so small, and what happens if your area has one of the ‘Big 4’ accounting firm’s offices, so there are thousands of shelf companies registered there. Probably not much profitable business will ever be done with such companies, unless you are a liquidating franchise! The point is apply a reality check to understand what the Franchisor ‘could’ do if they were ever to fill all their territories, and what that could do to you, and the long term business.

Summary If you are looking at taking on a mobile or home based franchise, ask the franchisor what research they have done, and more important, what assumptions they are making when working out your territory, and whether it has a reasonable chance of sustaining the business. Also look at it in terms of what could happen in 10 – 20 years if they were to fill all their territories, and what could be the impact on your business? If the answer is cloudy or blank, I suggest you look at another franchise system. Select well, Grasshopper. Peter Buckingham CFE is the Managing Director of Spectrum Analysis Australia Pty Ltd, a Melbourne based mapping and statistics consultancy, a Certified Management Consultant, and a Certified Franchise Executive. Spectrum specialises in assisting clients with decisions relating to territory building and retail location, using various scientific and statistical techniques. Contact Peter directly via: 03 9830 0077 peterb@spectrumanalysis.com.au www.spectrumanalysis.com.au

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Are we making ourselves redundant? “While we have the choice of multiple communication channels today, it is our faceto-face interactions that work best to create the trust and rapport needed for strong, and more meaningful relationships.” Dr. Jenny Brockis | The Brain Fitness Doctor

The debate about the future of work that suggests we will see the loss of 47 per cent of jobs, as we know them, according to the findings of Frey and Osborne1, has led to an undercurrent of fear and uncertainty. If true, this would amount to around 5 million Australian jobs over the next 10-15 years according to the 2015 Australian Future Workforce². McKinsey’s³ more optimistic outlook suggests how the automation of repetitive and less cognitively demanding work will free up more thinking time for greater innovation and creativity, lead to improved productivity and performance and potentially the saving of around $12 trillion globally from reduced wages and redeployment expenditure. The future of work will look different and the

disruption to the status quo is uncomfortable, but this is an opportunity to ask what do we want and need from our work for society, and ourselves and how we can use our human talents to our continuing advantage. While ATM machines, airport check-in kiosks and self-serve checkouts at the supermarket are part of everyday life, what these automated tasks cannot provide is the human experience. The implication is that human input will always be required. What makes us unique includes:

The ability to think deeply A survey⁴ of 400 senior HR managers named critical thinking and problem solving as the most valuable skill set required for future business success over the next few years. Critical thinking provides a pathway to better analytical thinking, better judgement and better decision-making. Asking better questions, seeking to validate and verify what we are told, helps us to be more effective when attempting to resolve conflict and solve problems more quickly. When under time pressure or provided with limited data, the risk is that we jump to conclusions or make assumptions that may be completely wrong. Applying critical

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thought reduces that risk by noticing when an assumption may be present, by asking others for their view on the subject and seeking to broaden our perspective. Taking the time to evaluate all information objectively leads to more considered and deliberate conclusions.

Self-awareness Self-care and self-compassion enables us to think more clearly, stay focused and minimises the impact of stress on our cognition. This can be developed through greater self-acceptance and maintaining an open mindset. Cognitive bias can have a significant impact on our decisions. While bias cannot be eliminated from our subconscious, having greater awareness of its presence can assist in mitigating its effect on existing thinking patterns. Regulating emotion requires the conscious awareness of how our thoughts and feelings affect our behaviour and impact others. Choosing a considered response rather than a knee jerk reaction is easier when we are not tired, frustrated or feeling stressed.

Social Intelligence and human connection Getting on well with others requires us to recognise what may be going on in someone else’s head. We pick up cues from non-verbal language, facial expressions and tonality of voice. When we unplug from our focused thought, our default network of thinking switches on automatically, helping us to make better sense of our world by thinking about others as well as ourselves.

While we have the choice of multiple communication channels today, it is our face-to-face interactions that work best to create the trust and rapport needed for strong, and more meaningful relationships. This is especially important when we seek to persuade, influence, hold others accountable or find consensus. As social beings we crave human connection. Being acknowledged for who we are and feeling cared about as an individual, boosts mood, lowers stress and shortens recovery time from illness. It keeps us in a ‘towards’ state where we are more open to other ideas, possibility thinking and willing to step up to a new challenge.

cognitive processes and our emotions that come together in large-scale networks.

technology for our benefit by staying in the driver’s seat.

Thinking outside the box, staying curious, and exploring new mediums leads to the development of those novel ideas that lead to greater creativity and adaptability. We appreciate the art and artistry of those who dance, paint, sculpt, and write, broadening our experience and improving cross-cultural competencies.

Meanwhile, staying human; being curious, adaptive and looking out for each other are fundamental traits unlikely to be replaced by our technology and are what make us so unique and successful as a species.

Creativity

A creative environment is one that we find stimulating and inspiring. A bit of background noise such as working in a café can help as can being away from work; which is why being in a green space, exercising or having a shower is often the time we experience our greatest insights.

The notion of having a left-sided or rightsided brain is a brain myth. We are whole brain thinkers. The creative process is now recognised as being highly complex, involving many different conscious and subconscious

We are being increasingly impacted by our technology and we are clearly moving to an integrated digitalised world. Rather than seeing this as something to be fearful of, it’s an opportunity to review how we can use

Dr. Jenny Brockis is the Brain Fitness Doctor specialising in high-performance thinking and cognitive health and author of the best selling Future Brain: the 12 Keys to Create Your High Performance Brain (Wiley). Visit www.drjennybrockis.com. .http://www.oxfordmartin.ox.ac.uk/downloads/academic/The_ Future_of_Employment.pdf

2 .http://adminpanel.ceda.com.au/FOLDERS/Service/Files/ Documents/26792~Futureworkforce_June2015.pdf 3 .http://www.mckinsey.com/business-functions/digital-mckinsey/ our-insights/where-machines-could-replace-humans-and-wherethey-cant-yet 4 .http://www.p21.org/storage/documents/FINAL_REPORT_ PDF09-29-06.pdf

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e x pert adv i c e

Back to Basics –

What is a Franchise? “Regardless of whether a franchise is homebased, a storefront, a manufacturing operation, etc. the underlying element is still a very specific system.” David Banfield | President | The Interface Financial Group

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There is little doubt that franchising is on an exponential growth curve. Over the past few years, the franchise industry has expanded from its once ‘fast food’ and ‘automotive services’ label to a multi-faceted industry where almost anything can now be

“Numerous franchise opportunities can now be run quite successfully with a computer and a telephone, and the need for more expensive equipment and premises, and sometimes staff have been eliminated.” franchised. If you check out any franchise portal you will see literally hundreds of franchise offerings. Not only has franchising grown in terms of industry diversity, but the franchise model has also grown as new industries enter the franchise arena. Typically, franchising was always related to a storefront operation in a high traffic location and ‘location, location, location’ was always the key phrase for success. In today’s franchise environment the storefront is quite often a secondary situation and home-based, and even cloud-based franchises are becoming extremely prominent. ‘Location, location, location’ has now in many instances been replaced by ‘support, support, support’ as the keywords for franchise success. Many first-time franchisees are individuals transitioning from the corporate world into self-employment and entrepreneurship. The lure of a home-based office, after possibly many years of commuting, has an enormous appeal and franchising has adapted to accommodate that situation. Technology has also played a significant part in boosting the home-based model. Numerous franchise opportunities can now be run quite successfully with a computer and a telephone, and the need for more expensive equipment and premises, and sometimes staff have been eliminated. Notwithstanding all of these changes which, in the main, have worked for the benefit of the franchise industry, the basic underlying model has not changed over the years. A franchise is still only a system. However, it is a system that has certain noticeable characteristics. Those characteristics include the fact that the system of the underlying business can be written down and replicated in numerous different environments. Invariably a franchise also represents an in-demand product or service, albeit sometimes in the short term, and the franchising aspect accommodates a rapid distribution opportunity. Regardless of whether a franchise is homebased, a storefront, a manufacturing operation, etc. the underlying element is still a very specific system. If all franchises are reduced to the common denominator of only being a system, what sets one franchise

above another? In virtually all franchise sectors there are a large number of franchise opportunities to choose from. In the fast food sector for example, hundreds or even thousands of opportunities still exist, and the diversity and variety also continues to expand. A similar situation extends with automotive services, print shops, sign and graphic stores, and so on. Quite often one of the elements that a would-be franchisee should consider is that of history. A franchise that has some solid history will naturally have some extensive track record that as an organisation it can share with their franchisees, which in turn should assist a new franchisee in developing and promoting their business in a rapid manner.

approach is always of paramount importance. A franchise is not something that can be purchased ‘off of the shelf’, but is usually considered an award to an individual who, in turn, also brings suitable history and experience to the franchise organisation. Franchisors look at potential franchisees and expect them to have a suitable and appropriate background for the franchise in question.

Therefore, when seeking out a franchise opportunity, an individual should explore the background and longevity of the organisation. A franchise organisation that can demonstrate a good base of franchisees and many years of operation will certainly be able to bring a mature model to the marketplace. Because a franchisee is acquiring a system, they expect that system to be as mature and well-tuned as possible. It is only history that can develop that fine-tuning.

Age and experience are without doubt key elements for any successful franchise.

Regardless of the franchise model that an individual may explore, a solid due diligence

What is a franchise – it is a system that has been tried and tested and proven. Would-be franchisees should therefore always look for the well-tried and tested aspect in any model that they are considering. When it comes to a mature business model, a franchise with solid positive history should always stand out from the crowd.

David Banfield is the President of 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

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OWNING YOUR MARKETING AND SOCIAL MEDIA! Getting into a new franchise venture is an exciting journey, greeted with equal waves of enthusiasm and anxiety. Enthusiastic to know that this could be a great opportunity to manage your own business but anxious over all the questions you have about how you can best build and grow a successful business.

By buying into a franchise model business, you are rightly banking on the support of the franchise brand, in terms of building up the brand and for high level marketing and advertising support.

and services provided by you, the franchisees.

However, new franchisees need to realise that the marketing the head office undertake is essentially aimed at promoting, preserving and expanding ‘the brand’ of the company. This means that they target their market to sell the overall brand vision and identity of the company rather than the specialty products

Leaving the responsibility of your business marketing entirely to the franchisor brand marketing is essentially putting someone else in the driver’s seat of your business.

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Whilst the success of widespread marketing by the franchisor certainly helps to promote franchisee businesses, it does not actively promote a specific local area business.

You need to consider your local area franchisee marketing activity in terms of driving your business’ sales. Your active engagement with

local marketing and social media strategies enhances your local presence and available opportunities. The development of your local area marketing is the real powerhouse for local franchisees. It is in this space that the marketing moves from branding and product awareness to the Holy Grail of any business – activities that deliver more customers.

YOU ARE THE FACE OF THE BRAND While it’s true that your customers are using the product/service provided by the brand, essentially they are doing business with you. They are your customer, and as such it is up to you to maintain the relationship. Focusing on the needs of your individual customers will see you become a trusted friend to them, not just a seller or supplier. If you are relying on just the franchisor marketing for all sales and leads delivered to your individual franchisee business, you are missing the opportunity to personalise the transaction and build a relationship with your customers. Essentially, these are your customers, not the franchisors.

SUCCESS FAVOURS THOSE WHO HELP THEMSELVES The origin of this saying is actually that luck favours those who help themselves. But realistically, there is very little luck concerned when building a new business. It takes action, preparation and planning rather than waiting, wondering or wishing, to accomplish great things. Research has shown that the franchisees that take on the responsibility of building a strong local marketing platform do much better than those who solely rely upon the franchisor. Taking control of your own local media marketing efforts is key to building your presence in the local market, giving the brand and products a personal touch with your local knowledge.

NO-ONE KNOWS THE LOCAL MARKET AS WELL AS A LOCAL One of the central benefits of running a franchise business is that your brand’s identity is recognisable before you have even begun to target your local area. With this in

“Taking control of your own local media marketing efforts is key to building your presence in the local market, giving the brand and products a personal touch with your local knowledge.” Joe Papadatos | Managing Director | Icon Visual Marketing

mind, it is important to present yourself as the local representative for your company in order to maximise the branding campaigns that the head office brand will have already implemented. Capitalising on local knowledge and presence is essential to maximising your sales potential. Strategic marketing and social media activity are effective ways to manage this conversation with your local area. A brand’s reach via mass marketing and advertising is great, but running into Johnno on Friday night at your kid’s Little Athletics, and talking about your business between shot put and long jump, can never be attained by head office. It’s your local knowledge, interactions and networks that are invaluable when starting your new franchise business and in growing your customer base. Never shy away from having business cards on hand, a brochure in the car or inviting someone to follow up with a business hours call. Local knowledge and personalities are extremely advantageous when it comes to you promoting your business.

SOCIAL MEDIA IN THE FRANCHISEE WORLD When it comes to social media, most of the above general marketing rules still apply, but often with a large dose of head office policies and restrictions around your ability to use it as a tool for your individual franchisee business. Social media is still a relative new marketing tool, despite some platforms having been around for nearly ten years. And while it is well-proving to be an effective and highly cost efficient marketing platform that can deliver amazing results, social media can also prove to do more harm than good if not used properly and with control. For franchise business models, social media has an extra layer of risk, as well as opportunity. To some

franchises, the thought of multiple and unrestrained franchisee voices on any social media is the stuff of nightmares. However for a new franchisee looking to build and grow a strong business, social media is an important marketing tool, one that has potential to take your business well beyond what traditional marketing can deliver. Social media is just another form of networking, and it’s one that you need to be involved in if your business is to grow. In fact, it’s arguably the biggest networking opportunity your business can take advantage of in this digital era.

BE AWARE OF BRAND POLICIES AND RESTRICTIONS Every franchise head office has a different approach to regulating their business marketing. It is important for any new franchisee to investigate head office guidelines and restrictions in relation to individual marketing and social media activities prior to implementing any strategies. Some companies have such tightly controlled policies and restrictions that it does not allow much room for the individual voice of a franchisee. But more and more franchised companies are recognising the inherent benefits of opening up marketing opportunities to their businesses. Question your franchise on their guidelines around social media, ensure you can communicate with your customers via social media and that your franchise makes it easy for you to do so. If you are unsure if what you are posting is within the brand guidelines, stop and ask. If you have doubts, then its best to err on the side of caution. After all, social media participation is an excellent way to enhance your presence in the local market and ultimately grow your business.

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“One of the central benefits of running a franchise business is that your brand’s identity is recognisable before you have even begun to target your local area.” USING YOUR LOCAL KNOWLEDGE TO PROMOTE YOUR SOCIAL MEDIA Local knowledge and personality can be extremely advantageous when it comes to promotion of localised services. The strength of a brand is usually established by existing marketing strategies, so adding the extra dimension of a local social media platform can enhance further brand development that would otherwise be left unexplored.

BRAND SENSITIVE SOCIAL MEDIA PARTICIPATION

SOCIAL MEDIA RESPONSIBILITIES

Remember, social media is essentially a conversation between two people, in this case yourself and your customers. But a note of caution, this is not your personal social media account, you are representing your business and the franchise business, so be sure you are representing it in the best light possible.

In most franchise business models, it’s the franchisee’s business who owns the customers and customer relationships, not the head office brand. And more than likely, your customers are interacting with social media, both with friends and brands that they trust and like. Social media is an imperative marketing tool that can contribute to your own business without relying on any marketing funds from head office or nationally rolled out campaigns. Used correctly, and within the brand constraints you operate, social media is essentially a free marketing tool that is only limited by your time, creativity and imagination. Well, mostly time.

Appropriate marketing and social media strategies will depend highly on the policies and guidelines of your specific head office. Appropriateness can relate to both the content and the delivery. Devising clever, engaging content must always be balanced by the guidelines and restrictions of your brand.

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“Social media is just another form of networking, and it’s one that you need to be involved in if your business is to grow. In fact, it’s arguably the biggest networking opportunity your business can take advantage of in this digital era.” • Building trust with prospective customers; and • Gaining more understanding of customers and what they are interested in to drive other marketing campaigns. If you are looking to social media to boost your business, understand that for most businesses, social media is an influence to a sale, just one place a potential customer will go to find out about your business.

Some general social media objectives for a new franchisee business should include: • Engaging with customers and encouraging two way communication; • Educating customers on your brand differences to competitors;

• URL Shorteners in Blog and Social Media – Measurable and saves valuable posting space. • Always link content back to the website. • Think mobile – is the content you have posted relevant for mobile?

Think you’ve got nothing to say or post? Here are a few layers of posts that you can share to your fans and followers on social media that are relevant and interesting to them.

• Respond quickly, respond to everyone and give everyone the benefit of the doubt.

Product – New product news or product updates are always of interest to those following you. Make these interesting and link back to where they can get in touch to order.

Social media is a communication platform, a way to keep in touch with customers while also informing them about the business, the industry and any other news that is relevant because of your business.

Here are some small tips to help you keep your posts professional.

WHAT DO I POST ON SOCIAL MEDIA?

Corporate – Share franchise news about the brand you are representing including any interesting news at a corporate level such as sponsorships, awards etc. Use this style of post sparingly, it can be seen as a little selfindulgent.

WHAT SHOULD I EXPECT FROM MY SOCIAL MEDIA EFFORT?

and remember, if you wouldn’t speak to your customers in this way in person, don’t speak to them in that way via social media.

Community – You are the representative of your brand in your local area, so it stands to reason local news is of interest to your fans and followers. Include local customer stories, local community support you are involved in and local franchisee news about yourself. Customer interest – This content is of great interest to your followers and encourages sharing of your content. This can include promotions, comparisons and reviews as well as ‘how to’ videos for example. When in doubt, stick to the 80 / 20 rule – 80 per cent tips, tricks, helpful or entertaining posts, 20 per cent company or product.

HOW TO POST ON SOCIAL MEDIA Posting on your own personal social media accounts is very different to representing your business. Always have your business hat on,

• Be brief – Limit Facebook posts to 80 characters and under, Twitter to 130 characters and under. • Be visual – Images are more likely to get shared, retweeted and opened across all social media. In the world of franchisee marketing and social media, the absolute key takeaway is to embrace this business, wholly and solely. Don’t just rely on the marketing activities of the brand, regardless of how effective they are. They have a different agenda to you. This is your business opportunity, own it in every way you can. Joe Papadatos is Managing Director of Icon Visual Marketing, a full service marketing agency that for over twelve years has been equipping businesses with the marketing and sales tools to help them reach their next customer. Icon Visual Marketing are highly experienced at strategically planning and building robust marketing hubs that help franchisors deliver the right marketing tools and resources to their franchisees. 1300 138 984 joe@iconvisual.com.au www.iconvisual.com.au

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h ot to pi c s

Behind the

headlines Domino’s faces marketing fund furore amid potential 11 per cent wage increase A “screw up” led to Domino’s not releasing the 2016 audit report on its marketing fund to franchisees on time, generating additional headlines for the brand after recent media reports of worker underpayment. The audit report of the $40 million marketing fund was last released in December 2014, according to a media report, with the most recent report released nearly three months late in early 2016 after inquiries by Fairfax media. Domino’s CEO Don Meij blamed a “screw up” for the oversight, however the Australian Competition and Consumer Commission (ACCC) has indicated it is looking at whether Domino’s has breached the Franchising Code of Conduct.

The Brisbane-based ASX-listed chain, with operations in Australia, New Zealand, Japan and Europe is understood to have recovered $4.5 million in outstanding wages from franchisees in Australia who have underpaid workers. Domino’s says it has “zero tolerance” for wage fraud, and has conducted 456 spot checks in the last three years, leading to 102 store audits, and investigated 88 complaints, with a number of audit and complaint investigations ongoing. Investment analysts at Deutsche Bank have estimated the company could face a hike in wage costs of 11 per cent when it negotiates a new enterprise agreement to replace one which expired in 2013. A proactive compliance deed between Domino’s and the Fair Work Ombudsman has also expired, with Ombudsman Natalie James recently indicating at a Senate committee

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hearing that she is uncertain about the prospects of a new deed being negotiated.

Caltex franchisees protest outside head office A group of about 70 Caltex franchisees, workers and their families carrying placards and chanting against the company’s management protested recently in the streets of Sydney CBD outside Caltex’s head office following the company’s crackdown on wage fraud. The protestors brandished signs with messages such as “Stop bullying franchisees” and “Stop stealing our stores” to protest against the audit and termination of franchisees for wage underpayment, claiming that the business model is not profitable, according to a media report.

The managing director of fuel retailer Caltex has publicly supported Government and Opposition policies which propose to hold franchisors accountable for wage underpayments by franchisees to their workers, and has promised to get tough on franchisees who exploit their workers. However the protestors claim that the audits are costing them thousands of dollars and do not show the lack of profitability in the business model, according to franchisees.

Minister Peter Dutton following the release of proposed legislation to make franchisors liable for franchisees’ wage underpayments following mass media coverage of wage fraud in 7-Eleven and other networks, however most foreign workers affected by this wage fraud were generally holders of student visas, not 457 visas.

Penalty rates cut for many franchise workers

Jason Gehrke | Director Franchise Advisory Centre

Two separate legal actions are being prepared against Caltex, according to the media report, with one lawyer representing 40 franchisees from across Australia.

Penalty rates for jobs in the heavily-franchised retail, fast food, pharmacy and hospitality industries have been slashed after the Fair Work Commission handed down its findings this week after a two-year inquiry.

Allphones collapses into administration

Employers in these industries estimate labour cost savings of between four to five percent, with Sunday rates being reduced in most fast food jobs from 150% to 125% for full and part-time workers, and from 200% to 175% for casual workers.

Mobile phone and internet reseller Allphones has collapsed into administration after its shareholders withdrew funding support to cover the group’s losses, according to a media report. Administrators PPB Advisory immediately closed 18 stores and made 69 staff redundant while it prepares the business and its remaining 66 stores for sale. At its peak, Allphones had 170 stores when it was purchased by Canadian telco Glentel for $70 million in 2012. A single Canadian shareholder took over the company last year with a view to turning around the shrinking business, but could not continue to fund the company’s losses.

Fast food chains to lose foreign worker visas The Fast Food Industry Labour Agreement which allowed sponsorship of foreign workers on temporary visas to work in fast food chains for even unskilled jobs has been axed by the Federal Government, claiming that Australian workers must be given priority for these jobs. Individual businesses will still be able to make requests under existing labour arrangements to fill roles where exceptional circumstances can be considered. Existing foreign workers on 457 fast food visas will be required to leave Australia when their visas expire unless their employers can present a case why they should stay. The Fast Food Industry Labour Agreement was introduced by the Gillard Labor government in 2012. The axing of the agreement was announced by Immigration

Penalty rate reductions of a similar size were determined for the other industries, however the restaurant and catering industry was not approved for a penalty rate reduction but may have another opportunity to seek change. The reduction in penalty rates will be welcome news for the franchise sector, where some franchisees struggle to trade on Sundays, or work the hours themselves, because of prohibitive wage costs. The Prime Minister has said the government will accept the Commission’s ruling, with the new penalty rate system to apply from July 1, however it is expected that the Opposition will not offer bipartisan support.

New owner and franchisee CEO to turn around Howard’s Storage World An experienced storage retailer from the United Arab Emirates has emerged as the new owner of Howard’s Storage World, which was placed into administration last December owning an undisclosed sum, according to a media report. The arrival of the new owner has saved 46 out of the brand’s 58 stores, and resulted in the appointment of a new CEO for the business, an existing franchisee who has been part of the group for the last seven years. New owner Enayat Ghiasi of My Home Storage and Store Trade has appointed Ron Pugsley as CEO, and will refocus the

business using local suppliers to create greater innovation in its supply chain, and a “back to basics” retail formula. The company has been able to renegotiate a number of leases to ensure the continuity of retail stores, while 12 mostly company-owned stores were closed during the administration.

Serial franchise conman Peter Foster arrested again Notorious fraudster Peter Foster has been arrested again barely a year after being released from jail for his role in the SensaSlim franchise scam which stole $6 million from 110 franchisees, according to a media report. Foster was arrested for his role in online sports betting scam Sports Trading Club, which defrauded a South African man living in Western Australia of $1.5 million. At a court hearing following his arrest, Foster’s application for bail was rejected by the court due to concerns Foster was planning to flee the country and continue the scam abroad.

Franchisees prefer closure to the cost of refurbishment Franchisees of food chain Nando’s are closing their stores at the end of their franchise agreements rather than pay refurbishment costs of up to $1m for a renewed term out of concerns that they will be unable to recoup their investment, according to a media report. Fairfax media reports that at least five Nando’s stores have closed in Melbourne since 2014, and that renovation costs make the businesses unviable for franchisees to renew. The company is currently involved in a Supreme Court dispute with one of its largest franchisees, whose three stores were seized by Nandos after they refused to pay for expensive upgrades. www.franchiseadvice.com.au

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pr o f ess i o na l s er v i c es l i st i n gs

IP | partnership

jejak graphics

JEJAK GRAPHICS

a lasting impression

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

MARSH & MAHER LAWYERS

T H

P 03 5977 8804 M 0422 267 639 Contact Michelle Quinn E jejak@bigpond.com CREATIVE DESIGN SOLUTIONS Jejak Graphics is a freelance graphic design business based in Melbourne, Australia working with clients worldwide. With over 18 years experience in the design and print industry specialising in magazine layout and advert design as well as offering a number of other graphic design services and print solutions including:

, HEALTHS FITNES TY U A & BE

• Corporate stationery • Brochures and flyers • Poster and banner design • Educational manuals • Sports programs • Monthly Newsletters • Product labels and packaging Artwork is tailored to your brand and focused on your message and target audience. No job is too big or small. Contact me today to discuss how Jejak Graphics can make your company or organisation leave ‘a lasting impression’.

the magazine for franchisees

Franchise BUSINESS

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

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.

96 Business Franchise Australia and New Zealand

AU S TR A LI A an d new z ea l an d

Professional services listings are a great way to promote your business for more information call 03 9787 8077 (+61 3 9787 8077 from outside Australia) and speak to one of our sales executives. www.businessfranchiseaustralia.com.au www.businessfranchisenz.co.nz

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