Business Franchise AUS & NZ July/August 2017 by CGB Publishing

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m a g a z i n e

f o r

f r a n c h i s e e s VOL 11 ISSUE 05 jul/aug 2017

AUSTRALIA and NEW ZEALAND

La Porchetta

delivering success

how to

choose the right franchise for you essential qualities for

$4.95 (AUD), $6.95 (nz) inc. gst.

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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 5, JUL/AUG 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: accounts@cgbpublishing.com.au GRAPHIC DESIGN: Jejak Graphics - Michelle Quinn jejak@bigpond.com COVER IMAGE: LA PORCHETTA TO SUBSCRIBE: www.businessfranchiseaustralia.com.au or www.isubscribe.com.au CGB PUBLISHING PO BOX 968

Searching for the right franchise system to buy into can often be a daunting task and Business Franchise Australia and New Zealand magazine is here to help you.

a retail store or office-based outlet, while mobile means exactly that, out on the road. This section of the magazine includes expert advice from Jason Gehrke from Franchise Advisory Centre. He discusses a different reality from the usual perception regarding mobile franchising; with franchisees often working just as many hours as fixed-location, see page 48.

As always, the magazine has page after page of sound advice from our stable of expert writers including lawyers, bankers, franchisors, consultants and other franchising specialists.

If you are in the very early stages of researching a franchise system to buy, a great place to start is to meet face-to-face with the franchisors themselves, some of whom are showcased within the magazine. With two Franchise Expo’s taking place, Brisbane in July and Melbourne in August; there’s a great opportunity to do this, as well as meeting a wide range of experts from the franchising industry to help you on your way. Full details can be found on page 86, along with details of how to register for free tickets, using BFM as the code word. Make sure you stop by the Business Franchise Australia and New Zealand stand to pick up more invaluable advice and information.

What are the essential qualities for franchise success? Ian Watt from Westpac says you need passion and a love for the franchise business you choose. Read an in-depth look into the skills and qualities required on page 16. This issue also includes advice from Stan Gordon, the founder and CEO of Franchised Food Company (FFCO). With brands including Cold Rock Ice Creamery, Healthy Habits and Nutshack, Stan offers his insights into how to choose the right franchise for you and important considerations you should make before signing on the dotted line. Read more on page 22. Also inside this issue, we feature ‘Fixed Site V’s Mobile franchises’. Fixed site franchises can range from working from home, within

Enjoy the read. Joanne Tuffy Editor

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

july/august 2017

On the Cover 10

Cover Story: La Porchetta

Who wants to be a Restaurateur?

16 Essential Qualities for Franchise Success Ian Watt, Westpac

22 How to Choose the Right Franchise for You Stan Gordon, Franchised Food Company

In Every Issue 6

What’s New! Announcements from the Industry

What the Franchise Council of Australia can do for Franchisees

Special Feature: Fixed V’s Mobile Franchises

Feature News

Feature Cover Story: Property Guys

Damien Paull, Franchise Council of Australia

Cover: Property Guys

The Future of Real Estate in Australia

Feature editorial: Fixed-Site V’s Mobile franchises Which one’s for you?

Hot Topics: Behind the Headlines

Jason Gehrke, Franchise Advisory Centre

Professional Services Listings

Listings

A-Z Directory

Snapshot

58 Snap-on Tools 84 Begin Bright

Focus 82 Clark Rubber

Have Your Say 46 Hog’s on the Road: Hog’s Australia

also in this issue: Profile 14

Sandwich Chefs®

BK’s Takeaway.....................................................81, 97 Aircoat Australia. ........................................................ 96 Appliance Tagging Services. .............................. 96

20 Liv-eat Fresh Eating

Cashflow It........................................................................ 2

24 Kwik Kopy

Chem-Dry. ............................................................. 85, 97

42 Games2u

Clark Rubber........................................................ 29, 97

68 Bakers Delight

Degani.............................................................................. 98

76 Banjo’s Bakery Cafe

Ecomist Australia....................................................... 98

86 Franchising Expo

Fastway Couriers............................................. IFC, 98 FC Business Solutions............................................19

Franchisor in Depth 26 Crema Espresso 72

Fasta Pasta

Franchise Infinity..........................................................75 Franchise Retail Brands......................................... 99 GroutPro. ........................................................................ 99 Hairhouse Warehouse...............................99, OBC IP Partnership.............................................................. 92

Showcase 52 Jim’s Pool Care 66 The Energy Alliance 88 NFC17: National Franchise Convention

Jejak Graphics. ................................................... 63, 92 Jim’s Building Maintenance. ............................... 99 Just Cuts.......................................................................100 Magnetite Windows. .............................................. 101 Marsh & Maher. .......................................................... 92 Midas. ............................................................................. 101

Expert Advice 44 Where’s the Money? Know the financial differences between Mobile & Fixed Site Kate Groom, The Franchise Accountants Network & Smart Franchise 48 The Realities of Mobile V’s Fixed Site Franchising Jason Gehrke, Franchise Advisory Centre 54 Territories for Mobile Franchises… What you need to know Peter Buckingham, Spectrum Analysis 56 On the Road Again Robert Toth, Marsh & Maher Lawyers 60 Leasing the Franchise Premises: What a Franchisee needs to know Emma Heuston, LegalVision 64 Networking Mastery: Building Connections that Matter Janine Garner, LBDGroup 70 Managing Mental Health at Work: Your Legal Responsibilities Janine Nicholson 78 Why the Vulnerable Workers Bill will add more Red Tape Troy Wild, National Retail Association

National Drones........................................................ 101 Novus Glass. .............................................................. 101 OZ Bin Cleaning. ...................................................... 102 Redcat................................................................................. 1 Smallprint .................................................................... 102 Snap-on Tools................................................ 102, IBC Soccajoeys.................................................................. 103 Spray Pave Australia.............................................. 103 The Cash Back App. ............................................. 103 The Interface Financial Group IFG 50/50..................................................................... 103 Theobroma Lounges, Pavilions, Bars......... 103 Thermawood.............................................................. 104 Trent Driving School............................................... 104 V.I.P. Home Services Fencing & Home Maintenance............................................................... 104 Yarra Valley Farms................................................... 104

what’snew! Builder Auctions House to Raise $250,000 for Children’s Charity been involved in the Variety Freedom House initiative, with $175,000 raised at auction last year by our Tamworth G.J. Gardner franchisee,” Mr Hogan said. “We’d love to go that little bit extra this year and get that figure up to $250,000”. Over 30 local suppliers have shown their support for the project by providing materials and services. “New suppliers are coming on board almost every day which means more money for Variety and more money for the kids who need it the most,” Mr Hogan said. “It’s been really heartening to see how positively Sydney businesses have responded to the fundraiser. We wouldn’t be able to do it without their help and I can’t thank them enough.”

G.J. Gardner Homes Sydney West has started construction of a brand new four bedroom family home, destined for a charity auction, in the picturesque Hawkesbury region of New South Wales. The ‘Variety Freedom House’ has a public auction scheduled in September. All profits will be donated to Variety - the Children’s

Charity to help Aussie children who are sick, disadvantaged or living with a disability. David and Belinda Hogan from G.J. Gardner Homes Sydney West said by building the home for cost only, and with the help of partners and suppliers, they hoped to raise upwards of $250,000 for Variety. “This is the third year G.J. Gardner has

CEO of Variety, David Sexton, said “The Freedom House initiative is a great boost to our fundraising efforts in NSW and the money raised will go towards helping some kids in serious need. Our sincere thanks go to everyone involved in the project. “G.J. Gardner has raised close to $500,000 for us over the past three years, which enables us to assist over 10,000 children in NSW every year.”

NATIONAL FRANCHISE CONVENTION 2017 Tickets are now available for the 2017 National Franchise Convention, which will take place on the Gold Coast this October. This year’s National Franchise Convention is shaping up to be one of the best yet. With a very exciting program, exceptional topics and some of the industry’s most highly regarded thought leaders, the bar has been set even higher for this year’s event. The 2017 National Franchise Convention will be the meeting place for inspiration, motivation and thought leadership on all things franchising. Keynote speakers sharing their inspiration and expertise at the convention will include Natalie Brennan FCA, Franchise Woman of the Year 2016, who started her career in the

Franchise sector at almost 15 years old. Ray Titus, Founder & CEO of United Franchise Group and its affiliated companies, is coming over from the USA to give presentations. Chief Telstra Scientist Dr Hugh Bradlow will share his expansive knowledge from his experience as President of the Australian Academy of Technology and Engineering, Chief Technology Officer and Head of Innovation at Telstra, and now Chief Scientist at Telstra. International speaker, author, and consultant Steve Simpson, described by UK based e-Customer Service World as ‘Australia’s leading corporate culture authority’, will also be at the event as a keynote speaker. The keynote speaking program will be supported by franchisor expert concurrent streams and in-depth round-table sessions.

6 Business Franchise Australia and New Zealand

Early bird tickets are available for a limited time. If you are planning on multiple people attending the convention this year, make sure you register early, so you can save even more. To register, visit: www.nationalfranchiseconvention.org.au. Book your accommodation at RACV Royal Pines Resort now to avoid disappointment as limited rooms are available. To book your room, please call the reservations team direct on 1800 886 880 or (07) 5597 8700 or email royalpines_groupres@racv.com.au and mention to the reservation team that you are attending the NFC17.

Brumby’s Product Specialist Crowned Champion Baker Brumby’s Bakery’s very own master baker and skilled Product Specialist, Brad Harvey, walked away with top honours at the Baking Association of Australia’s (BAA) Queensland Baking Show, where his heavenly loaves earned him the coveted ‘2017 Champion Loaf ’ title. All loaves entered into the show were judged on appearance, taste, aroma, weight and texture and Brad rose to the occasion by mixing, kneading and baking his way into the top three spots in all five of the categories entered. Brad started out in 1995 with a four-year bakery and pastry apprenticeship with Brumby’s Bakery, went on to become head baker and later owned and operated his very own store.

unnoticed by Retail Food Group (RFG), master franchisor behind Brumby’s Bakery. In 2016, Brad was offered the position of Product Specialist at RFG’s Training Academy to train up new franchisees. “RFG offered me a great opportunity as a Product Specialist and trainer for Brumby’s and I’ve loved every minute of teaching the art of baking beautiful bread to new franchise partners,” Brad said. Managing Director of RFG, Andre Nell, congratulated Brad on his wonderful achievement. “I have been in the baking industry for a long time and there’s no doubt that people’s habits have changed, but what really amazes me to this day, is that Brumby’s still produce the majority of their products from scratch for families all over Australia.

Over the years, Brad has had a hand in training many apprentices including Donna Elton, a fellow talented and innovative Product Developer for Brumby’s Bakery. His in-depth knowledge, expert skills and infallible passion for his craft didn’t go

“We are very proud of Brad’s exceptional results achieved at the Queensland Baking Show recently. Achievements of this nature are testament to the capability and passion of our exceptional team,” he said.

Be Inspired at the Franchising & Business Opportunities Expo In Brisbane this July, and in Melbourne in August, the Franchising Expo will showcase a wide range of local, national and multinational franchises, and host a range of business experts and support organisations – including the Franchise Council of Australia (FCA). “Some people find starting their own business is a bit overwhelming, but it doesn’t have to be,” says Exhibition Manager Fiona Stacey. “It’s a matter of finding the right people to help you on your journey. “It is crucial that you do extensive research on any franchise you are looking at,” Stacey adds. “The Franchising Expo is a great place to start, or dig deeper into a concept you’re considering.” Big brands including Lenard’s, Bakers Delight, Fogo Brazilia, Donut King, Michel’s Patisserie, Brumby’s, Crust Gourmet Pizza, Papa Johns, Juiced Life, Shingle Inn, Gloria

Jean’s, Ferguson Plarre Bakehouses, Spudbar, Lava Coffee and Banjo’s Bakery Café will be present at one or both shows. New player Franchise Retail Brands will be showcasing their fast-growing franchises Sabatini’s, 1582 Coffee, Dessert House, Crave Ice Creamery, Hombre Street Food and New York Slice at both shows, while success stories from the Craveable Brands stable – Red Rooster, Oporto and Chicken Treat – will be exhibiting in Brisbane for the first time. In addition to meeting the people behind the brands, visitors find great benefits in attending the free seminars. “The seminars are an important feature,” Stacey explains. “We aim for a broad range of speakers and topics, with general overviews on the benefits of franchising as well as more detailed topics such as legal and financial issues.”

For more information, go to www.franchisingexpo.com.au. If you are interested in exhibiting, contact Fiona Stacey on 03 9999 5464 or email Fiona@specialisedevents.com.au Brisbane 22-23 July at Brisbane Convention & Exhibition Centre Melbourne 26-27 August at Melbourne Exhibition Centre Reader offer: register for FREE at www.franchisingexpo.com.au with promo code BFM.

Business Franchise Australia and New Zealand 7

what’snew! Recognising Australia’s diverse retail leaders

CALL OUT TO SHARE WHAT YOU CAN SPARE

The National Retail Association (NRA) has launched its new-look annual awards program, with a strong focus on inclusion and celebrating diversity, recognising not only retail businesses, but the people behind them. The 2017 awards will recognise people and businesses at all levels of the industry – from fast food franchisees to fashion chains; from young retailers under 25 years to store managers and leaders within the industry.

Leading Australian medi-aesthetic company Australian Skin Clinics has found a new use for its medical scrubs and supplies – sending them to Africa to help save the lives of women in need.

NRA CEO Dominique Lamb said the National Retail Awards will reflect the diversity of the Australian retail industry, which is one of the most significant contributors to the of the national economy.

With one in 100 women in Madagascar dying during childbirth due to the lack of adequate medical standards and equipment, Australian Skin Clinics is rallying the beauty and mediaesthetics industry together to help provide supplies for this worthy cause.

“The NRA has almost doubled the number of categories this year, to make sure all entrants are standing against their real-world competitors, competing on their merits (regardless of size or channel), and to better reflect increasing diversity and innovation in the sector,” she said. “We’re calling on Australian retailers to put their hands up, or to nominate their staff or colleagues.” Last year the 2016 Retailer of the Year supreme award was taken out by a franchise outlet, Michel’s Patisserie Toronto, who also won Franchisee of the Year. Nominations are now open for various awards across many groupings. For more information, visit the National Retail Awards Website or phone 1800 RETAIL.

Working together with the not-for-profit organisation Australian Doctors for Africa (ADFA), Australian Skin Clinics Managing Director, Deb Farnworth-Wood, said she didn’t hesitate to donate supplies that her clinics use every day when she learnt that those same products could save a woman’s life. “It’s hard to imagine when we have ample supplies of medical scrubs at our clinics, that there are women out there that don’t survive child birth due to the lack of such essential equipment. At Australian Skin Clinics, we put enormous emphasis on the importance of cleanliness and hygiene, so it seemed only right that we continue that philosophy and practice beyond the clinics themselves and help as many women as possible to enjoy

8 Business Franchise Australia and New Zealand

safe and appropriate medical treatment,” Ms Farnworth-Wood said. Lack of sterile garments in Madagascan hospitals is one of the key issues that lead to problems after childbirth. While basic healthcare is provided for free, the patients themselves must pay for the required supplies such as bed sheets, dressings and food. “Working within the medical space, we believe that every woman should be treated with the highest standard of care,” Ms Farnworth-Wood said, “and we hope our contribution will allow these women to feel self-respect and dignity when giving birth. “We are calling on anyone in the mediaesthetic, beauty or medical space to share what they can spare – scrubs, sterile equipment and basic medical supplies will go a long way in helping to prevent complications during childbirth.” Scrub and medical supplier Medeleq has already pledged its support, but Ms Farnworth-Wood said they still need many more companies to come on board. For information on how to donate, please email info@ozskin.com.

Aussie Pool Franchise Opens New Headquarters in US Award winning pool and spa care franchise Poolwerx has marked its second anniversary in the US by purchasing the largest independent pool retailer in north Texas, and unveiling a new 10,000-squarefoot head office in Dallas. John O’Brien, CEO and Founder of Poolwerx, said the new facility was perfectly located to support franchisees across America as Poolwerx expands. “With our recent acquisition of Dallas-based Dolphin Pool Supply, the timing was right to relocate our operations to the Dallas facility,” said Mr O’Brien “Dolphin Pool Supply is one of the largest hot-tub retailers in Texas and has a substantial remodelling business, which should help Poolwerx penetrate further into those segments and provide an opportunity for learning we can transfer to our Australian operations also.”

that also,” Mr Carlson said.

Dolphin Pool Supply’s three previous owners, Doug and Rose Carlson and Larry Collier, will remain with the business to coach and mentor Poolwerx staff.

Since entering the US market in 2015, Poolwerx has established 24 stores and 115 service vehicles in six US states and Mr O’Brien said the company was on track to achieve their goal of opening 300 locations by 2021.

“Dolphin has always put our customers first and foremost and I know that Poolwerx does

“As the largest pool and spa care franchise in Australia, I always wanted to take the

He said the company plans to cover the Dallas market aggressively and has taken deposits from prospects interested in five new territories. process, like the ‘Cartridges 4 Planet Ark’ program, which allows us to recover and reuse valuable materials and keep them circulating, is essential. It doesn’t make good business sense to send useful and valuable materials to landfill, when they can be salvaged and directed back into the economy. We’re particularly proud of the fact that the program has consistently achieved zero waste to landfill every year,” Collins said.

Thanks Australia! 13,500 Printer Cartridges Recycled Every Working Day Australians have made history this year by recycling a record 13,500 printer cartridges every working day, making it the biggest year ever since the launch of the ‘Cartridges 4 Planet Ark’ program. In total, over 3.5 million cartridges were returned for recycling, which is equivalent to 6 backyard swimming pools every week! Ryan Collins, Recycling Programs Manager at Planet Ark, says a key factor in this success is the willingness to participate the scheme, which ensures responsible management of environmental impact. Collectively, the participating cartridge manufacturers Brother, Canon, Epson, HP, Konica Minolta and Kyocera have helped Australians recycle 34 million cartridges since 2003. “Working within a closed loop or circular

company to America because of the sheer size and opportunities within the marketplace,” Mr O’Brien said. “It’s not insurmountable to believe Poolwerx could become a major force in the pool industry in the US, and in franchising, very quickly.”

Printer cartridges can take 1,000 years to break down, and e-waste is the fastest-growing form of waste. Rapid innovation, decrease in product lifespan and declining prices have led to more and more items being discarded. So it’s vital, for the environment and a viable manufacturing industry, that the concept of a closed loop production cycle is embraced. Overall, Australian consumers are supportive of responsible waste management and recycling. In a recent study, 82% of participants stated that they will recycle even if it takes more effort. For more information or to get involved visit www.cartridges.planetark.org

Business Franchise Australia and New Zealand 9

c ov er sto ry: l a p o r c h e t ta

Who wants to be a restaurateur? Are you dreaming of being a restaurateur? Can you see yourself running a busy a-la-carte restaurant, serving great food, with great service in a warm, family-friendly atmosphere? Owning your own business can be one of the most rewarding things you will ever do, but if you’re an individual, independent operator, without proven backup systems to support you, it can also present many challenges that are difficult to deal with on your own. That’s why so many aspiring restaurant owners choose to buy into a successful, proven franchise like La Porchetta to fulfil their dream. One of the most significant benefits of owning a La Porchetta restaurant is the instant brand recognition and the trust you gain from customers. You don’t need to start from scratch to win a loyal customer base, because with La Porchetta you can reap the rewards of being part of a known and trusted brand. And there are many more benefits.

WHY LA PORCHETTA? • A proven profitable operation

• A commitment to innovation and brand development

• A much loved and recognised national brand

• Regular franchisee meetings where you can network and learn from other likeminded professionals

• Strong local area marketing support and advice

• A flat fee structure that allows you to build your business faster.

10 Business Franchise Australia and New Zealand

Consider menu development. For hospitality novices, a lack of industry knowledge can make it hard to create a balanced and wellcosted menu. La Porchetta works diligently with their award-winning executive chef to regularly update their comprehensive menu and ensure it offers modern, Italian food that tastes delicious and that their customers love, while continuing to also serve the dishes that are long-established customer favourites. Attracting and retaining the right staff is one of the most important secrets of running a successful business, especially in the highly competitive hospitality industry. La Porchetta provides a suite of training programs and employment protocols to help you bring the right staff into your business and maximise retention.

Even with the right staff employed, consistently providing great customer service can be a challenge in any retail business and that’s especially true in a restaurant, where today’s diners expect to be very well looked after. La Porchetta franchisees are supported with a unique and specially designed online communication platform that assists them to train and manage their staff to consistently provide outstanding service to every customer. Regardless of whether you’ve had business management experience, La Porchetta will support you to learn all the skills you need to effectively manage your restaurant. From the moment you join, La Porchetta provides comprehensive training, guidance and support in all aspects of day-to-day restaurant operations, so you can be totally in charge of every part of the business, from kitchen, bar and restaurant floor, through to business management systems. One of the greatest challenges of running a restaurant is ongoing marketing and promotions to attract as many customers as possible to your business. Not only can marketing be time consuming and expensive, but if you don’t know what you’re doing, it can also be ineffective. Imagine having the support of a marketing team behind you and a franchise operations coach to assist you as well. La Porchetta Support Office looks after all your branding needs, including menu design, point of sale material, brand advertising and much more, all adding to your profile in your local community. They also support you in building your own, targeted and effective local area marketing campaigns. Obtaining finance can also be challenging, however having an established brand name behind you can make a big difference when it comes to purchasing your own business. So where do you start? With more than 30 years as an industry leader in casual dining, La Porchetta has developed and refined a highly effective recruitment, training and induction program. First, their recruitment process is designed to ensure that both you and the franchisor feel comfortable that the fit is right, and then, La Porchetta provides an intensive training program which covers every aspect of the business and includes hands-on learning. You will learn about food preparation and safety, customer service excellence, building rosters, business administration and much more. You then spend time in a restaurant to learn everything you will need to know, from making their famous pizzas and working the bar, to cleaning and hygiene. From the moment you start in your own

When La Porchetta franchisee Gautam Gulati purchased his restaurant, he was attracted by La Porchetta’s business model. “I wanted to own a restaurant,” he said, “but first and foremost, I was looking for a good business to invest in.” franchised restaurant, all La Porchetta’s manuals are just a click away on their intranet system and you have the ongoing support of La Porchetta Support Office and your franchise operations coach. “Our franchisees are able to leverage off our many years of experience and success,” says La Porchetta CEO, Sara Pantaleo. “They get extensive, ongoing franchisee support, with systems, resources and staff to effectively help them grow their business and minimise risk.” When La Porchetta franchisee Gautam Gulati purchased his restaurant, he was attracted by La Porchetta’s business model. “I wanted to own a restaurant,” he said, “but first and foremost, I was looking for a good business to invest in.” One of the attractions for Mr. Gulati was La Porchetta’s fixed-fee system. “Many franchises take a percentage of your takings, whereas with La Porchetta, I know exactly what I’m paying each month,” he said. “La Porchetta is a very popular brand,” said Mr. Gulati. “In Victoria, it was a pioneer in Italian-style family dining and many people went to their local La Porchetta on a weekly basis. Just about every family has a history with the brand. Now it’s expanding and that gives me opportunity to expand as well. There is a lot of opportunity here.”

Mr. Gulati works hands-on in his restaurant. On a normal work day, his main focus is on customer service. “Within the first few months I knew most of my customers by name, which footy team they follow, how many kids they have, etc.,” he said. “Our customers keep coming back, so we are doing well.” Staff management is also a focus. He gives his staff flexibility, so they can plan leave in advance and thus reduce unplanned absences. “I love managing and I know what goes on in every corner of my restaurant,” says Mr. Gulati. “Every day I am with my staff and customers in every part of the restaurant. I am in the kitchen, at the pizza oven, in the bar, washing dishes and on the floor. I go everywhere.” La Porchetta is now poised for growth, with new sites opening in Australia and New Zealand and opportunities are available for aspiring restauranteurs who want to be part of a proven successful franchise. For more information contact: 03 9460 6700 franchising@laporchetta.com.au www.laporchetta.com.au or www.laporchetta.com/franchising

Business Franchise Australia and New Zealand 11

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

What the Franchise Council of Australia

can do for franchisees As the nation’s peak body for franchising, the Franchise Council of Australia (FCA) is a valuable resource for this vibrant and valuable sector, offering support and guidance to franchisors, franchisees and service providers.

And while it is the FCA’s role to support the sector as a whole, there are specific benefits the FCA can provide to franchisees as they progress through their franchise journey.

Membership benefits for franchisees As a franchisee, membership of the FCA will most likely be through your franchisor’s corporate membership – which entitles franchisees to the benefits of belonging to the FCA.

12 Business Franchise Australia and New Zealand

These benefits include activities such as the FCA’s representation and advocacy to governments and stakeholders on behalf of the sector, as well as the ability to attend the FCA’s educational and networking events at member rates and to gain accreditation through the Certified Franchise Executive program, which is the only internationally recognised professional accreditation program for franchise executives. Franchisees also have the opportunity to enter the FCA’s Excellence in Franchising Awards and the ability to attend the annual National Franchise Convention (NFC), where franchisees are entitled to a 70 per cent discount on the cost of registration. With a number of award categories specifically designed to recognise the success of outstanding franchisees, the Excellence in Franchising Awards, which are open to franchisees of FCA member organisations, provide franchisees with an unparalleled opportunity to gain recognition for their successes. The National Franchise Convention, which will this year be held from 8-10 October on Gold Coast, is Australia’s biggest franchise event. At the NFC, leading franchise brands share their expertise and experience in a packed program of panels, roundtables, masterclasses (including a dedicated franchisee

masterclass) and keynote presentations. For franchisees, it’s a unique opportunity to network with business leaders while building their franchising knowledge base. Find out more at: www.nationalfranchiseconvention.org.au

“As a franchisee, membership of the FCA will most likely be through your franchisor’s corporate membership – which entitles franchisees to the benefits of belonging to the FCA.”

The value of these benefits to franchisees cannot be underestimated.

Damian Paull | CEO | Franchise Council of Australia

“I’ve been actively involved with the FCA as a member for seven years,” says Jane Lombard, Franchisee at The Franchise Shop NSW/ACT and Fifo Capital. “Over that time the FCA has been an invaluable resource to me and has provided me with the opportunity to expand my business network and further my franchising education by attending a range of events, as a member of the FCA’s NSW State Chapter Committee, through participation in the Certified Franchise Executive program and through my involvement in the FCA’s Excellence in Franchising Award’s program. I’d highly recommend becoming involved with the FCA to any franchisee who is interested to be part of the greater franchising community.” Ryan Willsher, Franchisee at Finn Franchise Brokers and winner of the WA Multi Unit Franchisee of the Year Award at the FCA’s 2017 WA Excellence in Franchising Awards, echoes these sentiments. “The two biggest benefits I have gained from the FCA as a member are networking and education,” Ryan says. “Getting to know the rest of the franchise community in Western Australia and throughout Australia has been invaluable. Meeting people from different franchise brands and suppliers to the sector at educational and social events, including the Excellence in Franchising Awards, has really helped to build my professional network and grow my business. “I’ve only missed one National Franchise Convention since becoming an FCA member and really enjoy the program content and hearing from experts, including international speakers, sharing their experiences and providing information and ideas that I can use to drive further success in my franchise business.”

Resources for franchisees The FCA website, www.franchise.org.au, is your first port of call for more information about franchising, providing resources to assist franchisees right from the first steps of considering purchasing a franchise business.

“The FCA and its partner HR Central, the HR specialists for the franchising sector, are proud to offer our members a unique and specialised HR Help Desk service.”

For those considering purchasing a franchise the FCA’s The Franchisee Guide is available to purchase through the FCA bookshop on the FCA website. This, alongside other publications provides a broad overview of the various aspects involved in becoming a franchisee, including suitability, legalities and what to expect from your franchisor. If and when you decide to become a franchisee, you will also require an understanding of workplace compliance and financial management that you may not have needed to learn in your previous career. As a small business owner, you are responsible for managing the day-to-day financial operations of your franchise business, and possibly also managing employees. It’s prudent to be aware of some of the workplace issues that may arise as an employer, and in that regard the FCA site is also your portal to access online education resources provided by regulatory bodies including the Fair Work Ombudsman (FWO). Through the FCA website, FCA members can access free online learning courses from the FWO Online Learning Centre on topics including diversity and discrimination, workplace flexibility, managing performance, hiring employees and managing employees. Find out more at: www.franchise.org.au/fairwork-ombudsman-online-courses

FCA HR Help Desk The FCA recognises its members face a wide range of HR and employment law compliance challenges, and the importance of obtaining the right advice to ensure any such issues

are addressed in a timely manner, and most importantly, to ensure that franchisees and franchisors meet their compliance requirements. With this in mind, the FCA and its partner HR Central, the HR specialists for the franchising sector, are proud to offer our members a unique and specialised HR Help Desk service to ensure members obtain the best advice regarding compliance and best practice around all things HR. The FCA HR Central Help Desk provides members with exclusive access to the FCA HR Central’s free dedicated Help Desk and speak to a HR Specialist who will assess your situation and provide you with a personalised solution for your business, with no charge for the phone call, or advice/guidelines given by the specialist. If required, a further appointment and/or proposal can be arranged with the consultant, and any fees for these services will be outlined to the member so they can make an informed decision of whether to proceed with obtaining more detailed advice. The HR Help Desk can provide support for franchisees on matters including, but not limited to: hiring and managing staff; assistance with mitigation of risk/ loss of earnings; and ensuring compliance requirements are met. To contact the HR Help Desk, please call 1300 032 247 (13000 FCA HR) within office hours. www.franchise.org.au

Business Franchise Australia and New Zealand 13

pr o file : San dw i c h C h efs ®

AUSTRALIA’S FAITH IN

THE HUMBLE SANDWICH Three great mates walk into a sandwich bar… This is the beginning of a true story that formed a delicious partnership driven by the desire to make the kind of sandwiches people can’t make at home. The trio don’t always agree on how to do things, except for when it comes to making sandwiches properly. This includes having fresh local produce delivered daily, sourcing artisan bread and making as much as possible from scratch including 14 hour slow-roasted pork and crackling.

“With a number of new stores already in the pipeline and the beginning of the refurbishment roll out coming soon, Sandwich Chefs® is excited about the future.” Sandwich Chefs® first opened in 2001 in Sydney. Initially offering sandwiches, salads and coffee under the name of Fancy Fillings®. Since then the brand has expanded into the carvery sector with succulent pork and beef slow-roasted overnight which has fast become a hero product.

the pipeline and the beginning of the refurbishment roll out coming soon, Sandwich Chefs® is excited about the future. Located in the food courts of many of the largest shopping centres across Australia, Sandwich Chefs® is aiming to be the delicious taste on everyone’s lips.

Now, Sandwich Chefs® is taking on the world of sandwich bars and carveries by providing consumers with fresh gourmet quality food. The make to order approach satisfies even the fussiest consumer. A fresh alternative to fast food, sandwiches are always in demand and with over 30 years’ franchising experience we know how to make a great sandwich.

Targeting to reach 60 stores by the end of 2017, Sandwich Chefs® is looking to make their mark across Australia. With stores predominately in Victoria, the Sandwich Chefs® foot print is ready to be reinforced and extended across other states and territories.

Since the big move to update our brand last year, Sandwich Chefs® has already opened eight amazing stores in the new look and feel across Victoria. So far well received by customers, the sleek, sophisticated style is communicating the fresh, quality offerings that have always been available from Sandwich Chefs®. With a number of new stores already in

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With a number of prime locations already secured and our eye on even more, we are looking to get the highest value for our prospective Franchise Partners and our brand. If you want to be your own boss and you have ambition, creativity and drive, contact our friendly Franchise recruitment team today! 03 9856 4400 chrisf@pnfm.com.au www.sandwichchefs.com.au

now franchising www.sandwichchefs.com.au 03 9856 4400

Business Franchise Australia and New Zealand 15

e x pert a dv i c e

Essential qualities

for Franchise Success

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“You will need passion and a love for the franchise business you choose to get into.” Ian Watt | Senior Business Development Manager - Franchising, NSW & ACT | business banking, Westpac

Every business starts with a dream; however every dream doesn’t necessarily become a business. At the outset the dreamer needs to establish if they are the right person to turn that dream into a reality. Do you have the skills and qualities required to run your own franchise business? Purchasing a franchise and running your own business may be one of the most exciting things you ever do. It can offer lots of potential rewards however you need to understand the risks involved in running your own enterprise, both financially and personally. Ask yourself if you have what it takes to be your own boss; why do you want to be in business; is this really for me? Above all you will need passion and a love for the franchise business you choose to get into. Then, there are certain attributes that someone starting their own business ideally has: • risk appetite - you should be comfortable with a certain level of business risk; • numeracy - while you don’t need to be a mathematical genius, you do need to understand numbers and be confident in dealing with cash flow; • aspirations - without a boss to guide you, you will need to be self-motivated and have the ability to inspire and lead others; • resilience - because ‘the buck stops with you’ you need to have the stamina and persistence to work the hours needed; and • innovation – it will be up to you to anticipate potential problems or opportunities, to think logically about those situations and look for successful outcomes. Small business owners and franchisees need to understand or be willing to learn about day-to-day business management, planning, and sales and marketing. There are short (and longer) courses you can take to acquire any

skills you may be lacking. Don’t forget that one of the best skills is to ask questions and seek advice. One of the benefits of buying into a franchise system is that the franchisor often provides regular training opportunities for its franchisees. However, don’t just rely on the franchisor. Find an accountant, lawyer and bank manager that you trust and respect, and make sure you research material on how to manage your business – you may be surprised how much you already know and how many skills you already have, though you should always be willing to learn more. Whether you are getting into your own business because you have identified a gap in the market, or you simply want to be your own boss, it is good practice to flesh out your ideas on paper. Many small business owners fail to write business, marketing and financial plans which can lead to the business under performing. Your first job then, is to gather sufficient information to help you write these plans. Ask yourself these questions: • do you fully understand the franchise business you want to get into? • does the franchisor have similar goals and values to you, because you will need to work effectively together? • do you know who your customers are, and who your competitors are? • do you know why your customers would choose to buy from you rather than your competitors? • what are the opportunities for the business, and what strengths will help you make the most of those opportunities? • what weaknesses may potentially threaten the business? • do you have sufficient funds to pay for opening costs and cash flow needs for, say, 12 months? • do you have access to more funds if you need them? and, • how much money and time are you prepared to risk on this business? This list is not exhaustive but may help you get started. Take time to develop your business plan, outlining your goals, your strategies, your prospects and how you will achieve them. Each business will have its own unique plan so while it is good to work from a template, discard any headings that don’t specifically apply to your business. Don’t treat it as ‘homework’ but as a serious analysis of how your business will work. Planning will help you to test your ideas and decide on strategies to reach your goals.

Business Franchise Australia and New Zealand 17

e x pert a dv i c e

“Small business owners and franchisees need to understand or be willing to learn about day-to-day business management, planning, and sales and marketing.”

The nature of markets and consumer needs change rapidly, and planning can help you to recognise potential problems that may require external sources of information and assistance. While it cannot predict change, planning can help you recognise changes more quickly enabling you to adapt. Planning can also help you to avoid unexpected crises and achieve smooth business growth. Your plan is your roadmap to success. It helps you to regularly monitor your results against a set of goals and performance standards and, if you find yourself taking a detour away from your objectives, your business plan will help you find your way back to the main road. Above all, keep in mind your purpose for going into the business. At the end of the day, what is it that you want to achieve out of running a business? For many this will be wealth creation to provide a lifestyle. Remember though that in a business the ‘wealth’ is tied up in the business until such time as the owner decides to exit that business. It is therefore critical to have a strategy for how that ‘wealth’ is going to be maximised and then extracted from the business at that time. Anyone going into a new business or franchise should always do so with an ‘end’ in mind.

THINGS TO REMEMBER: Your key plan ingredients: • Direction: A business plan should establish your business’s priorities. Don’t try to do everything, and don’t try to please everyone.

Be specific about what you want to achieve. • Milestones: A business plan should detail objectives to be achieved with deadlines, budgets, resources available, standard to be achieved, measurements, and what success looks like. This will help keep you on track. • Cash flow: Cash is the lifeblood of every business and is different to profit. A business plan should show month by month projections of the cash needed to operate and compare actual cash flows regularly to help ensure it has the cash available to survive. • An ‘end game’: A business plan, even for a new business, should also address what the owner eventually wants to achieve from the business and how that will be realised. While the prospect of a new business or franchise is always exciting, any foray into the business world should be approached with caution. Information will be your best friend so find out as much as you can about the market you will be operating in, the franchisor and brand, business management, and your own skills and strengths. The Davidson Institute’s Ready for Business guide may be a useful starting point as you embark on your journey. Additional insights into business financial management are available from the Davidson Institute. The Davidson Institute, a Westpac initiative, is committed to providing financial education that will make a real difference in helping Australian’s achieve their financial goals. Our education is designed for

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businesses, individuals and not-for-profit organisations, offering a comprehensive range of topics from cash flow to business planning and superannuation to investment. As part of Westpac’s commitment to building long term sustainable businesses and communities, the Davidson Institute has developed a range of financial and business education, insights and tools that may be helpful in your business. Visit www.davidsoninstite.edu.au Ian Watt is the Senior Business Development Manager - Franchising, NSW & ACT at Westpac. He specialises in the franchise sector, working closely and assisting many franchise brands grow and maintain their network. He holds a Bachelor of Business, Diploma in Franchising and is a CPA. Westpac continues its long-term commitment to franchising in Australia through a national network of franchise specialist business bankers who are able to deal with the specific needs of the franchise sector. Contact Ian at: ianwatt@westpac.com.au www.westpac.com.au

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.

Franchise System Setup

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

Quality ISO 9001

Business Franchise Australia and New Zealand 15

pr o file : L i v-e at

Taste Success

with Australia’s Fastest Growing Healthy Franchise A Healthy Industry The health fast food industry is a great industry to be a part of. Rapid continual growth over a number of years and forecasted to keep growing considerably, IBIS estimates the fast food industry to be worth approximately $19bn annually. The fast food market is expected to grow by 3.9% annually over the next five years.

Why A Liv-eat Franchise?

Healthy Mind. Healthy Body. Happy Life. Happy Franchise Liv-eat Fresh Eating is a new and exciting fresh food franchise with an exciting national expansion plan. Liv-eat stores offer today’s busy and discerning consumers with the choice to make healthy lifestyle decisions on a daily basis. Liv-eat live up to their brand promise with their diverse range of innovative healthy food and drink options across the entire menu range that includes breakfast, lunch, dinner, and grab ‘n’ go snacks available throughout the day. Liv-eat recently launched the hot grilled menu to accompany tasty salads, wraps, gourmet sandwiches, hearty soups, premium coffee blend, delicious smoothies and fresh juices.

Healthy Beginnings. Healthy Future. Liv-eat was founded by three friends with a shared passion to love and live a fresh and healthy lifestyle. In their attempt to help others experience the benefits of a healthy lifestyle the trio performed extensive research throughout Australia and the USA. After much analysis and strategic planning the

Liv-eat Fresh Eating Franchise concept was born and the first store opened its doors in Tasmania in 2006, with an additional eight stores opened since then. Liv-eat embraces a culture of healthy living and lifestyle choices with great customer care. At the heart of Liv-eat’s culture is the company’s mission statement ‘We are committed to making the world a healthier, happier place… one customer at a time’.

A Proven Track Record Liv-eat entered the healthy fast food market at the right time, with the right offering for the right market. In addition, the Liv-eat team sought the best advice from highly experienced industry mentors and leaders. Learning from other business’ mistakes, making informed decisions and rivalling best practice behaviours has enabled Liv-eat to experience strong growth whilst disturbing the market and building a robust and high performing franchise system. This has also facilitated Liv-eat to build a powerful brand that has become synonymous with healthy eating. Customers love the positive and energetic instore experience and delicious healthy food.

20 Business Franchise Australia and New Zealand

When you choose Liv-eat you are choosing a tested, proven and robust franchise system that has been engineered for success. With a Liv-eat franchise you are leveraging over a decade’s experience and knowledge across all areas of the business. You will receive dedicated training and support to set your franchise up for success. You get to work in and contribute to a fun, upbeat and passionate workplace culture. You will also be directly responsible for empowering people to make healthier food choices.

Franchisee Criteria Liv-eat are seeking passionate, fun loving and healthy living people to join the team. “This is our number one requirement to ensure success,” says company director and co-founder Troy Sutcliffe. Sutcliffe continues, “It takes a special person to love what they do and just as you would like to pick the right franchise, we are passionate about only taking on franchisees who share our values and culture. This is imperative to growing the Liv-eat brand. Attractive franchisees will want to be working in their business every day with a hands-on approach.”

A Franchise Near You If you are a passionate person looking for a proven franchise model, don’t miss this great opportunity. Contact Liv-eat to share your story and access more information. www.liveat.com.au/franchise/

e x pert a dv i c e

How to choose the right franchise for you!

Stan Gordon, CEO of Franchised Food Company, is a passionate franchisor. With so many franchises available to buy, Stan knows all too well the ups and downs that come with owning a business, as well as all the questions potential franchisees have – or should have - when buying a franchise.

“Make sure you are passionate about the brand you are joining. Do you have the same aims and business goals? Do you ‘get’ the brand?” Here, Stan offers his insights and knowledge into how best to select the right franchise for you, the important factors to consider, and the personal attributes you’ll need to have to ensure your business is a success. It’s so important to do your research on the franchise brand you are looking to purchase. Find out how big or small the company behind it is, and be realistic about what you are expecting. Does the franchise business model match your ideal business model? Do they offer marketing support? Are they available for ongoing assistance or only when it suits them? Do they offer social media or marketing assistance? Can you choose your

22 Business Franchise Australia and New Zealand

own store location or is it given to you? Smaller franchise systems often won’t have the range of support, nor access to wider services, but they are often more readily available to answer your questions. Large franchises obviously have a successful and proven franchise model, but you need to be aware that some with very large franchise systems you sometimes risk being counted as just a number. How do you combat the above? Do your research! Contact other franchisees. Look into all aspects of the brand and do your due diligence. Remember, you get what you pay for… and you don’t know if you don’t ask! You also need to make sure you are passionate about the brand you are joining. Do you have

the same aims and business goals? Do you ‘get’ the brand? Is there enough support to assist you in ‘getting’ the brand? To ensure your values are in line with the franchisor’s culture you must understand what factors are important to the franchise, and check to see that they match your own priorities and values. If they don’t match then there is every chance your ideologies will clash, and you should look into another opportunity. Unfortunately, not many people are lucky enough to find happiness simply by looking to make money. Although a profitable business is very important, our most successful franchisees are the ones who love the brand, and sell our products to consumers because they love them. Financials are of course important, but it is a lot harder getting out of bed in the morning when you don’t love what you do. Be happy with your business, what it stands for and the products and services you are offering; they are of the utmost importance. You have to be true to yourself to be a good business owner! After all, you spend a huge portion of your day in your business. If you’re looking to be your own boss, but perhaps lack in some areas, a franchise is a good option that offers you a proven framework for success. Doing it alone can be very difficult. No one has all the expertise and resources required for a successful business. You can’t be the marketing, financial, legal, and operations expert alone, all at once. Starting a business is hard enough; so take advantage of the experience and expertise of others, which a franchise opportunity offers. Think about the different possibilities and pathways you could take to execute your business venture, and understand that you do have options. Recognise your strengths and weaknesses… and capitalise on your strengths and get help with the weaknesses. Be aware of the opportunities and threats. (That’s not just jargon, but reality). Becoming part of a franchise system means assistance is provided where and when it’s needed. Your franchisor wants you to succeed, so never be afraid to ask for help or advice. Asking for help is often warranted, but if you are not going to put the hard yards into your business, maybe owning a franchise is not for you! Just like any small, medium or large company, a franchise is a business, and that means hard work! Don’t fall into the trap of thinking that the work is done for you! You need to roll up your sleeves and get right in! Even in a franchise, your reputation on the

“You are the face of your own franchise. Any franchisor wants you to be proud of the product you represent. Make sure your choice is the right choice for YOU!” Stan Gordon | Founder and CEO | Franchised Food Company

line. You need to be the face of your business, which includes knowing the ins and outs of your offering. If a customer turned to you to ask for advice on the product you are selling, would you be confident in helping them? If you didn’t have the answers, how would you find out about them? Does your franchisor offer training? Learn about the best ways to equip yourself with the right tools to be able to run your business. You need to develop a strong knowledge of the franchise and the industry you are buying into. You also need to understand that this will determine not only your workload, but the areas of your business that require the most attention from you. If you have a strong marketing background, you may need help with the legal side of things. A social media whizz? Find out whether your franchise can have its own local, store-based platforms, or whether they are controlled by head office only. If possible, do research into the history of the franchise system, such as business revenue and years of operation. Research is critical! As the owner of the business, it is very important that you are comfortable and willing to work within it. You need to be able to be on the ground, speaking with customers, making sure that your staff and processes reflect the franchise benchmarks, but also your own standards of service. Have you developed a positive working environment? Do you and your staff have enough knowledge of the product? Know about trends in the industry and how they can help leverage further business. Before you commit, it’s a smart idea to get insights from other business and franchise owner’s experiences. Hearing about their key learnings can help drive your businesses success. There will be hard times, like anything you do in life! Getting advice and hearing about the negative times from others can help you minimise the negative impact on your business. Asking these questions is also a great opportunity to bond with your fellow franchisees. You are all in this together, so

networking with people in your business can help you build a better business. Again, research, research, and research. Look into other businesses in your area. Do you think you have enough of a customer base and a strong product to break through the market, or is it too crowded? Do you think that one fixed site is for you, or do you want the flexibility of a movable business? Some franchises have this offering, like our Pretzel World Tuk-Tuks. The business is on wheels, which means they are able to move to wherever the customer base is. On the flip side, this may also mean that because your business can move, the customer base may need to be built from scratch each time. Remember that many things impact a business. Is your offering seasonal? Is your location seasonal – for example, a beach side suburb or on a snowy mountain? Do people need your product out of necessity or want? Do you have a strong customer service base? Does your product sell itself? Consider whether your offering is a trend or something that is always ‘wanted’ or ‘needed’ by the public. Find your niche in the market; look for areas that your target audience might frequent, and set out to offer the best product and service possible. You are the face of your own franchise. Any franchisor wants you to be proud of the product you represent. Make sure your choice is the right choice for YOU! Most important to us, is the motto we live by, Make Money and Have Fun! Stan Gordon is the founder and CEO of Melbourne-based Franchised Food Company, the umbrella organisation incorporating the brands Cold Rock Ice Creamery, Trampoline Gelato, Mr Whippy, Pretzel World, Healthy Habits, Nutshack and Europa Coffee drive thru. 1300 003 326 info@ffco.com.au www.ffco.com.au

Business Franchise Australia and New Zealand 23

pr o file : K WI K KOPY

Keeping it in the family Daniel McKenzie knew he wanted to be part of a family business when he started working for his dad, Peter (Owner, Kwik Kopy Neutral Bay) in 2007. While Dan found the experience rewarding, he soon came to realise some entrepreneurial dreams of his own. With his family keen advocates of the Kwik Kopy brand and business model, Dan has been able to make those dreams a reality as owner of Kwik Kopy Miller Street in North Sydney, New South Wales. “I explored plenty of other business opportunities and franchise models, but Kwik Kopy’s tried and tested system continued to come out on top. Fortunately, Kwik Kopy recognised what a great fit the purchase would be with our existing family business. These days my sister Susie works with Dad, Peter at Kwik Kopy Neutral Bay, while I run the Kwik Kopy Miller Street location.”

Award Winning Franchise Model “Kwik Kopy has always felt like the right choice due to the leading position it holds in the industry delivering print, design and online solutions that meet the unique needs of corporate business today. There are also definite benefits of being part of such a strong national franchise community. “We were lucky enough to know the Kwik Kopy business but you don’t need any prior experience to become a Kwik Kopy franchisee as you receive comprehensive training and support. “As a B2B franchise you operate business hours Monday to Friday, giving you plenty of opportunity to achieve a work-life balance.”

L-R: Peter McKenzie, Daniel McKenzie, Susie McKenzie and David Bell

Strong Franchise Network Support “Kwik Kopy has built a reputation for working closely with its franchisees to successfully invigorate the organisation and continually find new ways to outperform the competition. Over recent years, it has become clear that print is still very much alive but Kwik Kopy continues to ensure its franchisees have the ability to respond quickly to ever-changing market demands. “We love that we get to use our experience to partner with clients to tailor the right print, design, web and marketing services solutions to meet their local business needs. “We have a dedicated Area Sales Manager who provides us with one-on-one local support on every aspect of our business to help increase sales and profitability. I’m also a big fan of the IT and technology with some tools exclusive to Kwik Kopy that give us 24/7 access to data, tools and business intelligence.”

2017 Franchise of the Year “As owner of Kwik Kopy Miller Street, I wanted a sound investment and to successfully build a business that could deliver long-term value to my family. A franchise is a great fit for us – we’re a local business but being part of the Kwik Kopy system means we benefit from the support of the entire community across

24 Business Franchise Australia and New Zealand

“I explored plenty of other business opportunities and franchise models, but Kwik Kopy’s tried and tested system continued to come out on top.” Australia. Also, the guidance Kwik Kopy head office provides to its franchisees to be able to operate profitably is second-to-none. “In just a few years, we have had a chance to put into practice everything we knew worked well at Kwik Kopy Neutral Bay and turn a struggling business into a top performer and almost quadrupling sales in the process. This has resulted in Kwik Kopy Miller Street being named 2017 Franchise of the Year.” Daniel finishes by saying, “Being a close-knit family, we wanted to instil the same family values into our team. We are all on the same page when it comes to delivering the very best results for our clients. We are thrilled with this win and excited about what the future holds.” For more information about joining the Kwik Kopy family, contact: 02 9967 5500 franchise@kwikkopy.com.au www.kwikkopy.com.au/franchise

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

kwikkopy.com.au

FR A N C H I S O R I N D EP T H : C r em a Es pr esso

Crema Espresso Leading The Way in Design Innovation

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“We wanted our store designs to be a point of difference from our peers and competitors. We wanted a freshness and brightness to the designs that exude a laidback cool.”

Crema Espresso is a franchise that is continually evolving. Already well known for their food and premium coffee, Crema stores are beginning to make waves in the retail community with their store designs. Each franchised store has their own unique identity avoiding the dreaded ‘cookie cutter’ appearance that unfortunately many consumers and even potential franchisees associate with a coffee chain. This has been a deliberate move by Managing Director Antony Forbutt, “We wanted our store designs to be a point of difference from our peers and competitors. We wanted a freshness and brightness to the designs that exude a laidback cool.” This has not gone unnoticed by leasing agents for some of the major shopping centres with Crema Espresso being offered premium locations for its new stores. The proud Queensland brand has grown to 18 stores with several scheduled to open later this year. Whilst this is a steady growth, Crema Espresso is not prepared to jeopardise the quality of its brand or its relationship with

its franchisees, “We do not want to open 100 stores; we would rather open 50 exclusive outlets where our franchisees are recording strong revenues and profits. Unlike some other systems, we want franchisee business partners, not hostages,” said Mr Forbutt. When recruiting new franchisees, Crema is always looking for community minded people. The business believes that this mind set and attitude brings a warmth and connection to customers that is invaluable. This is something that is also practiced at a brand level with ongoing support of the charity MND foundation, raising money to find a cure for the devastating Motor Neurone Disease. This year Crema has also joined forces with the children’s charity 4 ASD Kids, founded by ex-NRL star Mat Rogers and wife Chloe Maxwell. Already this year Crema sponsored the Brisbane to Byron bike ride that was held to raise money for both charities. ‘Crema Friends’, the brand’s training program, uses this philanthropic ideology to underpin its approach to connecting to the local community. The training program follows a simple premise: treat the people in store like you would treat your friends. The Crema Friends system has three levels. ‘Friends’ are the people in the business, ‘Neighbours’ are the other people and businesses in the shopping centre and then the wider ‘Community’. “The people who visit our stores are our friends. We don’t like using

Business Franchise Australia and New Zealand 27

FR A N C H I S O R I N D EP T H : C r em a Es pr esso

Face to face mentoring is also provided to franchises. Best Practice Franchise has been engaged by Crema Espresso to coach and review stores performance. All franchisees meet with a business coach for two hours every quarter to review and assess their business performance. Each franchisee is reviewed against a rating system and are provided benchmarks to compare their operations against other stores. This system is proven to be beneficial in the improvement and profitability of all stores. Crema Espresso is a franchise that is changing the face of the café experience and customers appreciate the personal service that a friend can offer.

Joining the Crema Espresso team gives you the opportunity to own your own business, but not just any business: • A proven business with a simple operation; • Flexible floor plans; • Local support;

“The people who visit our stores are our friends. We don’t like using the word ‘customer’. Our stores are communal places where friends come together to meet.”

• Regional advertising; • A four week training program; • Ongoing learning for franchisees and their staff; • Store development assistance;

the word ‘customer’. Our stores are communal places where friends come together to meet. We operate using the mantra: the coffee is the souvenir of the experience,” said Mr Forbutt. The popular ‘Crema Kids’ addition to the brand was born from the communal experience idea, small playgrounds in store that provide parents with a small respite whilst they enjoy the premium coffee. “We created and installed the Crema Kids concept, a 25sqm children’s play area installed within the café. This allows parents time to enjoy their coffee while their children play. This has proven exceptionally popular and has created opportunities that we did not expect. The success of this concept has created a lot of interest from major shopping centres, which has seen the incorporation of the concept over the past two years and the rapid expansion of our brand.” Crema Franchise system has benefitted from this attention to detail and personal approach. There is a mystery shopper program that provides franchisees with a critical insight into how their customers experience their store and

service. Crucial when word of mouth business is such a high impact marketing tool. This customer experience approach is supported with a loyalty program that rewards return customers and incentivises new customers into becoming regulars. Each transaction accrues a ten per cent value on the loyalty account that can be redeemed at any Crema Espresso store. Behind the scenes much of the team training and internal communications are provided through an online platform, ‘Bean Me Up’. It uses the cloud-based World Manager software suite that connects with every employee and provides them with online training. It allows for monitoring of employees to ensure they have completed courses such as food safety and quality control to the required levels. Store managers can see all the mystery shopper results, notices, a calendar of events, employee performance results, messages and links to social media. Managers can monitor the performance of employees any time from a phone application. The entire franchisee training program is on the intranet and all manuals and files can be accessed at any time.

28 Business Franchise Australia and New Zealand

• Design support; • Lease negotiations, • Staff guidance; and • Much, much more. At Crema Espresso, extensive training is in place to enable the success of your business. Your initial training will have you focused on whole store management. Then ongoing training and support will be assessed and delivered through your quarterly business reviews conducted by Crema Espresso and the consultancy firm Best Practice Franchising Pty Ltd. Crema Espresso are looking for hands-on franchisees. If you possess motivation and great communication skills, are looking for a new challenge, not afraid of rolling up your sleeves, and enjoy being around people in a communal environment, then Crema Espresso is for you. For more details contact: antony@cremaespresso.com.au www.cremaespresso.com.au

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 65 stores nationally. Our award winning have 64 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: Our franchisees benefit from:

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 marketing and and business business strategies strategies •• Proven

• •

Stores Clark Rubber Retail Stores $420,000 plus GST Starting from $400,000

• •

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

• •

Unparralled national •• Unparalleled nationaland andlocal localsupport support

Group buying buying power power •• Group •• No No franchise franchise renewal renewal fees fees •• Turnkey turnkey development and set up •• Retail Retail brand bramdcelebrating celebrating70 70years years •• Multi Multi Award Award winning winning franchise franchise system system

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

•• Unsurpassed Unsurpassed initial initial training training and and ongoing ongoing support support

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.auBusiness Franchise Australia and New Zealand

Donâ&#x20AC;&#x2122;t miss an issue

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VOL 11 ISSUE 05 july/august 2017

The future of Real Estate in Australia on the road again the realities of mobile vs fixed site franchising

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.

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32 Business Franchise Australia and New Zealand

Contents On the Cover Image: Property Guys

36 Cover story: The Future of Real Estate in Australia

Property Guys

48 Expert Advice: The Realities of Mobile V’s Fixed Site Franchising

Jason Gehrke, Franchise Advisory Centre

56 Expert Advice: On the Road Again

Robert Toth, Marsh & Maher Lawyers

34 What’s New! Feature news

38 Feature editorial: Fixed-Site V’s Mobile franchises

Which one’s for you?

42 Profile: Games 2u 44 Expert Advice: Where’s the Money? Know the financial differences

between Mobile & Fixed Site

Kate Groom, The Franchise Accountants Network & Smart Franchise

46 Have Your Say: Hog’s on the Road

Hog’s Australia

52 Showcase: Jim’s Pool Care 54 Expert Advice: Territories for Mobile Franchises… What you need to know

Peter Buckingham, Spectrum Analysis

58 Snapshot: Snap-on Tools 60 Expert Advice: Leasing the Franchise Premises: What a Franchisee

needs to know

Emma Heuston, LegalVision

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 33

what’snew! NATIONAL FIRST: Pizza Capers Launch Mobile Food Truck Pizza Capers first opened its doors in 1996 and began setting the bar for innovative, first to market franchise opportunities; they were the first to embrace and promote gourmet pizza options and as of July this year, will be the first national pizza franchisor to launch a gourmet mobile food truck. Pizza Capers Managing Director Sherrie Halliwell said the mobile food truck is a fully functioning mobile pizza store that will operate in designated territories around Australia, and provides franchise partners with the unique opportunity to work flexible hours, from their own place, and to fit in with their lifestyle.

restrictions of a static traditional store.”

launch activities,” Sherree said.

“Our mobile business model not only taps into a new market of consumer, but also new potential franchise partners,” she said.

Pizza Capers is confident in the success of the exciting new business model and are opening up a limited time offer to entrepreneurial enthusiasts who are interested in starting their own mobile food truck business.

Food service companies are constantly innovating to take advantage of the everevolving trends in the industry, and mobile food trucks have developed into increasingly popular ventures over the past decade.

“With lower operational costs and the freedom to take the truck to numerous locations and events, it offers the ability to provide the Pizza Capers gourmet menu, without the costs and

“Those interested are now able to purchase a franchise for less than $50,000 startup cost inclusive of initial franchise fees, comprehensive training and local marketing

“The food truck movement is a rising trend and we can’t wait to fill the gap and begin catering for the demand that static stores are unable to cater to,” she said.

ACCC Takes Action against Car Wash Franchisor Geowash’s director, Sanam Ali, and National Franchising Manager, Charles Cameron, also purportedly engaged in the conduct. In particular, the ACCC alleges that from at least November 2015 to May 2016, Geowash made false or misleading representations that: The Australian Competition and Consumer Commission (ACCC) has applied to the Federal Court to commence proceedings against Geowash, a national car wash franchisor. The ACCC proceedings will allege that Geowash made false or misleading representations and engaged in unconscionable conduct in breach of the Australian Consumer Law, and the good faith obligation in the Franchising Code of Conduct.

• Prospective franchisees could make revenues of $70,216 and estimated profits of $30,439 in an average 28-day period, when Geowash did not have reasonable grounds for making those representations; and • Geowash had a commercial relationship or affiliation with each of Nissan, Kia, Renault, Audi, Emirates, Shell, Hertz, Holden, Ikea, and Thrifty, when it did not. According to the ACCC, Geowash directed a substantial portion of franchisee funds for purposes not permitted under the franchise agreement and not disclosed to franchisees.

34 Business Franchise Australia and New Zealand

“The ACCC investigated Geowash’s conduct following complaints from franchisees alleging that they had been misled about their establishment costs, and ultimately had not been provided with an operating car wash franchise,” ACCC Deputy Chair Dr Michael Schaper said. “The ACCC was particularly concerned that, allegedly, franchisee funds were used for purposes other than those permitted by the franchise agreements, including as commissions paid to the director and franchise manager,” he continued. If granted leave to commence proceedings against Geowash, the ACCC will seek declarations, injunctions, an order for the payment of pecuniary penalties, orders for non-party consumer redress, corrective notice orders, and costs, as well as orders disqualifying Ms Ali and Mr Cameron from managing corporations for a period of five years.

60 Years of Problem Solving From a single heel bar in Brussels, to a global 300 store retail franchise - Mister Minit is celebrating its 60th Anniversary. The retailer has evolved over half a century, and today fixes more than more than 10 million jobs each year in Australia, New Zealand and South East Asia. From repairing designer pumps, stiletto heels and work boots, Mister Minit has diversified into a comprehensive range of personal and household services. “Quality shoe repairs continue to be a large part of what we do, however many of our 4 million local customers each year also visit Mister Minit stores for our wide array of other services. Our brand has become synonymous with ‘real people fixing problems’,” said Chief Executive Officer, Mark Rusbatch. Key cutting, personalised engraving and watch repairs are among the most popular services, with customers also visiting the retailer for mobile phone screen replacements and a choice of gifts. Since expanding into car keys and remote controls 20 years ago, Mister Minit has also become the market leader of spare car keys in Australia and New Zealand. “One of the fastest growing trends right now is ‘do it for me’ and Mister Minit is equipped to be able to make the lives of time poor customers that bit easier by fixing their problems quickly and cost efficiently,” said Mark Rusbatch. “It is wonderful to be celebrating our 60th Anniversary, and as we move through the next decade, we look forward to ‘fixing even more problems for more people’,” said Mark Rusbatch.

Select the right mobile solution: Requirements for mobility, and the dependence on data and collaboration for improved decision-making, are transforming the traditional business processes, triggering an increased demand for mobility solutions. Ilan Rubin, managing director, Wavelink, says, “Mobility is inevitable in a corporate landscape where speed, instant access to business data, and immediate responses are the new norm. However, keeping a mobile workforce productive can be challenging. Success depends on choosing the right partners, applications, and mobility solutions.” Unified communications (UC) tools such as Skype for Business are changing the way employees communicate, share data, and enhance productivity. However, truly successful companies are leveraging the value of UC by deploying the same functionality to their mobile workers. How to select the right mobile solution

1. User experience. There are more forms of communication than ever before and new technology is changing the way we do business. Yet some organisations are reluctant to invest in new solutions that employees might not use. Introducing a mobility solution to address end users’ needs can mean the difference between success and failure. 2. Environment. Certain business environments create unique obstacles for mobile workers. Organisations need to consider whether their mobile solution needs to be built to withstand harsh working conditions. 3. Process. Companies that have successfully integrated digital technologies, like mobility, have done so to transform how their businesses work. A good strategy considers the critical workflows of an organisation as well as its systems and processes. 4. Policy. Making mobile workers more productive is beneficial but not at the cost of

the business. Data protection policies should be configured to secure sensitive data and protect customer privacy. 5. Support. Enabling mobile workers to be more productive shouldn’t unduly burden the IT team. Businesses should choose solutions that make provisioning easy, provide remote management, have measures in place to facilitate troubleshooting, and offer a mix of maintenance and service plans.

Business Franchise Australia and New Zealand 35

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c ov er sto ry: Pr o pert y G u ys

Property Guys:

The future of Real Estate in Australia In recent years, Australia’s property market has been on the up and up. With house prices sky-rocketing across most capital cities, many property owners have experienced great success with their investment, and when it comes time to sell they want to know they are getting the most money possible for their investment.

That’s where Property Guys comes in.

Canadian foundations

Property Guys provides consumers with a real alternative to the traditional agent and the DIY proposition. Property Guys will provide sellers with a certified real estate agent, who will mentor the homeowner through the home sale process. A community of professionals that include valuers, stylists, photographers, expert marketers (signage, advertising), legal, building inspectors and more, will also assist the homeowner. Property Guys will do this for a single, one-off fixed fee, starting at $4950.

Established in Canada in 1998, PropertyGuys.com has had great success in disrupting the Canadian property market, and is now taking the model global, first to Australia.

After 19 years of revolutionising the Canadian property market, Property Guys is coming to Australia and is searching for franchisees to build the network across the country.

Chief Executive Officer, Property Guys Australia, and owner of the Australian Master Franchise, Marcus Cann, describes the growth of the successful franchise; “PropertyGuys was established in Moncton, New Brunswick by current owners Ken LeBlanc, Jeremy Demont and Walter Melanson. After several years building a disruptive real estate model, they converted the system into a true franchise business in 2001. Since that time, they have built a national franchise system with over 120 franchisees and over 80,000 home sellers across Canada. “They are now bringing the successful franchise system to Australia, and we are looking for the ‘Perfect Fit’. Licencees, franchise owners, PG Pros and strategic partners,” Marcus said. “I met Ken, Walter and Jeremy over two years ago and was impressed with the model,” says Marcus. “I flew to Canada in September 2015 to fully study the business, and it’s franchisees for a month. I also attended the week long, world-class ‘Property Guys University’ to be fully trained in the system and the culture. “In late 2016, Ken approached me to say they were ready to launch in Australia and offered me the Master Franchise. Since then, I have spent six months ensuring the system is ready to go in Australia. “My background of over 20 years in law, finance, property and technology means I am ideally placed to understand how a disruptive digital model is ready to change real estate forever,” Marcus said.

Property Guys in Australia “Australia and Canada are almost identical markets in terms of the number of properties, the number of properties sold,

36 Business Franchise Australia and New Zealand

“We are very similar culturally and more importantly, both countries have a passion for disruptive businesses and have the same level of adoption for franchise systems.” Property Guys believes the international real estate market is broken. “Property Guys has solved a 100+ year old real estate challenge. At one end of the market, consumers are being charged excessive commissions whilst being locked out of their own homes and with no access to a range of professionals who can assist them in selling their homes. “At the other end, so called ‘DIY’ solutions are depriving consumers of the much needed advice from a range of professionals, leaving them without any expert guidance or support while selling their home. That’s where Property Guys comes in and connects buyers and sellers – without charging excessive commissions, all while providing a range of professional services to get the job done!” said Marcus. Ken LeBlanc, President and CEO, PropertyGuys.com Inc. further explains their approach: “We provide sellers with everything they need to connect directly with buyers, allowing them the opportunity to make more money than when they use an agent,” explained Ken. “With over 120 franchise units in Canada, we’ve proven that our system works time and time again while saving Canadians a ton of money in commissions over the years. It’s time Australians get to experience more money in their pockets when they sell their property. We’re going global and we couldn’t think of a better place to start!” “The core values of Property Guys is represented in our ‘We Believe’ statements,” Marcus Cann explains. We Believe: • Real Estate is Broken • Anyone Can Sell Their Own House • People Work Hard For Their Money • In Connecting Buyers & Sellers • People Should Make More Money on the sale of their house We do this by: • Providing the Home Seller with a fully automated technology system; with • A Community Of Professionals (lawyers, valuers, stylists, REA etc); assisted by • A PG Pro (licensed coach and mentor); • For a Fixed (All Inclusive) Fee

The Opportunity “We are now recruiting our foundation franchisees – The Perfect Fit,” says Marcus. “The best part is that you don’t need previous real estate experience. You have to have a great attitude and a willingness to learn our rigorous training regime (including completing a real estate certificate), and we will take care of the rest.” Property Guys is looking for franchisees in all locations across NSW, Queensland, and Victoria. Enquiries for other states are also welcomed. “We are offering Area Development Agreements, Multi-Franchise Agreements and Single Franchise Agreements,” Marcus says. According to Marcus, people who have the ‘Perfect Fit’ are people who;

- Real Estate Certificate Training (one week) - Zeenius Program (access to the best of the best in Canada on all things Property Guys) - Mentoring Program (fortnightly coaching and mentoring from Property Guys Australia - one-on-one sessions) Ongoing support includes; - Franchisees can attend Property Guys University at any time for a refresher - Property Guys CLE’s: we conduct CLE sessions on a regular basis for education and compliance - Property Guys Professional Updates: we bring in one of our professionals once a month for an update

• believe Real Estate Is Broken

- Zeenius - you can access local Zeenius’ for help

• want to take charge of their destiny

- Mentoring

• want more freedom on how they spend their time

- Franchisee Council: quarterly

• love the property industry but do not love the current ‘culture’ • want to start something new and be part of something bigger • are ready for a challenge, and ready to learn a new way of doing things

Support Franchisees will have access to over 120 small business owners in Canada on everything that Property Guys has to offer. “We believe Property Guys franchise owners and their teams will be the most educated and trained new real estate professionals in the market in Australia,” stated Marcus. Property Guys franchisees are initially supported by; - Property Guys University (one week)

An exciting future Marcus is looking forward to seeing growth throughout the next 12 months, and to seeing Property Guys become a mainstay in the Australian property market. “We’d like to see at least 10 franchisees come on board in the next 12 months,” Marcus said. “We want to sell over 100 properties, and of course, we want to make home sellers more money. “With the vast knowledge of our Canadian partners and an industry that’s ripe for change, there’s no better time to get involved.” For more information contact: +61 4 3496 4887 franchise@propertyguys.com.au www.propertyguys.com.au

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price values, legislation, regulation and franchising law,” Marcus explains.

FE ATURE : fi x ed V ’s M o b i l e Fr anch ises Do you fancy sitting at your desk in your slippers and PJs? Or is hitting the open road more your style? Deciding which kind of franchise is right for you is one of the greatest decisions you will make when entering the world of franchising. In this edition of Business Franchise Australia & New Zealand we take a look at fixed site franchises and mobile franchises.

Apart from the obvious difference between these two kinds of franchise businesses, each in fact share a number of similarities – including (sometimes) lower start-up costs, and the flexibility to work around your personal schedule. First let’s take a close look at mobile franchises.

HIT THE ROAD Ever felt tied down by travelling day in and day out to the office, staring at the same four walls? Then perhaps a mobile franchise is for you. The freedom and diversity you will

38 Business Franchise Australia and New Zealand

gain by hitting the road and visiting your clients could be the change of scenery you are looking for. The variety of mobile franchise opportunities is vast and ever-expanding. Everything from food and coffee vans, dog washing, lawn mowing, house cleaning, car washing, selling tools, servicing cars, package delivery, fence building, business consulting…phew! The list just goes on and on. You name it, and there will probably be a mobile franchise available for you to make all your own. The one thing they all have in common is

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“The variety of mobile franchise opportunities is vast and everexpanding. You name it, and there will probably be a mobile franchise available for you.”

that they do not operate from fixed premises.

TERRITORY Territory, as with most franchise business, is particularly important when operating a mobile business. With a mobile franchise, your income will be received from the clients that you establish within your specified territory, so of course it is imperative that you know the exact parameters of your allocated territory. It is also important that when doing your

research into a mobile franchise that you investigate whether it is actually possible to generate the income you require – or desire! The ways in which franchise systems divide their territories may differ – whether it is by postcode or physical boundaries – you will need to investigate the area thoroughly. Some franchise systems offer exclusive territories, in which you will be the only operator of that franchise in that area, while others offer non-exclusive territories. In nonexcusive territories you will face competition from not only other similar businesses but

also from other franchisees in your network. Always check with the franchisor as to the specifics of territory allocation for the franchise system you are investigating.

FREEDOM As a mobile franchise operator, you are master of your own daily schedule. Need to drop the kids at school? No worries! Surf’s up? Grab the board and hit the waves! Obviously you’re not going to make much money if you spend all your time running errands and hanging ten, but when the

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members into the business, so the costs of doing so, and the associated paperwork, also disappear. However, just because your investment into the business may not be as high as that of a retail outlet, this does not mean your due diligence should be cut short.

HOME SWEET HOME Working from home is on the rise in Australia. The rapid development in technology over the last 20 years has changed the face of business, with technology available that allows us to communicate instantaneously, even face to face via video conferencing if we desire, with people anywhere in the world. For those working from home, we are no longer isolated; we are connected, both faster and clearer, than ever before. A home based franchise could be the right way for you to skip the daily commute, leave the office grind behind, and establish a business from home using the tried and tested formula of a successful franchise system.

“As a mobile franchise operator, you are master of your own daily schedule. Need to drop the kids at school? No worries! Surf’s up? Grab the board and hit the waves!” occasion does arise, it’s great to be able to have some flexibility in your day. As with any business, you are only going to get out of it as much as the hard work you put into it. With a mobile franchise you can choose to work as little or as much as you want.

CUSTOMER SERVICE Good customer service can set you apart from your competitors, and is what will keep your clients coming back. When operating a mobile franchise, this is truer than ever before. Be on time, be well presented, and ensure that you have everything you need to perform the job, or have the stock your client wants, every time. The presentation of your vehicle is also imperative. It is representative of your

business – keep it clean and well maintained and it will show your clients and members of the community that you take pride in your business.

$$$ In most cases a mobile franchise will be cheaper to purchase than a franchise operating from a retail outlet, the obvious difference being that fixed premises are not required therefore eliminating the need for a lease and rent payments and the cost of a shop fit out. Mobile businesses often operate from a home office, also keeping overhead costs at a minimum. To get started all you may need is a phone and computer. In addition, mobile franchises often eliminate the need to employ additional staff

40 Business Franchise Australia and New Zealand

Whilst many of us envision working from home slouching around in PJs and slippers, watching the odd midday movie, the reality is that working from home should be treated as a normal job. Setting a daily schedule, showering and dressing as if for the office and closing your office door behind you, is likely to be a more productive and motivating way to go about your day. Some home-based franchise systems will require you to visit your clients in person, others will allow you to conduct your work via phone calls and emails, and there are even franchise systems available that could provide passive income - meaning you can earn money by doing very little at all!

FLEXIBILTY One of the greatest advantages of operating a home business is that of flexibility. These kinds of businesses are perfect for a stay at home parent; work can be completed in between school hours, late at night or early in the morning whilst the house is still sleeping, even whilst baking a cake. The little ones may be happily settled in for a nap while you catch up emails and correspondence. It’s this flexibility that appeals to those operating a business at home. Or you may be an entrepreneur wishing to set up business but without all the associated overheads involved with employees and setting up a shop front.

FE ATURE : fi x ed V ’s M o b i l e Fr anch ises SUPPORT AND TRAINING As with any franchise, it is important to ensure that your franchisor provides adequate support and the ongoing training required to operate your business. This is one of the major benefits of being involved in a franchise system; you are becoming a part of a successful formula that is replicated again and again, and it is the franchisor’s job to ensure that their franchisees are adequately supported to be able to operate their business effectively. Ensure that you discuss with your franchisor what will be provided in order to begin operating your franchise, and what ongoing training will be provided.

DUE DILIGENCE Regardless of the type of franchise you choose to purchase, by conducting thorough due diligence you will increase your chances of making a good decision and of future success. Due diligence is the process of evaluating the prospective business purchase by getting information about the financial, legal, operational and other important aspects of the business. Some of the questions that need to be answered include: • Do you enjoy the work involved in this franchise? • How much will you need to invest to buy and operate your business?

“A home based franchise could be the right way for you to skip the daily commute, leave the office grind behind, and establish a business from home.” • What initial and ongoing training will you receive?

be forthcoming with the contact details of current franchisees.

• What level of support will you receive with managing your business?

It’s also recommended you read the Franchising Code of Conduct to understand your rights as a franchise and those of the franchisor. The Franchise Council of Australia has an abundance of information relating to the code as well as recent changes and reviews of these changes on their website www.franchise.org.au.

• What kinds of marketing activities are conducted by the franchisor? • How will you receive leads? Will they be provided by the franchisor or will you be responsible for generating them for yourself? • Does the franchise have the ability to remain competitive and maintain its brand value? Evaluating a prospective franchise business is not an easy process and professionals in franchising can help you carry out your due diligence. An accountant, lawyer and your bank are important sources of advice and knowledge. Talking to those already involved with the franchise system is a great starting point; franchisees can share firsthand their experiences with operating within the franchise system. The franchisor should

ENJOY THE RIDE So whether it’s a mobile franchise or a fixed site franchise that suits you best, we hope this brief guide has given you some insight into the benefits of each, and wish you luck on your franchising journey.

Look out for our next special feature: out with the old, in with the new

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pr o file : g a m es2u

AHEAD OF THE GAME Are you famous within your network for your kids’ parties? Do you want to join a franchise that knows how to party and have fun? Games2u know how to take the party to where no party has gone before, so join this growing franchise now and don’t miss out on the fun!

people, from children seven years of age through to adults, and are all managed by a trained Game Coach. Offering complete flexibility in location and activities, there is something for everyone, and a great time is guaranteed.

In operation for six years but bought by Con Klestinis in November 2016, Games2u are now franchising and set to grow quickly, with three franchisees already on board.

Mobile Laser Tag: Taking just minutes to set up either indoors or outdoors, players divide into teams and battle for supremacy with lightweight Laser Tag guns.

Tapping into a vibrant market, Games2u are ahead of the game and have secured the lead position. Utilising supplied operating, marketing, and financial systems, franchisees can focus their talents on growing their territory while enjoying being part of a beloved brand within a tried and tested operating platform.

Giant Hamster Ball: Also known as Zorb Balls, kids and adults alike climb inside the giant inflatable balls and have a blast – or have a ball!

GAMES2U BRING THE FUN This mobile franchise is high energy and lots of fun. Parties can cater for a range of

Activities include: Mobile Game Theatre: State-ofthe-art game theatres which include all the hottest games: FIFA 17, Just Dance, Super Smash Bros, Halo, Call of Duty, Rocket League, Minecraft, and much more. Up to 24 players can play at one time in these fully air-conditioned mobile theatres.

Water Tag: On those beautiful hot, sunny days, Water Tag is the hit of the party and a great way for kids (and adults) to cool down. Water Roller: The ultimate pool party accessory. Imagine the fun to be had, in the swimming pool with the kids (and adults) running inside!

42 Business Franchise Australia and New Zealand

FRANCHISES AVAILABLE NOW With franchises available across all States and Territories, now is the perfect time to join Games2u. The ideal franchisee should have existing business experience, be a motivated self-starter and possess an entrepreneurial spirit. Strong inter-personal skills and a willingness to learn, along with an enjoyment of working with children, is also a must. Easy to operate with low overheads, a Games2u franchise has unlimited room for growth. Party packages can be designed for small to large birthday groups or the larger sporting and community events including fairs, fundraisers, festivals, corporate and sporting club events. In addition to this, sessions can also be booked for Out Of School Hours Care programs by taking the fun to the kids, meaning no buses to organise for the School or Council. The opportunities are endless for the right franchisee. So, if you’re young at heart and looking for a franchise that’s high energy and lots of fun, look no further and contact Con Klestinis now on: 1300 780 562 info@games2u.com.au www.games2u.com.au

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e x pert adv i c e

Where’s the money? Know the financial differences between mobile and fixed site franchises

Mobile franchises have become very popular over the last few years. Some people wonder whether you can make decent money from them, and certainly you can… if you choose a good franchise and work smart. Years ago, mobile franchises were mainly about lawn mowing, home services and dog washing. However, you can now go mobile with bookkeeping, accounting, renovations,

drug testing, photography, HR consulting, building services, aged care and a host of others. And if you do things well you can make a decent income.

It will take time to build up your customer base, and there are costs to pay. But if you are self-motivated and money smart a good franchise can be a great option.

There are good reasons for the boom in mobile franchise offerings. One is the cost of rent, which means a franchisee in a retail location may need to cover annual rent of $100,000 or more. Mobile franchises don’t have this burden, neither do they have to pay to fit out the store or office. And they don’t have staff to pay - at least at the start!

Here are some of the differences between mobile and fixed site franchises and some suggestions for how to respond to them.

All of which means that mobile franchises are typically less costly to start and to run. However, this doesn’t mean that you’ll instantly achieve a $100,000 income, or that you’ll be able to spend every cent you make.

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Lower cost to get started A mobile franchise usually won’t cost as much to set up as one in a fixed location, but it might cost more than you think. Work out the full costs before you commit. Start up costs for mobile franchises tend to be much lower than those for fixed location businesses. With no fitout costs and (usually)

However, these headline numbers won’t be your only costs. So, before you borrow the money or invest your redundancy pay, take some time to properly understand the costs to get into business. For instance, to get your mobile franchise started you’ll need to buy or lease a vehicle, and purchase any equipment needed for your business. You’ll also need advice from a lawyer and franchise accountant and the costs to set up your business trading structure.

Lower running costs Mobile franchises tend to have low expenses whereas the owner of a fixed location business has significant monthly outgoings. But even in a mobile franchise you have expenses to pay. What will it cost you to run your mobile franchise? Whilst there will be costs, you won’t have the weekly and monthly expenses of rent and staff wages. Still, it’s important to have a good think about what it will cost to keep the business going. And it is a business, so you’ll really should run it like one. This means cleaning and maintaining your vehicle, wearing a uniform or appropriate work wear, equipping yourself with necessary technology to get the work done, paying for advertising and marketing, and proper bookkeeping and accounting help. There’s also the royalty fee! It’s a very good idea to work out these expenses before you start off in business. That way you know what sales you’ll need to achieve in order to pay the bills.

Time is money In a mobile business, your business income will largely be determined by the hours you are able to charge people for. Be realistic about the hours you can work and the amount you can charge. In most mobile businesses you are selling your time. Time really is money! Your income will be dependent on two key factors: how many hours you work and what you are able to charge for that time. Contrast this to a location based business where - in most cases - what you sell is a physical thing or a service delivered by other people. Your wages and profit are not directly related to the hours you work.

“Time really is money! Your income will be dependent on two key factors: how many hours you work and what you are able to charge for that time.” Kate Groom | Co-founder | The Franchise Accountants Network & Smart Franchise

This business model means a mobile franchisee must think carefully about how they use their time. Questions such as “How many hours can I actually charge people for?” and “What hourly rate is appropriate?” become really important. Let’s say you think you can charge $80 an hour as a bookkeeper or handyman. If you bill 38 hours a week, 52 weeks a year, that’s more than $150,000 in business income. Sounds great! But how many hours will you actually invoice in a month? What about the time you’ll need to spend on marketing and sales, and business management? What if you are sick? This should lead you to consider questions of how much money you need to make, what is realistic, and how you’ll need to operate the business to achieve these goals. These are important considerations when you’re mobile and working alone… because your time is money!

It takes time to build up your sales When you start your mobile franchise you probably won’t have any customers. In contrast, most fixed location franchises have some income from customers from day one. Be realistic about what you can make from your mobile franchise at the start. When you buy a mobile franchise you’ll need to accept that the first few weeks or months may not see much revenue. This stands in contrast with retail business where there is almost always good revenue from the start but remember the owner has a lot more debt, wage costs and overheads to pay. In almost every mobile business we know, it takes time to build up a customer base and start generating sales income. In fact, in some franchises it can take six months or more to start to see revenue coming in. This is one reason we think mobile franchisees need to enjoy the thrill of the sales chase! Which then raises two really

good questions to ask the franchisor: “What will you do to help me get customers?” and “How long has it taken existing franchisees to reach $X in monthly sales?” ($X is your initial monthly sales goal). This leads to this last point...

Self-motivation is vital Without self-motivation, you’ll really struggle to make your mobile franchise work. If you don’t put in the effort, there won’t be many customers. Almost everyone in franchising will attest to the importance of the owner working in the business. But a retail business can (and should) tick over if you’re not there all the time. However, in a mobile franchise you are the product. If you’re not working, there’s no income. So, in a mobile franchise you need a high level of self-motivation. This is the internal drive that comes from wanting to build a business and the desire and commitment to put food on the table. It’s you who has to talk yourself into pulling back the covers and getting on with it each day. And if you’re not that kind of person, it’s likely you’ll find your franchise business quite a challenge. Even if you are highly motivated, we think it’s important to have clear goals to work towards. This means financial targets and plans for your sales and marketing activity. Add to that a way of checking your progress against your plans and you’ll be well on your way to creating a solid business. Kate Groom is a co-founder of The Franchise Accountants Network and Smart Franchise. Kate spends her time understanding the accounting and bookkeeping needs of franchisees and developing practical, affordable ways to help them. Contact Kate via: www.franchiseaccountants.net.au www.smartfranchise.com.au

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minimal equipment, it’s likely that the main costs will be the initial franchise and training fees. For many mobile franchises this will probably come to less than $50,000.

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H AV E YO U R S AY

HOG’S ON THE ROAD Hog’s Australia’s Steakhouse announced earlier this year that it was moving into the mobile food industry after 28 years of operating exclusively as a bricks and mortar restaurant group. While Hog’s intends to keep growing its 83-strong restaurant group whenever great opportunities arise, the operations team saw huge merit in introducing a mobile offering to complement their traditional full-service restaurants. Enter stage right… Hog’s Express. Hog’s CEO Ross Worth, a stalwart of more than 30 years in the hospitality industry, says constant evolution in food trends means you have to be willing to embrace new initiatives and adapt to change in the hospitality business. “We’re an extremely agile company that makes decisions and acts on them quickly once the due diligence is done, so we’re efficient in adapting and taking advantage of industry trends,” says Worth.

“There’s no denying that consumers are increasingly looking for quick, accessible and inexpensive, but still good quality, options and we have a great food offering that can be prepared in a quick service environment, so developing a mobile offering was a nobrainer for us really.” Worth says that Hog’s Express provides many benefits to the group as a whole and to individual franchisees, not least of which is having mobile trucks on the road, essentially operating as moving billboards for the business, thereby providing great brand awareness for Hog’s. It also allows Hog’s the opportunity to attend events for their many valued sponsors, as well as a wide variety of other occasions. “We now have opportunity to attend various happenings from sporting and cultural events to music concerts and festivals, and these could be at a small grassroots community level up to major celebratory events on the national calendar,” says Worth. Hog’s sees another major benefit of the Express model being the ability to provide it’s very loyal fan base with quick and accessible options, that are still fresh and tasty, but able to be consumed on the run.

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“The menu still features all the Hog’s favourites cooked to order, including our famous Prime Rib Steak served as the crowd-favourite steak sandwich, and other easy-to-eat staples such as burgers, wraps and ‘hog dogs’.” The Express model is also a way for the Hog’s brand to be exposed to new markets that may not have a local area restaurant. Hog’s also sees the Express business as offering the existing franchisees of traditional restaurants an opportunity to cover their local area of influence more dynamically and ensure they have constant engagement with their community at local events, from school fetes to sports fixtures. As with all Hog’s franchisees, they will also have the grunt of the brand behind them with a proven Express menu, as well as training and marketing support. Hog’s Express will also come in the form of a smaller static offering and over time will make an appearance in select shopping malls, service centres, airports and food markets. Hog’s is about to launch the Express model in a major shopping centre in Perth, Morley Galleria, and in the Myer Centre in the heart of Brisbane’s CBD.

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Despite the emergence of Hog’s Express, the full service traditional restaurants are the lifeblood of the group, where the focus is on providing a great experience, and bringing family and people together. Such is the passion the brand evokes in franchisees that each year at the Annual Hog’s conference a ‘Pink Blood’ award is bestowed on the most loyal and committed of franchisees. “The Hog’s philosophy has always been to offer our guests a fun and memorable dining experience in addition to great food and service, and this philosophy is personified in most of our franchisees who are all ambassadors for the Hog’s brand in their restaurants and local communities, as are the staff they employ,” says Worth. “We hire for attitude and train for skill, so franchisees choose their staff carefully and we train them well, and they often become like a work family. They also have regular guests that they develop relationships with, so I would say that familiarity and friendship with staff and patrons is one of the great benefits of the traditional restaurant model. “Further, very often our franchisees are also heavily involved in local schools, clubs, or charitable endeavours and have great relationships within their community as a whole.” The restaurant model also allows franchisees to take advantage of some of the group’s more successful national marketing initiatives, like the loyalty program, Hog Squad, which offers patrons a range of benefits that have them coming back time and time again. Hog’s Squad members pay just $19.90 for lifetime membership and receive 25 per cent off their main meal every time they dine, as well as a free birthday meal. Another initiative that is immensely popular is the ‘Kids Eat Free’ option (T&C’s apply), a popular promotion that brings repeat customers and familiar faces to the Hog’s restaurants. In summary, there are enormous benefits to both models, it very much depends on what you hope to achieve and what works with your lifestyle best, as well as your level of experience in the hospitality industry, and the time and capital you have available.

Ross Worth is the CEO and Director of Hog’s Australia’s Steakhouse and has now been with the iconic restaurant group for over 16 years after joining the team in March 2001. Ross started his career in the hospitality industry over 35 years ago as a young teen at KFC and quickly worked his way up the corporate ladder from an inauspicious start as a dish hand. Despite the ever-changing face of hospitality and an industry where things move rapidly, he was to learn many of the business basics at KFC that still apply to today’s business world. And it was there that he developed his passion for hospitality, particularly in the area of Quick Service Restaurants (QSR). From KFC Ross went on to work with Lone Star Steakhouse for six years, followed by three years with the renowned Joe’s Fish Shack in Western Australia. With both positions he further developed his keen eye for the casual dining sector, including an ability to stay abreast of industry trends as well as understand what customers want. Ross is privileged to have worked with, and learnt from, some of the pioneers of Australia’s hospitality industry including Jack Cowin, Executive Chairman of Competitive Foods Australia, and Lone Star’s Bob and Robert LaPointe. The Hog’s philosophy is a clear reflection of the CEO himself - colourful and energetic - but the company and personal philosophy is not only a commitment to giving customers a fun and memorable dining experience, but also to delivering great service and excellent food. Along with his business partner Brett Dryland, Ross is passionate about the Hog’s brand and the many franchisees that are considered part of the family, and unwavering in his dedication to providing guests across Australia and New Zealand with a unique form of customer service that Hog’s likes to call Hog’spitality.

www.hogsbreath.com.au/franchising

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e x pert adv i c e

The realities of Mobile vs Fixed Site Franchising Working capital, lifestyle and royalties differ between mobile and fixed-location franchises On the face of it, the single and most obvious difference between a mobile franchise versus a fixed-location franchise is the initial investment cost, but there is far more to it than meets the eye. Typically a ‘greenfield’ (ie. new and not previously operated) mobile franchise will have an initial upfront cost of under $100,000, whereas fixed-location businesses can cost hundreds of thousands more, with the typical entry cost for a greenfield retail franchise tending to average around the $400,000 mark. For an existing business, those costs can go even higher when factoring in the goodwill component for a going concern that is generating steady profits. (Unprofitable franchisees, on the other hand, can often be worth less than a greenfield).

Working Capital Aside from the initial upfront investment, there are significant cost differences in working capital requirements, and ongoing royalty payments. Fixed-location brands, especially retail businesses, can deliver fairly strong cashflows to an operator quite quickly after opening if the initial marketing campaign has been effective. In turn, this reduces the amount of working capital an operator needs because the business can meet its working capital requirements from its strong cash flows.

“Mobile service operators are often the whole business themselves – the potential to make a capital gain when they sell is offset by the risk that their customers will not readily accept the buyer.” Jason Gehrke | Director | Franchise Advisory Centre

However in a mobile franchise, the ‘spoolup’ period may take considerably longer as the operator develops a market, finds customers, performs the services, and then waits for payment. In some white-collar mobile service franchises (such as mortgage broking), a franchisee may need to have six months (or more) of working capital behind them to cover the operating costs of the business while its cashflow develops. A mobile service franchise that might initially cost a relatively low $50,000 upfront could cost an extra $50,000 or more in working capital over the coming months, meaning that the operator should really have access to $100,000 or more at the outset to ensure they can not only afford to buy the franchise, but also afford to operate it until it starts making money. This working capital issue is resolved by some blue-colour mobile service franchises (eg. lawnmowing), where the franchisor may offer a minimum income guarantee to a new franchisee for the first month or two after they join the franchise. In reality, this income guarantee is simply a capitalised form of working capital. In other words, the franchisee pays for it

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in their upfront investment, but can draw down against it only if they fail to achieve minimum turnover targets. Because the franchisee paid for it in their upfront payment to the franchisor to start with, the income guarantee is basically a refund of their own money, but allows the recipient to still pay for costs that working capital would otherwise cover anyway. Income guarantees (ie. capitalised working capital) occur frequently in mobile franchises but rarely, if ever in fixed-location businesses.

Lifestyle A common benefit perceived by potential franchisees – and sometimes actively promoted by franchisors – is that a mobile service franchise gives an operator a great lifestyle because they can choose the hours they work and will not be tied-down to a shop or an office. The reality though is very different, with mobile operators often working just as many hours as an operator of a fixed-location business. While mobile operators might be able to take advantage of spare time between appointments for lifestyle activities, this time during working hours is often better used to actively seek more business by following up

FE ATURE : fi x ed V ’s M o b i l e Fr anch ises on quotes or finding opportunities to meet new customers. The commitment of time to a mobile service business (where the operator is usually the business’ entire labour force) also increases during periods of peak demand such as summer for a lawnmowing or pool maintenance business. Furthermore, whenever a mobile operator takes time off work it costs them money through lost income, as such businesses rarely have employees to keep things going when the owner is away. Of course this is different for fixed-location businesses where the owner is generally not the sole income-

“On the face of it, the single and most obvious difference between a mobile franchise versus a fixed-location franchise is the initial investment cost, but there is far more to it than meets the eye.” earner for the business, and if they do take time off, the staff can usually keep things going without them (for a short while at least). So despite the potential for mobile service franchises to offer a franchisee a high level of flexiblity with where and how they spend their time, this often comes at a much greater cost than to the operator of a fixedlocation franchise.

Royalties Royalties are the ongoing payments a franchisee makes to the franchisor in return for the continued use of the brand, systems and the support provided by the head office team. In most blue-collar mobile service franchises, royalties are paid as a set regular amount, regardless of the franchisee’s sales performance. This has the effect of making

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the royalties high or low, depending on the franchisee’s turnover, although generally as their turnover increases with the growth of their busines, the royalties will decrease as a proportion of that turnover. On the other hand, in many white-collar and most fixed-location franchises, royalties are generally calculated as a percentage of the franchisee’s total sales. While this will keep the cost of royalties equally proportional to the franchisee’s turnover regardless of how low or high this turnover might be, it also means that franchisees on this royalty model will usually end up paying a lot more to their franchisor over time compared to franchisees who pay the set regular amount. However while franchisees on percentage royalty models typically pay more, they also generally have access to higher levels of support as their franchisor is better-resourced through the higher royalties to provide additional support. In addition to the key differences of investment cost, working capital requirements, lifestyle and royalties, mobile franchises frequently differ from fixedlocation franchises in the levels of support delivered by the franchisor. They also differ in the degree of responsibility and stress involved in operating a business without staff (less hassle

“In a mobile franchise, the ‘spool-up’ period may take considerably longer as the operator develops a market, finds customers, performs the services, and then waits for payment.” and responsibility) to operating a fixed location business that may be dependent on staff (with all the challenges that managing staff provide).

And then there’s capital gains And while this is not meant to be an exhaustive list of the differences between mobile versus fixed location businesses, a final consideration for any potential franchisee might be the potential for a future capital gain if they want to sell the business in future. Both types of businesses can potentially make capital gains, however the role of the owner in the business will determine the size of any future capital gain. Because mobile service operators are often the whole business themselves, the potential to make a capital gain when they sell is offset by the risk that their customers will not readily accept the buyer, and in turn, the buyer will price for that risk in what they are prepared to pay for the business. But for fixed-location businesses where there is usually a staffing infrastructure around the owner and the businsess is not so critically dependant on the owner for its daily

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operations, the risk to a buyer is reduced and increases the potential of a capital gain accordingly. These factors are reflected in the earnings multiple used to price a going concern business for sale – mobile businesses usually sell for much lower multiples than fixed-location businesses. As you can see, there is more than price to consider when distinguishing between a mobile service versus fixed-location franchise. Remember in either case to do your homework first, and always rush slowly. Jason Gehrke is the director of the Franchise Advisory Centre and has been involved in franchising for more than 25 years at franchisee, franchisor and advisor level. He advises both existing and potential franchisors and franchisees, conducts franchise education programs throughout Australia, and publishes Franchise News, a fortnightly email news bulletin on franchising issues and trends. www.franchiseadvice.com.au

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S H OWCAS E : JIM ’S POOL CA RE

JUMP ONBOARD

AND JOIN THE FLEET Anyone with a pool knows how much regular maintenance they require. Jim’s Pool Care has captured this market segment, by building a fleet of mobile pool shops around Australia. Jim’s Pool Care is a true Mobile Pool Shop and have Australia’s pools covered in all major cities in all areas of pool cleaning, maintenance, heating, inspections, lighting, pool blankets, and robotic cleaners. As part of the Jim’s Group, Jim’s Pool Care began 12 years ago in Western Australia. Owner and General Manager Brett Blair has

seen the franchise chain grow from around 30 to 92 franchisees and 13 Regionals Franchisors over his eight years in the role. Brett says, “The Jim’s Pool Care concept is a true mobile pool shop that not only provides pool maintenance but sells a full and complete range of pool equipment and chemicals. This means our franchisees can charge for their time and earn great margins on lucrative chemical and pool equipment products.” This means you can work smarter and not harder by building long term relationships with customers.

A Network that Works As part of the Jim’s Group – there are currently over 3500+ franchisees - making it a nationally recognised brand, Jim’s Pool Care get to leverage off the other divisions who are also out every day in customers’ homes and backyards. While each Division

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has a dedicated marketing team and website, all Jim’s franchisees are encouraged to crosspromote the other 40 divisions, using local area marketing, which is extremely useful to a newly launched franchise. Brett told us, “Jim’s Pool Care has worked hard to develop a strong and supportive culture. The great thing about the Jim’s system is if new franchisees ever need any help, the support team is only a phone call away as we have an amazing network of friendly and helpful franchisees, franchisors and suppliers”. This strong support network is reinforced with an annual franchise convention, where franchisees fly in from all around Australia. The conventions are usually 3 - 4 days where they get to hear from other franchisees, industry experts and sales and motivation coaches, which provides a great opportunity to learn and network with other franchisees.

There are some really great stories shared each year of success and innovative ideas.

Opportunities to Earn When looking at a business, consider how many streams of income are available. With a Jim’s Mobile Pool Shop this includes casual pool servicing, regular maintenance programs, the sale and installation of new equipment, and a range of pool accessories. This covers domestic pools, Body Corporates, Hotels and Commercial opportunities. Jim’s Pool Care franchises are now for sale in selected locations across Australia. The price for a new site starts at $67,500 and includes a complete start-up package. Jim’s is committed to new franchisees and their success by offering a Pay for Work Guarantee of $1500 (incl. GST) per week. Conditions apply, but his means if you follow all the systems, and do not meet the weekly guarantee at the end of the month, you can be topped up the difference. Another exciting point of difference is a flat monthly franchise fee is charged, which is not percentage based. This means the harder you work; the more money you can make.

What does it take? “When looking for a franchisee, we are ideally looking for somebody that is personable and able to build great customer relationships, as we are not only about oneoff jobs in pool care, it’s about the ongoing regular maintenance. We are looking for people that are motivated to get into business for themselves, have a positive attitude and are able to get out on the road and build their own business with our systems. I am very proud of the team we have built and the service they provide pool owners around the country.” The recruitment and application process starts with an initial meeting, usually over a coffee and is a discovery phase for both parties. Potential franchisees are then offered a day on the road with a franchisee. This is

Jim’s Wins: 2017 Best Pool & Spa Business | QLD SPASA Awards | Duncan Smith (Astral Pool), Stephen Cluff (Jim’s Pool Care Award Winner), Brett Blair (Jim’s Pool Care General Manager), Lindsay McGrath (SPASA Australia)

a great concept and the potential franchisee is free to choose any working franchisee as Jim’s Group fully believe in being transparent all the way through the process. They are also encouraged to ask as many questions as they want. After they have been out on the road and experienced for themselves how the business works and if keen to move forward, the next step is to start formalising the application. Part of this process is selecting a territory to build the business. Usually the location is close or near to home to help reduce travel times and to help maximise chargeable hours for the franchisee. It also means that they can pop home if needed or help out with family commitments if they arise.

How can you grow? “We have franchisees from all walks of life including banking, engineering, trades, administrative and existing industry professionals. Our franchisees don’t need to have existing industry skills as Jim’s Pool Care provides comprehensive training; they just need to be willing to try new things, follow the systems we have developed and provide great customer service,” Brett says. This in-house training starts with three days at the Jim’s Group Training Centre in Melbourne. All franchisees, from around the country, fly to Melbourne to meet Jim Penman and to learn more about the Jim’s system and how to become successful in business. The franchisees then go back to their respective cities and states where they complete an on-the-road and face to face pool school training program which lasts approximately 15 days with their local Franchisor and trainer. Working with the best brands in the pool industry, including Astral, Davey, Zodiac,

Maytronics, Daisy and Sunbather, the support that the franchisees receive from the brands with regard to ongoing training and product support is impressive. Franchisees are encouraged to enhance their professional development each year, attend local team meetings and training sessions. Jim’s Pool Care also encourage franchisees to become specialised if they wish in certain pool areas. To help franchisees be the best they can be, all new franchisees are now required to complete the Certificate III &IV Pool Technician course, which is a national accredited qualification. This is provided in conjunction with the in house training completed by Jim’s Pool Care. “Ongoing training is provided by using a local master franchisor model. We have someone on the ground in every region that provides the ongoing training and support. Once trained, every month, as a minimum, the master franchisor will contact the franchisee to provide technical and business support. There are between 6 - 8 local regional meetings a year, which allows all the franchisees in that particular region to get together and share ideas and attend a range of supplier training. This provides our franchisees with a strong support network,” says Brett. A Jim’s Pool Care franchise is a mobile retail business with huge opportunities. This system provides you with the opportunity to work outside, to work your own hours, to be your own boss and to build your business without limit. If you too would like to take control of your future, contact Jim’s Pool Care now on: 131 546 info@jimspoolcare.com.au www.jimspoolcare.com.au

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“The Jim’s Pool Care concept is a true mobile pool shop that not only provides pool maintenance but sells the full retail range of pool equipment and chemicals.”

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e x pert adv i c e

Territories for Mobile Franchises …what you need to know (and ask your franchisor)

More and more mobile franchises are coming onto the market, many which we expect to be successful: like a business flying drones, or one taking mobile video games to kid’s parties. A potential client rang me the other day and said he and his wife were looking at going into a mobile franchise in the auto industry. He said the franchisor had given him a territory, and could we do some work to decide if it made business sense! Well, while I feel I am reasonably astute in these areas, my first question was: what did your franchisor tell you in the disclosure document, and what are the basic assumptions about the market and business you are becoming part of? The answer was quite unclear! This seems to be a common problem, especially with small franchise systems, where the potential franchisee sits between a franchisor telling them enough to raise interest, and trying to avoid saying anything of substance in fear of later recriminations (legal), if there is a problem. My view is if some logical work and assumptions have been formulated by the franchisor, then there is a reasonable case to give a territory with a realistic explanation, not just “This should work GREAT, but don’t ask me how we came to that

“The franchisor should have a business plan that addresses issues like total market size and forecast market share, and a good understanding of where the opportunities lie for the business.” Peter Buckingham | Managing Director | Spectrum Analysis

conclusion!” – which then evolves into the ‘Beer and Pizza map’. The ‘Beer and Pizza map’ is the map derived by a few early entry franchisees and the franchisor, after beers, pizza, and a black texta on the Boardroom table.

Some research and arithmetic: As a potential franchisee, you are predominantly interested in your own market and probably not other capital cities where the franchisor may operate. For this example, let’s consider we are in the automotive aftermarket business. Maybe we are joining a system that services vehicles as a mobile franchise. The first question is always: How big is the market? Let us imagine we are going into business in an area of Melbourne – so that we can visualise it. On a world-wide and national basis, if we undertake some research, we may find a report that incorporates the following: “The world slushie drink hire market is expected to reach US$5.59 billion by 2020,

54 Business Franchise Australia and New Zealand

and the Australia market is expected to be $40 million in 2016”. This may be able to be broken down to state level, and ultimately to specific areas. The franchisor should have a business plan that addresses issues like total market size and forecast market share, and a good understanding of where the opportunities lie for the business. The franchisor and their advisors have decided that with their mobile vehicle service system, they will target 30 per cent of the market, or a Melbourne and Geelong market of $7 million p.a. NOW WE ARE STARTING TO UNDERSTAND THE MARKET! While you may dispute the detail, at least we are gathering an understanding of the big picture, so now we need to understand: 1. Are the franchisor’s assumptions realistic? 2. How many territories should be created and what should a territory comprise of?

The franchisor’s assumptions In your Due Diligence - doing your own investigations to decide whether you

It does surprise us at times how some franchisors come to us for territory planning advice, and when we ask what is in their business plan and what assumptions they have made as far as market size and market share, we get a blank look. In our view, a franchisor should consider the question of territory numbers in one of three ways: 1. Have some successful territories that can be measured and replicated, and you understand that each territory has been built to meet a requirement. We call this the ‘Cookie Cutter’ approach, where a franchisor can say that certain franchisees have been able to successfully operate the system based in the following territory. Usually this is based on population, number of households or number of businesses in a B2B type application. This is then adjusted in size if the area (and postcodes) is seen to be better or worse than the average as far as it is likely to consume the service you are offering. 2. The franchisor may have an internal view that a franchisee needs to invoice out $500,000 p.a. to cover his own labour, return on investment, parts that he would expect to use in mobile servicing and other operating costs. If the Melbourne / Geelong target market is $7 million, then we should be able to support 14 franchisees when we approach maturity. This may need to be the 5–10 year plan, but at least you can issue some franchises and ask the franchisees to ‘care take’ other areas until the system can support the mature number of franchises. 3. Sometimes a franchisor has been successful in another market, and therefore we can use the territory numbers and sizes from elsewhere, and transpose that into the market we are working in. For example, if we have been operating for some years and have 20 territories in Sydney / Newcastle / Central Coast / Wollongong, this would be equivalent to having 16 in Melbourne / Geelong, based purely on population and household numbers.

city

persons

housholds

pop.ratio

5,141,783

1,802,104

34%

4,173,248

1,497,125

27%

2,965,630

1,069,104

19%

(Rockingham/ Mandurah)

1,728,743

627,090

11%

adelaide

1,225,233

475,370

sydney (Newcastle/Central Coast/Wollongong)

MELBOURNE (Geelong)

brisbane (Gold Coast/ Sunshine Coast)

perth

*Based on Census 2011 population estimates.

Whichever way it is put to you by the franchisor, you should expect to see realistic assumptions, facts and data to support this view.

Commitment of the franchisor Many applications we receive for Territory Planning at Spectrum Analysis start with the franchisor asking us “How many territories should I have?” Our initial reply is that we do not write the Business Plan, and this type of work should be considered in an urgent sense before any territory planning can occur. We walk them through most of the steps above to come out with a logical and realistic position. In our view, once established, it should be a Board ratified decision, as it is fundamental to the future of the system. Only recently we had an inquiry on behalf of an overseas franchise wanting to come to Australia, and we were told based on their experience, they should have 300 – 360 territories. The concept was IT based, and when we delved deeper into the logic, it was a wet finger in the air approach based on the number of businesses. We can only say that (on behalf of any future franchisees), they do undertake some realistic research, and not try and convince us they know best, or we will be just making another donation to the European Bail Out fund. Once a Franchisor has undertaken reasonable research, they should be able to show you a logically thought out set of information based on realistic assumptions, with mapping to back it up.

Typical market map for Sydney territories.

Summary If you are looking at taking on a mobile franchise, ask the franchisor what research they have done, and more importantly, what assumptions they are making in working out your territory, and whether it has a reasonable chance of sustaining the business. If the answer is cloudy or blank, I suggest you look at another franchise system. Peter Buckingham is the Managing Director of Spectrum Analysis Australia Pty Ltd, the leading Geodemographic and Sales Prediction Modelling Company in Australia. He is a Certified Franchise Executive, and also a past Director and Vic / Tas President of the Institute of Management Consultants. Peter is contactable at: peterb@spectrumanalysis.com.au www.spectrumanalysis.com.au

Business Franchise Australia and New Zealand 55

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proceed or not - you have every right to ask the franchisor to convince you that what they are putting before you is reasonable. Information such as the above is available, and should probably be included in the Disclosure Document, that is an obligatory right that you have to receive.

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e x pert adv i c e

ON THE ROAD AGAIN Mobile v Fixed Site Franchises

Can you imagine Willie Nelson happily running his mobile franchise? Wind in his hair, guitar in hand… Mobile franchises can be a good option to the free spirited person who does not want to be tied down to a shopping centre environment, working nine to five. Thanks Dolly! There is an emergence of mobile franchises on the market with the demand for home services. We all want our cars repaired at home or work, our dogs washed and taken for a walk, our laundry done and our personal trainer knocking on our door. Consumers have the money to spend on home care and support like in no other decade. Mobile services mean convenience to the overworked Mums and Dad’s out there. Mobile franchises have a smaller up front capital investment and can offer greater flexibility than a full retail franchise. It may not however suit everyone being out on the road. The franchise fee in a mobile franchise may be the largest component of the upfront cost, whereas for fixed site franchises it is usually the lowest cost due to the equipment

“Mobile franchises have a smaller up front capital investment and can offer greater flexibility than a full retail franchise. It may not however suit everyone being out on the road.” Robert Toth | Partner | Marsh & Maher Lawyers

and fitout costs required. A typical fixed site franchise may require investment of anything between $600,000 to $800,000, of which the franchise fee would constitute, for example $45,000. There may be franchises that charge a fixed royalty, payable fortnightly or monthly, not tied to turnover. This can be positive if the business is successful and growing but can otherwise be a fixed cost that becomes a debt to the franchisor, irrespective of the franchisee’s revenue. Fixed site franchises generally charge a Royalty, based on the turnover of the business of between 4 to 10 per cent with a marketing fund contribution of around 2 to 5 per cent. A mobile franchise may still charge a franchise fee of $20,000 to $30,000, plus the cost of the vehicle and equipment. The vehicle and equipment can usually be leased, thus reducing the capital outlay. The interest on the lease is tax deductible to the business. Fixed site franchises generally require the franchisee to hold stock and therefore

56 Business Franchise Australia and New Zealand

require greater working capital over the first six months or year of operation. A mobile franchise may involve an investment of $50,000 to $70,000 but will it generate a basic wage and for how many hours worked? Where is the territory that is allocated? Do you have to travel long distances to service clients for a small charge? You still need to do your financial due diligence and cash flows on the business. If the numbers don’t work, then don’t commit as mobile franchises can be difficult to sell. Buying a mobile franchise or a fixed site franchise usually requires the franchisee to borrow on the equity in their home. Like any business, this carries risk. Will the business be viable? Can it provide a reasonable salary for effort to the operator? Will it provide a return on the investment over time and also build some capital value? The rise in mobile franchising has come with the increased consumer demand. Consumers have limited time and from a marketing perspective taking your business to the consumer into their home or office is a great

FE ATURE : fi x ed V ’s M o b i l e Fr anch ises way to generate work without carrying the huge overheads of a fixed site.

“We all want our cars repaired at home or work, our dogs washed and taken for a walk, our laundry done and our personal trainer knocking on our door.”

There can however be issues as to the quality of the service provided with mobile services as opposed to a fixed site business. Mobile franchisees should ensure they receive adequate upfront training upon start up. They should also ensure customer service is monitored for repeat business and that the franchisor provides ongoing training and development.

worked? A lower start up investment doesn’t mean you may be working any less hours than in a fixed site. Can you separate the business from your personal life? If things don’t go as planned it can be difficult to get out and sell a mobile franchise. There may be little goodwill and all you have to sell are the fixed assets.

Robert Toth is a Partner of Marsh &

Prospective franchisees looking for a mobile franchise still need to be cautious and do their due diligence on the Franchisor. Is it a fad, the demand for which is not sustainable? What are the expectations for hours to be

So before you hit the road or stay put, do your analysis and get expert advice from specialist franchise lawyers and advisors to limit your risk and make an informed decision before you commit.

international franchisors and franchisees).

Maher Lawyers, with over 30 years of experience in franchise law. He is an Accredited Business Law Specialist with expertise in franchising, licensing and distribution and franchise dispute resolution (acting for both 03 9604 9400 rxt@marshmaher.com.au www.marshmaher.com.au

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S na psh ot: S na p- o n To o ls

The Next Snap-on Generation

franchise had provided in career enjoyment and success to their mother and father, both Craig and Daniel decided to invest in their own, individual Snap-on franchises. Snap-on’s comprehensive start-up support included Daniel and Craig heading to Dallas, U.S.A for training before taking possession of their own shiny new mobile Snap-on showrooms, in which was a proud moment for parents Clive and Wendy. “Snap-on has been a large part of our life. Snap-on offers an organised, proven franchise model, which truly is a whole package. Snap-on understands that if franchises are happy and successful, this is a win-win, so they go the extra mile with support. So we were very supportive when Craig and Daniel chose this path. ” said Wendy Waller. For Clive, it’s been a great experience having his sons’ learn the life lessons and responsibility that comes from owning their own businesses.

Clive Waller with sons Craig and Daniel Waller

For the Waller family, Snapon Tools means more than for most. In fact the positive impact of a Snap-on career for the Wallers’ has resulted in the next generation jumping on board to continue the same path of success in the tried , true and proven Snap-on Tools Franchise system, a well-recognised brand and award winning franchise model in Australia and internationally. Clive and wife Wendy Waller moved from England to Australia in 2003 with their two young sons. After a period settling in, Clive and Wendy searched for a new career for Clive that would be a smart decision for the family. With Clive’s previous success working for Snap-on in England, the Wallers’ leapt at the chance to again invest in their future with Snap-on. They knew that a Snap-on franchise meant the backing of a large support network, the best quality tool

brand, the potential for financial rewards with hard work, plus the ability to be your own boss. All were benefits that suited Clive and Wendy perfectly. The Waller children, twins Craig and Daniel, were exposed to the Snap-on career lifestyle from an early age. With Clive on the road, plus Wendy handling the stock ordering and accounts on top of her full-time role as a nurse, Snap-on was an ingrained part of Waller family life. “For as long as I remember, Dad has been working with Snap-on. As children, Daniel and I used to jump into the truck and admire all the cool tools in the back,” said Craig. When Craig and Daniel finished school many years later, working in the automotive industry was on their career radar. After both completing diesel mechanic apprenticeships, they then considered their first move into the work force. Understanding what the family Snap-on

58 Business Franchise Australia and New Zealand

“I’ve achieved success and been enjoying a great career with Snap-on, so I felt very comfortable in recommending the Snap-on franchise model to both of my boys as they came of age. My advice was simple. You get out what you put in, and so far they are excelling in building business. Best of all they are enjoying their work and it’s great to see,” said Clive Waller. Although only a couple of years into his Snap-on franchise life, Craig Waller is relishing his chosen path. “I think there is no better company to work for. You are starting from the best place for your career by selling the best tool brand in the market. I love being out and about and building relationships with people in the trade. The financial rewards are also there if you work for them. I absolutely recommend it to others looking for a career change,” said Craig. If you are looking for a fresh start as your own boss, using a proven successful franchise system with the most successful tool brand in the world, to learn more contact or visit: 1800 810 581 www.snapontools.com.au/franchise

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Leasing the Franchise Premises:

What a Franchisee Needs to Know Unless a franchisee is operating a mobile franchise or working from home, chances are the franchise will require a lease on a physical premises. Although there is no ‘one size fits all’ approach to franchising and leasing, franchisees typically use either of the following methods to lease the premises:

landlord directly and holds the lease in its name;

Method 1: the franchisee locates the premises, negotiates the lease with the

Following, we set out some of the advantages and disadvantages of each method.

Method 2: the franchisor locates the premises, negotiates and enters into the lease, and then licenses occupation to the franchisee. The following factors will ultimately drive the leasing method (which the franchisor often decides unilaterally): • nature of the franchise system and the policies and procedures of the franchisor; • risks that each party is prepared to take; and • the level of control that a franchisor wishes to retain over the premises/site of the business.

60 Business Franchise Australia and New Zealand

The franchisee locates the premises, negotiates the lease and holds the lease. If a franchisee enters into the lease directly with a landlord, the franchisee will have direct obligations to the landlord under the lease. The franchisor will not be involved in this aspect of the franchise business operations.

Key Terms to Look For in the Lease Use of the Premises Ensure the terms of the lease permit the operation of the franchised business from the premises and complies with any aspect of the franchise agreement in this regard.

Emma Heuston | Practice Leader, Commercial Leasing | LegalVision

the franchise agreement? Ideally the same terms and options would be in both the lease and the franchise agreement.

• outgoings expenses,

Outgoings

It is also worthwhile chatting to:

Be aware of ALL costs associated with maintaining the premises, for instance, council rates, repairs or cleaning are sometimes payable in addition to rent. It’s important that the landlord provides you with an estimate of these costs so you can budget accordingly. If the premises is to be a retail premises, the landlord will have disclosure obligations under various state based retail lease legislation.

• existing tenants nearby to see what trading conditions exist and whether they are aware of plans for the area; and

As set out above, where possible, franchisees should ideally ensure the franchise agreement and lease agreement aligns with their start date, term and option to renew. Otherwise, the franchisee could either have a business with no site or a premises with no business. If the two agreements don’t end at the same time, it is possible to negotiate a clause to end the franchise agreement early or relocate to alternative premises for the remainder of the franchise agreement.

Lease Term and Options Ensure the renewal options and lease terms align with the franchise term and options. Otherwise, a costly relocation or an early end to the franchise agreement could be on the cards.

Handover Date Will the landlord allow access to the premises before the commencement date to fit out the premises (noting any franchisor requirements for fit out)?

Commencement Date When did the lease commence? Does this align with the franchise agreement?

Option to Renew Do any lease options align with options in

It’s also important to consider whether the length of the lease will allow a franchisee to recover costs of investment in the business and premises. In other words, the period of the lease and franchise agreement should be long enough to obtain sufficient profits to cover the costly fit out and start up costs. Committing to a lease is a serious responsibility, and if the franchised business does not work out as planned, the franchisee must answer to both the landlord and the franchisor. As such, it is crucial for prospective franchisees to obtain independent legal advice in relation to the franchise agreement and lease documents to ensure that they understand the key commercial issues such as: • plans for redevelopment that may exist at the time of signing,

• personal guarantees, and • lease make good expenses.

• existing franchisees in the franchise system to determine if they are happy with the franchise.

The franchisor locates the premises, negotiates and enters into the lease, and licenses occupation to the franchisee. Here, the franchisor and the landlord enter into the lease in a separate transaction which the franchisee is not involved in. The franchisor then grants the franchisee a ‘licence to occupy’ the premises. The purpose of the licence is to place the franchisee in the shoes of the franchisor as if they were the tenant under the lease. The franchisee remains responsible for paying rent, the bank guarantee or security deposit as well as obtaining insurance. Usually, the franchisee is not involved in negotiating the terms of the lease and must simply accept the lease. It’s often ‘take it or leave it’ and the franchisee usually only has the chance to make amendments to the licence to occupy. Because the franchisor still exercises control of the premises, it’s easier to remove a franchisee for breaching the franchise agreement or lease and replace them with a new franchisee. This means that if a dispute arises in relation to the franchise agreement, the franchisee cannot merely ‘rebrand’ if the franchise agreement is terminated. There are advantages with a franchisor often having greater negotiating power to obtain more favourable lease terms.

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“Committing to a lease is a serious responsibility, and if the franchised business does not work out as planned, the franchisee must answer to both the landlord and the franchisor.”

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e x pert adv i c e

However, we still encourage franchisees to become involved in this process if possible and review the commercial lease and suggest amendments where possible. If, as a franchisee, you find yourself in this situation, ask to review or draft documents for input to ensure that the terms are balanced — this is especially important if you are the one paying rent each month and are responsible for the make good of the premises at the end of the lease!

Lease Incentive It’s common for the landlord to provide a lease incentive to entice the tenant to lease the premises. For instance, a cash-payment to assist with fit-out or a rent-free period. In this situation, the licence to occupy and any other associated documentation must be very clear as to who will receive this benefit. For example, the franchisor should not retain it and then expect a franchisee to fit out the shop without the benefit of the cash payment. Franchisees should, therefore, ask the franchisor whether there was any lease incentive and obtain a copy of any Fit Out

“It’s common for the landlord to provide a lease incentive to entice the tenant to lease the premises. For instance, a cashpayment to assist with fit-out or a rent-free period.” Deed along with a copy of the lease. Franchisees should also pay particular attention to the lease terms. For instance, the franchisor may include a term that says if a tenant leaves the premises or assigns the lease within a period, they must pay back the rental incentive (or part of it) to the landlord. This is known as a ‘claw-back’ period, and franchisees should ensure they are not caught by such clauses.

Costs The franchisee generally pays the franchisor’s legal fees. However, where the leased premises are to be a retail premises, the franchisee should be wary of paying the lessor’s legal fees to prepare and enter into a lease. The landlord cannot usually recover these fees under statebased retail lease legislation (unless in South Australia). In addition to paying rent, franchisees should also investigate the costs of any

62 Business Franchise Australia and New Zealand

premises security deposit, upfront rent, fit out, and other business establishment costs to better budget for their franchise.

Key Takeaways When buying a franchise, it’s easy to overlook the leasing aspect of the franchise opportunity. However, it’s an important piece of the puzzle that franchisees should not ignore. Seeking independent professional advice (legal, accounting and business) is a must to help identify and address any pitfalls before entering into a transaction. Emma is the Practice Leader in LegalVision’s Commercial Leasing team. Emma has been practising law for 17 years with a focus on retail, commercial and industrial leasing and franchise law. LegalVision is a market disruptor in the commercial legal services industry and has assisted more than 50,000 businesses. emma.heuston@legalvision.com.au www.legalvision.com.au

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Networking Mastery

Building connections that matter

64 Business Franchise Australia and New Zealand

Networking is essential for business growth and personal success.

“Choose to network wisely, building a circle of influence that allows transformational connections to be nurtured and business growth opportunities to be fostered.”

Yet the adage “it’s not what you know but 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. 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.

Janine Garner | CEO | LBDGroup

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

Momentum, however, starts with a significantly smaller circle of influence. It’s about engaging your personal network on a deeper level, putting you right in the middle of a network that connects you to people and information that matters for your growth and personal success. It’s about being small, strategic and smart and ensuring you have these key people to support you: • Promoter – your personal champion and inspiration • Pit Crew – who keep you on track and nurture you

Here are five key ways to master the art of building a network that works.

• Teacher – who expand your knowledge and wisdom and push you to know more every day

1) Get Clear On YOU

• Butt-kicker – who hold you accountable for your actions and decisions.

First of all take ownership and get clear on your goals and dreams so you can make the right decisions and meet the right people to take you there. It’s about: • understanding your values so you can consistently walk your talk,

3) First Impressions Do Count

• identifying your strengths so you can share them, • owning your weaknesses so you can seek help on them, and • being yourself so you can be authentic and true. When you get clear on ‘You’ and network with conviction, opportunities are created, value is exchanged, influence is increased and connections become transformational.

2) 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

someone, engaging in conversation and exchanging value, then you must make sure your words align with your actions. Your ability to nurture your network, to leverage conversations, to constantly give back and deliver will build the relationship over time.

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 sub-groups and tribes.

The importance of making a first impression cannot be overestimated, because first impressions influence later impressions. James Uleman, a professor of psychology at New York University explains, “You don’t get a second chance to make a first impression. In spite of the congeniality of many professional gatherings, judgements are being made and impressions are being formed all the time”. Whether we like it or not, appearance is our first filter – whether in person or online. Everything on the outside contributes to others’ impression of you. So make it a good one and take control.

4) Become An Action Taker

If you say you are going to do something, follow through and do it – this is a nonnegotiable when it comes to networking mastery. When you have spent time with

5) Exchange Value

Value exchange requires trust, faith and the ability to truly engage in conversation, to be switched in to the needs of others and to be curious about how you can help. The cross-fertilisation of intelligence and sharing of skills and knowledge means 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. When you learn to share openly with others with no expectation of anything in return, then everyone benefits. It’s the two-way street of powerful networking.

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, keynote speaker and author. She is a partner at Thought Leaders Global, which helps clever people to become commercially smart, and the founder and CEO of the LBDGroup, a networking community that connects like-minded women together to help them achieve extraordinary growth. She is the author of two books - 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 65

THE ENERGY ALLIANCE

Energy costs are soaring! DOES YOUR FRANCHISE SYSTEM HAVE A PROPER ENERGY MANAGEMENT SYSTEM?

some of the largest franchise systems in Australia over the past 15 years, and are experts in managing this area of expense.

Monitoring your Energy Usage

Spiralling electricity and gas costs over the past year have created serious concerns for franchise systems and franchisees. Energy is now one of the prime costs for a franchise business. A greater concern is the fact that many franchise systems and franchisees do not have a proper energy management plan â&#x20AC;&#x201C; or future strategy - in place. No longer is price the only driver that a franchise system should consider in the energy market. The amount of energy a business consumes now holds just as high importance as the actual price itself

SO WHAT ARE THE STEPS TO IMPLEMENT YOUR FRANCHISE ENERGY MANAGEMENT PLAN?

Buying Electricity & Gas for your Franchise System

Electricity and gas are commodity markets, and as such, are substantially LQÄ&#x2021;XHQFHG E\ PDQ\ IDFWRUV ERWK LQWHUQDO and external. For example, a weather catastrophe such as South Australia experienced in 2016 can send the market soaring by 25% - 50% overnight. Having a professionally organised, group buying strategy for your franchise system is vital to keep this rising expense under control. The Energy Alliance have organised â&#x20AC;&#x153;group energy purchasingâ&#x20AC;? for

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THE BOTTOM LINE At the end of the day having an effective Energy Management System in place for your franchise system will create greater SURÄ&#x2020;WDELOLW\ IRU IUDQFKLVHHV ĂĽ 7KH (QHUJ\ Alliance has been doing this for Franchise Systems for the past 15 years. Craig Jobson | CEO | The Energy Alliance For more information go to energyalliance.net.au or call us on (03) 9872 6869

We take the pressure off your business & manage all your energy needs We negotiate electricity and gas deals for some of the largest franchise groups in Australia. We also provide metering services to help understand and track how you use your energy. Our Target 40 program assists businesses to reduce their reliance on grid power by up to 40%. We offer several Solar options including one with no cost installation, LED lighting, Battery Storage, Power Factor Correction, Voltage Optimisation.

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Delightful Innovation

Since joining the business 23 years ago, General Manager for Operations Gabby Kelly has witnessed a lot of changes in Bakers Delight, a family owned franchise with over 700 bakeries in four countries. “Once you get into the business and it gets into your blood, it’s hard to imagine doing anything else.” The number of multi-site franchise owners says a lot about a franchise brand and at Bakers Delight, over 40 per cent of the network own more than one store!

Gabby Kelly, General Manager for Operations

Technology, innovation, changes in consumer shopping habits, and expectations within the market have been embraced by the business. But their fundamental core values, and what makes Bakers Delight stand out from the crowd, have not deviated over the last 36 years, staying true to the mantra ‘to delight every customer with beautiful, delightful bread’. Bakers Delight have recently celebrated their most successful Easter campaign to date, after introducing innovative strategies and new products into the stores. Starting her career within one of the stores, Gabby moved into the Bakers Delight corporate office in 2000 and discovered her true passion and joy, looking after the company owned portfolio. In 2013 she moved into her role of General Manager for Operations where she assists the company run over 580 bakeries across Australia, as well as New Zealand. Each Bakers Delight territory has its own Regional Manager to oversee that region, and they in turn have a support team of Area Managers reporting to them. “Each franchisee gets a lot of personalised contact and support,” says Gabby, “ensuring

that the communication channels between the franchisor and the franchisee are always open. We also have a large National Support office, consisting of Marketing, Training, Finance, and Human Resource teams amongst others, all there and designed to support and interact with our franchisees and partners.” Gabby continues, “We support our franchisees every step of the way. We’ve invested heavily in innovation for our franchisees and also their staff within the bakeries, which is important to make sure we’re staying on the front foot with regard to business opportunities.” Taking a different strategic approach to the 2017 Easter campaign, Gabby says, “As well as launching new products, we changed the way we implemented and rolled out the Easter programme. We completed a number of large national activation campaigns which included mass-sampling and giveaways, to get the product into people’s mouths and hands. As a result of this innovation, we were very pleased to see that we were over $4 million up in sales compared to the previous year.”

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“What’s quite unique about Bakers Delight is that we have evolved a multitude of entry points for new franchisees,” Gabby explains. “Whether it’s through the external market, developing talents through our internal programmes, or our more junior level ‘kickstart’ program, there’s an opportunity to get into this business. If you’ve got hunger, passion, and a community focus, there’s a pathway and career for you with Bakers Delight. “Once you get into the business and it gets into your blood, it’s hard to imagine doing anything else. It’s that perfect balance of a family business, which has that sense of community and connection, but it’s also big enough where we can be leading and driving the market. “People look for stability and security and want a large level of autonomy in what they are doing and Bakers Delight can give them the lifestyle and opportunity that they are looking for,” Gabby says. Bakers Delight is looking for people who share their values, are passionate, motivated, and have a strong work ethic. If this sounds like you, contact the Franchise Recruitment team now to learn more. 1300 309 759 www.bakersdelight.com.au/franchise

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Managing Mental Health at Work

Your Legal Responsibilities The majority of employees with mental health problems successfully manage their illness without it impacting on their work, and it is important to remember that people affected by mental illness have the same rights and responsibilities, as other employees. A stressful work environment or a workplace incident, can however cause considerable anxiety and aggravate or contribute to the

manifestation of mental illness. Employers and managers are obliged to take appropriate steps to eliminate and minimise health and safety risks in the workplace. In terms of mental illness, as an employer or manager you are compelled to: â&#x20AC;˘ identify workplace practices, actions or incidents which may cause or contribute to the mental illness â&#x20AC;˘ take actions to eliminate or minimise these risks. The legal obligations of employers in relation to the management of mental illness in the workplace are as follows: 1. Occupational Health and Safety (OHS) legislation requires you to ensure your workplace is safe and healthy for all employees and does not cause ill health

70 Business Franchise Australia and New Zealand

or aggravate existing conditions. It is important to objectively assess the actual OHS risk of a worker with mental illness. Proceed as one would with any Risk Assessment: a. determine the degree of risk and take steps to minimise or prevent it b. take action to eliminate or manage the risk as appropriate. 2. Discrimination in the workplace against someone with a mental illness (or other disability) is unlawful under the Disability Discrimination Act 1992. You are also required to make reasonable adjustments in the workplace, to meet the needs of workers with mental illness. 3. The Privacy Act 1988, requires you to ensure personal information about

a worker’s mental health status is not disclosed to anyone without the affected employees’ consent. The only exceptions may be:

“It is important to remember that people affected by mental illness have the same rights and responsibilities, as other employees.”

a. use of the information is necessary to prevent or lessen a serious and imminent threat to the life or health of the individual concerned or another person, or b. use of the information is required or authorised by law. You are obliged to eliminate, isolate or lessen health and safety risks, while taking care to ensure the privacy of employees is upheld. Under the Fair Work Act 2009, it is essential to ensure that unfavourable action is not taken against a worker because of their mental illness. An adverse action can include dismissal, injuring the employee, altering the position of the employee to the employees’ disadvantage, refusing to employ a prospective employee or discriminating against an employee with mental illness. While employers have several legal obligations, they do have the right to ask certain questions about an employee or potential employee’s mental health status, if obtaining more information about a condition is legitimate, necessary and desirable. This additional information may be: • to determine whether the person can perform the inherent requirements of the job; • to identify if any reasonable adjustments may be needed, either in the selection and recruitment process or in the work environment; • to establish facts for entitlements such as sick leave, superannuation, workers’ compensation and other insurance; • If you do ask your employee for information, you must maintain confidentiality and protect his or her right to privacy. This means protecting the information against improper access and disclosure. In turn, all employees (including those with mental illness) are legally obliged to: • take reasonable care for their own health and safety • take reasonable care that their acts and omissions do not adversely affect the health or safety of others • cooperate with any reasonable instructions to ensure workplace health and safety.

Clarification The law defines discrimination to include both direct and indirect discrimination. It

Janine Nicholson

is important to note that a failure to make reasonable adjustments for a worker with disability, including a worker with mental illness, may constitute direct or indirect discrimination.

An adjustment will be a ‘reasonable adjustment’ unless it would cause an employer an ‘unjustifiable hardship’ to make the adjustment.

Direct discrimination occurs in employment where: a worker is treated less favourably by an employer than someone without disability. For example, refusing to employ or dismissing someone because they have a mental illness. or not allowing someone with depression to work part-time where this arrangement has been sought as an adjustment for the worker’s mental illness, may be direct discrimination. Indirect discrimination occurs in employment where:

Harassment is defined as an action taken in relation to a person’s disability that is likely to humiliate, offend, intimidate or distress the person. The behaviour does not have to be repeated or ongoing to be harassment. Inherent requirements of a job are those requirements, tasks or skills that are essential to the position. It is not unlawful discrimination to terminate a worker’s employment where they cannot perform the inherent requirements of the job after reasonable adjustments have been made. However the employer may still have legal obligations under the contract of employment, award or agreement or other laws.

an employer sets a requirement or condition that applies generally, but an employee cannot comply with it because of their disability or they are disadvantaged. For example, it may be indirect discrimination to require a worker with mental illness to start work at 7am, when the effect of their medication means they are not alert in the early morning.

In consultation with experts and clients, myosh have developed the Wellbeing platform to Manage Workplace Mental Health.

• Improve Productivity

It may be indirect discrimination to expect that employees must work an 8 hour shift, but not allow a worker with mental illness to take additional breaks where required, to be able to complete their shift.

• Promote a positive working environment

Reasonable adjustments are changes which can be made to a job, to enable a worker to perform their duties more effectively in the workplace. They should be in response to the particular needs or issues of a worker and can include: • offering flexible working arrangements (e.g. job rotation, variable start and finish times); • changing some aspects of the job or work tasks (e.g. breaking down a large, demanding project into a number of smaller tasks); • changing the workplace or work area (e.g. moving a worker to a quieter work area); • purchasing or modifying equipment.

The cloud based solution provides managers and employees with resources and strategies to: • Reduce Risk

• Raise awareness and reduce stigma Join a webinar to learn more about Mental Health Management at Work and the Wellbeing Platform. http://myosh.com/wellbeing/ Janine Nicholson is a free-lance writer who researches and reports on topics relating to Workplace Health, Safety and Environmental issues. A BSc Honours Degree in Life Sciences formed the foundation for a 27 year career spanning Analytical Laboratories, Hazardous Waste Management, Industrial Health and Safety, Environmental Consulting and Auditing. References Australian Human Rights Commission https://www.humanrights.gov.au/publications/2010workers-mental-illness-practical-guide-managers/ appendix-knowing-law

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FA ST AP AS TA .C OM.A U

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COMMUNICATE CLEARLY WITH YOUR FRANCHISE with our franchise management software To arrange a demo, email us at sales@franchiseinfinity.com. Visit www.franchiseinfinity.com for more information.

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Franchising & Business Opportunities Expo’S 2017: Brisbane: 22-23 July

Brisbane Convention & Exhibition Centre, South Bank

Melbourne: 26-27 August

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TO THE 2017

FRANCHISING & BUSINESS OPPORTUNITIES EXPO’S FOR BUSINESS FRANCHISE READERS!

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

www.franchisingexpo.com.au Business Franchise Australia and New Zealand 75

pr o file : Banj o’s bak ery caf e

BANJO’S: The Born & Bread Australian! A speciality bakery cafe retailer, we have over 38 bakeries across Australia and more than 30 years’ experience in franchising. Founded on the belief that people would enjoy a bakery café concept, with great coffee, fresh bread and plenty of variety in a welcoming dine-in environment, through hard work Banjo’s has grown from a single store to a network of stores across Australia. Our focus is on product, the retail experience and operational excellence. Bread and bakery goods are made fresh each day using traditional baking methods whilst using premium ingredients where possible from Australian farmers and growers. Committed to our franchisees and customers, our innovative product range is constantly reviewed to meet their needs. The constant evolution of the Banjo’s brand and commitment to customer satisfaction has seen Banjo’s grow into a market leader.

BORN & BREAD AUSTRALIAN Popular throughout Australia with locals and visitors alike, our mission is to provide great wholesome food and provide exceptional customer service within a warm authentic environment and to support the local community. The bakery café leader in Australia, our success is in the baking – we consistently make the best quality products and our customers come back again and again. Banjo’s stores are an integral part of the community in all locations throughout Tasmania, Victoria, New South Wales and

Queensland and a family favourite. We also actively support schools, sporting groups, charities and organisations in each local area.

BENEFITS OF OWNING A BANJO’S FRANCHISE • Access to Banjo’s specialised systems • Be in business for yourself - but not by yourself • Be part of a successful franchise operation • Buying power with key suppliers • Marketing, Operational, HR and IT support • Hands on business support and advice • Continual product and systems development

required as a full training program is provided. Banjo’s initial training program will ensure you learn about all aspects of the business. The next step towards successfully running the business is putting all that you have learned in training into practice. Banjo’s provide trainers and mentors who have proven experience in their specialist areas. You will learn about production, rostering, IT, human resources, training, financial management, occupational health and safety, marketing and administration and much, much more. A specific store launch marketing campaign is managed through head office alongside an ongoing integrated marketing strategy to promote the brand throughout all relevant markets.

• Ongoing training and development • Financing available.

EXCITING OPPORTUNITIES

RECIPE FOR SUCCESS

We currently have sites available in the following locations.

Banjo’s stores are strategically located in shopping centres and independent shopping zones, with drive thru sites ready to be released nationally. All our stores are unique - but are created with consistent themes and styling. Stores are designed to be a perfect fit with the local environment and the consumer demographic. Banjo’s are constantly on the lookout for potential sites and use a variety of strategies to assist you in selecting the right site, including demographics, locating allied traders and market surveys.

QLD: Gold Coast, Sunshine Coast, Brisbane, Cairns, Dalby, Ipswich, Mackay, Maryborough, Roma, Toowoomba, Townsville, Yeppoon.

VIC: Melbourne, Altona, Daylesford, Mildura, Sebastopol, Stawell, Traralgon, Tentham, Truganina, Warragul, Winchelsea. NSW: Sydney, Newcastle, Forbes, Narradarra, Tamworth.

TRAINING & SUPPORT

For more information about joining this market leading franchise, contact:

With competitive investment levels, no qualifications or previous experience is

franchising@banjos.com.au www.banjos.com.au

76 Business Franchise Australia and New Zealand

Busi

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Why the Vulnerable Workers Bill will add even

more red tape to the franchise industry

The retail industry in Australia accounts for a whopping 4.1 per cent GDP, and more than 10.7 per cent of Australia’s workforce, making it one of the most significant contributors to the Australian economy. It’s one of the highest employers of young people – more than a quarter of employed people aged between 15 and 24 work across the almost 140,000 retail businesses in this country. Among these are tens of thousands of franchisees, the majority of whom are already overburdened by red tape and compliance issues, however, there’s a very real danger that’s about to worsen.

As we all know, there’ve been a string of scandals in the franchise industry – 7-Eleven, Caltex, Domino’s Pizza and Pizza Hut have deservedly been outed for the serious underpayment of staff. The 7-Eleven saga has probably gained the most attention after the Fair Work Commission handed it record penalties - more than $400,000 in one instance - for deliberate underpayments which are now in the 100s of millions of dollars. The exploitation of workers is a serious issue and must be addressed with swift and hefty penalties. These cases were extreme and shocking examples of how the system can go wrong, however, none of them is an accurate reflection of this long-standing, successful model.

The ‘Protecting Vulnerable Workers’ Bill On 1 March this year, the Fair Work

78 Business Franchise Australia and New Zealand

(Protecting Vulnerable Workers) Bill 2017 (Bill) was introduced in Federal Parliament to amend the Fair Work Act 2009 (Cth) (FW Act) in an effort to make franchisors more responsible for the actions of franchisees, especially in relation to underpayment of employees. As the Director of Legal Services at the National Retail Association (NRA), an industry association representing thousands of these retailers of all sizes, we have expressed serious concerns about the Bill which we believe unfairly penalises everyone in the franchise industry for the sins of an unscrupulous few.

What is it? The Bill is effectively seeking to hold franchisors and holding companies as guarantors over the employment and payroll practices of separate legal entities and, in the case of franchisees, unrelated third parties.

The Bill seeks to: • Introduce fines of up to $54,000 for every instance of underpayment by a franchisee, and similarly, increase the penalty for serious breaches for a franchisee from $10,800 to $108,000, and for a body corporate franchisee, from $54,000 to $540,000; • hold franchisors and holding companies responsible for certain breaches by their franchisees or subsidiaries, where they knew or should have reasonably known but failed to take reasonable steps to prevent them;

“We believe the Bill will add significant costs to those doing the right thing, deter entrepreneurs from considering franchising as an option, and erode the critical relationships between franchisees and franchisors.” Troy Wild | Deputy CEO & Director of Legal Services | National Retail Association | Principal Lawyer | NRA Legal

• clarify the prohibition on employers unreasonably requiring their employees to make payments in relation to the performance of work;

The ‘reasonable steps’ are, in fact, unreasonably onerous on franchisors and holding companies, both in terms of costs and business confidence (eroding complex business relationships between franchisees and franchisors), with the extra costs inevitably going to be passed down to franchisees.

• provide the Fair Work Ombudsman (FWO) with evidence-gathering powers similar to those available to corporate regulators such as the Australian Securities and Investment Commission and the Australian Competition and Consumer Commission; and

Imposing an expectation of this kind is not sustainable or affordable for many businesses - many retailers and fast food entities that would be captured by the Bill in its current form simply do not have the financial or personnel resources for a finance or audit division.

• prohibit the hindering or obstructing of the FWO and or an inspector in the performance or his or her functions or powers, or the giving of false or misleading information or documents.

In some cases, retailers have informed us that they would be required to reroute funding from core services focused on keeping businesses open or reduce staff levels to provide an auditing and other ‘watchdog’ type services (i.e. taking reasonable steps to prevent a contravention by a separate legal entity within their franchise or company framework).

What will it mean for franchise groups? We believe the Bill will add significant costs to those doing the right thing, deter entrepreneurs from considering franchising as an option, and erode the critical relationships between franchisees and franchisors. It’s not enough that a franchisor didn’t know about a significant breach, it’s enough simply that they should have known about it, and that the franchisor should have taken ‘reasonable steps’ to prevent this kind of behaviour.

These activities, in our view, will not grow business, innovate or support market competitiveness. The NRA made formal submissions to the Senate Inquiry stating our opposition to the amendments as proposed under the Bill, and held several emergency meetings with the Department, however, with bipartisan support, it’s likely the Bill will become legislated later this year.

Some of the issues we have flagged include: • The current legislation is sufficient to cover franchise entities and holding companies (that are the subject of the Bill), for the issues that came to light in these investigations; • Terminology that is open to interpretation needs to be amended; • The Bill imposes a primary liability on a responsible franchisor or holding company for a contravention by a franchisee or subsidiary entity irrespective of whether an order has been sought or made against the franchisee or subsidiary, but in the vast majority of cases the franchisor is removed from the employment practices of its franchisees; • A prosecution would not need to prove the responsible franchisor (or holding company) knew exactly who was being underpaid and on what basis; • The reference to “auditing of companies in the network” in the Explanatory Memorandum indicates that this would be a necessary reasonable step for franchisors and holding companies to take to ensure compliance with the FW Act

How will it work in practice? The real concern coming out of the 7-Eleven inquiry report is the lack of power the FWO has when it comes to gathering direct

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“Unlike some regulators, the FWO doesn’t actually have the capacity to require or compel anyone to answer questions on the record in relation to alleged contraventions of workplace laws.” evidence in relation to an accessory’s role in or knowledge of the business and the facts comprising a contravention. The 7-Eleven inquiry flagged widespread lack of cooperation, and the creation of records that concealed rather than established contravening conduct – limiting the FWC’s capacity to investigate and establish accessorial liability beyond the direct employer and franchisee level. The inquiry also highlighted that many witnesses were unwilling to talk on the record or give evidence on the conduct of others. Unlike some regulators, the FWO doesn’t actually have the capacity to require or compel anyone to answer questions on the record in relation to alleged contraventions of workplace laws. For this reason, we are supportive of the FWO being given further and better powers to obtain direct evidence in relation to an accessory’s role in, or knowledge of, these types of breaches, with the accompanying immunity that generally flows to a witness.

The long and short of it We absolutely support the prosecution of those who are doing the wrong thing, however, the Bill, despite its best intentions, is unnecessarily holding to account the entire franchising industry for the acts of a small number of rogue entitles, in circumstances where the FW Act already has adequate protections in place (with only some modifications needed to extend the FWO’s powers to investigate suspected contraventions).

competitive landscape, soaring wages and unsustainable leasing costs, more red tape and costs imposts are not the answer.

Should the Bill become legislation (which is highly likely) those franchisors and holding companies captured by the Bill will need to take reasonable and proactive steps to avoid liability, in areas such as education/awareness, non-compliance reporting and auditing. Such measures will require a review and likely amendment of existing franchise agreements and policy – which of course all comes at a cost and at a time when the franchising industry can least afford to take on extra costs and regulatory burden.

Troy Wild is the Deputy CEO of the National Retail Association and Director of NRA Legal. He has over 14 years’ experience in Employment, Industrial Relations and Work Health & Safety Law to the NRA Legal team, as well as 12 years as a NSW police detective. He has represented a wide range of clients throughout Australia and abroad, including national retailers, multinational corporations, energy and resources industries, small business, and member associations.

And when there are big retailers falling over in this country right now amid an increasingly

The National Retail Association (NRA) is Australia’s largest and most representative

80 Business Franchise Australia and New Zealand

retail industry organisation. For almost 100 years, the NRA has represented the interests of the retail, fast food and broader service sector, delivering critical legal information, government representation, professional training and signature events. NRA offers an all-in-one solution for retailers with decades of retail-specific knowledge and experience. To find out more about the NRA or NRA Legal, contact: 1800 RETAIL www.nra.net.au

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A Triumph Through Time

Australian favourite and award winning national franchise Clark Rubber has a proud retail history spanning over 70 years. With over 64 stores across the country, two individual franchise models, and a mobile pool service franchise, Clark Rubber offers many great opportunities to Australian entrepreneurs. Two Aussie men, Charlesworth and Clark, started the business back in 1946, and it grew so quickly it was listen on the Australian Stock Exchange in just a few years. In 1982, Clark Rubber was bought by the Adsteam Group, who later sold the name and logo to Vita Pacific in 1994. Vita Pacific, a wholly owned subsidiary of Pacific Dunlop, then closed the network of retail stores. Then Chris Malcolm, a veteran of Australian retailing, stepped in. Chris licensed the Clark

Rubber brand from Vita Pacific, and decided 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 Clark Rubber store had opened, and the brand was once again one of the best recognised in Australian retail. In 2000, Chris Malcolm bought the Clark Rubber brand from Pacific Dunlop. The store network continued to grow and, in 2003, 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’. In 2006, Clark Rubber was awarded the Franchise Council of Australia’s highest honour, Franchisor of the year.

Benefits as Big as the Business Today, Clark Rubber franchisees are still enjoying the support from Clark Rubber, giving them the knowledge and skills they need, as well as ensuring that they have

82 Business Franchise Australia and New Zealand

tangible business tools and support needed to help them run their business. The dedicated merchandise team works closely with suppliers to build product ranges across key categories of pools, foam and rubber. In addition, they source products, develop promotional offers and negotiate terms and pricing, making sure that products meets the needs of our customers and the market. Marketing and advertising are key to the ongoing success of any retail business. Clark Rubber invests in brand development and national advertising each year to ensure continuing drive to customers and business to franchisees. They also work closely with all Clark Rubber franchisees to develop and execute effective local area marketing at a store level. Franchisees also receive the IT infrastructure required to manage every aspect of business, including stock control, POS, financial reporting and benchmarking. The Clark Rubber IT helpdesk is even on hand to assist with any system related issues.

All Clark Rubber franchisees maintain an ongoing relationship with a dedicated Regional Sales Manager. They spend time in each store, working with each franchisee to achieve their goals, and provide regular feedback and support on all aspects of store performance.

Flexibility meets Reputation 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. Including a unique product mix of pools, foam and rubber, these stores provide strong customer appeal and income potential across all seasons. Clark Rubber stores also include their own mobile pool van, providing you with the opportunity to build a strong local market. Leveraging the Clark Rubber brand and reputation in pools, the Clark Pool and Spa franchise model has been developed to allow for a complete focus on pools and spas sales and service. Being a part of the national franchise network, you will also benefit from the great advantages of group buying, marketing, and support. 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, the commitment to customer service and providing our customers with solutions helps to differentiate the business in the market and with their customers. Coupled together with their extensive product range, you have the opportunity to build a strong business and retail destination within your local market.

Supporting Your Success All of these franchise models benefit from being a part of a national franchise group. With a network of support and opportunities for growth, the Clark Rubber system provides all the help a franchisee could need. • Initial training programs, ongoing support, and business development across all areas of the business means 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 consistent market presence. • Products are sourced to ensure the best product mix to meet customer demand and changing trends within the market. • The online shop is designed to drive business direct to your store.

Franchising for the Future 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 – 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 via: 03 8727 9999 dirk.heinert@clarkrubber.com.au www.clarkrubber.com.au

Business Franchise Australia and New Zealand 83

sna psh ot: B eg i n B r i g h t

begin your bright future today! Looking for a business opportunity in a fast growth industry with a fast growth company? Begin Bright school readiness and primary tutoring centres could be for you! Begin Bright school readiness and primary tutoring franchise was started in 2008. After the success of licencing the program, Begin Bright has successfully converted to a franchise model and has now grown to over 30 centres throughout Australia. With large growth plans, Begin Bright was

acquired by international education business, Cognition Education Group in July 2016. Cognition Education brings an additional expertise to support the accelerated growth plans of Begin Bright, both nationally and internationally. Begin Bright is now looking for investors to join the team and partner with a young, innovative and rapidly growing franchise system. Be part of an award-winning primary tutoring franchise that’s committed to educating our next generation. You will be supported by a highly experienced management team and have access to a range of support services and latest technology needed to grow your business. All of Begin Bright’s systems are located on an online portal, making it easy and convenient for owners to access the information they need anytime and anywhere.

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Begin Bright Franchisees are also provided with: • consistent and supportive training; • Regular opportunities to meet other franchisees and collaborate at state conferences; • a dedicated Field Support Manager to ensure that franchisees are supported and can excel in their business; and • a newly developed centralised online booking system, making booking easy and straight forward for you and your customers. To kick-start your future by learning more about becoming a Begin Bright Franchisee, contact us today. 1300 234 462 franchise@beginbright.com.au

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. Business Franchise Australia and New Zealand 85

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

What’s your dream business? Whether it’s a café, a salon, accounting, or maybe health and fitness, there are plenty of business ideas to motivate and inspire at the Franchising & Business Opportunities Expo.

you are looking at,” she says. “The Franchising Expo is a great place to start, or dig deeper into a concept you’re considering.”

Being held in Brisbane this July and in Melbourne in August, the Franchising Expo will showcase a wide range of local, national and multinational franchises, and also host a variety of business experts and support organisations – such as the Franchise Council of Australia (FCA).

People dreaming of their own café, restaurant or takeaway outlet will find many ideas to inspire them, with brands such as Lenard’s, Bakers Delight, Fogo Brazilia, Donut King, Michel’s Patisserie, Brumby’s, Crust Gourmet Pizza, Papa Johns, Juiced Life, Shingle Inn, Gloria Jean’s, Ferguson Plarre Bakehouses, Spudbar, Lava Coffee and Banjo’s Bakery Café exhibiting at one or both shows.

“Some people find starting their own business is a bit overwhelming, but it doesn’t have to be,” says Exhibition Manager Fiona Stacey. “It’s a matter of finding the right people to help you on your journey – be they franchisors, lawyers, consultants, accountants or other advisors. All those people are available at the Expo, and more than willing to answer all your questions.” Stacey adds that entering a franchise agreement is a serious business, and it should not be undertaken lightly. “It is crucial that you do extensive research on any franchise

The Melbourne Franchising & Business Opportunities Expo in August is traditionally the biggest of the year, and will once again be a highlight of the Victorian Small Business Festival. Meanwhile there will be plenty of buzz in Brisbane this July, with new concepts to see and motivating presentations from seminar speakers.

New player Franchise Retail Brands will be showcasing their fast-growing franchises Sabatini’s, 1582 Coffee, Dessert House, Crave Ice Creamery, Hombre Street Food and New York Slice at both shows, while success stories from the Craveable Brands stable – Red Rooster, Oporto and Chicken Treat – will be exhibiting in Brisbane for the first time. In addition to meeting the people behind the brands, visitors find great benefits in attending the free seminars.

See experts such as Poolwerx’s CEO John O’Brien at the free seminars.

86 Business Franchise Australia and New Zealand

“The seminars are an important feature,” Stacey explains. “We aim for a broad range of speakers and topics, with general overviews on the benefits of franchising as well as more detailed topics such as legal and financial issues.” While the internet is a great way to research different opportunities, Stacey believes nothing can replace a real person explaining their business to you. “And besides, a lot of people find at the Expo they come across franchises they never knew existed!” For more information and a seminar program, go to www.franchisingexpo.com.au. If you are interested in exhibiting, contact Fiona Stacey on 03 9999 5464 or email Fiona@specialisedevents.com.au

Brisbane 22-23 July at Brisbane Convention & Exhibition Centre Melbourne 26-27 August at Melbourne Exhibition Centre Reader offer: register for FREE at franchisingexpo.com.au with promo code BFM.

It’s important to research and find the right people who can help you on your franchising journey.

N ational FR A N C H I S e convention 2017

National franchise convention 2017 Keynote speakers Keynote speakers sharing their inspiration and expertise at NFC17 will include:

RAY TITUS (USA) Founder & CEO - United Franchise Group

NATALIE BRENNAN FCA - Franchise Woman Of The Year 2016 Head of Corporate Brand Support FoodCo, Natalie started her career in the Franchise sector at almost 15 years old; now some three decades later she’s still passionate about franchising and paving the way for other women in this sector. Natalie spent the first 10 years of her career in Operational Training roles with multi-unit operations including Collins Foods, Power House Hotels and the Billabong Group. She has since trained thousands of people, leading, mentoring and inspiring along the way.

Ray Titus is the CEO of United Franchise Group and its affiliated companies. Mr. Titus is a life-long entrepreneur who began his career with his father, franchising legend Roy Titus, and went on to develop a group of successful brands and franchise development services. The company has over 1,400 franchisees in more than 80 countries with the brands.

DR HUGH BRADLOW

STEVE SIMPSON

Chief Scientist - Telstra

International speaker, Author and Consultant – UGRs

Dr Bradlow is President of the Australian Academy of Technology and Engineering, and Chief Scientist at Telstra Corporation. In the latter role, he acts as a “forward scout” looking at the longer-term technology directions and technology disruption that will impact Telstra and its customers.

Steve Simpson is an international speaker, consultant and author. Described by UK based e-Customer Service World as ‘Australia’s leading corporate culture authority’, Steve has created the concept of UGRs® which is receiving global acclaim as a tool to understand and improve organisational culture.

Prior to becoming Chief Scientist, he was Chief Technology Officer and Head of Innovation at Telstra, responsible for the introduction of new technologies into Telstra’s business.

The keynote speaking program will be supported by franchisor expert concurrent streams and in-depth round-table sessions.

BOOK YOUR EARLY BIRD NFC17 TICKETS NOW

ACCOMMODATION

Early bird tickets will only be available for a limited time. If you are planning on multiple people attending the convention this year, make sure you register early, so you can save even more.

Book your accommodation at RACV Royal Pines Resort now to avoid disappointment as limited rooms are available.

To register visit www.nationalfranchiseconvention.org.au.

88 Business Franchise Australia and New Zealand

To book your room please call the reservations team directly on 1800 886 880 or (07) 5597 8700 or email royalpines_groupres@racv.com.au and mention that you are attending the NFC17.

For more information visit www.nationalfranchiseconvention.org.au For sponsorship and exhibition opportunities, call Angie Cooksey on 1300 669 030, email angie.cooksey@franchise.org.au or visit franchise.org.au

Business Franchise Australia and New Zealand 89

h ot to pi c s

Behind the

headlines Joint employer liability bill resumes journey through Parliament The Australian Government’s move to create a joint employer liability on franchisors has regained momentum after its proposed Protecting Vulnerable Workers Bill returned for discussion in Parliament on May 11, after a Senate inquiry report was lodged just two days earlier. During the same week that the government released its annual Budget, the tabling of the Senate inquiry report which recommended relatively minor adjustments to the proposed Bill went largely unnoticed in the media. While the report also recommends some further adjustments by the relevant Minister, it is unknown just what changes may be adopted, or when the Bill may be passed and become law. The Senate inquiry received a total of 37 submissions, despite only logging nine as at the official deadline of April 6. The controversial bill was referred on March 23

to the Senate Education and Employment Legislation Committee, with a tiny window for stakeholder consultation. The proposed legislation would make franchisors liable for outstanding wages owed to workers in their networks even when those workers are employed and paid by franchisees. The bill was inspired by widespread wage fraud in the 7-Eleven network, which has seen the privately-owned company so far repay more than $95 million in outstanding wages to nearly 2,500 underpaid workers for an average of more than $38,000 per worker.

Domino’s becomes first brand to be issued penalties under new Code Pizza chain Domino’s has become the first franchise to be issued with financial penalties following changes to the Franchising Code of Conduct which took effect on 1 January 2015. Domino’s was issued with two infringement notices worth $9,000 each for failing to

90 Business Franchise Australia and New Zealand

provide franchisees with both an annual marketing fund financial statement and auditor’s report within the time limits prescribed by the Code. The payment of an infringement notice is not an acknowledgement of wrongdoing by a company, however in a statement Domino’s said the failure to release the statement and report was an oversight and funds had been audited and found to be in order.

Pizza Hut appeal heads to court A class action by former Pizza Hut franchisees to appeal a previous court ruling which upheld the franchisor’s decision to lower prices to compete in a price war with Domino’s has commenced, according to a media report. The appeal to the original class action decision is funded by liquidator Bob Jacobs (acting for an operator of three Pizza Hut outlets), along with the Australian Tax Office who are owed an estimated $1.5 million in taxes by the former Pizza Hut operator. The price war court appeal comes after the

deadline by which franchisees of Eagle Boys located outside of the existing trade area of Pizza Hut stores could opt to convert to the Pizza Hut brand.

Startup wins first round in trademark battle The first stage of a David versus Goliath trademark battle has been won by tech startup Sendle after a hearing by trademark office IP Australia cleared the company to proceed with its application to register “Post without the office” despite opposition from Australia Post. The postal giant had opposed the initial application on the basis that it infringed existing Australia Post trademarks, however IP Australia ruled that the application could proceed as it was not similar to the Australia Post trademarks. Although Australia Post can still appeal the decision, the win is a milestone for online delivery platform Sendle, which secured $5 million in funding last year.

Telstra franchisee silent on future store plans A listed operator of more than 100 Telstra stores has said that it is neither planning to close any existing stores or open any new stores while it negotiates new commercial terms with Telstra following the telco’s announcement of a restructure of its network. Shares in Vita, Telstra’s only master licensed dealer and operator of 107 mobile phone stores, plunged 30 per cent after the company revealed its commission payments from Telstra could be reduced due to increased competition and the rollout of the National Broadband Network. Earlier this year, a leaked internal Telstra document which considered taking back control of a number of stores operated by Vita sent shockwaves through the business. The document was reported to indicate that Telstra would make greater profits if it bought back a number of stores as it would no longer need to pay sales commissions to licensees. At the time, Vita released a statement indicating that its relationship with Telstra goes back 22 years, and that its current master license agreement is valid until 2020.

International students routinely exploited by employers: SBS An SBS radio report has found that international students are routinely exploited by employers in the hospitality industry in Melbourne. The report found that international students often worked for employers from the same migrant backgrounds and were initially

grateful to have a job, before later realising they were being paid well below the minimum wage. One employer was quoted by the show as saying that if a potential employee asks about the salary, they don’t get hired. The report also indicates that wage fraud is common among independent restaurant operators, despite attempts by the Australian government to specifically legislate against wage fraud in the franchise sector.

Franchisee in court for $18,000 cashback scam against one worker A Brisbane franchisee of The Coffee Club is facing court for forcing a worker to repay $18,000 cash shortly after paying him more than $19,000 in outstanding wages, and threatening that the worker’s 457 visa would be cancelled if they did not comply. Sandeep Chokhani, owner of The Coffee Club at Nundah Village, consistently underpaid the Indian worker over several months, and paid outstanding wages of $19,334 before demanding the $18,000 cash reimbursement. Incidences of wage fraud committed by migrant franchisees against fellow migrants are common among prosecutions for underpayment undertaken by the Fair Work Ombudsman.

Red Rooster stores investigated for wage underpayment Seven Red Rooster stores in Queensland have been raided by officers from the Fair Work Ombudsman after a report aired on Channel 7 about systemic underpayment of staff. The stores on Brisbane’s southside at Camp Hill, Mt Gravatt, Cannon Hill, Inala, Underwood, Wishart and Forest Lake are alleged to have targeted migrant workers, particularly those from India, with most being paid about half of the correct hourly rate. However Red Rooster has since terminated the franchise agreements of the stores under investigation.

Fuel retailer United Petroleum buys Pie Face After going bust in late 2016 for the second time in two years, trouble-plagued food brand Pie Face has now been sold by receivers to family-owned fuel retailer United Petroleum for an undisclosed sum, according to a media report. The sale includes Pie Face’s intellectual property and 29-store retail network, but does not include its central kitchen facility, whose costs had previously been attributed as part of the reason for the chain’s financial troubles.

Jason Gehrke | Director Franchise Advisory Centre

United Petroleum operate 400 retail outlets and expects to leverage this scale to grow Pie Face, which had more than 70 outlets in Australia at its peak, plus outlets in New York and other overseas locations when it first went bust in late 2014. The US operations are now closed and former CEO and company founder Wayne Homschek is being pursued by former investors who lost millions. United Petroleum has also been in the news recently after an investigation by the Fair Work Ombudsman found that 46 employees in 12 stores had been underpaid a total of more than $20,000 following inspections in September 2015.

Mortgage broker remuneration under fire Mortgage broking franchises may have to review their franchise models if banks accept the recommendations of an industry review to limit the incentives paid to loanwriters. The Sedgwick Retail Banking Remuneration Review, commissioned by the Australian Banker’s Association, has already recommended reducing performance bonuses based on sales alone, and for changes to be made to third party (ie. broker) channel remuneration. The industry-based review is in addition to a review being undertaken by the Australian Government into remuneration and ownership structures employed by mortgage brokers as part of its overall response to the 2015 Financial System Inquiry. The review of mortgage broker remuneration will consider broker commission models, moving away from bonus commissions, increasing disclosure requirements and oversight of brokers by lenders and aggregators. There are more than a dozen franchised mortgage broking brands in Australia. Public submissions closed on June 30. www.franchiseadvice.com.au

Business Franchise Australia and New Zealand 91

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: • 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.

92 Business Franchise Australia and New Zealand

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