Business Franchise AUS & NZ September/October 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 06 sep/oct 2017

AUSTRALIA and NEW ZEALAND

building a smarter future

ESCAPE THE CORPORATE ‘BORED’ ROOM with

Chem-Dry

$6.95 (AUD), $7.95 (nz) inc. gst.

FINANCIAL & legal ADVICE

five steps to help you better your franchise LATEST NEWS

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Shift to Combining Loyalty and Online Ordering

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AUSTRALIA and NEW ZEAL AND

AUSTR ALIA and NEW ZEAL AND

BUSINESS FRANCHISE AUSTRALIA and new zealand VOLUME 11 ISSUE 6, sep/oct 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: chem-dry australia TO SUBSCRIBE: www.businessfranchiseaustralia.com.au or www.isubscribe.com.au CGB PUBLISHING

Have you always wanted to be in business for yourself, but weren’t confident you had the right skills or knowledge to be successful? You’re not alone. Business Franchise Australia and New Zealand magazine is here to help. The more information you read from franchise industry leaders, the more you will discover that franchising is a fantastic opportunity for you to become your own boss. 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. This issue, we have a number of articles that focus on providing information to potential franchisees at the very beginning of their franchise journey. On page 16, Jeremy Streten, lawyer and bestselling author asks if “you understand what is required and what you are getting yourself in for?” while on page 20, Dr Michael Schaper,

Deputy Chair of the Australian Competition and Consumer Commission asks if you “Understand your Rights’ before embarking on your first franchise purchase. Jason Gehrke, Director of the Franchise Advice Centre highlights the five things that cause a franchisee to fail and how they can be avoided on page 32. Also inside this issue is our feature ‘Out with the Old, In with the New’. At this time of year with Spring upon us, this adage rings true! Our homes and businesses are in constant need of attention and this section of the magazine showcases select franchise systems working within the home and business improvement sector. Former franchisee, Past Chairman of the Franchise Council of Australia and now franchisor at Bathroom Werx, George Yammouni answers the most common questions asked by those new to franchising on page 56. A must read for those starting out. Enjoy the read. Joanne Tuffy Editor

PO BOX 968 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

september/october 2017

On the Cover

Cover Story: Chem-Dry Australia

Escape the Corporate ‘Bored’ Room

Building a Smarter Future Damien Paull, Franchise Council of Australia

64 Five Steps to help you better your Franchise Tom Wheeler, Australian Taxation Office

In Every Issue 6

What’s New! Announcements from the Industry

Building a Smarter Future

Special Feature: Out with the Old, In with the New!

Feature News

Feature editorial: Out with the Old, In with the New Home and Business maintenance

Hot Topics: Behind the Headlines

Damien Paull, Franchise Council of Australia

Jason Gehrke, Franchise Advisory Centre

Professional Services Listings

Listings

A-Z Directory

Snapshot 18

Soccajoeys

26 Proven Business Consultants Australia

88 Trent Driving School

Showcase 22 Midas

Have Your Say

60 A Man on a Customer Service Mission Jim Penman, Jim’s Group

also in this issue: Profile

7-Eleven....................................................................27, 96

Appliance Tagging Services. .............................. 96

Rolld

46 Luxaflex® Window Fashions

Aircoat Australia. ........................................................ 96

Begin Bright.................................................................. 96 Cashflow It......................................................................67

68 ADP

Clark Rubber.........................................................31, 97

76 Franchising Expo

Crema Espresso.........................................................97

84 National Franchising Convention 2017

Franchisor in Depth 52 V.I.P. Home Services Fencing & Home Maintenance

Ecomist Australia........................................................97 Fasta Pasta.....................................................................97 Fastway Couriers............................................. IFC, 98 FC Business Solutions............................................19 FocalPoint. ..................................................................... 98 Franchise Infinity..........................................................73 Franchise Retail Brands......................................... 98

Expert Advice 16 Becoming a Franchisee – What Do You Need to Consider? Jeremy Streten

GroutPro. ........................................................................ 98 Hairhouse Warehouse.................................... 35, 99 Hitman Professional Pest Control. .......... 51, 99 IP Partnership.............................................................. 92

20 New to franchising? Understand your Rights Dr Michael Schaper, Australian Competition and Consumer Commission

Jejak Graphics. ........................................................... 92

24 Challenges and Strengths for Australian SME’s Peter Saccasan, RSM Australia

Just Cuts......................................................................... 99

28 Independent Advice: Take Advantage of It Peter Thelwell, IP Partnership

Listen to your Body. ...............................................100

32 Five things that cause Franchisees to Fail (and how you can avoid them) Jason Gehrke, Franchise Advisory Centre

Magnetite Windows. ..............................................100

48 Actualise your Service Franchise Steve Seddon, Westpac 56 New to Franchising? Your questions answered George Yammouni, Bathroom Werx Group

Jim’s Pool Care........................................................... 99

Lava Coffee.................................................................100

Little Kickers & Little Rugby. .............................100

Matt Fiddes Martial Arts...................................... 101 Marsh & Maher. .......................................................... 92 National Drones........................................................ 101 Novus Glass. .............................................................. 101 Proven Business Consultants Australia................................................................... 2, 101 Redcat................................................................................. 1

62 Time is Money – Don’t Waste it Leisa Rennie, HR Central

Smallprint .................................................................... 102

70 The Value of Local Area Marketing for Franchisees Samantha Brooks, Fuse Agency

Spray Pave Australia.............................................. 102

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

The Cash Back App. ............................................. 103

Financing your Franchise Dream

The Energy Alliance............................................. OBC

David Banfield, The Interface Financial Group

The Interface Financial Group IFG 50/50..................................................................... 103

78 Recruiting Staff? Your essential interview questions Saxon Marsden-Huggins, Recruit Shop

Theobroma Lounges, Pavilions, Bars......... 103

82 Share your Story Gabrielle Dolan, Jargon Free Fridays

Thermawood.............................................................. 103

86 Spotlight shines on Customer Loyalty Programs and Fringe Benefit Tax Rami Brass, RSM Australia

Wok Me. ........................................................................ 104

Walker Wayland.......................................................... 92

Workplace Assured.................................................. 89 Yarra Valley Farms................................................... 104

what’snew! Stand by Queensland – Oporto has arrived! It’s the beginning of a new era for Oporto in Queensland with the opening of their latest store at The Barracks precinct in Brisbane. In very close proximity to Suncorp Stadium, Oporto The Barracks has been opened in response to consumer desire for a modern casual dining experience. The Barracks is the first of ten Oporto stores to be opened in South East Queensland over the next 12 months – heralding a big step forward in the brand’s Queensland expansion plans. With natural materials contributing to an impressively modern space, Oporto at The Barracks has been designed and built with a fresh new look and feel. With a fully functioning open kitchen and an impressive outdoor alfresco dining area, the store is quintessentially suited to the Queensland lifestyle. Serving a streamlined menu focusing on what Oporto is most wellknown for, including flame grilled Portuguese chicken and their delicious and iconic Bondi burgers. The store is also one of the first in the network to serve alcohol. Oporto at The Barracks is the perfect example of the new direction the brand is taking and the first of many similar stores opening their doors in Queensland. The Oporto brand itself is undergoing an amazing transformation with a comprehensive renovation and expansion plan set for not only Queensland but also the rest of Australia. Craig Tozer, Oporto CEO is thrilled about the new store: “The Barracks is our latest impressive addition to the Oporto stable- with an exciting look and feel and designed to highlight our use of fresh produce and cooking methods, it’s the perfect start to an epic rollout for Oporto in Queensland.”

RFG Appoints Head of Marketing - Coffee Retail Bronwyn Powell, a senior marketing, digital transformation and innovation specialist with 30 years’ experience in business change and transformation strategy, has been appointed to the newly-created role and recently assumed her position at RFG’s Castle Hill office. RFG’s Coffee Retail Divisional Director, Jevon Le Roux, expressed that Bronwyn joined the business with extensive experience leading the way with brave and disruptive campaigns sure to shake up the Group’s coffee retail Brand Systems.

Retail Food Group (RFG) is bolstering growth within its Coffee Retail Division with the recent appointment of a new Head of Marketing – Coffee Retail.

“Bronwyn has touched many global, iconic brands from fast moving consumer goods to retail and quick service restaurants, leading change strategy through development and execution, as well as customer experience strategy across all touchpoints,” he said. “She will be responsible for heading up the marketing department and teams in the

6 Business Franchise Australia and New Zealand

bourgeoning Coffee Retail division at RFG and leading change strategies to reposition the Gloria Jean’s Coffees brand system, as well as accelerate growth of the Cafe2U and The Coffee Guy networks. “Bronwyn has a proven record of success and is known for having a passion for innovation and conceptual thinking, with the ability to deliver inspiring transformational change,” said Jevon. Bronwyn said that she is looking forward to reigniting consumers’ love for RFG’s coffee retail Brands Systems. “I look forward to re-engaging Australian consumers love for the Gloria Jean’s Coffees Brand System, and boosting the mobile coffee division at RFG, through disruptive and innovative growth and engagement marketing campaigns,” she said.

Pizza Capers Breaks into Indian Market Australia’s leading gourmet pizza kitchen, Pizza Capers, has announced plans to serve up its unique and high quality pizzas and sides within the Indian market via a Master Franchise license in favour of local firm Krsna Foods (India) Pvt Limited. RFG Chief Executive - International, Mike Gilbert, noted that the grant of Master Franchise rights for India represented a watershed event for the brand that sets the platform for further international growth. “Pizza Capers has enjoyed considerable success in the Australian market, and we are excited to be partnering with local experts who share our vision for introducing high quality gourmet pizzas to Indian consumers. “A surge in consumerism coupled with increasing incomes and changes to lifestyle and eating patterns within India has meant that entry into the territory has long been on our radar. We expect these factors to provide a huge platform upon which the Pizza Capers brand can prosper,” he said. RFG is confident its new Master Franchise Partner, who brings to the table extensive multi-unit QSR experience across India and the Pacific, especially within the pizza segment, together with a strong connection with the Franchise Association of India, is the ideal candidate to launch the Pizza Capers brand in the region.

SUMOSALAD OPENS FIRST STORE IN MELBOURNE AIRPORT

SumoSalad Chief Executive Officer, Luke Baylis, said the store was the first at Melbourne Airport, following the successful opening of a similar store at the Sydney International airport terminal. The store opening is in line with the strategic direction outlined by SumoSalad earlier this year, which will help to future proof the business by moving away from traditional outlets and into more appropriate, customerfocussed locations. “Consumers – whether they are getting on a plane or getting lunch on a work day are demanding healthier options. SumoSalad are completely focused on meeting these changing needs and are rising to expectations by making our food more convenient, and even better value,” Mr Baylis said.

Travellers leaving from Melbourne Airport can now say goodbye to typical ‘airport food’ and say hello to a healthier journey with the opening of SumoSalad at the Virgin Terminal (T2).

Australia’s largest healthy fast food restaurant chain have taken the next step in their business transformation journey while by captialising on a growing consumer demand for healthier foods on the go.

“Our customers have been telling us that there are other, more suitable places for our stores, and the opening of the Virgin Terminal store is in line with our objective to grow our presence in transport hubs and in educational and entertainment precincts.” Mr Baylis said that SumoSalad had plans to open further stores in the coming months at Caltex sites while also launching its pilot of delivery services to homes and offices.

Business Franchise Australia and New Zealand 7

what’snew! SILVER CHEF LAUNCHES INDUSTRY-FIRST GUIDE Leading hospitality provider Silver Chef is offering its expertise and guidance in an industry-first initiative to assist SME owners enlisting on the Personal Property Securities Register (PPS Register). The launch of Silver Chef’s PPS Register Handbook follows the introduction of the Personal Properties Act 2009, in which the PPS Register was established to safeguard consumers before purchasing personal property. Silver Chef’s Head of Coffee Strategy Kieran Westlake believes the handbook will help to simplify the legislation for hospitality owners left out in the dark. “The government guide is long, complicated and difficult to interpret unless you have a legal background or you know what you’re looking for,” he said. “The Silver Chef PPS Register Handbook provides security and protection for our partners and customers who are lending their assets to a third party. We

are pleased to provide business owners with knowledge they should have, but don’t know they need, to protect them from the risk they could incur.” In addition, Silver Chef is focused on giving small business partners greater bargaining power in situations where they may typically be vulnerable. “For example, if a landlord takes the assets of a client who has had to close their doors, our customers will have the shield of Silver Chef, which is a much more formidable opponent to the likes of Westfield who might want to free our client’s assets or tie them up in legal battles.” Mr Westlake added that business owners in the coffee roasting industry in particular would benefit from the handbook, given that close to 60 per cent of businesses provide equipment to their customers in return for guaranteed volumes of coffee sales.

7-Eleven vindicated in Supreme Court case terminated its franchise agreement with Chahal following investigations which revealed that Chahal had been requesting ‘cash-back’ payments from two of Chahal’s employees.

7-Eleven’s decision to terminate its franchise agreement with a franchisee for engaging in wage fraud has been vindicated by the Supreme Court of New South Wales. Norton Rose Fulbright acted for 7-Eleven and offer the following summary of the case of Chahal Group Pty Ltd and Anor v 7-Eleven Stores Pty Ltd [2017] NSWSC 532. The case concerned a claim for wrongful termination of a franchise agreement brought by the franchisee, Chahal Group Pty Ltd (Chahal), against 7-Eleven. 7-Eleven had

These employees had been paid their award rate entitlements directly by 7-Eleven. However, on demand from Chahal, the employees were subsequently required to pay back to Chahal a portion of their salary in cash (cash-backs). This allowed the franchisee to conceal underpayment of the employees and circumvent the payroll system administered by 7-Eleven, in order to obtain a financial benefit from the exploitation of its employees. Upon becoming aware of the cash-backs, 7-Eleven terminated its franchise agreement with Chahal and took possession of the franchised business on the basis that: - Chahal had acted fraudulently in implementing the cash-backs arrangement; and - the continued occupation of the franchised business by Chahal was likely to cause substantial damage to 7-Eleven’s reputation.

8 Business Franchise Australia and New Zealand

Chahal challenged the legality of the termination by commencing equity proceedings in the Supreme Court of NSW against 7-Eleven. Chahal’s claim revolved around a denial that any arrangement involving cash-backs had been implemented. The matter proceeded to trial essentially on the basis of whether the Court would prefer the evidence of the two employees over the evidence of Mr Chaudhry, who was the principal of Chahal. The Court found in favour of 7-Eleven, finding that the termination of the franchise agreement was valid as the cash-backs did occur. The credibility of the witnesses was key as there was a direct conflict between the evidence of Mr Chaudhry and the two employees. The detailed quality of the affidavit evidence given by the employees and their performance in the witness box under cross-examination were important factors in the Court’s decision. The Court also considered the respective motives of each witness in giving their evidence and its bearing on the inherent probability or improbability of the cash-backs having occurred.

NFC17: Five reasons to book today The National Franchise Convention, to be held from October 8-10 on the Gold Coast, has shaped up to be one of the best yet. Here are the top five reasons to book: 1. NFC is truly unique and fully immersive. There’s nothing else like it in Australia. It is the biggest franchising convention and a must-attend event 2. More than 60 influential speakers, 25plus sessions, and 30 round tables giving participants plenty of opportunity to network and learn 3. The National Awards Gala Dinner provides a prestigious recognition of franchising success and a great opportunity to inspire others. 4. This event attracts franchisors from startup to mature brands, as well as decision makers from head office, franchisees and suppliers. 5. A valuable investment in franchise professional development towards the Certified Franchise Executive (CFE) qualification. 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 (NFC17) will be the meeting place for inspiration, motivation and thought leadership on all things franchising. Don’t miss out - Join hundreds of business leaders in Australia’s biggest franchising event and book your NFC17 tickets today. www.nationalfranchiseconvention.org.au/ buy-tickets/

New Zealand the ‘most franchised country in the world’ The Franchising New Zealand 2017 survey from Griffith University’s Asia-Pacific Centre for Franchising Excellence and the Massey University Business School has found that, per capita, New Zealand is the most franchised country in the world. The survey identified 631 franchised brands operating in New Zealand and 37,000 franchise units – equating to one for every 124 Kiwis. Professor Lorelle Frazer, Director of the Asia-Pacific Centre for Franchising Excellence, says the New Zealand per capita rate is more than double the equivalent figure in Australia of one franchise unit per 310 people. It is thought that no other country in the world comes close to the New Zealand rate of franchises per capita, giving it claim to the title of the ‘most franchised country in the world’. The Franchising New Zealand 2017 survey found that the combined turnover of franchises in New Zealand (excluding motor vehicle sales and fuel retail) is $27.6 billion – roughly equivalent to 11% of New Zealand’s GDP. This is a considerable increase since

the last survey in 2012, which estimated the size of the country’s franchise market at $15 billion from 22,400 units across 446 different franchises. The latest survey also shows that New Zealand’s franchise sector employs a total of more 124,000 people, including 74,300 full-time and 42,500 part-time staff. The proportion of full-time staff members has increased since 2012. It provides the only systematic universitybacked data on New Zealand’s franchise sector. Griffith University’s Asia-Pacific Centre for Franchising Excellence undertakes a similar biennial survey of franchising in Australia. Sponsored by the Franchise Association of New Zealand and supporting contributors Westpac, Franchize Consultant, Hayes Knight, Asco Legal and The Franchise Coach, Brad Jacobs, chairman of the Franchise Association of New Zealand says, “The latest survey demonstrates the value that franchising brings to New Zealanders.”

Business Franchise Australia and New Zealand 9

c ov er sto ry: Ch em -D ry Aust r a l i a

ESCAPE THE CORPORATE ‘BORED’ ROOM Business partners Rudy Ventura and Stephanie Chalias are embracing the challenges of business ownership since leaving high-level corporate jobs to join the largest carpet cleaning franchise in the world. Now, they are looking forward to growing their franchise in Sydney’s inner west.

Business Franchise magazine caught up with Rudy and Stephanie, who after realising their dream of business ownership have just celebrated their first year with Chem-Dry.

How did you hear about the Chem-Dry franchise system and why did you choose that franchise industry? Rudy: We chose this type of franchise as we were looking for a business with a low entry point, plus there’s a real need in the marketplace for this type of service. After researching the various carpet cleaning companies available, we knew that ChemDry was the right fit for us; offering the right package, support, great products, and a great name in the industry. Another aspect that really appealed was that we felt it would be easy to train future employees. The long-term plan is to build the business up and have multiple vans on the road. Stephanie: I totally agree with Rudy. We knew that Chem-Dry would be the right fit. I asked different friends and associates who they used for their carpets, and Chem-Dry always seemed to come up. What really resonated with me was that the Chem-Dry service consistently outperformed the other carpet cleaners they had used and that customers were happy to pay for the premium services offered, especially when in their own home.

“More than thirty years since launching their first Chem-Dry Australian franchise, this family run business has over 3,500 franchise partners operating across 50 countries.” 10 Business Franchise Australia and New Zealand

You both come from a corporate background, what was the turning point that made you realise you wanted to change your career path? Rudy: Working within a corporate environment for more than 25 years, I had become disillusioned - dealing with the USA on a regular basis, there were early morning meetings and conference calls at midnight. I certainly don’t mind hard work but I knew I could put this effort and energy into something better, and benefit from it personally. Turning 50 seemed to give me the

push I was looking for and I haven’t looked back. Stephanie: The expectations that employees have put upon them now is insane and the lack of support mind-blowing. I had always wanted to have my own business but there never seemed to be the right time. Rudy and I just happened to be in the right head space at the right time and as soon as we started to talk about it, it started to become a reality. We have worked together in the past and have had a friendship for many years so we knew we could work together. I cannot imagine working for anyone else anymore; I wish I had made the move a lot earlier.

You must both have an extensive list of skills acquired during your corporate years, how have you put these to use within your own business? Rudy: Working at a corporate level for over 25 years, I’ve developed strong sales and marketing, business development, and account and business management skillsets, all of which are transferrable. To be honest though, the training and support offered by Chem-Dry is so extensive that I feel anyone, from any background, can develop the skills required to operate their own successful business. Stephanie: Yes, we have had extensive experience in the corporate world, but I feel we both bring something different to the table. Rudy’s focus has been to bring in the sales - if you are not prepared to chase work then starting your own business can be difficult. My area of strength and focus has been what I like to call the back-end work, ensuring our processes are smooth, customer satisfaction is high, and all administration is completed; all the little pieces of the puzzle coming together.

What was the process like once you signed the franchise agreement? Rudy: The process was very thorough - with realistic timeframes and specific milestones to be achieved. These included choosing our company name and setting the business up, launching the website, obtaining the necessary insurances, choosing a van and installing all the branding, on-site training which included general business, sales & marketing, handson product training, and performing specific services offered. Stephanie: I liked the fact that before we signed the franchise agreement, we weren’t rushed or pressurised to sign. All processes

were professionally explained and all our questions were answered, which to me was very important and I felt safe in my decision. The training onsite was very helpful - the Head Office staff are really great.

to get off the ground. The Chem-Dry name is well known with a good reputation and the products and processes are amazing. If you do the very best possible job each time, this will lead to repeat business.

What training and support is still provided to you, now that you’re up-and-running?

Stephanie: I would also say don’t worry too much if you don’t have a trade background and like me, have never had to work any type of machinery. It’s surprising what you pick up and how quickly these things become second nature. Everything can be learnt ‘on-thetools’, all it takes is a ‘jump in at the deep end’ attitude and before you know it, you’ll be talking fibres and products like an expert. I now know that Chem-Dry’s reputation is very well deserved. Why wouldn’t you want to be part of such a great franchise system!

Rudy: There is an online portal with training courses for individuals to complete and includes everything from performing specific tasks on the job, how to deal with customers, marketing, developing customer relationships, information on products, and much, much more. The Franchisee Development Manager visits us onsite; providing support and additional training. He also goes over our business plans to ensure that we stay on target and regular reviews and analysis are done to identify gaps. Specific outcomes are then agreed to be implemented over a specific period. Stephanie: I agree with everything Rudy says but also, I found the phone and sms messages that we sent and received quick answers to, especially when you are new and on the job, were very helpful. Getting a response pretty much straight away with advice on the best way to treat something is fantastic.

If someone was interested in joining your franchise system, what would you say to them? Rudy: Without hesitation, I would recommend Chem-Dry. Franchisees need to be self-reliant, comfortable with business development and promoting the business especially to the commercial sector. Also, use the franchise network for advice, tips of the trade, go out with other franchisees and be patient; it takes a little while for the business

About Chem-Dry More than thirty years since launching their first Chem-Dry Australian franchise, this family run business has over 3,500 franchise partners operating across 50 countries. Services offered include floor and carpet cleaning, tile and stone cleaning, granite benchtop restoration, leather cleaning, stain removal and even water damage restoration. Franchisees use the patented Chem-Dry carbonated water cleaning process, which doesn’t use large amounts of water, allowing carpets to dry in just 1-2 hours. No harmful detergents are used - only 100 per cent natural, green certified and safe products, giving customers peace of mind, especially families with children. If, like Rudy and Stephanie, you would like to escape the corporate world, and work in your own business, not somebody else’s, contact Chem-Dry to find out more on: 1800 243 637

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

Building a smarter future 12 Business Franchise Australia and New Zealand

Dear Readers, Every franchisee who owns and runs one of the estimated 79,000 franchise businesses operating in Australia has made a decision to improve their future by becoming a part of this dynamic and economically important sector.

Whether the goal is to build financial sustainability, gain a better work/life balance, to ‘be your own boss’, or a combination of any of these aims, franchising provides everyday Australians with a chance to shape their own futures.

Preparing franchisees for the future The Franchise Council of Australia’s annual National Franchise Convention (NFC17) ‘Franchise Intelligence - Building a Smarter Future’ this year poses the question: what is standing between you and a smarter future for your franchise? It might be as simple as a new conversation that makes you think differently, or a connection that can help to grow your business. It could be that nugget of information or spark of an idea from one of our speakers that leads you to explore a new way of thinking or approaching the challenges you have in your business. The answer, and indeed the question, will be different for every attendee. But we are confident that at Australia’s biggest franchising event, you will find something that will help you along the journey to a smarter future for your franchise business. We are particularly pleased this year to include a Franchisee Forum in the NFC17 program. This half-day program is designed to provide franchisees with tools to drive growth and sales in their businesses. The program for the Franchisee Forum has been crafted by the FCA in conjunction with the Franchise Relationship Institute’s Greg Nathan, a global thought leader on the psychology of franchising and a member of the FCA’s Franchise Hall of Fame. The Franchise Relationship Institute will be just one of the experts imparting their knowledge as part of the forum. We are also thrilled to welcome as speaker at the Forum Dr Glen Richards, the founder and former CEO of Greencross, Australia’s largest pet care company, and one of five business mentors on Channel 10’s ‘Shark Tank’ reality competition television series. The chance to learn from Glen is an opportunity not to be missed, and at NFC17 franchisees will have the chance to participate in a Q&A session with this business expert.

“We are particularly pleased this year to include a Franchisee Forum in the NFC17 program. This half-day program is designed to provide franchisees with tools to drive growth and sales in their businesses.” Damian Paull | CEO | Franchise Council of Australia

Equally important is the chance to learn from franchisees who have demonstrated success in their businesses and the ‘Psychology of Success Panel’ will reveal the secrets of success from some of the best franchisees in Australia – all of whom are past winners of the Franchise Council of Australia’s (FCA’s) Excellence in Franchising Awards. These are people who have experienced the struggles of starting a new business and found strategies to grow and thrive. They also represent a diverse range of franchisees, from multi-unit franchise owners to single-unit franchisees who don’t employee any staff, and come from an array of industry sectors The Franchisee Forum will also include opportunities to share ideas at round-table sessions where franchisees can talk about their experiences, solve problems, and gain practical advice on a range of hot topics. Recognising too, that franchisees can gain valuable insights from the entire NFC17 program, we are pleased to provide franchisees with a 70 per cent discount to attend the full convention program of panels, round-tables, masterclasses and keynote plenary sessions. To find out more about NFC17, which takes place on the Gold Coast from October 8-10, and to register your attendance, visit www. nationalfranchiseconvention.org.au.

Celebrating successful franchisees Over the past few months, I’ve had the privilege to attend the FCA’s Excellence in Franchising Regional Awards presentations and have seen just how the franchise business model provides everyday Australians from all walks of life with the chance to build a better future. Every finalist and every winner has a unique story, and their own motivations and inspirations for becoming a franchisee.

But the thing that struck me most was the passion they all shared for their business, their franchise system, and the support and reassurance that is provided through the franchise business model. “I love what I do. I love helping people. I love seeing people achieve. It doesn’t feel like a real job,” said Glen Cammiade, winner of the Vic/ Tas Single Unit Franchisee of the Year, less than two staff Award for 2017. Glen purchased his EFM Ferntree Gully franchise in 2009, and describes the support and advice he gets as a franchisee at EFM Health Clubs as being “just priceless. Any question you’ve ever got, the team at the head office have done it before and they know the answers.” It’s a similar story for Mt Gambier Salts of the Earth franchisee, Cathy Beckman, who took out the SA Single Unit Franchisee of the Year, two or more staff award for 2017. “When I researched Salts of the Earth, it just seemed like a really good fit for me. I believed in the product, I believed in the model, the company. The franchisor seemed very supportive and I just believed it was the right next chapter of my life. I love seeing the results and I love helping people,” said Cathy. These are just two of many such anecdotes provided by Regional Award winners across Australia this year. I would like to once again congratulate all winners of the Excellence in Franchising Regional Awards for 2017, and wish them all the best as they move forward as finalists for the MYOB FCA National Excellence in Franchising Awards, to be presented on Tuesday 10 October at the culmination of the 2017 National Franchise Convention. Regards, Damian Paull. www.franchise.org.au

Business Franchise Australia and New Zealand 13

pr o file : ROLLD

BECOME A PART OF THE FAMILY Bringing Vietnamese street food to the Australian QSR market five years ago, Rolld is very much a family affair. Living by the company motto ‘To enrich lives, one memorable meal at a time’, Sales Director and New Business Development Manager Tuan Hoang and the Rolld family are looking for franchisees who share this vision. Tuan, one of the first franchisees and brother of co-founder Bao Hoang, has first-hand experience of the Rolld vision, which is to make sure that each customer coming through the door has a memorable food experience – just like going home for dinner at your parents’ house. Eating together is a way of life in Vietnam and at Rolld, the fresh and vibrant menu offerings - passed down through the generations - are quality tested by the women who inspired the recipes, Mama Hoang and Mama Ly. “My parents still work in the business every day, making the Ph spices for all the stores. They still put it together by hand using the family recipe. As a family, we are all involved

in the day-to-day running of the business, my younger sister and older brother are both franchisees and we have now grown to over 60 stores nationwide,” says Tuan.

and performance management, the Rolld Experience Program and management of the internal communication system, World Manager.

NATIONAL GROWTH

PURPOSE

Bringing in experienced senior executives from the retail industry, with a focus on operational efficiency and training and development, allows Rolld to develop and continue to grow on a national scale.

Growing up surrounded by the love of family and food, the founders of Rolld know that “it’s not all about the money”, says Tuan.

Tuan continues, “We are looking for franchisees who share the same goals and vision as ourselves, where family values are key. I’ve found that successful franchisees within the group are people that understand financial figures, and can manage cash flow but who are also passionate about customer service. “Asian eateries aren’t traditionally renowned for prioritising customer service, but we’re on a mission to change that. At Rolld, we focus on creating memorable experiences. We ask our franchisees and employees to recognise how every decision they make and every action they take can affect the customer. This mantra has taken us to over 60 stores so far and we’re continuing to grow.” New franchisees complete an extensive eightweek induction training program, covering all the operational, administration and financial skills required to run a successful franchise. Rolld have recently introduced their People and Culture Team to the network. This key team are responsible for staff and franchisee engagement, staff training, talent

14 Business Franchise Australia and New Zealand

Rolld work passionately and with determination with Australian charity Blue Dragon Children’s Foundation to rescue kids in crisis. In 2016, having raised over $180,000 through the franchise network, Rolld opened a boarding house for 150 kids in North Vietnam and has committed to funding the build of a second boarding house in 2018. “This was an amazing way to give back to the community and the realisation of a longheld dream by my parents, who travelled to Vietnam with Bao to open the boarding house. We’re looking for franchisees with the same compassion. We strive for success, including financial success, with the ambition of making a significant difference in the lives of others. Each franchisee and employee that joins us is like a member of our extended family and we are team that lives by our family values.” If you have business experience, have a desire to run your own franchise business, and want to become part of the Rolld family, contact the Rolld team on: www.rolld.com.au/franchise

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Becoming a franchisee-

what do you need to consider? 16 Business Franchise Australia and New Zealand

Are you considering starting a business as a franchisee? Do you understand what is required and what you are getting yourself in for? Starting a business as a franchisee is a sometimes complicated process that requires you to consider many aspects of a new business. Importantly when you become a franchisee you are entering into a business relationship with the franchisor.

What happens when you want to invest in a franchise? To invest in a franchise, the franchisee (you) must usually pay the franchisor (owner), an initial fee for the rights to the business, training in the business model, and the equipment required to operate the franchise. After the business is set up, you will generally be required to pay the franchisor a regular royalty payment (such as a percentage of gross sales or fees) for the continued use of the franchise model. These payments are generally on a monthly or quarterly basis. When you buy a franchise you are effectively buying a brand that should be protected by a registered trademark and gives you the right to trade using that trademark. After the franchise agreement has been signed, your business will replicate the franchisor’s business model. Usually, the franchisor will assist the franchisee where necessary to ensure that the reputation of the business trademark and model are maintained.

What do you need to consider? There are a number of different factors that you need to consider when entering into a franchise including: • The existing brand and its reputation; • Whether you can you make the payments required by the franchise agreement and still operate a profitable business;

“When you buy a franchise you are effectively buying a brand that should be protected by a registered trademark and gives you the right to trade using that trademark.” Jeremy Streten | Lawyer and Author

• Whether you have the time to invest in building the business; • Which systems and controls does the franchisor have in place that will help you in operating the business; • If there are other franchisees, contact them and discuss the franchise with them. Has the franchisor delivered on what they promised, how have they dealt with problems and what happens if things don’t work out the way that everyone expects; • If you are leasing premises, how that is set up, is the franchisor or a related entity the tenant and licence space to you; and • What other fees and charges the franchisor will charge you if you want to renew the franchise for another term, if you want to sell the franchise business, what payments are made to third parties and how are you to purchase your goods and supplies. As a franchisee you will be required to obtain independent legal advice and independent financial advice in relation to the proposed franchise documentation. You should consider all of these points when you meet with your consultants. You don’t know what you don’t know so ask lots of questions and make sure that if there is any aspect of the agreement that you don’t understand or don’t agree with that you ask for clarification or get it changed.

Control of the franchise Generally, the franchisor will require that the same business model is used by all the franchised businesses. This may include using the same uniforms, business processes, and

“You don’t know what you don’t know so ask lots of questions and make sure that if there is any aspect of the agreement that you don’t understand or don’t agree with that you ask for clarification or get it changed.”

signs or logos particular to the business. These help to identify the business and keep the brand consistent to the outside world. You should remember that you are not just buying the right to sell the franchisor’s product or service, but the right to use the successful business process of the franchise. Often the franchisee will pay an advertisement fee to the franchisor so that consistent advertising can be utilised to a larger audience rather than each franchisee attempting to advertise their business on their own. For example, a franchisee may only be able to afford to advertise in a limited area around their business due to the cost. Where multiple franchisees pool their money together, they can often afford advertising that reaches a much larger market and is therefore more beneficial to all of the franchisees as a whole. While there are many benefits to investing in an already successful franchise business, there can also be drawbacks. As with any investment, you should do your research thoroughly before you make any purchasing decisions. You should ensure that your franchise agreement is fully reviewed by a competent lawyer who can advise you in relation to your rights and obligations under it. Also you should obtain advice from your accountant and financial planner to ensure that you are able to properly operate the business from a financial standpoint. Jeremy Streten is a lawyer and the author of the Amazon best seller The Business Legal Lifecycle which is a guidebook designed to help business owners understand what they are doing in their business from a legal perspective and give them a plan for the future. Jeremy can be contacted at: lifecycle@jeremystreten.com www.businesslegallifecycle.com

Business Franchise Australia and New Zealand 17

sna ps h ot: So c caj o e ys

Get ahead of the game! Well known as Australia’s leading childhood development program for children aged two and a half to eight years, Soccajoeys provides a well-rounded start to the physical, social and educational development of Australia’s next generation. Created by a team of childhood development experts, Soccajoeys, in business since 2007, began franchising in 2010 and now delivers programs to over 30,000 children annually with over 300 classes in operation across the country on a weekly basis. Their mission is to give children the opportunity to develop skills for life through soccer. Classes foster and nurture skills for each and every child and with this as its focus, Soccajoeys provides an inclusive and dynamic environment for children to experience the joys of the world’s most popular game and develop a healthy and active lifestyle. Soccajoeys offer multiple programs, therefore generating multiple revenue streams for franchisees: Minis (2.5 – 3 years) – Designed to give children the best start to a healthy and active lifestyle. Each 45 minute class has two coaches and no more than 12 children per class, ensuring that each child gets the individual attention they deserve. Preschool (3 – 5 years) – the core of the Soccajoeys business. Each class runs for one hour at an indoor venue and adopts the latest advancements in preschool coaching theory and practices. Promotes social interaction in a non-competitive atmosphere and is run in a nurturing and fun environment. Junior (6 – 8 years) – developed due to the overwhelming demand of participants in the Preschool program. The Junior program builds upon the fundamentals taught in Preschool program, further developing participants soccer skills as well as their selfconfidence and self-esteem. Daycare Program – due to being the leaders in the Early Childhood sector and the demand from Early Childhood centres, we

tailored and developed our program to deliver it on a weekly basis in centres as part of their weekly curriculum. Schools Program - this program is for boys and girls in grades K to 6. Each session is expertly planned and is supported by outcome based training modules. Programs are implemented to meet the requirements of the Board of Studies K-6 PD/H/PE syllabus. Birthday Parties – a fun, soccer themed birthday party to keep children fully entertained on their big day. Two qualified and entertaining coaches travel to a venue of the customer’s choice to provide an action packed one hour party.

OVERWHELMING DEMAND Expanding due to overwhelming demand across the country, Soccajoeys are seeking franchisees in all states and territories to join the 24 franchisees currently in NSW, ACT, SA, VIC and WA. Soccajoeys are looking for energetic and driven people who are passionate about childhood development and making a difference to children’s lives. Soccajoeys offers a unique opportunity for franchisees to become mentors to the next generation of Australian kids, instilling in them from an early age a passion to lead healthy and active lives. Appealing to a broad range of candidates, a Soccajoeys franchise would suit individuals, couples, those looking to return to the

18 Business Franchise Australia and New Zealand

workforce, young parents, sports coaches or personal trainers. A background in sport or childhood development is not essential though as all training and support is provided as long as you: • Have a sense of fun; • Have exceptional people skills; • Are driven to succeed; • Passionate about working with children; • Highly motivated; • Fit and outgoing; and • Are engaged with the local community.

SUPPORT Training and support is at the cornerstone of the Soccajoeys Franchise opportunity. Receive both initial and ongoing training as well access to industry leading childhood development programs plus coaching and mentoring workshops along with continuous head office support in areas such as marketing, operations, financial and systems. With these proven systems and processes as well as the dedicated support from Head Office, you can kick-start your career in sport now. For more information on how to join this market leading development program for children contact our team on: 1300 781 735 info@soccajoeys.com www.soccajoeys.com

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 Franchise Australia Australia and and New New Zealand Zealand 15 19 Business

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NEW TO FRANCHISING?

UNDERSTAND YOUR RIGHTS For many Australians, their first experience in small business will be as a franchisee. Franchise arrangements are often seen as a lower-risk business option, as it allows you to build on a proven business model. However, it pays to be cautious and understand your rights and obligations under the Franchising Code, the mandatory code of conduct which governs franchising arrangements in Australia. The Code regulates the conduct of franchising participants towards one another and is overseen by the Australian Competition and Consumer Commission under the Competition and Consumer Act 2010.

Are you new to franchising? If you’re new to franchising, it’s essential that you know and understand your obligations under the Code, whether you’re a franchisee or a franchisor. It includes: • disclosure requirements

“If you’re interested in acquiring a franchise, the franchisor must give you a two-page information statement highlighting some of the key risks and rewards of franchising.” Dr Michael Schaper | Deputy Chair Australian Competition and Consumer Commission

As a franchisee, you must act in good faith towards your franchisor and they must act in good faith in their dealings with you. Good faith requires parties to exercise their powers reasonably and not arbitrarily or for some irrelevant purpose. Acting in good faith extends to all aspects of the franchising relationship.

What you must be told If you’re interested in acquiring a franchise, the franchisor must give you a two-page information statement highlighting some of the key risks and rewards of franchising. If you decide to proceed with the franchise, the franchisor must provide you with a disclosure document, the executable copy of the franchise agreement and a copy of the Code at least 14 days before you enter into an agreement or make a non-refundable payment.

• good faith obligations

The disclosure document will contain important information, including:

• a dispute resolution mechanism

• operating costs and fees you’ll have to pay,

• a cooling-off period for potential franchisees, and

• contact details of current and former franchisees,,

• procedures for ending a franchise agreement.

• whether you have an exclusive territory, and • conditions for renewal.

20 Business Franchise Australia and New Zealand

The franchise agreement is your contract with the franchisor and sets out your rights and obligations as a franchisee. It’s important that you read the documents provided to you by the franchisor and seek independent legal, accounting and business advice from professionals with expertise in franchising. Remember: franchising is a business and there’s no guarantee of success. Make sure you’ve done your due diligence before making a decision about a franchise opportunity.

Cooling-off periods and dispute resolution As a franchisee, you are entitled to terminate a new franchise agreement within seven days of entering into the agreement (or an agreement to enter into a franchise agreement) or making a payment under the agreement (whichever happens first). The cooling-off period does not cover a renewal, extension or transfer of an existing agreement. If you decide to terminate a franchise agreement, you’re entitled to a refund of payments you have made within 14 days. However, the franchisor can still deduct its reasonable expenses from this amount if the

“Remember: franchising is a business and there’s no guarantee of success. Make sure you’ve done your due diligence before making a decision about a franchise opportunity.” expenses, or the method of calculating such expenses, has been set out in the franchise agreement. If a dispute arises, the Franchising Code requires that parties try to resolve it by outlining (in writing) to the other party: • the nature of the dispute, • what outcome they want, • what action will settle the dispute. If the parties can’t resolve the dispute within three weeks, either party may refer the matter to mediation, an informal negotiation facilitated by an independent third party. Mediators assist parties negotiate an outcome that is acceptable to both parties. Parties can agree to appoint a mediator or request that the Office of the Franchising Mediation Adviser appoint one. Alternatively, the Small Business Commissioner in your state (if available) or the Australian Small Business & Family Enterprise Ombudsman may be able to appoint a mediator.

The role of the ACCC The Franchising Code is regulated by the ACCC, which can provide information to

assist franchisees and franchisors understand their rights and responsibilities under the Code. To encourage compliance with the Code, the ACCC undertakes enforcement and compliance activities and is currently directing resources to ensure franchisees gain the protections of the Code The ACCC can now issue infringement notices to firms and has the power to seek financial penalties for certain breaches of the Code, including penalties against directors. This year, a number of high-profile actions have been taken, including: • Domino’s: in May 2017, following the issue of two infringement notices by the ACCC, Domino’s Pizza Enterprises Ltd paid penalties totalling $18,000 for breaches of the Franchising Code by failing to provide franchisees with both an annual marketing fund financial statement and an auditor’s report within the time limits prescribed under the Code. • UltraTune: in May 2017, the ACCC alleged that in 2015, Ultra Tune Australia Pty Ltd failed to act in good faith in its dealing with a prospective franchisee, and failed to provide this prospective franchisee

with documents the Code specifies must be provided before accepting a non-refundable payment. This action was ongoing at time of publication. • PastaCup: in September 2016 the ACCC alleged that Pastacup’s current franchisor, Morild Pty Ltd, and the company’s former director failed to disclose the relevant business experience of all its officers to franchisees. This action was ongoing at time of publication.

Further information To understand your rights and responsibilities under the Franchising Code of Conduct, visit www.accc.gov.au/business/franchising, contact the ACCC small business helpline on 1300 302 502, or contact the Small Business Commissioner in your state. Griffith University also runs a free Buying a Franchise online education program, funded by the ACCC, to help you understand what’s involved with franchising. You can access the program at www.accc.gov.au/ccaeducation. For more information visit: www.accc.gov.au/uct

Business Franchise Australia and New Zealand 21

s h owcase : m i das

TAKE THE EXCITING NEXT STEP WITH MIDAS Midas has been well known in the Australian automotive repair and maintenance landscape for more than 40 years. Commencing operations as a brake and muffler specialist, Midas stores across Australia today are full auto service experts, providing car servicing, brakes, suspension, exhaust and all general repair requirements.

Midas is a national automotive servicing and repair group that is positioning itself as the technical leaders in modern vehicle servicing and maintenance, for the constantly growing and ever more diverse Australian automotive car parc. Independent repairers seeking to take that important next step to stay at the forefront of vehicle servicing and repair, along with enthusiastic automotive technicians who want to establish their own businesses, should take a closer look at joining the Midas group.

environment based on common goals and mutual trust. This group of Australian auto service experts has managed to enhance and grow Midas’ high levels of consumer trust over the years, largely due to the major emphasis that the organisation places on integrity and technical proficiency. “It is our goal to be the most technically proficient automotive service group in Australia,” stated General Manager, Service for Midas, Mark Geraghty.

There are currently 88 Midas Auto Service Centres operating across Australia, with a number of franchisees operating multiple sites due to their success within specific urban and regional areas.

“We are investing significantly in training, support and ensuring that each Midas store is equipped with the latest diagnostic workshop equipment. This is imperative to our success as automotive technology continues to evolve across the next 10 to 20 years.

Midas operates as a community of customers, employees, franchisees, suppliers and consultants working together in an open

“We also offer conversion opportunities to existing independent automotive repairers who want their businesses to be supported

22 Business Franchise Australia and New Zealand

Ms Carmel Alabakis, Franchisee of the multiple award winning Midas Werribee Plaza workshop in Melbourne.

automotive aftermarket companies in Australia.

“Independent repairers seeking to take that important next step to stay at the forefront of vehicle servicing and repair, along with enthusiastic automotive technicians who want to establish their own businesses, should take a closer look at joining the Midas group.” in taking the next step, or for enthusiastic automotive technicians who want to establish their own future in the industry by creating their own businesses,” Mr Geraghty added. In joining Midas, your business becomes indelibly linked to a highly recognised national brand. Your business gains the benefits of store set-up consultancy, national marketing support along with detailed business support. This comes from a strong national organisation that is owned by Bapcor, one of the largest and most successful

Midas conducts several national consumer targeted promotions each year, generating strong motorist attention to the nationwide automotive servicing and maintenance group. In one of the most high profile activities of this kind, Midas has established a highly successful marketing partnership with Virgin Australia’s Velocity Frequent Flyer program. This outstanding marketing platform promotes all national Midas Auto Service Centres to more than five and a half million Velocity Frequent Flyer members and car owners through specific Midas marketing activities at various points during each year. Instead of viewing the future for independent automotive service and repair businesses as a challenge, by joining Midas you will be assisted and supported to see the future as an exciting opportunity for growth and long term success. All that is needed from you is your continued commitment to provide excellent customer service through high quality automotive service and repairs. According to these Midas franchisees, making the decision to join this full automotive service group was one of the best they have ever made; One of the most successful Midas stores in the country, Midas Werribee Plaza (Victoria), was born out of the desire to make a positive change to how automotive service and repair businesses operate. Franchisee Carmel Alabakis had endured a bad experience with a mechanic and wanted to stop this from

happening to others. Carmel has managed to achieve this highly successfully without any mechanical knowledge or background thanks to the support she has received from becoming a Midas Franchisee. “I saw an opportunity to make a change in how automotive servicing and repair work is carried out in my area when I saw a Midas business for sale at Werribee Plaza back in 2005. The support that I received from Midas from day one was outstanding and continues to this day. From the provision of technical training for our staff through to the efficiency of our operating systems, being with Midas has enabled me to enact positive change in how auto repairers provide total quality services to their customers, which is very important to me. I also love being my own boss while being a part of a large and well known national group,” Ms Alabakis stated. Justin Wade, Franchisee from the Tingalpa and Capalaba Midas Auto Service Centres in Queensland has joined the ranks of successful Franchisees who own multiple Midas workshops. “I love the strength of the collective group and the cohesion in the Midas model. I have a background in the auto service industry and I liked the Midas concept, so I became a Franchisee 15 years ago,” Mr Wade said. To find out more about converting your automotive business to a Midas Auto Service Centre or to establish a new Midas Auto Service Centre call: 03 8878 1111

Business Franchise Australia and New Zealand 23

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RSM survey reveals

challenges and strengths for Australian SMEs

24 Business Franchise Australia and New Zealand

There is strong evidence that small business owners who prepare a business plan will grow their business, according to RSM Australia’s thinkBIG 2017 findings. Despite this, many SME owners still don’t understand the relationship between developing a business plan and achieving growth. In previous years, thinkBIG has demonstrated that creating a strong business plan can be the difference between achieving growth and remaining stagnant and the 2017 survey results are no different. Interestingly, 2017 has seen a slight resurgence in the number of businesses creating a regular business plan. In 2017, the number of respondents who created a regular business plan was 69 per cent, an increase of four per cent compared with the response in 2016, although this is still well down from a high of 76 per cent in 2012. thinkBIG 2017 found that almost one-third (31 per cent) of respondents still don’t have a business plan, which is concerning given there is such strong evidence that businesses with plans outperform those without plans. In 2017, of those companies that completed a business plan, 53 per cent said they achieved growth and just 15 per cent experienced a decline in revenue. Companies that did not complete a business plan were less successful, with only 38 per cent reporting growth and 18 per cent reporting a decline in revenue. Based on the evidence of previous years’ results, the absence of a good business plan may reduce the ability of businesses to bring growth to fruition and suggests that many SME owners still don’t understand the relationship between developing a plan and achieving growth. Almost two-thirds (61 per cent) of SME owners who did not complete a business plan said they still anticipated achieving growth in the coming year. It is dangerous for small business owners to operate according to an informal or unwritten plan as it relies on that one person being present and capable of working in the business well into the future, making long-term

“Companies that did not complete a business plan were less successful, with only 38 per cent reporting growth and 18 per cent reporting a decline in revenue.” Peter Saccasan | Director & National Head of Business Advisory RSM Australia

growth and sustainability difficult. A formal, written plan ensures everyone in the business understands its goals and milestones, making employees more likely to be fully engaged and lessen the workload of the business’s principals.

Exit planning When it comes to exit planning, a critical aspect given that every business owner will exit the business eventually, it’s surprising that just 36 per cent of respondents have an exit plan in place, compared with 46 per cent in 2016. When it’s time to exit, business owners need to understand what their business is actually worth, as opposed to what they think it should be worth. This year’s thinkBIG survey found that nearly three-quarters (74 per cent) of business owners believe their business has increased in value this year, but just 29 per cent of respondents actually did a recent business valuation. In the absence of hard data from a valuation, it is hoped that the expectation of an increase in value is not misplaced optimism. Whether owners are looking to exit soon or not, it can be worth doing a valuation just to see where the business sits in the marketplace. If the timing is right, a good valuation may encourage some owners speed up their retirement plans or, if the reverse is true, then the business owners can revise their exit plans as appropriate. The valuation can also make it easier to lock down business finance at favourable rates, saving the business money. An exit plan usually takes a couple of years to properly execute. Owners should ensure they set about drawing up and then executing the plan over a medium term period. It is not a process that can begin two or three months out from retirement.

Of those SME owners who have an exit plan, 17 per cent plan to sell the business to employees or existing shareholders, while eight per cent will close the business when they exit. When it comes to retiring, two-thirds of business owners (66 per cent) don’t intend to fund their retirement primarily from the sale of the business. This reflects last year’s results and a seemingly-increasing trend towards SME owners relying on other investments and income sources. thinkBIG has measured the pulse of the Australian SME sector since 2005. It benchmarks business growth, business planning, exit planning, superannuation and the impact and uptake of technology. 216 business owners participated in the 2017 study, providing insights into how Australian SMEs feel about their business and what keeps them awake at night. Peter Saccasan is a Partner of RSM Australia Partners and a Director of RSM Australia Pty Ltd. Having grown into one of Australia’s leading professional services firms over the last ninety five years, RSM Australia is committed to enabling clients through a greater understanding of what matters most to their business. In addition to local knowledge provided by their advisers in 30 offices across Australia, RSM Australia draws on their international reach and scale to ensure clients stay at the forefront of the world’s best practices, technology and innovation within a rapidly changing global economy. 02 8226 4500 Peter.Saccasan@rsm.com.au www.rsm.global/australia/

Business Franchise Australia and New Zealand 25

s n a ps h ot: Pr ov en B us i n ess C o n su ltan ts Aust r a l i a

TURN YOUR EXPERIENCE INTO A SUCCESSFUL BUSINESS

The business world is constantly changing – that’s one thing that we can all agree on. Powerful disruptive trends like globalisation and cloud-based services are threatening traditional business models and the need for fresh solutions is increasing every day. Now more than ever, the Australian private and public sectors are looking to expert consultants for specialist advice, service, and support in all areas. According to a recent report by Forrester, The Future of Consulting Through 20201 58 per cent of decision-makers intended to increase their spend on business consultants by at least 5 per cent in 2016, and 23 per cent planned a budget increase of at least 10 per cent. With the emergence of bold new players and rise of boutique, on-demand consulting services, Australia’s consulting industry has grown to US$4.4 billion2. Businesses are looking for fast, flexible, customised solutions for their needs. Could you be a part of the solution?

CAPITALISE ON YOUR EXPERTISE – HELP AUSTRALIAN BUSINESSES GROW Proven Business Consultants Australia recognise the value of experience, and want to see professionals contributing their experience to Australian businesses in meaningful ways. The Directors of PBCA, Owen Watson and

“Proven Business Consultants Australia recognise the value of experience, and want to see professionals contributing their experience to Australian businesses in meaningful ways.”

Catherine Bell, run their own successful consulting practices and have discovered the professional fulfilment, satisfaction and flexible lifestyle choices that have opened up to them as a result. Now, they are sharing their first-hand knowledge of what it takes to run a great consulting business with select professionals from all industries. In a 24-month all-inclusive program, participants including CEO, CFO, or COO level, through to Company Directors and Senior Management should be looking to leverage their experience into a niche consultancy business.

THE PBCA PROGRAM

team of IT experts to get you up and running and maintain your web presence and business as it grows.

WHAT MAKES THIS PROGRAM UNIQUE? In running their own practices, the program Directors have discovered what works (and what doesn’t!) – in the modern consulting environment. Owen and Catherine have seen colleagues and competitors come and go, and realised that expertise is simply not enough - consultants need to know how to start and run a sustainable small business that works for their life, if they want their practice to succeed.

The 40-day workshop program is delivered in intensive blocks of 10 days per quarter, providing you with the roadmap to success and the tools needed to turn your specialist experience into a profitable and marketable consultancy business. Each workshop is tailored to complement your existing skillset and give you the confidence to strike out on your own, and create a life of your design.

They have created an executive-level program based on real life experience and partnered with some of Australia’s best independent business owners to deliver a unique learning experience and fill this need.

Throughout the entire workshop series and for a full 12 months after workshop completion, you will have personal support by phone and email. PBCA will also take care of the finer details like your website, business cards, professional headshots and more. In addition, you will be supported with your website and marketing for the full program term, with a

To find out more, call 1300 467 222, or email admin@pbca.com.au. Further information available at www.pbca.com.au.

26 Business Franchise Australia and New Zealand

Join this highly recommended program and make the most of your experience in your own consulting practice.

1 Forrester (2016). The Future Of Consulting Through 2020. www.forrester.com/report/The+Future+Of+Consulting+Through+2 020/-/E-RES129429 2 Source Global Research (2016) Planning for Growth in 2017. www.sourceglobalresearch.com/report/1319/planning-for-growthin-2017

Be the

LEADER OF N W O R U O Y SUCCESS Welcome to a world of opportunity, brought to you by 7-Eleven, the brand that’s world famous. A 7-Eleven franchise is a partnership in success. When you buy a 7-Eleven franchise, you buy two things. Firstly, a brand name that’s recognised around the world, and secondly a business system that works, one that provides more support than most other franchise networks.

BENEFITS OF BEING A 7-ELEVEN FRANCHISEE Our stores are open 24/7, so we’re with you 24 hours a day, supporting you in every part of your operation. From setup, to training, to marketing, and even to book-keeping, we’ll help you turn your new business into a solid investment. We set up shop for you and give you

full training

We take payroll admin off your hands

and help with the book-keeping

We deal with suppliers to get you the

best products

We manage the fuel

Financials

Contact Details

An initial investment of between $400,000 and $1,000,000 + is what is required to become a 7-Eleven Franchisee, so it’s certainly a big decision to make.

Franchise Development Managers

The 7-Eleven franchised business model is one with a difference, because we tie our financial success to the success of our Franchisees. 7-Eleven shares in the profits, so it’s in our interest to ensure that we continually work with you to meet the needs of your customers to grow sales, and to grow profits. Our gross profit split is determined progressively, and there are other shared income stream profits, such as commissions.

We have brands you won’t ﬁnd anywhere

Brett Reading Queensland

E-Mail: bzr@7eleven.com.au Mobile: 0407 877 674 Peter O’Hara Victoria / Western Australia

E-Mail: pwo@7eleven.com.au Mobile: 0408 175 534 Shayne Boogaard New South Wales

E-Mail: szh@7eleven.com.au Mobile: 0418 136 156

else

We provide advertising and promotional

support

START YOUR SUCCESS STORY TODAY www.7elevenfranchise.com.au

FRANCHISING

Business Franchise Australia and New Zealand 27

e xpert a dv i c e

Independent Advice: Take Advantage of It “Prospective franchisees should not feel pressured to sign the franchise agreement on the fourteenth (14th) day which may be before they have had an opportunity to seek the appropriate independent advice.” Peter Thelwell – LLB (Hons) & Acc. Spec. (Bus.) Qld | Partner IP Partnership

28 Business Franchise Australia and New Zealand

The Code requires that franchisors allow and in fact recommend that franchisees obtain independent legal, financial and business advice. Further, franchisees must provide signed certificates from those independent advisers or waive their right to seek such advice having acknowledged the franchisor’s recommendation to do so.

Much recent legal commentary relating to franchising is focused on changes to the mandatory Franchising Code of Conduct (Code), which came into effect in 2015, and other new or amended legislation which will affect franchising. However, many prospective franchisees are not aware or do not take advantage of the rights which were included in the original Code in 1998 including those related to independent advice.

In addition, a franchise agreement cannot be signed until a minimum of fourteen (14) clear days has passed from the date on which the franchisor issues the disclosure document along with the proposed franchise agreement and a copy of the Code. This period cannot be waived so that prospective franchisees have time to obtain independent advice and properly consider whether they wish to proceed with the purchase of the proposed franchised business. Furthermore, the mandatory fourteen (14) day period between disclosure and the signing of a franchise agreement is a minimum time period, not the prescribed time period. Accordingly, prospective franchisees should not feel pressured to sign the franchise agreement on the fourteenth (14th) day which may be before they have had an opportunity to seek the appropriate independent advice. Unfortunately, many prospective franchisees choose not to seek independent advice prior to entering into a franchise agreement, which we believe is one of the main causes of disputes in franchising. This is because franchisees who choose not to seek independent advice are often unaware of what their franchise agreement requires of themselves or the franchisor and also what their franchise agreement prohibits or allows in terms of their conduct or that of the franchisor.

Therefore, franchisees often become aware of elements of their franchise agreement which they do not like after they have been operating the franchised business for some time, which leads to them becoming disillusioned with the franchise system and seeking to “get out”. One of the most common reasons for prospective franchisees choosing not to seek independent advice is costs. There is no doubt that professional advice is expensive, and the time prior to a franchisee purchasing a franchised business is when they are incurring numerous other costs all at once. However, especially in respect of legal costs, the costs involved with “getting out” of a franchise agreement will be far greater than those involved with understanding that contract before it is entered into which will hopefully prevent a situation where a franchisee is seeking to “get out”. Another common reason for prospective franchisees choosing not to seek independent advice, particularly from a legal perspective, is a misconception of the benefits of doing so. As many franchisors are not willing to negotiate the terms of their franchise agreement - hence why the new unfair contract terms legislation will most certainly apply to franchising – prospective franchisees often think there is no point in obtaining legal advice on the franchise agreement if there will be no negotiation on the terms of the franchise agreement. This is an unfortunate misconception. While some franchisors engage in conduct which breaches either the franchise agreement or some relevant legislation which leads to a dispute, most disputes in franchising are actually due to a franchisee being displeased

Business Franchise Australia and New Zealand 29

e xpert a dv i c e

“It is common for franchisees to be provided with projections of potential income by franchisors and it is easy to focus on the possibly attractive bottom line figures presented.”

the business for a period of time before selling it, they should understand the relevant provisions of the franchise agreement and also develop a plan for the timing of a sale to maximise the possible sale price.

with the actions of the franchisor which are permitted by both the franchise agreement and relevant legislation. This can lead to franchisees being “stuck” in a franchise relationship which they are not happy with due to the fact that they were not aware of the contractual relationship they were entering into. In addition to prospective franchisees being aware of the content of their franchise agreement, good legal advice can enhance the advice obtained from an accountant and a business adviser. Franchisees, quite understandably are often very excited about the prospect of purchasing a franchised business, having discussed it with the franchisor who will have advised the various benefits of the opportunity. While this excitement is a good thing, it can often lead to prospective franchisees making emotional decisions, and it is important therefore for them to seek the advice of independent advisers to provide an objective assessment of the opportunity. This objective assessment of the opportunity is especially important in relation to representations the franchisor may have made to the prospective franchisee, particularly financial representations. It is common for franchisees to be provided with projections of potential income by franchisors and it is easy to focus on the possibly attractive bottom line figures presented. It is important however for an independent accountant or business adviser to assess the figures provided objectively and take into account the assumptions the franchisor has based the projections on – which assumptions they must disclose under

the Code – and assess if the projections are reasonable and realistic. Further, accountants and business advisers can develop a financial strategy for the finite period of time that the franchisee will own the franchised business. Such a financial strategy should include, but not be limited to: determining how the franchisee will fund the purchase of the franchised business; determining the appropriate working capital required to operate the franchised business in the early stages and then moving forward; assessment of the potential return on investment; and determining break-even thresholds. Further, being mindful of the provisions of the franchise agreement which apply after expiry or termination, an appropriate exit strategy can be determined. Prospective franchisees very rarely contemplate what will happen at the end of their time owning the franchise business, despite the fact that all franchise agreements will eventually come to an end. Instead, prospective franchisees should take advantage of the protections in the Code regarding independent advice to seek expert, objective assistance in developing a proactive strategy for their exit from the business to prevent them acting reactively at a later time. For example, most franchise agreements do not allow franchisees to sell the franchised business at the end of the contracted term and, even if the contracted term has not expired, usually at the time of a sale a purchaser will only receive the unexpired contract term and any attached options to renew the agreement. Therefore, if a franchisee intends to operate

30 Business Franchise Australia and New Zealand

Ultimately, a prospective franchisee may choose not to proceed with the purchase of the proposed franchised business following the independent advice they have received. If this is the case, it is important for franchisees to understand their rights under the Code in such circumstances. The Code provides that all monies paid by the franchisee to the franchisor are fully refundable until the franchisee has entered into the franchise agreement. Therefore, all deposits paid are fully refundable if the prospective franchisee elects not to proceed prior to signing the franchise agreement. In addition, the Code provides all franchisees with the right to “cool off” for a period of seven (7) days after the signing of a franchise agreement. However, if a franchisee relies on the right to “cool off” the franchisor can retain its reasonable expenses from monies paid providing those reasonable expenses have been properly disclosed. Peter Thelwell – LLB (Hons) & Acc. Spec. (Bus.) Qld was admitted as a solicitor in Queensland in 2009, and has specialised in franchising and intellectual property since that time. He is a Partner at IP Partnership, a boutique franchising and intellectual property firm on the Gold Coast. Peter is a Queensland Law Society (QLS) Accredited Specialist in Business Law and a member of the QLS Franchising Committee. Contact Peter via: 07 5591 2522 pt@ippartnership.com.au www.ippartnership.com.au

BUILD YOUR FUTURE WITH A RETAIL ICON

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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:

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•• 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

e xpert a dv i c e

Five things that cause franchisees to fail (and how you can avoid them)

After more than 25 years in the franchise sector, I have seen many franchisees achieve spectacular things that would never have been possible in their previous jobs. However at the same time, I have also seen more than a few franchisees crash and burn. Typically, when a business fails, the owner will externalise responsibility for this and blame someone else. For an independent small business, the targets of blame are typically banks, landlords, big competitors, government regulation, the economy, or one or more of these in varying measure. For a franchisee, these same targets of blame exist, as well as the largest and most convenient target: the franchisor. While it might be easy for a failing franchisee to blame their lack of success on a variety of perceived or imagined shortcomings by the franchisor, sometimes franchisees are the authors of their own misfortune. So, based on 25 yearsâ&#x20AC;&#x2122; experience, here are my top five reasons why franchisees fail, and what they should do to avoid them.

â&#x20AC;&#x153;Read the Disclosure Document and franchise agreement for yourself (in addition to getting advice from a lawyer). As boring as these documents are to read, they contain the essence of your future as a franchisee.â&#x20AC;? 32 Business Franchise Australia and New Zealand

“Your accountant won’t lose their house if it all goes pear-shaped - you will. So take responsibility up front, and make it your plan.”

This can be a fatal mistake. The business plan is the road map by which good franchisees drive their businesses to future success. This means they will constantly refer back to the plan while operating the business, and make frequent and minor course corrections to keep the business back on track with the plan.

Jason Gehrke | Director | Franchise Advisory Centre

Insufficient Research

For many people, the decision to become self-employed is driven by factors other than money. It’s about taking control of their lives, enjoying a better lifestyle, getting out of an unenjoyable job or work environment, or some other issue. Rarely is it a decision based solely on dollars and cents. As a result of these emotive decision factors, potential franchisees often don’t do anywhere near enough research before buying a franchise. For those who do make an attempt before signing up, it is often by proxy. In other words, they pay their accountant to do a business plan, and a lawyer for advice on the franchise agreement, then ignore both and go ahead anyway. So, what you need to do is better research right up front, and neither your accountant or lawyer can do this on your behalf. (And a word of caution here – deal only with lawyers who are knowledgeable and experienced in franchising. They will save you time, money and anguish in the long run compared to the local lawyer who did your will or the conveyancing when you last bought a house). You need to talk to as many current and former franchisees as you possibly can (not just one or two, but dozens). The franchisor will have a list of these, and their contact details in their Disclosure Document. You should also read the Disclosure Document and franchise agreement for yourself (in addition to getting advice from a lawyer). As boring as these documents are to read, they contain the essence of your future as a franchisee, including what you can and can’t do, and what you might be forced to do in future even if you don’t really want to. So my recommendation is very simple: Be prepared to spend up to one hour of research for each $1,000 to be invested in the business.

Be creative with your research too. Sit outside the proposed location and count the number of cars or pedestrians which pass by. Identify all of the potential competitors in your location, and learn as much about them as you can. Do a small business course online (there are lots to choose from). The more time you spend on your research up front, the better-prepared you will be to run a successful business.

Inadequate Business Planning

Starting a business without a business plan is like jumping out of plane without a parachute. Good franchisors will insist that you do a business plan, and great franchisors will go through yours (and possibly reject it a couple of times because you have made unrealistic assumptions) before they let you join. So let’s just get one thing straight. Business plans ARE important, but you need to OWN the plan. You need to craft it. You need to determine the sales projections and cost lines. Get your accountant to coach you on putting this stuff together, but it has to be YOUR plan, because your business will live or die by this. Relying exclusively on your accountant to do your business plan for you is a common and often fatal mistake. Your accountant won’t be running the business - you will. Your accountant won’t be responsible for any losses - you will. Your accountant won’t lose their house if it all goes pear-shaped - you will. So take responsibility up front, and make it your plan.

Insufficient monitoring and modification

Once a franchisee has a business plan, has completed the selection process, undergone training and finally started operating, they too quickly forget their plan as they get caught up in the daily needs of the business.

Unfortunately, many franchisees shelve their plans after they start operating, and only wonder what went wrong when they get to the end of their first six or 12 months of trading and wonder why they are so far off course compared to the plan. By then, it can often be too late to make the big changes necessary to turn things around. So the lesson here is to monitor the performance of your business ruthlessly against the plan. Your plan should have annual, monthly, weekly, daily and even hourly sales targets (depending on the nature of the business), and therefore you should monitor these targets just as often to ensure you are on or ahead of target, and if you’re not, you need to act quickly to improve things before the rot sets in.

Not following the System

The ultimate act of self-sabotage that leads to ruin for franchisees is when they don’t follow the franchisor’s system. When franchisees invest in a franchise, they buy into a formula for how to run a business. When franchisees stop following this formula, not only do they undermine the initial investment that they made, but they also put their entire business at risk. The risks are twofold: The first is that the franchisee’s business will simply enter into a progressive tailspin because they aren’t doing all the things necessary to run it properly in accordance with the franchisor’s system, and will find that customers stop buying, sales dry up, expenses blow out, and the whole thing goes to hell in a handbasket. The other risk is that the franchisor will breach or terminate the franchisee for not following the system, especially if their behaviour is likely to cause damage to the brand or the businesses of other franchisees in the network. (For example, franchisee’s taking shortcuts in performing services, swappingout approved products for unapproved products, failing to follow minimum safety requirements, failing to pay their staff correctly, etc).

Business Franchise Australia and New Zealand 33

e xpert a dv i c e

Franchisees can still influence positive change in a network, but must do so through the processes established by the franchisor. Some of the greatest innovations in some networks have been developed by franchisees, but these have occurred where the franchisor has assessed the innovation for the benefit of the network as a whole. Franchisees cannot make universal changes to how they run their business without checking the implications of doing so with the franchisor first.

Complacency

Even successful franchisees have failed, often because they built their business to a level of performance where they thought they could just sit back and count the money, and therein lies the problem. A business requires the operator to be BUSY. A successful business is one where the operator stays in control and has their finger on the pulse at all times. They monitor the business’ critical sales and cost data constantly, and know what interventions to apply when things go off track. Good business owners don’t take their businesses for granted. They don’t abandon the business for someone else without an ownership stake to run it, because then they

“Good business owners also reinvest in their businesses, rather than plunder its spare cash for expensive holidays, cars, boats or other trinkets that they kid themselves into thinking they deserve.” are only ever one phone call, text message or email away from anarchy and chaos when that key employee resigns.

franchisees fail, but it is hopefully a warning to potential franchisees who have a rosecoloured view of their future in business.

Good business owners also reinvest in their businesses, rather than plunder its spare cash for expensive holidays, cars, boats or other trinkets that they kid themselves into thinking they deserve. Bad business owners who plunder their businesses later wonder why they didn’t have the cash to pay their annual tax bill, or the means to refurbish their store at the end of its lease, or the means to replace a piece of critical equipment that fails unexpectedly.

Remember that a franchisee’s best asset is their franchisor, and their worst enemy is often themself.

Good businesses owners are constantly looking for improvements in sales, margins, cost containment and profit. Bad businesses owners – if they look at these things at all – often focus only on costs to drive profits, and miss obvious opportunities to grow revenues.

If you can avoid making the mistakes in this top five list, you will vastly increase your chances of running a successful franchise and start building your business empire. 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.

The bottom line

He advises both potential and existing franchisors and franchisees, and conducts franchise education programs throughout Australia, and publishes Franchise News, a fortnightly email news bulletin on franchising issues and trends.

This is not an exhaustive list of why

www.franchiseadvice.com.au

34 Business Franchise Australia and New Zealand

READY TO OWN YOUR FUTURE? When itâ&#x20AC;&#x2122;s your own business, thereâ&#x20AC;&#x2122;s no limit to the amount that you take home. With franchising opportunities now available, it makes sense to join our world class team.

ENQUIRE TODAY (03) 9234 2200 | franchising@hairhousewarehouse.com.au www.hairhousefranchising.com.au Business Franchise Australia and New Zealand 35

Donâ&#x20AC;&#x2122;t miss an issue

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VOL 11 ISSUE 06 sept/oct 2017

out with the old, in with the new! actualise your service franchise Donâ&#x20AC;&#x2122;t buy a job, build a business

Resources at your fingertips!

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

www.businessfranchiseaustralia.com.au

38 Business Franchise Australia and New Zealand

Contents

41 What’s New!

Feature news

42 Feature editorial:

Out with the Old, In with the New!

46 Profile:

Luxaflex® Window Fashions Don’t Buy a Job, Build a Business

48 Expert Advice:

Actualise your Service Franchise Steve Seddon, Westpac

51 Advertising:

Hitman Professional Pest Control

52 Franchisor in Depth:

V.I.P. Home Services Fencing & Home Maintenance A Real Business with a Real Income

56 Expert Advice:

New to Franchising? Your questions answered

George Yammouni, Bathroom Werx Group

60 Have your Say:

A Man on a Customer Service Mission

Jim Penman, Jim’s Group

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 39

WANT TO STAY ON TOP OF THE LATEST NEWS AND WHAT’S HAPPENING AT THE FOREFRONT OF FRANCHISING?

Franchise BUSINESS

AU S TR A LI A A N D N E W Z E A L A N D

SUBSCRIBE TO Business Franchise Australia and New Zealand’s newsletter and receive all the latest franchising news delivered straight to your inbox, every week!

To subscribe visit: www.businessfranchiseaustralia.com.au 40 Business Franchise Australia and New Zealand

what’snew! Swim schools wanted to back child safety initiative Swim schools across the country are being urged to throw their support behind a child safety initiative designed to get more young children in the water learning to swim. Running from 23 September to 2 October, Learn2Swim Week offers parents and carers the opportunity to access free swimming lessons for under 5s from partnering swim schools throughout Australia. Major advocate of Learn2Swim Week, Laurie Lawrence from Kids Alive Do The Five, said cost was often a reason parents gave for not enrolling their children in swim classes. “This is a tragedy; that something like cost prevents children getting lessons that could one day save their life,” Laurie said. “We know the ability to swim is one of the most important factors in reducing the risk of childhood drowning, so we need to introduce more kids to swimming lessons as early as possible.”

to back Learn2Swim Week by registering their school on the Learn2Swim Week website and offering free swimming lessons to participating children under 5. “Ideally, offering a 5-lesson intensive course is recommended but even if a swim school can provide one free lesson it might just help prove to a parent how vital learning about water safety is. It’s a great way for swim schools to show their local community they care about saving children’s lives,” Laurie said.

campaign nationally, says “Since we started in 2013 we have doubled the amount of swim schools participating in the safety initiative each year and we are hoping 2017 will be no different. There are over 900 swim schools in this country and we would like every one of them supporting the cause. The more swim schools that partner with us the closer we get to our ultimate goal of zero drownings in under-fives.”

Supported by all the major industry associations, swim schools are being asked

CEO and Founder of Poolwerx, John O’Brien, who’s company initiated and grew the

To register, check out www.learn2swimweek.com.

AFTER 27 YEARS STAIN BUSTERS REINVENTS ITSELF Stain Busters has been around for over 27 years with pretty much the same business model. Franchisor Paddy Sweeney, stepped back from active management fifteen years ago and established a regime of Master Franchisees including an International Master to look after and drive the business. This worked fine for the first three years, then revenue plateaued, travelling along the top for ten year. Then two years ago revenue started dropping, not dramatically, but sufficient to be an indicator as to an emerging trend. Paddy came up with a new franchise model, radically different from what had been the way for twenty five years. He was unable to convince his Master Franchisees to buy into the idea, so he set about assuming control to restructure and reinvent the system. The model involved guaranteed incomes (not revenue), Stain Busters providing the money to cover the lease of new equipment and a new van plus supplying the work, taking the bookings and collecting the money. The new Franchisee would pay zero franchise fees ever. The model has just been launched and no doubt other Franchisors who may also be considering the need for reinvention will follow this with interest.

Business Franchise Australia and New Zealand 41

FE ATUR E : ou t w i t h t h e o l d, i n w i t h t h e n e w

OUT WITH THE OLD, IN WITH THE NEW! “Australia’s love of beautiful homes and gardens mean big business. Luckily, there is a vast number of professionals to help us maintain our properties.”

Owning your own home or business is part of the big Australian dream. We aspire to it, plan for it and save for it. Then, once we have achieved it, we take a great amount of pride, and spend a significant amount of money, on cleaning, maintaining and improving our most prized possession. At this time of year - with Spring upon us, the old adage ‘Out with the old, in with the new’ rings true! Whether it is buying and replacing new fixtures and fittings, cleaning, maintenance, putting in a new pool, trimming the lawn, or even fixing the cracks in the garden path – our homes and businesses are in constant need of attention. Australia’s love of beautiful homes and gardens mean big business. Luckily, for the home and business owner and the vast

number of franchises that service these, we often turn to professionals to help us maintain our properties. The domestic and commercial building, maintenance, cleaning and landscape industry has adapted to consumer demand. People are busier today than ever before. They have less time for maintenance and small projects around the home or workplace. It is easier for people to contract out the jobs to capable businesses than spend the time and money trying to do it themselves. This has resulted in a growth market for small business owners, including franchisees, to step in and complete these tasks once done by homeowners and business owners themselves.

Brands you know and trust As the building, cleaning and landscape jobs required usually take place on our property and in our home, we want someone we know and can trust. A franchisee who lives locally and works for a well-respected brand appeals to us. We know the name of the franchise, it has most likely been recommended by a neighbour or friend, and once we take the

42 Business Franchise Australia and New Zealand

first step and call the local franchisee to install our kerbs or repair our roof, chances are we put their business card on our fridge and call them every time we have a similar project or repair. This is assuming they deliver a high quality product with the best customer service. With so much money being spent on property renovation and maintenance, as well as cleaning, gardening and landscaping, the franchises that offer these services are thriving. If working with your hands appeals to you and you have background in building, construction, gardening or other trade related skills, or you have just decided it is time for a change, the opportunities available in this sector of franchising are nearly limitless. There is a franchise system to cover nearly every area of the building, cleaning and landscape industry. Specific franchise systems include, but are certainly not limited to, kerb installation, building maintenance and safety, home waterproofing, shed construction, pavement crack repair, antenna installation, mowing, fencing, roofing and landscape maintenance. Below is a snapshot of a few of the franchise systems working within this industry who feature within this issue of Business Franchise magazine:

Resurfacing has been recognised as one of the most lucrative businesses in decades. An Aircoat Australia franchise can offer the right person fantastic income potential, an ideal home based service, and an affordable all-inclusive business package incorporating high profits with low overheads, the ability to set your hours for a more flexible schedule and begin your new career without the ‘new business’ startup risks. You’re the boss, making all the decisions for your business yet you are under an umbrella of total support with Aircoat Australia’s experience and guidance. Choose your hours and whether you work solo or hire employees. Using the trusted name and exposure, having access to the continuing support and guidance, your new business can be anything you want it to be. Aircoat Australia has built a strong reputation in the resurfacing industry and prides itself on being an innovative company in multi facet resurfacing and restoration. Aircoat Australia specialise in the renewal of worn and damaged fixtures and surfaces including bathtubs, tiles, porcelain, laminates, fibreglass, vitreous china, appliances, benchtops, floors and timber surfaces.

Chem-Dry Australia Chem-Dry is the world’s largest carpet cleaning franchise, and has been helping Australian’s realise their dream of business ownership since 1986. Their 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. They are looking for franchise partners that have the drive and

determination to work hard and enjoy their success. The Chem-Dry 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.

Ecomist Australia Established in 1994, Ecomist Australia is a leading provider of premium quality hygiene products and services, specialising in Odour Control and Insect Control. Their core product is an innovative programmable aerosol dispensing system that won an award for the Best New Product from The Aerosol Association of Australia and New Zealand. Aerosol products are manufactured in New Zealand and Ecomist offer a natural insect killer and over 50 fragrance options with French perfume.

GroutPro Earn between $50 and $200 per hour and get a high return on investment in the booming Home Improvement Industry with LOW SETUP COSTS & little competition. GroutPro specialises in the after-market care of tiles and grout to homeowners and businesses. Offering a range of professional services from stain protection of new tile and grout installations to their flagship grout “colourseal” application which rejuvenates and recolours old grout saving customers time and money without having to re-tile. Specialists use GroutPro’s own branded range of professional quality products including cleaners, sealers, tile Anti-Slip treatments and shower glass restoration and sealer coatings. This is a complete package to get you up and running in your own business fast.

Their ultimate aim is to enhance the environments of our customers through high quality products and excellent after-sales service. Over the last 23 years Ecomist have developed a secure and proven franchising business model. Each Ecomist franchise has its own exclusive territory based on post codes and purchase price is generally 2x the net income of the existing business.

Hitman Pest Control A Hitman franchise is a highly profitable business generating in excess of $100,000 net of expenses in its first year. Clients are generated by Hitman and allocated so franchisees only have to focus on doing an exceptional job for clients. Hitman has been servicing clients in Brisbane, Gold Coast and Sunshine Coast since 1995. The company services approximately 20,000 homes and businesses each year and has a client retention in excess of 80%.

Business Franchise Australia and New Zealand 43

FE ATUR E : ou t w i t h t h e o l d, i n w i t h t h e n e w

Aircoat Australia

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The head office staff manage marketing and sourcing of new clients as well as the rebooking of all existing clients. They also manage the day to day scheduling of jobs for each franchisee. The new franchisee receives full training and then starts earning from day one. Franchisees collect money from the client and head office invoices the franchisee on a fortnightly basis.

Hunter Douglas offers an unrivalled partnership to meet specific commercial needs, under our LUXAFLEX® Window Fashions Gallery and LUXAFLEX® Window Fashions Showcase Alliance programs. This includes marketing support, manufacture and production of all products and fabrics, as well as local on the ground sales support. No experience is required to enter the Programs as all training is provided, which focuses on enhancing the customer experience and increasing your profitability.

• #1 place in a niche market, with a unique product range;

Join the Jim’s Pool Care team and Australia’s largest franchise system to build a business that suits your goals and lifestyle.

• Comprehensive, hands-on training, with ongoing business and technical support;

Owning a Jim’s mobile pool shop means you can earn money from multiple streams. You charge for your time and charge for the lucrative pool items such as chemicals, pool equipment and pool accessories. This means your income is not limited by how many hours you can work and gives you scope to grow the business to a level that suits you.

Luxaflex Window Fashions ®

There are over eight million households in Australia – think about how many window furnishings that amounts to! The LUXAFLEX® Window Fashions brand is one of the most widely known and respected window furnishing brands in Australia, having sold its products under the Hunter Douglas Group in Australia for over sixty years – and is currently recruiting entrepreneurs looking for a new venture!

Magnetite franchisees specialise in double glazing existing windows, as the core offering in a product range that includes seals, tint and other complementary window treatments. Magnetite solutions provide all the benefits of double glazing without the cost and mess of replacement windows. Join the team that has: • 18+ years technical and practical experience;

Jim’s Pool Care

Another great bonus is the FLAT franchise fee. Yes, the fee is a flat franchise fee system so you can work hard and earn as much as you like and pay the same at fee with all training and ongoing support included. If you are ready for a change then you need to put Jim’s Pool Care on your list.

results for existing windows, without the mess and fuss of replacement systems that add cost to the customer and waste to the environment.

• National recognition through membership of key industry bodies; and • Average franchisee tenure now over 12 years.

Spray Pave Australia Earn up to $3,300 per week with Income Guarantee. That’s right, up to $170,000 per year!

Magnetite Windows Windows create harmony between inside and outside spaces, as well as being critical to the aesthetic character of a building. While adding healthy natural light to our lives, windows are the weakest link when it comes to energy and acoustic insulation in buildings. As excessive noise and energy efficiency are prominent issues plaguing home owners, now is the perfect time to become part of an expert team who solve these issues every day. Magnetite franchisees create world class

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The Spray Pave service decorates concrete and spray, polish, epoxy and stain. Jobs are inside and outside and customers are domestic, commercial and Government. The license structure allows you to choose when, where and how you want to work! This is a sincere “Be Your Own Boss” system. You genuinely keep all the profits! • Learn a range of new lifelong trades. • Guaranteed work available any time after training. • Head office training plus follow-up on your own job. • Customers contract and interest free finance.

The cleaning services industry expects an increase of 2.2 per cent for the year with expected projections of $4.3 billion, according to IBISWorld

Building towards a brighter future V.I.P. Home Services Fencing & Home Maintenance • Lifelong support from 6 Head Office trainers. • From $7,000 deposit + Support Payment Plan.

Thermawood Thermawood Retro-Fit Double Glazing System is designed to retro-fit double glazing into existing wooden windows. Proven systems and processes with the Thermawood Patented drainage system. Retro-Fitting fitting double glazing into existing wooden windows allows the home owner to retain the character of their windows, be more energy efficient, reduce energy costs and reduce noise. Along with installing double glazing Thermawood installers also fit draft/sound seals to all types of windows including double hung windows, casement windows and doors. Become part of the success story with: • Full Training and ongoing support • Strong industry Growth • Full Advertising & Marketing • Patented product new to the Australian Building industry.

V.I.P. Home Services - Fencing and Home Maintenance is a newly launched division that is part of the iconic V.I.P. Home Services group. You have a choice of owning a Fencing Franchise or Home Maintenance Franchise or why not do both? Affordable Franchise Opportunities NOW available in Melbourne, Victoria and Perth in Fencing or Home Maintenance. • 8 Weeks Paid Training - Fencing • 4 Weeks Paid Training - Home Maintenance • Ongoing coaching and mentoring • Comprehensive Cloud based IT systems • National and local marketing • And much, much more. Regional (Master) Opportunities available! Currently V.I.P. are seeking suitable candidates to take up this excellent but limited opportunity that is available Australia Wide. Husband and wife teams or business partners with integrity, energy and self-motivation should apply! Add to this the professional services of mortgage brokers, real estate agents and property inspectors and there is certainly a wide market appeal.

Growth sectors The $3.5 billion building industry is one that is leading the way. A steady rise in home-building approvals, has led to increased building activity, and outstanding opportunities for construction and design companies to take on franchise partners. The market for home improvements in Australia is also big business. Many of us are feeling the pinch of rising costs of living coupled with uncertainty within the real estate market, and are choosing to renovate rather than move.

One of the biggest appeals toward this type of franchise for many new and potential franchisees is the fact that you get to enjoy the flexibility of making your own hours and you spend a great deal of your time outdoors. Although there is the administration side of things, bills to be paid, marketing strategies to implement and business plans to be reviewed, the majority of your time will be spent on location, helping people to enhance and maintain their homes and their property. In buying a franchise, the difficult side of establishing the business and developing operational procedures has already been done for you. This allows you to get straight to work finding your customers and then delivering top quality products and excellent customer service. This allows you to choose the particular franchise system that most aligns with your passions, knowing that the demand for your product exists and the tools necessary to find, generate and keep your customers are already in place. So in considering a career in the building, cleaning and landscape sector of franchising... remember it is just as important to build relationships, build trust with your customers and build your business with the assistance of the franchisor. Franchising is not a guaranteed path to success, but it is however a solid formula, based upon tried and tested systems, that can pave the way for the right franchisee to achieve success.

Look out for our next special feature: get ready for summer

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Australians have always been passionate about home renovation and improvements, but even the do-it-yourself renovators often require the assistance of professional experts. Recent Australian Bureau of Statistic figures show the trend in home renovations is increasing and that the sector is currently valued at around $550 million.

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pr o fi l e : Lu xaf l e x ® W i n d ow Fas h i o n s

Don’t buy a job, build a business

Hunter Douglas’ flagship brand Luxaflex® Window Fashions has been established in Australia for over 60 years and is currently the market leader when it comes to innovative, technologically superior window coverings. With most of the products still manufactured in Australia, the brand plays to its strengths and brand heritage while constantly innovating and researching, ensuring the brand understands its customers and stays ahead of interior decorating trends.

Offering the most comprehensive collection for Australian homeowners with a vast choice of styles, colours, and patented operating systems, the brand offers a selection of indoor and outdoor products including Blinds, Shutters and Awnings. Numerous patented products such as Luxaflex® Duette® Architella® Shades set the brand apart. Exclusive operating systems also provide market differentiation such as PowerView® Motorisation. This provides motorised control of the blinds by setting ‘scenes’ which operate automatically throughout the day - for example, closing the blinds upon sundown, all through an app or stunning Pebble® Remote Control. The Luxaflex customer experience is personalised to the client offering solutions to their design, heat, light and privacy requirements in state of the art showrooms and in-home consultations. The window coverings are then manufactured to order and sent to the Luxaflex Alliance dealer licensee to provide the installation service. This service, as well as the quality and breadth of product range available, is what sets the brand apart from competitors.

across the country for over 60 years. This partnered, localised support is what drives the continued success of the brand. We do not just offer a range of products, we truly become your partner with ongoing training, networking opportunities and comprehensive marketing support. Initial investment is affordable with no inventory holding required. Key areas are now available nationwide and no previous window covering or interior decorating experience is required. There are two options in the Luxaflex Alliance program. The Luxaflex Gallery program is the premium full-line retailer, with access to the entire range of products and business programs offered by Hunter Douglas while Luxaflex Showcase is a smaller program that still provides retailers with access to a comprehensive range of products within a smaller retail environment that suits generally smaller interior design stores.

Your Luxaflex Gallery Business

The Opportunity

The Luxaflex Gallery is specially designed to display full-size products in the latest fabrics and colours, allowing consumers to envision the product in their homes. The entire Gallery is set up for a superior customer experience, designed to inspire consumers to consider products that they may not have been aware of, leading to a satisfied customer and a higher sale value.

The Luxaflex Window Fashions brand has partnered with independent, local businesses

Marketing support and communication tools that work on both a national and local

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level are provided and can include a mix of television, digital & print advertising, local area marketing, point of sale, direct mail campaigns and printed catalogues. The marketing focus is lead-generation with individualised websites available for all Galleries which contain comprehensive product information and inspirational information for consumers. You will benefit from leads received via the website’s Dealer Locator pages alongside the use of Google Adwords, Social Media marketing, eBrochures, sponsorships and much more. An advanced marketing automation system, Eloqua, is used to promote your business to existing customers and personalise communications to potential customers. There is a dedicated training team that offers in-person and online video training to support your product and installation knowledge. Training is ongoing with support always close at hand. A national annual conference offers networking opportunities with likeminded business owners while a Gala Awards and Travel Incentive Program are designed to reward you for your business success. Luxaflex Window Fashion license opportunities are available now in selected parts of Australia. To find out more about joining this innovative and world leading brand contact Mark Futeran at: 02 9638 8000 mark.futeran@hunterdouglas.com.au www.luxaflex.com.au

Design and Innovation Leaders

Integrated Marketing

Patented Products

Build Yourself a Business With the market leaders by your side, establishing and managing your own Window Coverings business is a highly rewarding experience. Having partnered with small business in Australia for over 60 years, we understand the support behind the products are just as vital for business success. The Luxaflex Window Fashions alliance programs provide comprehensive marketing, training, development, networking, incentives, events and showroom fitouts to support our innovative high yield product range. With opportunities available in numerous prime positions, the time to join our highly successful network of Luxaflex Window Fashions showrooms is now. Contact Mark Futeran on 02 9638 8000 or mark.futeran@hunterdouglas.com.au to discover the possibilities of the Luxaflex Window Fashions alliance programs.

Business Training & Support

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actualise your Service Franchise “With a few exceptions, service franchises can offer a relatively high return on capital invested. When compared to retail business, service franchises tend to have lower stock levels and equipment/fit out requirements.” Steve Seddon | Senior Business Development Manager | Westpac

Service franchises cover a wide range of business types that require different ranges of skill levels, time and investment. Examples of service franchises include: business coaching, domestic cleaning, commercial cleaning, pool maintenance, education services, childcare, travel agency, home care and maintenance, mortgage broking etc.

invested. When compared to retail business, service franchises tend to have lower stock levels and equipment/fit out requirements. Other benefits can include: • The current trend of outsourcing in the business sector where businesses prefer to use a contractor, rather than an employee, to undertake some activities. For example businesses may use contract couriers to deliver goods and documents. The provision of cleaning and security services while once done in-house may be outsourced to specialist providers. • Growth in the outsourcing of domestic activities as large numbers of families become increasingly time poor. These tasks may include, household lawn mowing, house/car cleaning, window cleaning and swimming pool servicing.

Potential Benefits

• Income guarantee by franchisor. A word of caution, buyers must take care to understand these arrangements as any income guarantee will have a number of conditions attached. Also this income will rely on the franchisors capacity/ willingness to pay. Banks are unable to rely on an income guarantee to support a loan.

With a few exceptions, service franchises can offer a relatively high return on capital

• Lower stock levels which may reduce overall investment.

This segment provides franchise business opportunities in a broad range of activities. Buyers will be able to tailor their research depending on their interests, risk profile and financial capacity.

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• Operating hours may be more flexible than the more restrictive nature of retail trading hours. Some franchise systems may even offer weekend or part time opportunities. • Overheads in many service businesses are low. For example, mobile services may not need expensive premises and others have an ability to work from home. This means they may be profitable more quickly than other business segments. • They may offer a good way of using existing skills rather than relying on capital to generate an income. • Service franchises tend to require handson and direct input from the owner. They are best run on an owner-operator basis. • Some mobile businesses have the opportunity to grow through the addition of one or more employees. This will vary depending on the franchise system.

Potential Drawbacks • While returns on investment may be high, many service businesses may offer low absolute profits, particularly when factoring in the franchisee’s time working (personal exertion). • Earnings will be limited by the hours that can be physically worked by the franchisee and their own abilities to compete the tasks. • Some may be more seasonal in nature with lower levels of activity in certain times of the year. • Many require the franchisee to market and sell the service. Although franchisors may provide the tools, processes, and undertake group advertising, the success or otherwise of the business will

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depend on the franchisee’s efforts. This will usually continue for the life of the franchise. The time required to complete this aspect of the business will need to be considered. This is particularly evident in the start-up phase. • Lower entry costs also make it easier for others to enter the market. This may include both competing franchise groups and independent operators. • Business may be highly dependent on the continuing efforts of the owner. This may make the business more difficult to sell unless these skills are transferable to a new operator. • Some may require additional licenses and qualifications. For example franchisees operating in real estate sales or pest control are required to hold appropriate licences. There will be a number of other advantages and disadvantages. It is essential to engage an accountant and a lawyer who has prior experience in the franchise sector.

Funding to Buy a Service Franchise Some of the characteristics of a service franchise as outlined above may make it more difficult to obtain funding. Traditional funding may depend on whether the franchisor has a financing arrangement in place with a bank and/or the financial capacity of the buyer.

“Franchise systems with lower levels of investment tend to be funded using equity in the buyer’s residential property. Banks will generally lend up to 80 per cent of the property’s valuation subject to a demonstrated capacity to repay to loans.”

Franchise systems with lower levels of

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investment tend to be funded using equity in the buyer’s residential property. Banks will generally lend up to 80 per cent of the property’s valuation subject to a demonstrated capacity to repay to loans. The applicant’s full position will be considered. This includes any additional income sources and requirement to meet living costs and repayment of business loans, home loans, credit cards, personal loans etc. Applicants will be required to present a detailed business plan to support their application. This should include the following: • Historical financial results (for the purchase of an existing business); • Cash flow/profit and loss projections (new and existing businesses);

• The Buyer’s own cash, through savings or sale of an owned asset; • Equipment finance to fund vehicles and any major pieces of equipment; • Private loans from family and friends. (Take care to fully document in order to avoid any misunderstandings in the future);

• Assistance from the franchise (this is rare, however some franchise systems may provide a level of assistance).

Free information is available at Westpac’s Davidson Institute. Visit: www.davidsoninstitute.edu.au.

The above may not suit everyone. However, it is important to ensure any loan repayments are taken into account when looking at the financial viability of the business.

• Applicant’s background (prior work experience, industry experience and education);

• The full ingoing cost;

• Franchise term and expiry. Buyers without property may look to other (non-bank) funding sources. These may include one or a combination of the following:

• Seeking good quality advice from an accountant and lawyer (experienced in franchising).

• A vendor loan from the outgoing franchise; and

Summary

• Lease term and expiry (if applicable); and

• Allowing for costs to repay the loan and cover franchise and marketing fees;

Content has been prepared with the assistance and input from Daniel Cloete, National Manager Franchise, Westpac Banking Corporation, New Zealand.

• Applicant’s current financial position (including assets and liabilities, income and expenditure);

• Full details of the business being purchased, ingoing cost, working capital requirements, legal/accounting/training costs, location/territory, local competition;

happened to the video rental industry;

Take care to fully research and understand the business opportunity, consider: • The expected turnover and profit; • How quickly the business will reach a ‘break even’ point (income covering costs); • The time required to earn the income. Don’t forget to include time to complete the actual work task, marketing activity, administration, travel time, training time; • The location and surrounding territory. Don’t forget to research existing and potential competition; • The business’s industry growth prospects and risk of decline. Look at what

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Steve Seddon is Westpac’s, Senior Business Development Manager – Franchising, Western Australia, Queensland and South Australia. He is a CPA and a member of the Franchise Council of Australia’s Western Australian committee. Westpac continues a long-term commitment to the franchise sector in Australia. The bank has a national network of franchise specialist business bankers who are able to deal with the specific needs of the franchise sector. Contact Steve at: 0407 401 892 sseddon@westpac.com.au www.westpac.com.au/business-banking/ industries/franchising/

WOULD YOU LIKE TO BE A HITMAN (OR HITWOMAN)?

BECOME A FRANCHISEE

A Hitman Franchise offers you the opportunity to build a highly profitable business with plenty of room for business growth and development. Hitman currently has 18 franchises across Brisbane, Gold Coast and Sunshine Coast. All franchisees earn a minimum of $100,000 net of expenses in their first year. Hitman is a successful Brisbane based business that has been providing pest management services for 22 years. The key to Hitman’s success is its rigid adherence to systems in all areas of the business. These systems ensure that clients receive exceptional service from the time they first call the office, through the 12 month service period, to when they are rebooked for their treatment the following year. These systems also mean that Hitman is a perfect business to franchise. Hitman Franchises are Unique Hitman franchises are definitely unique. The big difference between Hitman and other franchises is that the bulk of the clients are sourced by head office. This means that the onus is not on you to find work. However, if you do source your own clients your income will be substantially higher. A Hitman franchise is also seasonal which is great for anyone who likes to work hard for 9 months of the year and take it easy for 3 months. Hitman’s expertise is not only in the treatment of pests but also in its ability to acquire clients and retain them. Donna Ross-Teigan cofounder of Hitman with her husband Niels has an extensive background in marketing which has been extremely beneficial to Hitman and its franchisees. $100,000 Earnings in First Year All Hitman franchisees earn in excess of $100,000 net of expenses in their first year assuming they do all work allocated to them. Hitman’s retention rate of clients is 80% which means that the bulk of clients is retained by the office and reallocated to the franchisee. Most of the income is earned between October and May of each year. This is when the pests are most prevalent and clients prefer to

have their treatment. This means that the winter months of June, July and August are the slow months and a minimum of work is done. This is when all holidays are taken over this time. Full Training All Hitman franchisees are new to the pest control industry when they buy a franchise. Once they are trained they are indisputably the best in the industry. The training received includes a certificate course of study as well as five to six weeks practical training. The training program is overseen by Niels Ross-Teigan who has been in the industry for over 20 years. Cash Flow from Day One As soon as the training is completed you begin work. You are given a work schedule of between 4 and 5 jobs per day. You collect the money directly from the client and then invoiced fortnightly by Hitman for jobs supplied. This means that you have an excellent cash flow from day one allowing you to focus fully on the job at hand. Territory Considerations As Hitman sources the bulk of all jobs there are no territories specific to franchisees. All work is allocated in the most geographically effective manner spread across all franchisees in their first year. In subsequent years existing clients will be reallocated to the franchisee that performed the treatment the previous year. Franchise Price A Hitman franchise including comprehensive training, all equipment, start-up chemicals and stationery is $153,000 + approximately $33,000 for the car. These prices exclude GST. Franchisees receive payment from clients on the day. Therefore, income starts day 1 after training finishes. FOR FURTHER INFORMATION CONTACT: Ms Donna Ross-Teigan, Director (07) 3827 5000

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V.I.P. H O M E S ERV I C ES FEN C I N G & H O M E M A I N T EN A N C E

A REAL BUSINESS WITH A REAL INCOME Do you want to own a real business - one that earns you money while you sleep? Becoming a master franchisee with V.I.P. Home Services Fencing & Home Maintenance (V.I.P. F&HM) can set you and your family up for life, with the opportunity to build a real business with a real income ongoing.

National Franchisors Warren Smith and Vea Johnston collectively have over 30 years’ experience within the franchising sector and drawing upon their previous experience, they are steadily building a team of niche operators to become the best in the industry, rather than just the biggest. Franchisees are sought to service Melbourne and Perth’s ever-present customer work requests, and due to their large population size V.I.P. F&HM are also keen to recruit Regional Master franchisees in Sydney, Brisbane and Adelaide – at relative low-cost entry levels. With four tiers of income available to Master Franchisees, V.I.P. F&HM take people that have never run a business before and turn them into successful franchise owners.

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INCOME: Tier One – Operate your own franchise V.I.P. F&HM franchisees offer a range of services, encompassing fencing, home maintenance or both! From paling, picket and Colorbond® fences through to automatic gates and modular wall systems, the fencing services available are extensive. Added to this, are popular home maintenance services including carpentry, painting, plastering, tiling plus many more. With this in mind a Master Franchisee will be assisted by us to operate their own franchise just like any regular franchise owner does and of course derive an income from that which usually entails a six-figure income from doing so.

Clinton Webster-Hill, Franchise Owner in Essendon, VIC, says, “I chose V.I.P. Home Services due to their size and long history of success in Australia. The added appeal was having Warren Smith and Vea Johnston running the Fencing and Home maintenance division. They both have an extensive and successful history in the franchise world.”

INCOME Tier Two- Operation of Your Master Franchise Purchasing the Regional Master rights upfront, the first responsibility of a Regional Master Franchisee (RMF) is – after up to 10 weeks’ paid training - to operate a successful franchise themselves. Once the franchise is running successfully and a full understanding of operating a V.I.P. F&HM territory achieved, RMF’s can then move onto the next step. A RMF seeks to recruit new franchise owners by offering territories within the region and derives an income from that process within their region, although for the more adventurous and top operators there is no geographical restriction, providing that the new franchisees can be trained and supported successfully.

“This opens up a huge growth opportunity for somebody within a city such as Sydney or Brisbane, where there are multiple regions,” says Warren. “RMF’s have a very large paddock to play in for a very modest investment upfront and with the ability to expand beyond, this multiplies their earning potential.”

on, it’s very intense to say the least but you learn a lot during the initial 8-week training package about not only building a variety of fences but just as importantly how to run a business.”

Bryan and Karen Buckley are doing this, as Regional Master Franchisees in Perth. Bryan says, “I have always wanted to work in a business which I felt was fool proof and stable. I have seen lots of new businesses in Perth and Fremantle come and go and didn’t want to be a statistic. We chose to go down the franchise path as there is a support structure with systems and support set in place.

As each new franchisee is recruited, the RMF benefits from the capital gain growth within the region they have developed. Warren says, “The master franchise is a real business, which I define as something that earns you money while you sleep or are on holiday. Everything else – in my eyes – is self-employment, which is fine if that’s what you want only.”

“We are currently building up our franchise business here in the Fremantle area but eventually we will sell this and focus specifically on helping others succeed here in Perth via our Regional Master Franchise Business.”

NEW and INNOVATIVE WAY to help you build your region to its full potential!

INCOME: Tier Three – Ongoing Fees and Royalties Following the allocation of territories to newly recruited franchisees, residual income is earned from ongoing fees, royalties, and training fees if applicable.

INCOME: Tier Four – Capital gain on the region’s value

Traditionally, franchising has relied upon new franchisees being home owners to finance their purchase. But, the truth of the matter is home ownership is at an all-time low, and coupled with non-existent wage growth, it’s a ‘Catch 22’ for young (and older) Australians. If you don’t own a home, it’s difficult to borrow money.

All incoming franchisees receive up to eight weeks’ intensive training, paid. This is either completed by the Franchise Training Manager or the RMF, meaning an additional income is received to cover training fees, adding to this third tier of income available.

Cementing their position as pioneers within the sector, V.I.P. F&HM recognised this, and after a lengthy consultation process with a finance group, and in recognition of the quality training, ongoing support and subsequent franchisees’ success and profitability, they can now offer new franchisees – subject to conditions- up to 100 per cent deposit-free finance.

Training at the highest standard is of utmost importance to Warren and Vea. Ange Sercia, franchise owner in Melbourne confirms this. “Training is something these guys are big

National Franchisor Warren Smith says, “This means a non-home owning individual, who wants to get ahead by owning a franchise now has the means to do so.

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“Franchisees are sought to service Melbourne and Perth’s ever-present customer work requests, and due to their large population size V.I.P. F&HM are also keen to recruit Regional Master franchisees in Sydney, Brisbane and Adelaide – at relative low-cost entry levels.”

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V.I.P. H O M E S ERV I C ES FEN C I N G & H O M E M A I N T EN A N C E

“V.I.P. F&HM do not simply sell franchise territories, but aim to build a team of niche fencing and home maintenance professionals that will fit into the existing culture and this also includes Masters!” Utilising Facebook and their own website landing pages, franchisees have access to a huge library of images and YouTube content, so that customers can see the quality of work being completed across the brand. This has led to a multitude of five-star reviews and testimonials, all of which are validated by Head Office.

LOOKING FOR THE RIGHT FIT AT EVERY LEVEL V.I.P. F&HM do not simply sell franchise territories, but aim to build a team of niche fencing and home maintenance professionals that will fit into the existing culture, this of course also includes Masters. “We’re very honest when people first reach out. We don’t try to sell businesses, we’re trying to find the right people and have rejected quite a few. We’re very fussy about who we bring into the network and franchisees have to be able to fit into our culture. We want to make sure that the culture is right – across the board,” says Vea

“With an abundance of work opportunities but NOT ENOUGH people to satisfy the high level of demand, this innovative finance opens a new opportunity, not only for us but the public; interested in escaping the trap of a low wage environment. “To the best of our knowledge, we’re the only franchise system within this sector to offer this, meaning we can now help new franchisees where others cannot!”

FOSTERING THE RIGHT CULTURE Developing and growing at a steady pace over the last two years, Warren and Vea are consolidating on the great culture that’s been developed with the franchisees. Vea says, “Our franchisees are engaged with the brand, they love the system and they all work together, creating a really happy team environment. They are so supportive of each other; I’ve never seen anything like it before. I’m staggered at how great the culture is! The meetings that we have are so much fun!” Catering to the franchisee’s specific needs and requirements and having tweaked the

training provided over the last few years, Warren says, “When the franchisees leave the training environment, all have a full diary of work waiting for them, from four weeks up to three months’ worth.” Clinton adds, “I received eight weeks paid training that included both practical ‘on the tools’ training and business training. It felt to me like it was six months of training built into eight weeks – it was very comprehensive. I still receive ongoing support whenever I need it.” All accounting and administration systems including appointment setting and quoting are cloud-based, fully live and mobile friendly, that way franchisees have access wherever they are, via their mobile phone or tablet. Vea continues, “All franchisees receive ongoing support and assistance, not just from head office but from the other franchisees within the network. After training, franchisees want to be out in their territory building fences and the last thing they want to think about is marketing; so we do that for them initially.”

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“We don’t kid our prospective franchisees or Masters about how hard it is in the early days, you don’t just rock in and immediately have the freedom you crave and a fullyfledged business. In the early days, it’s all sacrifice and hard work. “We’re honest, direct and firm with the training. When franchisees come out the other side, they understand and ‘get’ why we do it the way we do! The relationship changes because of this ‘lightbulb moment’.” With franchises, currently on offer in Victoria and Perth and Regional Master availability nationwide, V.I.P. F&HM offer fantastic earning potential for both. Coupled with national and local support, work flexibility and unparalleled value for money, V.I.P. Fencing & Home Maintenance are looking for people to take that next step into becoming a business owner. To get further information about joining this exciting and innovative franchise system, contact Australian National Franchisor Warren Smith for more information: 13 26 13 warren.smith@vipfandhm.com.au www.vipfandhm.com.au

Next issue we showcase the

Health, Fitness & Beauty sector - Feel-good franchising Attractive businesses that are guaranteed to make you feel good! Whether you simply want to join these booming industries for the financial returns or you enjoy a healthy lifestyle and keeping fit, then look no further than Business Franchise magazine to provide you with a multitude of exciting business opportunities.

on-sale

If you would like to showcase your franchise within this popular feature, contact Kathleen Lennox on 03 9787 8077 to discuss advertising opportunities available.

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NEW TO FRANCHISING?

Your questions answered During my 31 years in business - running a national franchise service operation specialising in bathroom makeovers - I have been asked many questions by people from various backgrounds, looking to get into their first franchise business.

It’s important that they are behind you in this undertaking.

Of course, many are related to our business and the details of the day-to-day operations, however I have selected the most common questions I have been asked over the years and answer them for you below.

Look at the skills you currently have - can you use those skills in your own business? If you can, that’s one less thing to worry about as there are plenty of new things to learn when running your own business. If you are going to be doing something completely different, see if you can go out and work for someone who is already in this business for at least a week. Make sure you like doing this work and enjoy it! Take annual leave from your job if you must; work for free if need be – this will be the most valuable thing that you do and will help you enormously in making your decision.

As you read through this, I hope it provides insight and assistance in your quest for the right business opportunity, for you and your family.

I want to get into business for myself – where do I start? Firstly, make sure you have the support of your partner and family as being in business is going to consume a lot of your time.

Then, start saving money. You want to have at least half the purchase price in cash, this will mean you don’t have to borrow more than 50 per cent which will take a lot of pressure off you. Next, think about what sort of business you are going to enjoy getting up for every morning.

If looking to buy an existing business, then I would recommend a two-week trial shift

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with the current owner. That way you get to determine whether you like the work, confirm the weekly sales of the business, see first-hand how it runs and what is involved on a day to day basis and gain many more valuable insights into the real business. There are lots of websites that you can visit to find out more about the business you want to get into and the industry that it operates in. It is very important you have a good idea of the big picture and how that can impact on the business you are looking at. It’s not that hard. You just have to make the decision and make a start. The more research and preparation you do, the better chance you give yourself of success.

What sort of franchise business would you like? To find the franchise business for you, ask yourself the following questions: • Can I see myself getting up every morning and running this business? • Does it excite me?

FE ATUR E : ou t w ith the o l d, in w ith the ne w • Does my family support me in my decision to buy this business? Getting into business is a serious undertaking that is going to consume a lot of your waking hours. So, it is a good idea that the business is something that you enjoy doing. You will be putting a lot of hours into your business, especially in the first few years, so having the support of your family is very important.

Do you have control over decisions in a franchise? Franchising is about the synergy that develops from two people combining their entrepreneurial spirit to grow and develop their mutual business - the aim of this synergy is to create wealth for both. This means that in running the business you will have certain functions to perform to make sure that you are successful and your franchisor has certain responsibilities to ensure that the value of the brand, and therefore your business, continuously increases in value. If you look at franchising this way you will soon realise that you are getting into business with a lot of people – they all have a stake in the business, they all want to be

“The way you run your franchise business has an impact on every other franchisee in the system and them on yours.” George Yammouni FCPA, B.Bus.| CEO | Bathroom Werx Group

involved in decisions and outcomes that affect them. The way you run your franchise business has an impact on every other franchisee in the system and them on you. You can start to see how important the franchisor’s role of keeping everyone ‘singing from the same hymn sheet’ becomes crucial to the success of the brand. So back to the question, of course you have a say. You control the day-to-day and the interaction of your customers with your employees and with the brand. Every day you should always ask yourself how you can run things better, so that your customer is the winner. These are the sort of answers that your franchisor is always searching for and this is where you have a big say in the business. The other side of this is that you are one

part of a big team… your brand - and that requires discipline from you to play your part on that team. There is nothing to be unsure about in running a franchise business. The functions that determine the success of your business have been identified and systems are in place to help you carry them out. All you have to do is follow the SYSTEM. In general, this is one of the most important factors that makes franchising more successful than small business.

How much of the purchase price should I borrow to buy a franchise? My recommendation is to have at least 50 per cent in cash, which means you will not need to borrow more than 50 per cent and the reason for this is simple.

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“It makes a lot of sense to use the knowledge you’ve gained in running your new business and leverage that into two, three, four or more stores inside your franchise system.” your own resources – not borrowings against other assets. Business loans are generally short-term loans of five to ten years (usually they will match the term of your franchise agreement), and have higher interest rates and fees. This means that your loan should be repaid over this time period therefore increasing the monthly repayment amount. Can the business afford to pay that each month? In this example $50,000 must be repaid over five years which is $1,100 per month (at a 11.5 per cent interest rate). Can the business afford this each month? If it can, will it leave you with enough money to live? These are simple enough calculations which I would highly recommend doing first when deciding first how much you should borrow. There are plenty of challenges in running a business – why burden yourself with the extra stress and worry of borrowing too much.

Becoming a multi-unit franchisee You’ve made the decision, you’ve done all your homework, organised your finance, finished the training and now you’re there… running your own franchise business. Life sure has changed a lot since you started in business – it’s exhilarating and you love every minute of it. So, what happens next?

Before you go and buy a house, you have already determined what price range you can afford. You know how much you have saved up and you have already been advised the maximum amount you can borrow – this is based on your level of income which determines your repayment which then determines the maximum amount you can borrow. So, armed with this information you now have a budget for the maximum amount you can spend to buy a house. The result is that you are going to end up with a house that you can afford to pay off each week based on the income that you earn. You should follow a similar process when buying a business.

Most accountants would advise you to never borrow more than 50 per cent of the capital required to get into that business and I have to agree with that. For example, if you are buying a business that has a total purchase price (including all the costs of acquisition of $100,000, my rule of thumb is never borrow more than 50 per cent of the annual net profit of the business (before interest, tax and owners’ wages), or 50 per cent of the purchase price of the business, whichever is the smaller figure. Don’t forget that loan repayments have to come from the profit that the business makes. The rest of the money should be in cash from

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One of your options for the future is to expand your business by opening another store in your franchise network i.e. become a multi-unit franchisee. This option is being explored by more and more franchisees now as they grow their businesses to the next level. It makes a lot of sense to use the knowledge you’ve gained in running your new business and leverage that into two, three, four or more stores inside your franchise system. It also makes more financial sense to do this rather than put your money into other investments - whose returns you have no control over. Plus, your business has a much higher rate of return that most investments in the market place. Isn’t that why you got into business in the first place?

It also gives franchisees the opportunity to develop and grow substantial businesses, which not only add value to the brand but also become huge wealth generating assets for the franchisee. Here are some things to think about before you go down that road:

1. Learn the business first It is critical that you have a very good understand of the key drivers of your business. Concentrate on developing your skills in the key areas of the business: • managing and developing your team, • establishing a management structure, • ability to delegate, • local marketing and customer service, • continuously reviewing your performance, • business and financial planning. As a multi-unit franchisee, your focus must change from operational to more strategic. You are going to have to develop your financial skills, as well as staff recruitment and management skills. If you have these skills from your previous work life experiences, you are ahead of the game already. Measure your performance against other franchisees in the system. This way you can start to gauge whether you are achieving good market penetration in your current store before you move on to your next one.

2. Organise your finance to ensure you have enough working capital to finance another location You are going to need money in the bank or credit facilities to finance your expansion. This can include the following: • franchise fee, • store fit out, • stock, • staff recruitment and training, • management team to run new location, • opening marketing promotion, and • working capital. Take the time to do this as going into your second store highly leveraged is a recipe for

disaster. If you had to borrow a lot of money to start your first store then make sure that you have paid a good part of that off before starting your next store. Sit down with your accountant and do some serious financial modelling, making sure that you understand the cash flow implications of a second store. I also recommend breakeven analysis so that you know what sales levels are required in the second store and the impact it can have on your overall profitability. Running a profitable first store is crucial to your success, as its cash flow will be very important in the early months of your new store. That is why it is crucial to have a profitable business before you start your expansion.

3. Do your market research again Choosing the location of your next site is just as important as the decision you made to choose the location for your first store. This time you know more about your business and your customers and this knowledge is going to help you enormously in analysing and choosing your next location. Thoroughly research your site selection, and work with your franchisor to ensure you have chosen the right site. There are a lot of factors to consider and sometimes you just have to be patient as you wait for the right site to come up. If it’s not right, don’t jump in - there is no hurry to jump into a second-rate site. Don’t forget you already have an existing business to run. Your franchisor is going to be an enormous help to you here, as they are going to have their own research in this area and will be able to provide you with some very important information.

4. A strong management team and infrastructure Building a strong management team and an administration infrastructure to run your business is critical as you move into the next phase of your business growth. This will enable you to add a third, fourth, or fifth location. This structure can easily be leveraged to grow your business and add even more stores. It provides pathways for your staff where you can offer rewarding careers for your most talented staff members, offering them a variety of different roles at different locations. This will help you retain and attract great staff.

This is probably the most expensive part of running your business but the good news is that this infrastructure can handle multiple stores and it is this leverage that will make you serious money in the long term. The management system and infrastructure you run is the backbone of your business. Make sure that you are using the latest technology available to keep your administration costs down. It is vital that it gives you the leverage to grow the business without having to resort to increasing your staff numbers to cope with the growth.

5. Talk to your franchisor As soon as you start thinking about expansion, talk to your franchisor. They will have the experience of helping other franchisees that have followed this path and will be able to provide you with a checklist of all the things you have to do. There will also be clauses in your Franchise Agreement that govern this and you will have to check whether your Franchise Agreement allows you to do this and that you are eligible for a multi-store franchise operation. The good news is that franchising is about replicating success… in many locations. Somebody else has already done all the hard work in working out the best systems that will run a multi-location franchise – following the model is a recipe for success that reduces the risk of expansion and helps you generate more wealth for you and your family. George Yammouni is CEO of the Bathroom Werx Group - a national franchise system specialising in quick and affordable bathroom makeovers and renovations. He is a 30 year CPA veteran by profession and started his business as a franchisee in 1986 after a career in merchant banking. He acquired the franchisor in 1988 and began franchising in 1990. Bathroom Werx renovates over 200 bathrooms every month around Australia for Customers, including the world’s leading Hotel groups and Government Housing Departments. George is one of Australia’s leading exponents of service franchising and is a Past Chairman of the Franchise Council of Australia. To contact George directly, email: george.yammouni@bathroomWERX.com

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A lot of franchisors are now encouraging this trend, as it makes a lot of sense to encourage existing franchisees to expand and grow their businesses. It keeps top performing franchisees in the system and gives them the opportunity to set goals which form part of their long-term business plans.

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have your say

Jim Penman:

A man on a Customer Service mission When franchising Jimâ&#x20AC;&#x2122;s Mowing back in 1989, I had very little idea of what I was doing. I had no system to check on work quality, no formal training, and no way to monitor vehicle or trailer signage. I badly wanted my franchises to be successful, and to give better service than my existing subcontractors, but few ideas on how to go about it. It was only gradually, over the next three decades, that we began to work out how this could be done. One thing I did get right from the beginning was to only take on franchisees I was convinced would succeed, a bold policy when only a fraction of the size of my nearest competitor! That was not only because I wanted my customers to be looked after, but because I knew from past experience that contractors who gave poor service tended to fail. So, I made a point of sending all prospects out for a trial with people I trusted. Those who did not measure up were knocked back, and that was quite a few. The next stage, sometime later, was to change the way we charged fees. I was frustrated that franchisees were taking leads but not following them up, leaving customers in the lurch. After a few experiments, we began a trial of charging a small fee for each lead provided, balanced by reducing the base fee. A customer survey found that this made a dramatic difference. Not only were franchisees charged lead fees far less likely to neglect clients, but we were picking up 50 per cent more work from the same number of leads! Franchisees stopped asking for work when they were busy, because they didnâ&#x20AC;&#x2122;t want to pay the lead fee. Instead, the leads went to franchisees who really wanted them. This then became our standard system.

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The proper recording of complaints showed that we still had serious problems with customer service, even if it was much better than in pre-franchise days. So, I talked with my franchisors and we came up with the idea of asking the franchisor to phone a franchisee following each complaint, judge whether it was justified, and counsel them on how to avoid such problems in future. The next step was to deal with the relatively small number of franchisees getting far more than their share of complaints. We set up a system of steadily more serious warning letters, up to and including a breach notice, retraining, and termination. Becoming more rigorous with time, this system had a dramatic impact. Even though we terminated relatively few people, most letters caused a swift change for the better. This became even more effective once we started surveying customers by email, with any sort of negative answer treated as a complaint. About this time, we began a more formal training system, with all prospective franchisees brought to Melbourne for at least three days. I launched and still launch the first session by talking at length about customer service, both what we expect and the system behind it. I also made sure that the rest of the course carried on this theme. Not only did these courses lead to a clear drop in attrition over the first year, but they left franchisees in no doubt about our views on customer service. I began to take a more personal and direct role in service issues, asking call centre staff to send to me any complaint where the customer had called a second time. I would follow up the complaint with the customer, franchisee and franchisor until it was resolved, if necessary paying the client out of a special fund and back-billing the franchisee. If the franchisee had left the system, we simply paid the cost from the fund. This also allowed me to counsel and discuss customer service problems with franchisee and franchisor. I also became directly involved with the warning letters being sent out, and set myself as the only

“What is the lesson from our experience? That customer service matters more than anything. It is far more powerful than advertising, or social media, or the slickest PR campaign.” person who could actually delete a complaint if wrong. Daily involvement strengthened my motivation and also to bring about changes to the system, such as asking franchisees to SMS a client if they could not get through on the phone (since people rarely listen to their voicemails). All of these changes together led to a steady decline in complaints, which are now less than a third of what they were when we started recording them properly, and with an ongoing decline year by year. But this is still not good enough. More radical measures are needed. About a year ago we began to ask clients to star-rate their service, making clear to franchisees that these and any client comments would be placed online. That way, customers would be able to check out ratings before booking the job (though unlike Hi-Pages and other systems, they could only book one person). This gives an extra incentive for good service, and also to fix problems with the service since clients could be asked to change their rating once this was done. And it helps clients to avoid the small minority of franchisees who give poor service but tend to take a lot of leads, because they don’t enjoy the referrals and ongoing regulars that most of our people get. This system has yet to be launched at the time of writing, but it works very well in another venture that we are developing. Future plans include setting up franchisees with software that measures how quickly they respond to a lead, as well as giving cast-iron evidence when they have done the right thing (unfair complaints can be very demoralising). And we want to make it much easier for clients to respond to surveys, so that many more will reply. Measures such as these sometimes cause discontent, over issues such as paying lead fees when jobs do not work out, or for what may be regarded as unfair complaints. But the effect on work coming through has been huge. Twenty years ago, most franchisors overspent their advertising budgets and we had canvassers knocking on doors to find work. These days, many franchisors cannot even spend the advertising levy and must give it back, or use it to pay costs such as trailer stickers. There is simply no point to advertising when almost all franchisees in

the area are flat out. And the proportion of franchisees reporting good income has risen steadily. In fact, unserviced leads have become a major and growing problem. Over the past twelve months alone we have knocked back more than 143,000 leads, and the number continues to rise. The number of our franchisees is growing steadily, and will likely pass 4,000 next year, but we simply cannot keep up with the public demand. There is a HUGE demand for prompt and reliable service, almost regardless of cost. We teach our franchisees not to compete on price, and yet surveys suggest that about 75 per cent of our leads turn into jobs. Over-supply does not apply to all divisions in all areas, since in our system each division and each franchisor controls their own advertising, but it has become in itself a major issue of customer service. As a result, we are setting up a system where such leads can be sold to carefully vetted independent contractors, with money steered back into the system to get our people more work when they need it. What is the lesson from our experience? That customer service matters more than anything. It is far more powerful than advertising, or social media, or the slickest PR campaign. Our aim must be to not only satisfy but delight our customers, to exceed their expectations, and that we must always strive to do better. Poor service to customers upsets and offends me. Even one unhappy customer is one too many. Jim Penman launched Jim’s Mowing with a $24 investment in 1982, franchising in 1989. He now has over 3,700 franchisees in four countries, the largest franchise chain in Australia. He is happily married, with three children still living at home. His hobby and passion is scientific research into the epigenetics of social behavior, which he sees as having real potential for the treatment of depression, anxiety and drug addiction. His books, including Every Customer a Raving Fan can be downloaded without charge from his websites: www.jims.net www.biohistory.org.

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Another change came as a result of me taking a turn answering phones in the call centre. Though taking only about 2 per cent of calls, I found myself recording 10 per cent of complaints. It was clear that other staff were taking a ‘generous’ view of complaints, only marking them as such when really serious. I began asking them to record ALL complaints as such unless obviously wrong, such as complaints about over-charging (which is not poor service in my view, since we encourage franchisees to quote on the high side).

e x pert advice

Time is money – don’t waste it! Process. Some of us love it, some of us hate it. Either way, it is necessary to ensure HR runs efficiently and is compliant. Process usually lets us down in the HR space when it gets employees, managers and business owners feeling that “it is too hard”, or “it takes too long”. And let’s face it, HR for many can

be stressful, time consuming and a chore. But it doesn’t have to be…. In my time as an HR Specialist, I have quickly learnt that the only way to combat the feelings of “it’s too hard” or “I don’t have time” is to get streamlining with systems and processes. The introduction of HR management software has increasingly changed the way in which HR functions within a business and how once haphazard and antiquated systems and processes are managed. Gone (hopefully!) are the days of excel spreadsheets, manila folders and paper shuffled from desk to desk. If you

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want to achieve optimal productivity in this day and age, implementing an online HR Management system is key. Cloud based online HR information systems (HRIS) have changed the landscape of HR in many ways. The forward momentum that technology has introduced into the HR space has not only diversified the offering that HR brings to a business, but has meant that smaller business and franchises can now too reap the benefits of such systems which were once kept only for the big fish. With specially designed online HR platforms in the SME

space, keeping on top of HR has never been easier. One of the key benefits to implementing an HRIS is centralisation. Everything you need in the one place. Sounds like a dream, I know! Cloud based HRIS allow you to manage the full employee lifecycle from recruitment, induction, training and performance reviews right through to exiting an employee all in the one place. Not only is this great for increasing efficiency, it enables access to vital information at the drop of a hat, anywhere, anytime – essential not only for you as a business owner but for your staff as well. With all kinds of information so readily available these days, it makes sense to follow suit when it comes to HR. With centralisation of data and processes comes a reduction in the manual nature of HR related tasks. I dread to think of the number of owners, managers and HR staff that have a pile of paper leave forms sitting on their desk waiting to be processed. Or performance review forms waiting to be filed away in personnel files. Time spent pushing paper and managing manual processes can be better spent enriching and growing your business and engaging your employees. It is time to get rid of that paper weight and throw away that filing cabinet, and bring your HR processes into the 21st century. What I believe is the most important way in which a cloud based HRIS can transform your business is in helping to reduce and manage risk. With legislation increasing since the passing of the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 (I know you have heard of it!), managing risk as a small business and franchisor is becoming increasingly important. Cloud based HRIS help to manage this risk by confirming compliance and by providing audit trails; whether that be policy sign off, completion of online training or tracking of important qualifications. In times of a legal dispute, don’t waste time searching through piles of paper in an employee’s personnel file to see if they signed off on a particular policy, you can simply check your online system. Aside from the benefits in reducing risk, HRIS systems implemented across a franchise network can also bring your network together (and I don’t mean in the way of having everyone singing kumbaya in the courtyard...). It will create consistency in HR practices and documentation, make accessing information as a franchisor easier, and ensures that your brand is supported and reputation in the

“I dread to think of the number of owners, managers and HR staff that have a pile of paper leave forms sitting on their desk waiting to be processed. Or performance review forms waiting to be filed away in personnel files.” Leisa Rennie | HR Central

marketplace protected. And when HR isn’t your specialty, or you don’t have HR support for franchisees at the Head Office level, your best bet is to partner with a company and a system that will provide you with that peace of mind to help you sleep soundly at night. For all those data nerds out there, an online HRIS can feel like being a child in a candy shop. Think of all that data at your fingertips just waiting to be analysed. Transform the way in which you analyse and leverage data through your HRIS. Whether you want to identify trends in how personal leave is being taken or track employee turnover, having the data to analyse provides the ability to delve deeper, make informed decisions and identify opportunities for improvement. Any business owner will know that time is money. And what could be more valuable than your time. Although it can be difficult to measure, utilising an online HRIS will increase efficiency and productivity, which correlates directly to cost savings. Aside from the obvious savings, less tangible savings really are the cherry on top. There is immense value in having data at your fingertips for analysis and in creating improved communication and employee experiences. And in a world where one of the most frustrating experiences is not being able to access information, or having to wait to receive information (insert any computer or phone based loading icon here…I can feel you tense up already!) we need to keep up. Time and cost savings - it just makes good business sense. Another benefit to implementing an online HRIS is in the ability to improve communication within your business. This communication is not only in the ability to send memo’s or news across the office in one go, but also in making employee information accessible via indirect communication – leave balances, salary and other benefit or compensation data. The greater communication and transparency is in your business, the happier and more productive

your team will be, and the happier and more positive the culture. Last but not least, online HRIS ensure your business has top notch data security. HR documentation is often confidential, and needs to stay that way. Although filing cabinets can be kept locked, they still don’t have the same level of security that a cloud based system can offer. Threats to security don’t only come in the form of snooping employees or lost keys, but what about in the case of a disaster? Hard copy files can be swept away in a flood or destroyed by a fire. Most cloud based HR systems will back up your information and give you peace of mind that you can meet your tax and other compliance obligations. The way forward with HR is changing, once a paper shuffle, now a holistic well-oiled online machine. So, stop wasting time in Excel and throw out all those paper files (but only once they are on the cloud!). Leisa Rennie joined HR Central in April 2016, after the acquisition of Melbourne based HR Consultancy, People Dynamics. Her experience, combined with practical and analytical nature has contributed greatly to the team, and Leisa is a valued and respected advisor to the increasing HR Central client base. HR Central are experienced providers of HR solutions to the Franchise sector. Their subscription based solution is a combination of both software to manage the administration side of HR, and a support helpdesk for HR specialist advice. HR Central partner with you to increase productivity within your business, and to assist with compliancy around HR legislation, thus minimising risk to pocket and reputation. 1300 717 721 info@hrcentral.com.au www.hrcentral.com.au

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e x pert advice

Five steps to help you better your franchise

There are many things you need to consider when running a franchise. Here are five to help you along the way. A lot of factors can contribute to how well a business performs. Help better your franchise by:

Being on-trend with customer payments

Many people like to pay by card. Cash will always be around, but card is becoming the number one thing people reach for in their wallets. Research shows that over two-thirds of in-store payments are now made by card. Electronic payments for transactions under $10 have also grown; 31 per cent are paid with â&#x20AC;&#x2DC;tap and goâ&#x20AC;&#x2122;. In addition to making it easier for your customers to go through with their sale (after all, customer is king), having some type of electronic payment facility means:

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“Our visits aren’t about trying to catch people out; if you need help to take control of your record keeping, we show businesses the tools that are available and how to use them.” Tom Wheeler | Assistant Commissioner | Australian Taxation Office (ATO)

records, finalising forgotten income tax or activity statement lodgements, or fixing their under-reported income or over-reported expense claims. You’ll be surprised how we still find people who keep cash boxes under their cash registers, or have an excessive number of ‘voids’ or ‘no sales’ made through their cash registers. Our visits aren’t about trying to catch people out; if you need help to take control of your record keeping, we show businesses the tools that are available and how to use them. During the visits we’ll be reviewing record keeping systems, checking GST registration, and seeing if activity statement and income tax lodgements are up to date. We’ll also assist with any questions businesses may have.

• less time spent counting money and balancing your till (the more you rely on cash, the longer it takes to reconcile your sales); • less paperwork and administration; • less worry about counterfeit notes; and • less likely to be targeted by theft (both external and employee theft). To help educate small businesses on the benefits of electronic payment facilities, we’re currently visiting businesses around the country, some of whom advertise as ‘cash only’ or mainly deal in cash transactions. We’re doing this because large amounts of cash often leads to more mistakes, and it also provides more opportunity for some people to deliberately do the wrong thing and gain an unfair advantage over honest businesses.

Practicing good record keeping (get it right the first time) Generally, 70 per cent of the businesses we visit have something they need to fix – whether it’s learning how to keep better

was using various Australian business numbers (ABNs) on their cash register receipts. We asked the business owner a few questions, and they decided to make a voluntary disclosure about over-claimed expenses. We found unreported income and overstated expenses totalling more than $1.1 million. After taking legitimate deductions into account, the business had to pay around $211,000 in income tax, GST and some penalties (after taking the voluntary disclosure into account the penalties were reduced by $12,000).

Using small business benchmarks to help track your performance

Consider investing in an electronic record keeping and payment system to save you time. It’ll also help you be more organised if you need to get additional finance, a mortgage, or if you want to sell your business later down the track. There are hundreds of different packages available that are often designed for specific types of businesses. If nothing else, a basic package that records sales, voids, refunds and exchanges makes the end-of-theday reconciling so much quicker. Then there’s the other end of the spectrum that helps with invoicing, payroll, budgets, forecasting and even managing stock.

Small business benchmarks help you see how you’re performing compared to similar businesses in your industry (they’re also a helpful indicator to gauge the health of your business). You can use the business performance check in the ATO app to do this.

It’s worth going online and reading reviews and also having a chat with your registered tax or BAS agent. See what they use and get something that’s compatible with your agent’s system to make it easier when sending files and information across to them.

• you’re doing something much better than your competitors;

• you’ve used the wrong business industry code.

Fixing your mistakes ASAP

If you know you’ve made a mistake, it’s easy to fix. It’s also better for you to make the first step and make a voluntary disclosure instead of waiting for us to come to you. You’ll need to pay back the tax you haven’t paid (everyone needs to pay their fair share), but you may reduce any penalties and interest by making a voluntary disclosure. In one of our past visits, we realised a business

The benchmarks use information from tax returns and activity statements collected from over 1.4 million small businesses, and they’re published as a range for each industry (so you can compare apples with apples). If your business is outside the benchmarks, it may mean:

• there are areas you can improve on; • you’ve reported something under the wrong label; or

In addition to helping small businesses, the benchmarks are also one of the risk indicators we use to identify businesses that may be deliberately doing the wrong thing. Evaluate your business’ performance regularly to help you identify potential issues early on – it’s always better to correct problems sooner rather than later.

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Understanding your obligations and doing the right thing It’s important to do the right thing, and in addition to helping us identify businesses that may need some assistance, data matching is one of the ways we protect honest businesses. We regularly get data from franchisors to see if franchisees are reporting the same numbers to them as what they’re reporting to us. Unfortunately, sometimes we find that the numbers don’t match, but we also find that the franchisor’s controls may not be as good as they think they are. In another one of our visits to a franchisee retail business, we found the owners weren’t consistently reporting the tax withheld from their employees’ wages, and the business didn’t seem to have enough employees to keep it running and was dealing in significant amounts of cash. We investigated further, and discovered the business wasn’t fully reporting the sale of extra products and didn’t have a cash register to record the extra sales (they were only recording franchise product sales in the electronic system supplied by the franchisor).

“We regularly get data from franchisors to see if franchisees are reporting the same numbers to them as what they’re reporting to us. Unfortunately, sometimes we find that the numbers don’t match, but we also find that the franchisor’s controls may not be as good as they think they are.” The owners decided to make a voluntary disclosure. We took this into consideration and reduced their penalties by $14,000 – the business paid $3,000 in penalties and $24,000 in tax for the extra income.

calls a year from concerned community members, employees that have been taken advantage of, and customers who are asked to only pay in cash or don’t get a receipt with their purchase.

Other red flags we investigate include when business owners appear to be living beyond their reported income. Our data-matching capabilities can help us detect those who try to get an unfair advantage by not doing the right thing. We also tend to take a closer look at industries that mainly take cash payments, such as restaurants, cafes and takeaways, hair and beauty, and general retail.

These are just a few of the things for you to consider when it comes to running your franchise.

Remember you also have employee and superannuation obligations (for example, from 1 July 2017, all businesses need to make employee super contributions electronically through SuperStream). We receive over 10,000

Tom Wheeler is an Assistant Commissioner for Small business at the Australian Taxation Office (ATO). He has worked in the ATO for a number of years and has a wealth of experience covering tax, GST and the cash and hidden economy. If you’d like more information on the work the ATO does, visit: www.ato.gov.au/protectinghonestbusiness

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Grow your network with Cashflow It Franchise Accreditation

Help your franchise partners get the finance they need by becoming a Cashflow It accredited franchise system. Not only does accreditation reduce the challenges of accessing finance, it is also a powerful tool to assist in the growth of your franchise network. While Cashflow It operates with the flexibility of a small business, we have the resources and backing of one of Australiaâ&#x20AC;&#x2122;s largest non-bank finance companies - Thorn Group Ltd, an ASX 200 company with over 80 yearsâ&#x20AC;&#x2122; experience in the finance industry.

Cashflow It has been a key partner for the growth of the Rolld system. Where traditional lenders have rigid requirements, the team at Cashflow It have understood the challenges of a growing franchise system and have been prepared to partner for growth. Ray Esquieres, Co-Founder & CFO, Rolld Australia

Benefits of Accreditation

What can be funded?

1. Guaranteed access to finance

Just about any serialised piece of equipment can be funded with Cashflow It as well as some customised assets.

2. Preferred rates of funding 3. Access our full range of finance products 4. Accredited franchise priority service 5. Other exclusive benefits

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profi l e : A D P

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to gaining payroll compliance, efficiency and insights “I’m spending valuable time and resources managing payroll and related administrative tasks rather than focussing on growing my business!” Does this sound like you? Australian franchises operate in a challenging environment. Shifting workforce demographics, labour shortages and changing government regulations, such as the recent move to abolish the 457 visa, clamour for attention. At the same time, employees increasingly want easy-to-use systems throughout their employment journey. Legacy payroll tools can struggle to support these demands – leading to compliance risks and errors. With an estimated1 70 per cent of operating costs coming from salaries, overtime and other compensation – any payroll error could be a significant risk to your profitability and growth. ADP has developed cost effective solutions that can meet the specific demands of your franchise business. Our service helps you better manage time capture, rostering and leave requests – improving accuracy, efficiency and productivity, across your business. And everything is seamlessly and securely integrated into our payroll system so you just have one system to deal with.

Compliance from clock-in to payslip mitigates risk Did you know that 43 per cent of hourly workers2 admit to inflating the amount of time they work? ADP payroll solutions leverage advanced biometrics to stop buddy punching and geofencing on mobile applications to verify

the location of employees when they clock-in. The hours your employees work are fed directly into your payroll system where automated payment rules and Australian award interpretation enables easy compliance with Fair Work legislation. PAYG Tax and Superannuation are calculated, SuperStream requirements are met and compliant payslips are created. We help remove the administrative burden of payroll and compliance so you can focus on growing your business.

Efficiency across rostering and payroll processing reduces costs With 88 per cent of spreadsheets containing errors3 how confident are you that you’re not making costly mistakes? ADP payroll solutions allows you to escape the Excel maze of payroll processing. Our workforce management platform enables you to assign employees to rosters or, rosters to employees. This helps you schedule staff with the right skills on the right shifts. The system also provides roster costs so you have the information you need, before you commit resources. And you have the flexibility to view employee preferences and make any necessary adjustments anytime, from anywhere (online, or via a mobile app). In addition, a selection of detailed payroll reports give you the accurate information you require to efficiently monitor and manage your largest business cost. We increase your rostering and payroll efficiency so that you can have optimal performance.

Insights identifies leave liability Why is it that a business with automated leave and absence management4 has 33 per cent less unplanned overtime? ADP’s automated leave approval system

allows you to ensure an established process is followed. Legislative and employer specific leave policies are captured in one system so everyone has clarity. Online access enables self-service for employees - and managers can view and approve individual requests, giving them real-time visibility into the accrual liabilities of their team. We provide clear insight to help you better manage absences and improve productivity.

Why more Australian franchises choose ADP ADP has worked with Australian businesses for more than 35 years and has over 7000 clients. Globally, the ADP group is one of the largest providers of Human Capital Management and payroll solutions, serving more than 650,000 clients. We provide our customers with a platform to mitigate compliance risk, deliver business insight and gain operational efficiency. From software to outsourcing solutions, organisations of all sizes take advantage of ADP’s deep expertise to free their teams and help them focus on driving greater business results. Learn how you can take advantage of our expertise in franchise payroll, time & attendance and rostering solutions: Franchise.ANZ@adp.com adppayroll.com.au Australia: 1800 000 729 International: +61 3 9566 5100 Sources: 1. ‘The advantages of workforce management’, (2014), HR Magazine 2. ‘How Software Can Reduce Payroll Losses’, IndustryView (2015) Software Advice 3. ‘The world’s most useful and dangerous program - Microsoft Excel - turns 30’, (2015), Operis 4. Productivity: Managing and Measuring a Workforce’, (2015), Aberdeen Group

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Reduce your risk Single Touch Payroll legislation changes Australian Taxation Office reporting. Find out more and get your business ready to take advantage of the efďŹ ciencies.

adppayroll.com/stp Visit ADP at the 2017 National Franchise Convention to learn more. Booth Number: 31 Take advantage of our expertise in franchise payroll, time & attendance and rostering solutions. Australia: 1800 000 729 International: +61 3 9566 5100 The ADP logo and ADP are registered trade marks of ADP, LLC. All other marks are the property of their respective owners. Copyright ÂŠ 2017 ADP, LLC. Mk_ad_Reduce your risk_AUNZ_v6_0717

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The Value of Local Area Marketing for Franchisees

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well-followed social influencers or even celebs with mega followers to post about their brand, where maybe only 40 of their followers are from the franchisee’s area. Great for the brand in general, but it’s not going to bring customers to your door. Sourcing local advocates is much more affordable, and has the potential to target a far more relevant and engaged audience. For example:

“By getting to know your own local community (including factors such as age, popular fields of employment / unemployment and general interests and concerns), the community will get to know your business.” Samantha Brooks | Director | Fuse Agency

Congratulations! Your nationally-recognised franchisor, with a sizeable marketing budget and keen eye on the marketplace, has just launched a huge Australia-wide marketing campaign, thereby propelling your franchise into the spotlight. Great stuff! But as wonderful as this is for the brand and trickle-down effect to all franchisees, you can’t rest on your laurels and rely on the strength of this campaign and others that may or may not follow. As you will read in this article, there is an extremely important realm of marketing that franchisees can’t disregard in order make their franchise as successful as the national brand - Local Area Marketing, or if you’ll allow me to indulge in some industry-speak LAM. To help you see the value in LAM, we have outlined how this form of marketing can propel your franchise to new heights, as well as offering ideas on how to do so. You know all this already though right? Well, a reminder never hurt and you may just get some new ideas or inspiration. Some of these ideas and insights are as simple as can be, but are highly effective and often overlooked in favour of initiatives with more immediate impact.

Need reminding of the value of Local Area Marketing? • Increase your local awareness, engagement and reach. • Generate customer loyalty and repeat business. • Improve on, or establish, a positive brand image in the local community. • Franchisees have a better understanding of their local target market and competitors. This is important to note as national

franchisers may have a much broader target market demographic and entirely different competitors, compared to local franchises. • Campaigns that are tailored to the vast differentials that occur among franchises in different communities. For example: - Consider a national cafe franchise - in one community, this cafe might be the Friday afternoon hub for local high school students while in another, it may be a popular date night location for mature couples - pretty hard for a national campaign to cover all bases right? By getting to know your own local community (including factors such as age, popular fields of employment / unemployment and general interests and concerns), the community will get to know your business.

Local Area Marketing Ideas & Inspiration • Events. Involvement in local events is a very powerful way to have face-to-face contact with the local community in a way that is not as forward or as overtly sales-focused as some national marketing efforts can be. It is also great for positive public image and brand awareness in the local community and to the relevant target market. For example: - Sponsor local sporting teams - this will expose your brand to many local and relevant, and perhaps new, spectators. - Get involved in local fundraising events this shows your appreciation and support for local community matters. - Where practical, offer your business space to hosts community events - attendees are sure to come back as paying guests if they have an enjoyable experience, plus you’re recognised as being a local ambassador for a variety of causes • Make use of brand advocates and influencers that are in your local area to drive awareness. This marketing activity has the potential to reach a very large and relevant audience that is also nearby. Too often we see brands pay hundreds to enlist

- If you offer a food service, gifting a free meal or offering a discount to customers who upload a photo tagging the franchisee, or if they check- in online, this will create a much better targeted hype around your franchise’s offering. • Digital. The ‘Local’ feature on Facebook that targets people within a certain distance of your business - it’s cost-effective, and easy to execute with Facebook taking care of the hard work. • Share your story. People like to be able to relate on a personal level. Give the business a unique personality and people will want to show their support. Local media and social media are useful avenues to share your business’s story, and even those of your staff and loyal customers. • Stay active. The more active you are in different areas of the community, the more often your business name will be mentioned in a discussion among friends and community members. • Keep your customers involved through personal communication and engagement. Depending on the business, some ideas are: mailing list and social media engagement, e-newsletters, comment or feedback cards. Let’s not forget that the more your community feels included, the more they will include themselves (by visiting/ recommending your business). • Tee up alliances and cross promotions with another local business that shares synergy with yours. For example, if you have a healthy food offering it makes sense to partner with a gym, or for a family restaurant to connect with local schools and sporting clubs where families are in abundance. • Public Relations. When you’re doing something great in the community make sure you let the local paper and / or radio stations know what you’re up to - you never know, they just might cover it, thereby creating ‘money-can’t-buy’ media attention for your business. A great example of a successful franchisee that engages with the local community is Hog’s

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“If you offer a food service, gifting a free meal or offering a discount to customers who upload a photo tagging the franchisee, or if they check- in online, this will create a much better targeted hype around your franchise’s offering.”

Australia’s Steakhouse - Mandurah. We’re lucky ducks and get to work with the Hog’s Australia’s Steakhouse Franchise Support team. Earlier this year we attended their annual conference in Fiji where the Mandurah franchisee, Manish Gupta, was awarded the coveted ‘Franchisee of the Year’ award. Whilst there are many reasons he won, Manish is a well-known identity in his local community for a number of initiatives including providing free meals for the homeless and disadvantaged, particularly at Christmas time. He’s a man of generous spirit, but to his advantage, this has drawn a lot of attention to the restaurant from local media and community groups and has surely contributed to his success, with a second successful restaurant in Eaton also under his belt. Many other Hog’s franchisees around the country are heavily involved in various local activities and provide support to schools, sporting clubs, charities and community groups. Hog’s Surfers Paradise recently supported the Surfers Paradise Variety Waiters Race to raise

money for Variety Children’s Charity. Hog’s Tamworth is a great supporter of the Country Music Festival, while Hog’s Cleveland joined with the Brisbane Racing Club to help support the inaugural Starlight Foundation’s Superhero Saturday. Hog’s also localises its national initiatives by providing franchises the opportunity to host fan dinners and restaurant visits from their sponsorships like the DJR Penske Supercar team, which attracts new and often repeat customers. While we’ve shown how abundant the advantages of LAM can be, it’s important to not disregard the marketing efforts of your franchisor. They have a whole head office team dedicated to ensuring your franchise is a success, and engage in activities from TV and radio advertising, to massive social media and digital campaigns, outdoor advertising, national sponsorships and more, and the success of these campaigns does funnel down the chain to local outlets. You also need to make sure you abide by any rules surrounding franchisee marketing campaigns so make

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sure you check franchisor guidelines, or even seek approval, before starting any form of local-area marketing - you don’t want to do something that may compromise a major national brand initiative. The effort involved in LAM should not be discouraging. There is hard work involved in every successful business endeavour, plus you already enjoy the benefit of being a franchise with the weight of a recognised brand behind your business. So, there you have it. You’re lucky enough to have your franchise involved in national marketing campaigns as organised by the franchisor, but now you have the necessary means to engage with your local audience for a much more targeted and meaningful campaign. A consistent approach to LAM, together with a reputable franchisor brand, is a powerful combination. For more information or guidance on this matter, shoot an email to Sam, PR/ Marketing expert from a full- service marketing agency in Newstead called Fuse Agency. samantha@fuseagency.com.au

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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Business Franchise Australia & New Zealand is part of the global network of CGB Publishing With 30 years’ experience in providing high quality business information, with a particularly strong focus on franchising, our global presence allows opportunity for international franchise marketing solutions.

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