Business Franchise May/June 17 Feature: Food & Beverage Franchising by CGB Publishing

VOL 11 ISSUE 04 may/june 2017

bakers delight

delivering on the delight

serving up the best

consumers are hungry for more

buying a food franchise?

what you should know

WHAT ARE YOU WAITING FOR?

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

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

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

Crown Perth, Burswood

Brisbane: 22-23 July

Brisbane Convention & Exhibition Centre, South Bank

Melbourne: 26-27 August

Melbourne Exhibition Centre, South Wharf

TO THE 2017

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

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

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

www.franchisingexpo.com.au

Contents On the Cover Image: Bakers Delight

40 Cover story: Delivering on the Delight

Bakers Delight

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

Masao Watanabe, LegalVision

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

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

from Your Best

Karen Gately, Ryan Gately

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

Matt Manzie, Burger Urge

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

Business Franchise Australia and New Zealand 35

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

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

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

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

Nicole Penrose

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

36 Business Franchise Australia and New Zealand

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

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

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

“For a long time, people have been restricted

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

by offering a home delivery service, Zambrero

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

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

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

“At SumoSalad we are completely focused

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

Business Franchise Australia and New Zealand 37

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

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

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

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

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

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

38 Business Franchise Australia and New Zealand

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

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

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

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

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

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

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

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

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

Business Franchise Australia and New Zealand 39

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

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

Q&A with Bakers Delight

DELIVERING ON THE DELIGHT Q

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

Elise Gillespie and David Christie

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

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

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

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

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

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

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

A. We’ve both been working in the business

A. To be the favourite bakery in every

40 Business Franchise Australia and New Zealand

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

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

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

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

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

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

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

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

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

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

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

Business Franchise Australia and New Zealand 41

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

Serving up the Best

Consumers are Hungry for More Australians spend over $130

The First Bites

billion on food and beverages

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

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

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

42 Business Franchise Australia and New Zealand

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

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

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

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

Business Franchise Australia and New Zealand 43

FE ATURE : Foo d & B e v er age

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

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

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

Rules and Regulations

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

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

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

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

44 Business Franchise Australia and New Zealand

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

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

OF THE BEST ASIAN FOOD FRANCHISES

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

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

• • • • • •

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

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

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

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

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

You must then get with your franchise banker and put together a realistic sum of money you can afford to invest in this new venture. This will most likely weed out some systems quite quickly, as the larger, more well-known food names come with a hefty price tag. They are strong, tried and tested and have proven success stories, but you must truly be able to afford to buy into this.

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

Get to Know Your Franchisor The franchisor holds the key. The management system, the operational procedures, the leasing agreements, the contracts, and the fees have been generated by the franchisor. Check the franchisors background – is it solid? Meet with him or her. Do they seem to be a person of integrity? Do they answer all of your questions openly and honestly? Do they invite you to do your own investigations into the company? Are they eager for you to talk to existing franchisees? If at any point you feel pushed, rushed, bullied or even ignored by the franchisor – it is time to consider walking

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

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

The next step is to meet with several existing franchisees. While it’s fine to have all the manuals in place and have the franchisor tell you how great and successful the business may be, it’s the franchisees that have the real story. Visit them in their place of business, ask questions, and ask their employees if they enjoy working there.

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

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

46 Business Franchise Australia and New Zealand

Bon appetite!

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

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

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

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

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

Business Franchise Australia and New Zealand 47

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

e x pert adv i c e

BUYING A FOOD FRANCHISe?

WHAT you SHOULD KNOW

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

48 Business Franchise Australia and New Zealand

handling food. We unpack each of these points below.

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

Masao Watanabe | Franchise Lawyer | Legalvision

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

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

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

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

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

Business Franchise Australia and New Zealand 49

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

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e x pert adv i c e

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

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

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

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

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

50 Business Franchise Australia and New Zealand

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

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

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

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

52 Business Franchise Australia and New Zealand

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

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e x pert adv i c e

Enabling high achievers:

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

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

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

54 Business Franchise Australia and New Zealand

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

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

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

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

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

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

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

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

Business Franchise Australia and New Zealand 55

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

franchise retail brands

growing brands

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

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

will have different target markets or run in different environments.

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

56 Business Franchise Australia and New Zealand

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

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