AUS & NZ Business Franchisor issue 4#2 Jul-Aug-Sep 2014

Australian & new zealand

Franchisor B u s i n e s s

VOL 04 ISSUE 02, 2014

Use the

power of your brand

Leasing changes:

A moving target franchisee recruitment an agEing challenge

having difficult conversations in the workplace BUSINESSFRANCHISOR 1

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Australian & new zealand BUSINESS FRANCHISOR VOLUME 4 ISSUE 2 CGB Publishing Pty Ltd TEL: 03 9787 8077 (AUS)

Franchisor B u s i n e s s

FAX: 03 9787 8499 (AUS)

publisher: Colin Bradbury colin@cgbpublishing.com EDITOR: Joanne Tuffy editor@cgbpublishing.com.au SALES DIRECTOR: Vikki Bradbury vikki@cgbpublishing.com SALES and marketing manager: Kathleen Lennox kathleen@cgbpublishing.com.au PRODUCTION: production@cgbpublishing.com.au ACCOUNTS: Samantha Klimecki accounts@cgbpublishing.com.au DESIGN: Jejak Graphics (03) 8790 8006 TO SUBSCRIBE: PLEASE CONTACT CGB PUBLISHING

from the

Editor

The franchising community is currently experiencing a period of great change, the likes of which haven’t been seen in many years.

Following on from the independent review by Alan Wein last year and the recommendations taken from the subsequent report, Federal Small Business Minister, Bruce Billson announced on April 2 changes to the Code, to become effective from 1 January 2015. These will apply to new or renewed franchise agreements from that date and not applied to existing agreements.

As franchisors, it’s important that you understand how these changes will impact you and also your franchisees and over the coming months, we will keep you up to date as we are provided more insight. In this issue, on page 10 Michael Paul, the Chairman of the Franchise Council of Australia (FCA) reports on the continued consultive role they have taken with the Government since the changes were first announced.

industry. Michele Herson explains how to find your next franchisee using the power of your brand on page 24, Robert Hortle from the Fair Work Ombudsman explains how to have difficult conversations in the workplace on page 14, and Kimberley Carney from William Buck highlights the impact that proposed changes to Australian Accounting Standards could potentially cost Australian businesses million in compliance and education, on page 8.

There’s all this and much more, including profiles of the businesses that can assist you in your journey to become a successful franchise business.

As always, at CGB Publishing we welcome your feedback. Enjoy the read.

Joanne Tuffy Editor

EY have completed agreed upon procedures in relation to our net distribution for Jul/Aug 2013 edition of 6524 copies.

This edition of Business Franchisor is packed with advice from experts across the franchising

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Email: cgb@cgbpublishing.com.au www.businessfranchiseaustralia.com.au or www.isubscribe.com.au

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.

BUSINESSFRANCHISOR 3

CONTENTS issue 4, volume 2, 2014

On the Cover 8

Leasing changes: A moving target

14

Tips for having difficult conversations in the workplace

24

Find your next franchisee using the power of your brand

34

Franchisee Recruitment: An ageing challenge

Kimberley Carney, William Buck

Robert Hortle, Fair Work Ombudsman

BABY BOOMERS

34

Michele Herson, Herson Communication Services

Corina Vucic, FC Business Solutions

Expert Advice 10 Slow and Steady Consultation on Franchising Code of Conduct review

Franchise Council of Australia

18

Branchising Australia – Changing the way we do things

26

Training Franchisees for Success

30

The 10 Habits of Effective Field Managers

42

Innovation: The Key to Growth

44

How to reduce everyday overwhelm and thrive in business

48

The Franchise Dilemma

50

Pop up into Retail

Robert Toth, Wisewould Mahony Lawyers

GEN X

Nigel O’Neil, hockingstewart

Greg Nathan, Franchise Relationships Institute

Michael Paul, PACK & SEND

Tania Allen, Vision Alliance

Paolo Tanner, Fuse

Peter Buckingham, Spectrum Analysis

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GEN Y

24

26

ALSO IN THIS ISSUE 2

44

42

Walker Wayland

6 News items

Announcements from the industry 12

Franchise Fitouts Australia

16 NFC2014 - Early Bird tickets 21

10 THOUSAND FEET

22

A True Australian Success Story Plus Fitness 24/7

37

Voyages

38

Franchising Expo

39 National Franchise Insurance Brokers 40 The Role of Public Relations in the Franchise System

Keep Left PR 47

Book Review:

52

A-Z Directory

54

Jejak Graphics

40

The Franchise Relationships Book of Tips

BUSINESSFRANCHISOR 5

business franchisor

NEWSitems

New registry to strengthen credibility in franchising sector

AUSTRALIA’S first franchise registry was launched in June by Federal Small Business Minister Bruce Billson at a franchise industry event in Melbourne. ACCC Deputy Chair Michael Schaper and Franchise Council of Australia (FCA) Chairman Michael Paul also spoke at the event, addressing a group of leading figures in franchising.

Digital Pigeon helps make large share files fly A Melbourne-­b ased business has created the fastest, most reliable filesending service tailored for businesses where presentation counts.

Aptly called Digital Pigeon, the file-­sharing service is the brainchild of Melbourne friends, Stuart Clayton, an Experience Design whiz, and Dan Washusen, a former Microsoft Enterprise Developer, who wanted to eliminate the chore of sharing large files by creating an intuitive and functional service that did the hard work for you.

Dan said the idea came about after his brother, a photographer, related his frustration at sharing large files using existing systems. “With our Experience Design and IT backgrounds, Stuart and I realised there was an opportunity to provide a file delivery tool specifically built for those that deal with large digital media files quickly, intuitively and beautifully,” Dan said.

“Digital Pigeon’s file-sharing service is unique in that it utilises globallydistributed servers based in business centres in the US, Europe, SE Asia and Australia, therefore resulting in much faster uploads and downloads, up to five times faster.”

That translates to critical time savings for businesses, only taking 7 mins to send 1GB of files, if you’ve got a strong internet connection at your end.

“We also wanted to create a service that allowed people to share larger files – Digital Pigeon can send files that are double the size of our competitors, with a maximum file size of 20GB, up to 100GB for bespoke corporate plans. On top of that, it is easy to use and there is no need to waste time babysitting your files as they send – you can start uploading and walk away, and check progress, update information and even confirm the send remotely via a mobile app and mobile site,” Stuart said.

Since it was launched in September 2013, Digital Pigeon has attracted numerous local and international clients. “We are the only Australian company in the sector and the feedback has been overwhelmingly positive,” Dan said.

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Minister Billson welcomed the establishment of The Franchise Registry™ and its ability to further enhance the credibility of Australian franchising, improve franchisor compliance and provide an excellent resource for people looking to invest in a franchise.

The Franchise Registry™ promotes greater transparency in the sector which boasts over 1,100 franchise systems and 70,000 franchised businesses. It requires franchise brands to provide a current Disclosure Document and current Franchise Agreement each year and to also confirm these documents comply with the Franchising Code of Conduct.

Successfully registered franchise systems receive a unique franchise registration number which they can use in all dealings.

The registry will provide people looking to enter franchising, and their advisors, with a base level of assurance in identifying genuine and responsible brands, helping disperse the cloud of uncertainty that persists over the industry as a result of recent Government inquiries.

“Federal Government has long had an appetite for better indicators of stability in franchising and we welcome any initiative that can generate more meaningful data that we can use to enhance our support of the sector,” Minister Billson said.

Franchise Council of Australia (FCA) Chairman Michael Paul welcomes the registry and said the registry would highlight credibility and strength in the $131 billion sector.

“It’s unfortunate that allegations of inappropriate franchisor behaviour from a small but vocal minority have the potential to impact the reputation of the wider franchising sector when Australia is the envy of global franchising, with the lowest rates of franchisee disputes in the world,” he said.

Darryn McAuliffe, CEO of FRANdata Australia, which administers The Franchise Registry™, said “an information gap exists between the positive economic performance of franchising and the way people view individual franchise brands, but the publicly accessible registry gives responsible franchisors the opportunity to strengthen the credibility in franchising.”

More than two hundred franchise systems are already listed on The Franchise Registry™.

The registry can be found at the website www.thefranchiseregistry.com.au.

How safe is your Franchise Territory?

a unique way of taking your brand to the road For those in the franchise industry, there are plenty of compelling reasons to get involved in Australia’s famed motoring charity event, the Variety Bash. A corporate Bash vehicle makes sound philanthropic and promotional sense and is a unique way to take your brand to the road.

This year in particular, businesses can look forward to maximum brand exposure with special plans underway for the event’s 30th celebrations with six consecutive State and Territory Bashes running consecutively and coming together for a spectacular, high profile event in Sydney on 17th August.

700 fancy-dressed, vintage vehicles and 2000 colourful characters will set out on their unique routes which will culminate in a grand parade across Sydney’s Harbour Bridge with more than collectively driving over 20,000kms to congregate at a special finale at Moore Park.

The $5000 to $8500 entry fee to participate in your local Bash (dependent on State or Territory) is in fact a donation to Variety - the Children’s Charity and is therefore tax deductible. The event is also a powerful team building exercise, doing the Bash together fosters open communication, a sense of adventure, trust, co-operation and above all, fun!

Budget savvy franchisers and franchisees can leverage this year’s Bash as an out-of-the-box way to get brand exposure in a creative way, by sign painting or wrapping a vintage vehicle with unique branding, to provide your business with a philanthropic edge.

Variety offices in each State or Territory can also offer a wealth of expertise and advice to get corporate teams on the road including access to ex Bash cars up for sale on the Variety website and recommended suppliers that can assist with branding and wrapping the car.

With special plans underway this year to mark 30 years since the first Bash, the National Bash is expected to gain significant media exposure nationally – a welcome bonus for adventurers and philanthropic businesses.

Businesses that want to get involved in this year’s event can find more information and to register visit: www.variety.org.au

Until now, there have been very few territorial cases in the Courts brought by franchisees because of the legal costs and potential damage to the working franchise relationship but two recent decisions were Video Ezy International Pty Ltd v Sedema Pty Ltd [2014] NSWSC 143 (Video Ezy Case) and RPR Maintenance Pty Ltd v Marmax Investments Pty Ltd [2014] FCA 409, (RPR Case) with the court recognising the franchisee’s exclusive territory and awarding damages against the franchisor.

In the Video Ezy Case, the Supreme Court on appeal, agreed with the Local Court’s decision that Video Ezy (franchisor) breached a franchisee’s exclusive territory by allowing Blockbuster and EzyDVD (as related entities of the franchisor) to engage in online sales and subscriptions of movies and DVDs in a franchisee’s territory. The franchisor argued that it was not in breach of the exclusive territory because it had not physically entered into the franchisee’s territory and establish a ‘brick and mortar’ store to directly compete against the franchisee but the Court ruled ‘The distinction suggested between the operation of a ‘bricks and mortar’ business and on-line trading is illusory’ and also held that in addition to the breach of the terms of the franchise agreement, the franchisor was in breach of an implied term to act in good faith against the franchisee.

In the RPR Case, the franchisee (RPR Maintenance Pty Ltd) complained to the franchisor over a 2 year period, (Spanline Weatherstrong Building Systems Pty Ltd) that its neighbouring franchisee (Marmax Investments Pty Ltd), was poaching jobs in its franchised territory in the South Coast of NSW. The Court was critical of the deficiencies in the franchisor’s investigations into the complaints made by the affected franchisee.

The franchisor argued that there was no breach of the exclusive territory provisions when the neighbouring franchisee did not establish a showroom to sell the ‘Spanline’ products in the franchisee’s exclusive territory, nor did the neighbouring franchisee directly advertise in the exclusive territory.

The Court decided that under this particular franchise agreement, the exclusive territory included the activities of selling and installing the franchisor’s product and did not simply rely on whether a showroom was established in the franchisee’s territory.

The court also held the franchisor had an implied term of good faith and fair dealing towards the franchisee. The franchisor was ordered to pay for the lost profits that the franchisee had missed out on, by losing the sales and profits to the neighbouring franchisee, even though the franchisor did not receive or benefit from the profits.

The Courts have now sent a strong message to franchisors that if they do not preserve their franchisee’s exclusive territories, then a franchisor may be liable for lost profits, whether or not they received those profits.

To read in further detail, click here.

BUSINESSFRANCHISOR 7

Kimberley Carney

Lease changes a moving target for franchise sector

L

easing plays an important role in the franchise sector as it accommodates the transfer and delivery of a ready-made business model without the capital outlay or liability involved with purchasing property, plant and equipment.

Although the relationship between the franchisor and franchisee makes the lease arrangements more complex, it nevertheless underpins the business model and enables the business to upscale, downsize or modify service delivery as required.

But a proposed change to Australian Accounting Standards could dramatically change the way leased property, plant and equipment is represented on balance sheets, potentially costing businesses millions in compliance

8 BUSINESSFRANCHISOR

and education, particularly those that lease a significant amount of assets.

While it’s still not entirely clear what the final impacts of the changes will be, as definitions and concepts are changing every day, it’s important for the franchise sector to be aware of the changes and begin thinking about how they will impact on their business.

Bringing leases on balance sheeT The main area of change for the Australian Accounting Standards, which could be finalised as early as 2015, is they would require businesses to record on their balance sheet any leased property or equipment, such as a franchisee’s operating premises.

The International Accounting Standards Board (IASB) has been discussing the issue for over five years, with the goal of providing increased transparency about a company’s assets and debts.

Currently, leases are generally classified in one of two ways; operating leases and finance leases. The classification of these leases will be determined by who bears the risks and rewards as outlined in the agreement.

In the franchise sector it is not uncommon for a franchisor to enter into a lease with a landlord for the rental of a premises. The franchisor may then enter into a sub-lease with the franchisee or provide the franchisee with the use of the premises under a license agreement. Alternatively the franchisee may

Finance leases on the other hand are recognised on balance sheet, so the leased asset is recognised as well as a corresponding lease liability.

If the changes are introduced, businesses big and small would be forced to show all leased items on balance sheet (with some limited exceptions), potentially meaning millions of dollars worth of liabilities would come onto the balance sheet.

The biggest impact of this change being that it could significantly increase the liabilities of the business without a corresponding increase in tangible assets.

This, together with any deferred tax balance consequences, could make the business look more debt laden than the books currently show, with the risk that the changed debt ratios could breach franchise agreement or borrowing agreement covenants depending on how the franchisor, franchise agreement or financier view the corresponding intangible right of use asset.

These franchise or borrowing agreements may need to be renegotiated, requiring significant time, cost, effort and the potential risk that the franchise or funding relationship could breakdown.

The new rules will likely impact the franchise sector significantly given the propensity of the sector to use operating leases due to the nature of asset requirements. The additional administrative burden together with the need to bring these assets onto the balance sheet should not be underestimated. The rules will also not allow ‘grandfathering’ of existing leases, meaning the rules will apply to leases negotiated historically.

Kimberley Carney is National Technical Senior Manager at William Buck. William Buck is the largest Australasian owned and operated accounting and business advisory firm, with more than 120 years experience servicing the mid-tier market. It specialises in providing integrated business solutions in the areas of tax, audit and assurance, corporate advisory, business advisory, wealth advisory and business recovery.

For more information call: P: 03 9824 8555

For many businesses, the largest potential burden of the change may be putting in place monitoring and record keeping controls, as well as the costs to educate staff and financial statement users.

Begin preparing now

lease the premises directly from the landlord.

These arrangements would likely be considered operating leases as the risks and rewards associated with the premises would generally remain with the landlord however their treatment would need to be reconsidered under the proposals.

The other matter for consideration is whether other licenses granted by franchisors to franchisees are captured as leases under the new proposals.

Currently, operating leases are not recognised on balance sheet. This means that there is no leased asset or lease liability shown on the balance sheet, but a lease expense is recognised in the income statement periodically.

Unfortunately, until the final requirements are released on this change, how the ‘new’ lease accounting assets and liabilities will be viewed is unknown.

It’s also advisable that businesses start looking at their leases or arrangements that may be considered leases and ensuring they understand the terms.

They need to start considering what the potential impact will be on the business as a whole considering some franchisors or franchisees may potentially become large proprietary companies who may therefore be subject to more onerous reporting requirements under the Corporations Act 2001 depending on the type of entity used to facilitate the franchise arrangement.

BUSINESSFRANCHISOR 9

franchise council of australia

10 BUSINESSFRANCHISOR

Slow and steady consultation on

Franchising Code of Conduct review S

ince Minister for Small Business, Bruce Billson released The Future of Franchising media statement in the first week of April, the Franchise Council of Australia (FCA) has engaged in further constructive discussions with Government and relevant departments.

At the time of writing, a consultation period is open, as are the lines of communication surrounding the exposure draft, which is a document containing the draft legislation of the impending changes to the Franchising Code of Conduct, following the release of the Wein Report more than 12 months ago.

Pleasingly, it seems the Government is quite well aligned with the sector itself in terms of policy, and is open to discussion, and keen to ensure the updated Franchising Code of Conduct has broad industry support.

The FCA has produced a detailed submission on the Exposure Draft released on 2 April, to ensure the changes are drafted in such a way that continues to support the Australian franchise sector, which has always been such an exciting place to do business.

The changes The Minister’s media statement was largely in line with the expectations of the wider franchise sector. However, there are areas of the draft itself that the FCA believes require further finetuning to ensure the impending changes deliver the red tape savings promised by the Minister in his statement.

While much of the industry input is evident in both the statement and the draft, specific areas of the draft requiring attention are the proposed new good faith obligation, penalties, and the

enforcement of post-termination restraints.

Based on the recommendations in the Wein Report, it was expected the common law duty of good faith would become part of the Code.

Since a new and separate obligation has been put forward, further work on the drafting is in order to avoid legal uncertainty and increased disputation, which is contrary to the Minister’s intentions.

FCA has consulted widely within its own member base to ensure suggestions on the new version of good faith, along with other elements of the draft represent the views of the wider sector.

The Exposure Draft also goes further than the Wein Report with regard to penalties. The FCA is including suggestions on wording in its submission to ensure those penalties are for fundamental breaches of the Code, and are in line with improving our sector, rather than ambiguous wording that would lend itself to penalties for more trivial, unintentional breaches.

Similarly, the FCA is including a variation on wording for enforcement of post-termination non-compete provisions, in the submission to be lodged as this issue goes to press.

While the vast majority of what has been put forward is reasonable and serves to enhance franchise relationships, it is a matter of precise wording to ensure any changes are not enforced in ways that were not intended.

The FCA has also suggested an alternative method of implementation. Currently, the Draft applies the new Code only to franchise agreements new or renewed after 1 January 2015. This will create layered regulation for the entire length of an agreement for some brands.

FCA has made suggestions that will apply to franchise agreements across the board.

Michael Paul, Chairman, FCA

Looking forward At the time of publishing, the FCA, in conjunction with a representative FCA legal committee will have completed the detailed submission. Along with this, the FCA will continue to liaise with Government and represent our members’ best interests.

The most important aspect of franchising in Australia is that when done well, it is a win-win situation for both franchisor and franchisee. As an association, we will continue to represent franchisors that uphold our member standards and promote world’s best practice franchising.

We will continue to work on their behalf to ensure Australia remains the best business environment in which to franchise in the world, for both franchisor and franchisee.

Editor’s note: Prior to publishing, the FCA has engaged in further consultation with the Department of Treasury. Go to www.franchise.org. au/articles/franchising-code-of-conduct-reviewconsultation-update.html to read the update.

Visit the website of the Franchise Council of Australia for further information: W: www.franchise.org.au

BUSINESSFRANCHISOR 11

franchise fitouts australia

Saving you time AND money F

ranchise Fitouts Australia CEO and Founder Zoran Kolimackovski has brought together a team that can save you thousands of dollars as well as open your store up to two weeks earlier than the competition.

With a background in shop fitting and joinery, and over the years building a series of successful relationships with franchisors and franchisees, it was a natural progression to move into franchising and Franchise Fitouts Australia was formed.

Zoran is excited at the direction he has taken, “I realised that by specialising in franchising, particularly the retail and hospitality industries, there was great scope for a business as streamlined as our own.

“We have become known as the fastest growing shop and kiosk fit out company in Australia as we can get clients trading up to 30 per cent faster than the industry standard. We’ve achieved this by working with a tight team of experienced Project Managers plus trades people who all work together as a team and not individually.”

The Complete Package Not just a fitout company, Franchise Fitouts Australia can offer a full design service. With consultations and innovative design solutions, they work with you every step of the way. If you have existing designs already they can re-engineer these to add value and reduce costs by utilising the most efficient techniques and materials.

Taking 100 per cent control of the shop fitting process, Franchise Fitouts Australia will manage the project, delivering on time and within budget, ensuring your opening day goes ahead as planned.

By assigning a Personal Project Manager to work closely with you, you’ll only need one point

12 BUSINESSFRANCHISOR

of contact. They’ll ensure all project timelines and OHS compliances are adhered to, building applications and permits are completed whilst offering the total turnkey solution and keeping you informed every step of the way.

Zoran continues, “By offering the complete package as we do, we remove the stress from the franchisor. Removing these frustrations and delays allows the franchisor to focus on what they do best, by doing what we do best.

“Every delay has a knock on effect, usually resulting in costing the franchisor money. A four week delay can cost up to $80,000 with lost weekly earnings, rent and interest being charged and by working 30 per cent faster than our competitors we ensure you open on time.”

Seamless By offering this complete package, Franchise Fitouts Australia are well placed to assist international franchise systems expand into Australia. Their experienced Project Managers

and qualified and licensed Contractors are positioned nationally to ensure your franchise gets the kick start it needs to grow at a rapid rate.

Current clients include Starbucks, Walkers Doughnuts, Degani, Bella Cosi and South Melbourne Dim Sims.

Jim Stoupas, Chief Executive of Walkers Doughnuts says, “The team that Zoran has built is a testament to his work ethic, business integrity and can-do attitude. At Walker’s we cannot speak highly enough of Franchise Fitouts Australia (FFA) - they made difficult seem easy.... FFA is to be our sole Fit-out contractor when we roll out the next 5 retail stores.”

If you too would like to save time and money during your franchise fit out, contact Franchise Fitouts Australia on: P: 1300 FIT OUT (348 688) E: Enquiries@franchisefitoutsaustralia.com.au W: www.franchisefitoutsaustralia.com.au

Robert Hortle

Tips for having

difficult conversations in the workplace A well-constructed and thought-out discussion can often lead to a productive result, with both parties walking away feeling positive and with resolution in sight.

conversations with an emotional response, so

The first step is to deal with the situation straight away. By allowing it to linger, it could become a bigger ‘issue’ than need be.

The person holding the conversation should

The next step is to spend time developing a careful, considered approach.

The ideal result is to reach agreement on a plan

A difficult conversation handled insensitively can affect not only a business’s relationship with an individual employee, but also its wider workforce.

employee’s commitment to a plan-of-action

Once a discussion has commenced, get straight to the point, rather than engaging in unnecessary small talk.

It’s also a good idea to keep a record of the

Stick to the facts, rather than relying on opinions or hearsay, and where possible, give the employee examples to back up your comments.

The next step is to actually make sure the

Explain how the issue is impacting on the business. Focus on the issue at hand rather than the person.

and that the plan-of-action is being fulfilled.

further issues arise.

with a sense of anguish, because they don’t have

Keep an open mind, listen to the employee and consider their point of view. There could be a range of facts that haven’t yet come to the surface, which could lead to alternative resolutions.

to end negatively.

Some employees may react to difficult

and high employee turnover.

M

ost people who run or manage a business will attest that difficult conversations can arise in all

workplaces.

They can range from resolving a communication breakdown or personality clash, to rejecting a leave request or delivering poor performance feedback.

But these conversations shouldn’t be approached

14 BUSINESSFRANCHISOR

be prepared for this and consider telling the employee they can bring a support person to the meeting if they want to. remember to manage their own emotions as well.

It’s important to remain calm and objective. for resolving the matter at hand. Gaining the significantly increases the chances that it will be successful. discussion, as well as the decided steps for resolution. actions agreed to are taken. Follow up with the employee to ensure the matter is being resolved Keep communication channels open and ensure the employee is comfortable to speak up if any When workplace issues are left unresolved, or handled poorly, they can cause considerable harm to staff morale, workplace culture and productivity, possibly resulting in absenteeism

However, when difficult conversations are executed quickly and successful outcomes are achieved, it can improve staff engagement and confidence and create a happier, more productive workplace.

Having difficult workplace conversations is the topic of a free course offered through the Fair Work Ombudsman’s Online Learning Centre at www.fairwork.gov.au/learning.

The course has practical tips to help employers develop the skills and confidence to have a difficult conversation in the workplace and minimise disputes.

The Fair Work Ombudsman also assists franchise businesses through the National Franchise Program.

The program has been designed to help franchisors protect their brand by supporting fair and compliant workplaces across their franchise business.

The program provides practical support and advice around employment practices to help improve and create better support systems.

Participants will meet with a Fair Work Adviser to discuss the services available, their franchise structure and business needs. The program is then tailored to best support their business.

manage underperformance • Termination and Redundancy: Be confident you are meeting your obligations in termination and redundancy situations.

Participation in the National Franchise Program is both free and voluntary.

Examples of the modules offered include:

The next National Franchise Program intake has

• About the FWO: Understand the role of the Fair Work Ombudsman

limited places still available. For more information

• Minimum Entitlements: Understand all aspects of employee minimum entitlements and avoid common mistakes

Robert Hortle is the Fair Work Ombudsman’s

• Recruitment: Work towards best practice recruitment in your workplace • Flexibility: Improve productivity through a flexible working environment • Manage Underperformance: Work with employees and managers to prevent and

please contact franchising@fwo.gov.au.

Director of Small Business Strategy. Robert and his team ensure that the needs of small business are understood and accounted for within the work of the Fair Work Ombudsman.

Contact the Fair Work Ombudsman at: P: 13 13 94 W: www.fairwork.gov.au

BUSINESSFRANCHISOR 15

nfc14

People, passion, performance T

NFC14 early bird tickets available now

he countdown to this year’s National Franchise Convention has begun, with early bird tickets going on sale in May.

This year the event will return to Sydney, the centre of the Australian business community.

Held at Sydney Olympic Park, the event is always a standout on the franchising calendar, attracting professionals from across the country.

Who will be there?

NFC is attended by franchisors, franchise experts and advisers from all over Australia. Brands represented include the well known, the market leaders, the innovators and the up and comers.

Why attend?

Along with keynote speakers including Ita Buttrose, David Smorgon (Generation Investments), John Pollaers (Pacific Brands), Glenn Cooper (Coopers Brewery) and Karen Matthews (Freedom Furniture), there is a wealth of thought leadership and experience on offer through the franchisor concurrent panels.

16 BUSINESSFRANCHISOR

Add to this, the opportunity to network with likeminded individuals and gain exposure for your own brand, and NFC14 is certainly not an event you should miss.

National Franchise Convention 2014 Sydney Olympic Park, Sunday 26 – Tuesday 28 October Go to www.franchise.org.au or call 1300 669 030 for more information.

Early bird tickets are now on sale. Limited sponsorship and exhibition packages are still available.

What past sponsors are saying about NFC… The main benefit for Microsoft to be a part of this conference is being able to engage with this very important community. Small to medium businesses are a core part of Microsoft, and being able to engage with the franchisors and franchisees who are a core component of the SMB

market is critical. We couldn’t think of a better place than here to do that.

Gianpaolo Carraro, Director Microsoft FCA Partner and NFC13 Exhibitor We’re delighted to partner with NFC and showcase our brands at the event. It’s a great way for us to meet all the guests that are visiting the conference, and more importantly, give them a great cup of coffee.

Drew Eide, Group Marketing Manager Foodco Group NFC13 Espresso Cafe Sponsor Battery World has been involved with NFC13 because we really see the benefit of being involved with the peak industry body. It’s a really good association for Battery World to be involved with.

We’ve had a lot of exposure through the FCA at this conference and it’s gone really well.

Kerry Hannah, Marketing Manager Battery World Australia NFC13 Delegate Bag Sponsor

NFC14 14

NATIONAL FRANCHISE CONVENTION 2014 26-28 OCTOBER OLYMPIC PARK SYDNEY REGISTER NOW This year’s NFC14, People Passion Performance, promises to be the meeting place for inspiration, motivation and thought leadership on all things franchising.

The event, still a must-attend for all franchise professionals in Australia, will follow on from years gone by with a knockout speaking program and ample networking opportunities.

Along with expert concurrent sessions and a bustling trade show, delegates will learn about the Franchising Code of Conduct changes, which will affect everyone in the sector.

Join hundreds of Australian franchisors for the franchise networking event of the year.

For more information, call 1300 669 030 or go to franchise.org.au Early bird registrations are now open.

Limited Sponsor and Exhibitor packages are still available.

KEYNOTE SPEAKERS INCLUDE: Ita Buttrose AO OBE Ita Buttrose is a truly exceptional Australian: a legendary media editor, businesswoman, best-selling author, committed community and welfare contributor and 2013 Australian of the Year.

David Smorgon OAM Founder of Generation Investments, formerly Smorgon Consolidated Industries, David Smorgon is a highly successful and respected businessman whose skills have seen him rise to the heights of the business and sports management worlds.

John Pollaers, CEO & Executive Director, Pacific Brands Prior to joining Pacific Brands in 2012, John was Chief Executive Officer of Foster’s Group Limited, from May 2011, after joining the company as Managing Director of Carlton & United Breweries in 2010.

RULES OF SUCCESS

PEOPLE PASSION PERFORMANCE

The FCA gratefully acknowledges the contribution of the following sponsors for NFC14

Robert Toth

BRANCHISING AUSTRALIA

CHANGING THE WAY WE DO THINGS

18 BUSINESSFRANCHISOR

F

ranchising has been operating in one form or another for the past 40 years in Australia. It became a regulated industry under the Franchise Code of Conduct in 1998. The industry was regulated to protect individuals and small business operators (franchisees) by requiring mandatory disclosure of material information by franchisors to prospective franchisees at least 14 days before a Franchise Agreement is entered into.

The Code review The industry as a whole has underdone major and rapid change over this period with a number of reviews of the Franchise Code by the Government over the years to address the imbalance of power and control between franchisors and franchisees.

The most recent review with the appointment of Mr Alan Wein has just been completed. Mr Wein reviewed issues such as good faith in franchising, the rights of a franchisee at end of term including recognition for any contribution made to building the franchise and the operation of the provisions of the Competition and Consumer Act 2010 regarding enforcement of the Code.

The business format franchises and franchise models that currently exist are based on traditional franchise models whereby the franchisee operates under a brand, system and controls determined by the franchisor.

So what’s changed?

There have been major changes to business and the economic climate as we are all well aware over the past four to five years with the global financial crisis, increased competition in certain market segments and reduced margins on sale of goods services due to aggressive competition and marketing.

In addition to this there has been: • changed expectations by franchisees as to the support, training and systems to be provided by a franchisor; • the significant and rapid move from retail sales to online marketing; • increased cost to franchisors in providing point of sale and software systems to support and

monitor its franchisees; • increased costs to franchisees by way of set up costs with labour and rental; • rapid changes in social media leading to different avenues to market, to name a few; • increased disconnect between franchisor and franchisee expectations; and • increased costs of regulatory compliance whether to do with the ATO , the Workplace Ombudsman, occupational health and safety issues.

In the midst of all of this change, the traditional franchise model by which franchisees pay a royalty and marketing fee based on percentage of their gross revenue or a fixed monthly franchise fee has not changed. Meanwhile, franchisees struggle to make ends meet and draw a reasonable salary for their effort and are unlikely to see a return on their investment.

This led me to think that with all of this change surely we must, as franchisors and franchisees engage differently and find a franchise model more suitable to current economic conditions and which addresses the ‘disconnect’ that has become evident over the years between franchisors and franchisees. A model that is more transparent and which equitably shares the risks of doing business.

Proven Techniques for Rapid Company Expansion and Market Dominance’ first published in approximately 1960.

It is a term used to cover ‘business franchising’ and traditionally referred to the conversion of existing company owned outlets, to franchised or licenced units. It includes establishing new units in conjunction with a franchisee in which both the franchisee and the franchisor each retain equity.

The franchisor can sell the company owned outlet or a part of it to recoup some capital for further growth while retaining some degree of control and ongoing profit from the franchised unit.

A Branchise is a franchise and will be governed by the Franchise Code with obligations of disclosure and subject to the mandatory obligations as contained in the Franchise Code of Conduct.

The resurrection of the concept of Branchising in Australia arose from my recent discussions with a number of consultants and due to the increased level on disputes and disentachment by franchisors and franchisees with the existing traditional franchise model.

I acknowledge the contribution of Glenys Crawford of Crawford Consulting in my developing what I now call ‘Branchising for Australia’ as an alternate business franchise model.

So what is ‘change’?

John F Kennedy said “change is the law of life and those who only look to the past or present are certain to miss the future.”

James Baldwin (an African American writer – 1924-1987) stated that “not everything that is faced can be changed, but nothing can be changed until it is faced.”

What this says to me is that you can not expect to meet the challenges that confront business today using yesterday’s mindset and expect to be at the forefront of business tomorrow.

Branchising – A Whole New World?

I should first state that the term ‘branchising’ is not new, and was a term coined by author David. D. Seltz in a text entitled ‘Branchising –

BUSINESSFRANCHISOR 19

Robert Toth

So what is Branchising?

Is it just a fancy and clever name or does it truly reflect a different relationship between the franchisor and franchisee?

The traditional existing franchise relationship The traditional franchise relationship tends to be a vertical relationship whereby the franchisee is under the control and power of the franchisor rather than truly working in partnership. The use of the term ‘franchise partner’ by a franchisor does not change this feeling of control and power that a franchisee experiences.

The key features of the traditional vertical franchise relationship are; • onerous obligations on the franchisee; • little real obligation on the franchisor;

by the franchisor over the franchisee.

capital sufficient to purchase the pharmacy.

• all power and control vests in the franchisor;

Each of the parties contributes financially and operationally to the business.

The parties enter into a partnership arrangement by which the young pharmacist as a manager builds up equity over time and acquires the older pharmacist’s interest. The older pharmacist may retain some limited equity and continues on as a mentor and an advisor.

• the goodwill and ownership of all intellectual property and goodwill developed over the franchise term remains vested in the franchisor; • the payment of franchise fees from gross revenue (not profit); • no sharing of risk or profit; • default provisions with threat of termination; and • all capital costs funded by the franchisee.

Branchising – a new business model The Branchise model is a horizontal relationship representing a more equitable relationship whereby the franchisor and franchisee own the business together and work for mutual benefit. Each party has equity in the enterprise and therefore a vested interest in ensuring its success.

The franchisee continues the day to day management of the business with the support of the franchisor who is likely to be more attentive as they have equity in the business.

The franchisor relies on the energy and enthusiasm of the franchisee.

A branchise outlet is not subject to unnecessary and undisclosed fees and costs. There is generally no marketing fund. The franchisor and franchisee work together and the franchisee directly accesses management financial support and systems.

The company becomes the franchisor upon each retail unit being sold to an independent operator, which then becomes a franchisee.

As each company unit is sold to a qualified franchisee the company recovers their cost for the fit out, inventory, equipment and goodwill in the form of a franchise fee.

At the conclusion of the arrangement and/or sale of that business, the franchisee will recover (based on their equity) its share of goodwill and along the way a share of profit.

The company can transfer the Lease to the newly appointed franchisee.

Advantages of Branchising

It is a model that has been adapted in pharmacy where the older generation of pharmacists who may wish to take a step back or retire, can not readily sell their pharmacies as young pharmacists who may be working in the business do not have

As a true partnering relationship it addresses the issues of the traditional franchise model in relation to the feeling of power and control held

20 BUSINESSFRANCHISOR

The owner/operator franchisee is generally a more self motivated individual than the salary manager.

In the US it has been found that Branchising results in a higher sale price per franchise unit than the traditional franchise unit.

The Branchising model already operates successfully in real estate and retail franchise models but is suitable for any market segment.

I am not saying that Branchising should take over the traditional franchise model. What it does provide is an alternate model to be considered.

Robert Toth is a Partner with Wisewould Mahony Lawyers and has authored many articles on franchising and dispute resolution in franchising. He acts for and has assisted a number of international franchisors and companies, to establish business operations in Australia.

Wisewould Mahony is an Australian law firm that is recognised in the area of franchise law providing clients with corporate and commercial advice.

Contact Robert at: P: 03 9612 7297 E: robert.toth@wisemah.com.au W: www.wisewouldmahony.com.au

BUSINESSFRANCHISOR 21

Plus Fitness 24/7

A true Australian Success Story A

ustralian owned and originated Plus Fitness is set to open its 100th 24 Hour Gym Franchise next month and has simultaneously sold its 150th franchise territory in three years, confirming Plus Fitness as a true ‘Australian Success Story’.

The first Plus Fitness was in fact opened some 16 years ago by founding CEO John Fuller. John went on to open four more Plus Fitness gyms over the following years and in 2008 formed a partnership with Nigel Miller with both having franchising the Plus Fitness brand set firmly in their minds.

After initially franchising the ‘Plus Fitness Health Club’ model in 2009, John and Nigel soon recognised that a change in the fitness industry was looming and set about remodelling their franchise from traditional ‘big box gyms’ to smaller, lower priced, more convenient 24 hour gyms.

After researching the 24 hour gym market, the pair developed a franchise model with some unique and appealing selling points to assist in gaining market share in what was becoming one of the fastest growing segments within the franchising sector. These included developing a true turn key franchise offering that presented exceptional value, inclusive of everything from gym equipment to fit out, franchise training to marketing. Added to this was a low staff model and an exclusive territory for each franchisee protecting them from any future market saturation. With the continual support of a committed team of industry experts headed up by two of the most experienced operators in the fitness industry, it is then no surprise that along with a lot of hard work, Plus Fitness has become the ‘home grown’ success it is today.

22 BUSINESSFRANCHISOR

After the official launch of the ‘Plus Fitness 24/7’ franchise model at the Sydney Franchise Expo in 2011, alongside a targeted advertising campaign, John and Nigel sold five franchises ‘off the stand’ in three days, the pair have gone from strength to strength always seeking to further develop their infrastructure, franchise support and consumer product offering. With a Head Office team made up of what they refer to as ‘Support Specialists’, John and Nigel repeatedly reference the passion and hard work of this team as a large part of their success.

has always been very important to us and as we have continued to grow we have constantly revisited how we deliver this to ensure that we are providing all franchisees access to the support and tools they need to succeed. Lately we have turned more to technology to assist us here with the recent launch of both an online Training Platform and an online Print Management System.”

When asked what has contributed to such impressive and sustained growth a number of key points were raised with John specifically referencing that, “Multi Unit franchisees now represent a high percentage of our network which is something we are very proud of. Our franchisees ability to expand their portfolio of franchises is testament to their hard work and the success of the model and we are seeing more and more franchisees drive exceptional results from multi-site ownership.”

Plus Fitness has had its recent achievements widely recognised over the past 12 months winning a number of prestigious awards. This includes being named as the Emerging Franchisor of the Year for 2013 by the Franchise Council of Australia. This was awarded in front of the Australian franchise community at the annual Gala Dinner held at Jupiters Casino and describe

by John and Nigel as a “humbling achievement”.

In addition to this, Plus Fitness were ranked 27th in the BRW Fast Starters for 2013, took out the Smart Company Top Franchise award and were also recognised as the Smart Company 8th Fastest Growing Australian Company for 2013.

When asked what was one of the most important things to consider as a franchisor of a fast growing brand, the response was unanimously focused around ongoing franchise support and Nigel Miller had this to say, “Franchise support

All about the equipment: Plus Fitness Franchisees have always benefited greatly from a number of strong and longstanding relationships with a number of recognised commercial gym equipment suppliers. These ongoing relationships

have enabled Plus Fitness to deliver a quality range of commercial gym equipment at incredibly competitive prices for their Franchisees.

There is no stopping the Plus Fitness team when it comes to innovation. The next six months alone will see the launch of a range of Plus Fitness Supplements to be sold in-house. Then there is the pending launch of the Plus Fitness Member Nutrition and Body Challenge programs that are being developed in collaboration with Channel 7’s Matt O’Neill. In addition to this, Plus Fitness have just launched their own in-house media channel to be streamed into each franchise and have also just seen the Fit’N’Flexed TV show, that is filmed largely inside Plus Fitness gyms picked up by the Ten Network with a second series about to enter into production and set to air by the end of the year on Channel 10 and ONE. Branding themselves as ‘Your Local Gym’s Australia Wide’, and with a Plus Fitness opening every 10 days, then if there isn’t a Plus Fitness near you now, there no doubt will be soon!

For more information on Plus Fitness 24/7 contact Plus Fitness Head Office at: P: 02 4648 2099 E: info@plusfitness.com.au W: www.plusfitness.com.au

BUSINESSFRANCHISOR 23

Michele Herson

find your next franchisee using the power of your brand F ranchise Recruitment Marketing is one of the most important activities a franchise

network can undertake to ensure its success and continual growth. Therefore it is

essential that franchisors take a holistic approach and develop a strong and long lasting

lead generation program.

Unless a company has a massive budget to invest in all mediums, advertising alone is not enough, and even with a big budget, the company’s profile needs to be high enough to motivate potential franchisees to consider the franchisor’s offers.

A most important component to the success of this approach is the development of a strong public profile and well known brand name. This is crucial to the success of any business and particularly in the case of a franchise business system, as a key asset of a franchise is the power of its brand.

The credibility, reliability and reputation of the brand are major factors to the success a company

24 BUSINESSFRANCHISOR

achieves when recruiting franchisees.

How wonderful it would be if prospective franchise owners were clambering at the door to join the successful company; but unfortunately, too often this is not the case.

So how does a company achieve this all important profile and brand name?

It can achieve it by implementing a well thought out marketing campaign. Under the marketing banner are the sales, advertising, public relations and promotions components of the company and these areas need to be coordinated and maximised.

Building the profile of the company requires that nothing is left to chance or done on an ad hoc basis.

We all know that the best form of advertising is ‘word of mouth’ but developing this takes time and needs to be helped along with an excellent marketing plan.

As media is the primary way to deliver key messages to the public, it is essential to understand how to do so in a positive manner.

Media comprises all forms of communication including television, radio, print, online publications, video and contemporary forms of internet and social media such as Facebook, YouTube, Twitter, Instagram and Blogs. And never underestimate the power of local area marketing, such as leaflet drops and cross promotions with other local businesses.

This is not to say that the company’s IP, products, services, and offers are not important; they are crucial. But without the public knowing about the company or its franchisees, who take the product to the market, success cannot be assured and the best idea in the world could fail.

This is why I recommend that a full marketing plan be created with appropriate activities undertaken to ensure that the company has the very best chance at success in the market place.

This is especially important when a franchise system is going to the market, especially as a support and stimulus for recruitment.

Development and implementation of the Franchise Recruitment Marketing Plan The first activity undertaken is the preparation of a comprehensive franchise recruitment marketing plan prior to the implementation of its activities.

This is the blueprint to ensure that the company achieves its objectives.

This plan includes a number of key areas: • Research of the market; this includes gaining a thorough understanding of the market place; the requirements of your target customer base, your competitor’s offers and implementation strategies, and identification of mediums that will effectively reach its desired targets.

• Franchisee profile; knowing the attributes and mindset of your ideal franchisee is essential to reaching the target audience. Material needs to be written to attract potential franchisee with the ‘right fit’ for network and then it needs to be positioned in the correct mediums to reach them.

• Preparation of media information kits; this includes the compilation of comprehensive target media lists, excellent photographs and images in both high and low resolution formats, background information about the company, its senior management team and its franchisees, case studies regarding the company’s performance and success stories, media releases and logos.

• Media training; this is important to ensure that company spokespersons are in command of interviews with all areas of the media.

• Organisation of media coverage; this includes the organisation of interviews with print, online and broadcast media, television and public appearances with company spokespersons and success stories about franchisees, products, services and its clients.

• Development of website material; in today’s internet world keeping the website fresh, using blogging and having active social media such as Facebook and tweeting is essential.

• Organising promotions; specialised and targeted promotions need to be designed to keep the name in the public arena.

• Launch of franchise system milestones; depending on the company requirements, the launch of the company milestones such as new products and services are important to the campaign.

• Launching recruitment drive; once the name is ‘out there’ it is time to let hopefuls know that they can buy into this exciting prospect.

• Launch of franchisees; from the first franchisee onwards it is important to share

good news with the public and this is a good way to achieve the goal.

• Internal communications; your internal stakeholders are as important as the public to the brand’s success. The franchisees must also be kept excited by the brand. Their pride in the company can be stimulated in a number of ways and they need to be included in any brand building exercise.

• Awards and accolades; part of the ongoing support to the brand is recognition by various trade or business bodies. These accolades provide credibility and recognition of the brand.

• Sponsorships, events and functions; depending on the company’s requirements sponsoring various groups, conducting functions and events need to be assessed for inclusion in the marketing plan.

• Advertising; No matter what else the company does, it will still need to have a targeted advertising campaign to re-enforce the brand and stimulate franchisee interest.

Even though this is a high cost area, it can still be conducted in a cost effective manner and should include a mix of all forms of mediums.

Managing Director of Herson Communication Services Pty Limited, Michele Herson is a specialist in Franchise Recruitment Marketing, Sponsorships and Strategic Alliances, Exhibition and Event Management, National Marketing and Public Relations campaigns, Award submissions, Video Production and Media Training.

To contact Michele: P: 02 9029 2901 W: www.hersons.com.au

BUSINESSFRANCHISOR 25

Nigel O’Neil

Training franchisees to succeed R

unning a business is a tough gig – particularly if you’re doing it alone. As many small business owners would

know, the title of business owner often translates to ‘jack of all trades’ – manager, bookkeeper, salesperson, marketer –all rolled into one.

With so many balls to juggle, it comes as no surprise that 30 per cent of Australian small businesses failed between 2008 and early 2013, according to the Australian Bureau of Statistics.

It makes sense that one of the key tempters to buying into a franchise as opposed to starting a private business is having access to the training and resources offered by franchise groups to support an owner through these challenges.

As franchisors, it’s in your best interest to offer such services. After all, your success lies in the individual successes of your franchisees.

In the first instance, your role as franchisor is to source people with the talent and skills to run a franchise. But once you’ve found a suitable franchisee, your job is then to bolster their chances of success by optimising the benefits of the franchise system.

Pitfalls of traditional training methods Most franchisors recognise that not all franchisees are natural leaders before opening their own business. With this in mind, it has become common practice for franchisors to invest

26 BUSINESSFRANCHISOR

in short term training to help them gain business acumen.

A 2012 Franchising Australia report undertaken

by Griffith University’s Asia-Pacific Centre for Franchising Excellence showed that 90 per cent of local franchisors offer internal training programmes, with 40 per cent drawing on external trainers or programmes to assist franchisees.

However, what some franchisors fail to recognise is that franchisees can’t learn everything in a one-day workshop. It takes time, tailoring and investment.

Franchisors can often fall into the trap that the franchise they offer works perfectly for every individual and every environment. This is generally never the case. Each territory comes with its own set of challenges, whether that is competition, demographics or any other quirk of the area in which the franchise operates. It doesn’t always make sense to offer short term, cookie-cutter training solutions to very specific business challenges and expect results.

This form of training also encourages franchisees to become reliant on the franchisor as it’s the franchisor that’s assuming responsibility for training and development, rather than nurturing franchisees to take charge of their own success over time.

Likewise, every individual who buys into a franchise will be at a different stage in their development. In real estate, outstanding sales agents often look to open their own business after

several years of success in the field. In theory, this is the ideal scenario as the franchisor obtains an experienced salesperson familiar with the ‘insand-outs’ of the industry. In practice, running a successful business is a very different scenario to simply listing and selling property.

So how should training be structured? What can franchisors do to best help their franchisees maximise their chance of success?

Training true leaders – slow harvest style Recognising that successful franchise owners can’t be created overnight, hockingstuart recently overhauled its leadership training. Late last year we launched a new three-year programme simply called the Leadership Development Programme.

The Leadership Development Programme was designed to: • Drive growth and profitability across the franchise by improving the performance of Directors (franchisees) and subsequently their salespeople.

• Add value from a franchise perspective by initiating industry leading development programmes.

• Increase financial turnover and profitability of existing franchisees.

• Go over and above the standard ‘stand and deliver’ type training and serve as a strong value proposition to prospective recruits in the market place by demonstrating a long term commitment to franchisee development.

• Link all programmes into one overall business strategy to give franchisees improved visibility of the bigger franchise picture and develop a sense of camaraderie among franchisees.

Public management and leadership skills training organisation, performancedevelopment.com.au, claims a lack of long-term planning, inadequate financial planning and underestimating operational expenses are among the most common small business pitfalls.

Unlike traditional training sessions, the hockingstuart programme is a long term commitment that aims to familiarise franchisees with the nuts and bolts of their businesses to stop these issues in their tracks - before they become major problems.

We require all hockingstuart franchisees to regularly attend small workshops and report back every quarter on financial, personal and organisational development.

Each franchisee works with trainers to develop business plans that reflect their personal goals and local business needs, with specific actions and delivery dates. From there, they are coached in methods to achieve their objectives.

Franchisees are also monitored to assist them to stay on track, undertaking quarterly accountability calls and recharge days to ensure the techniques taught in training are gradually implemented across each business.

In the seven months since the programme began, the progress among franchisees has been remarkable.

For many the Leadership Development Programme has been a challenge. We have asked franchisees to step away from their day to day activities of working in the business and instead work on the business.

Despite the challenge, the programme has been met with great acceptance by our franchisees.

One claimed it is the best initiative our franchise group has ever offered, expressing “it’s exactly what we need to take our business to the next level”.

Others have noted what a significant impact re-skilling of franchisees has had on the rest of

BUSINESSFRANCHISOR 27

Nigel O’Neil

the team. We are seeing leaders who are more switched on and responsive to team dynamics, which is helping to improve staff morale.

Similarly, setting concrete local business goals with regular health checks is helping franchisees to direct and communicate with staff on what to prioritise and develop, and why.

No ‘one size fits all’ training programme could achieve the same results.

Changing your training tune For franchisors, making a similar adjustment to your training style is like switching from a mentoring to a supervisory role. A mentor is there to help and protect, but won’t do the disciplining.

One-off training workshops are a nice add-on, but they won’t help much over the long term without any follow up. A supervisor, on the other hand, can be nurturing and supportive, but they won’t hold your hand through every task and will expect results.

Your franchisees need to learn from their own experience and mistakes. Don’t be afraid to let them know that running a successful business

28 BUSINESSFRANCHISOR

can be hard work, and that they can’t expect the franchisor to offer the answer to every question or scenario. In saying this, the franchisor must provide the tools, training and support to assist every franchisee to develop as a business operator, and to run a profitable business.

As franchisors, it’s important to reflect on where you are trying to get to as a group before you can be clear on what you expect from franchisees.

What are your key long and short terms goals and what’s needed from franchisees to get there?

must be synergy with the needs of the individual franchisee.

Increased performance comes from business leaders who are in control, have clear goals and are motivated to succeed.

Treat training as a way to empower your franchisees to be better leaders, not a token ‘addon’ that’s simply expected from a franchise group.

Nigel O’Neil is CEO of hockingstuart, one of Victoria’s largest and most established

Similarly, get to know the individual challenges of your franchisees and where they’re falling short.

Once you know this, then ask - will quick fix training make them better leaders? If the answer is no (and I dare say it will be), it may be time to rethink how you’re spending your franchisor dollars.

real estate franchises. Nigel is a qualified

Increased performance doesn’t come from quick fixes. It’s about looking for long term development to improve the business, increase productivity, reduce burnout of staff and keep staff morale high. That’s not to say there’s no place for short training workshops, but there

broader real estate community.

Chartered Accountant and has successfully built and grown large successful businesses by leveraging his strong business acumen and financial and legal experience. He is now applying the same principles to his role leading hockingstuart and as a leader across the Contact details: P: 03 9690 4388 E: nallan@hockingstuart.com.au W: www.hockingstuart.com.au/corporate/

Franchise BUSINESS

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Greg Nathan

The 10 Habits of Effective Field Managers

30 BUSINESSFRANCHISOR

F

ield managers are the people at the front line of the franchisor’s business, supporting and monitoring franchisees to maximise their engagement with the brand and the performance of their businesses. It’s an important, complex and challenging role.

Last year on a flight back to Australia from the USA, I decided to review everything I knew about what helps field managers achieve superior performance in their job, drawing on seven sources of information: • Interviews with national operations managers on what differentiates their best field managers from the rest.

• Focus groups with franchisees on what their field managers did that was most and least useful.

• A study of field managers who were asked to describe the attributes most useful for increasing their effectiveness.

• Observations of field managers at work, noting the behaviours that seemed to create the best engagement and outcomes.

• Research into what builds trust, credibility and positive behavioural change in professional relationships.

• Surveys on thousands of franchisees which have revealed what they want from their franchise relationship.

• Models of franchising excellence developed by the Franchise Relationships Institute, including The Franchisor and Franchisee Wheels of Excellence.

During this 13 hour flight I delved into the evidence, looking for consistent themes on the behaviours and habits that seemed to produce the best results for field managers. By the time we were ready to land I had identified 10 habits.

Franchisees don’t live on baby food alone Habits are the things we do without thinking – ingrained behaviours literally hard wired into our brains. Good habits improve our effectiveness and satisfaction. They also have a positive

impact on the people around us. Bad habits do the opposite. While some habits are inherited, all habits can be changed or developed through conscious effort and repetition.

confidence enabled their field managers to defuse tense situations by listening in a non-defensive way. It also created a positive climate for open and frank discussions.

Before outlining these habits, let’s put the field manager’s job into context. The franchisor’s role is to ensure relevant systems and support are available to franchisees so they can achieve their reasonable goals and consistently deliver the brand promise to customers. Field managers are largely responsible for delivering this support and checking on whether franchisees are doing the right thing by themselves and the brand.

To be comfortable in your own skin you need to be clear on who you are and what you stand for. Personal courage is important. Speaking of skin, it also helps if you have a thick one because you will regularly face unfair criticism for things outside your control!

As franchisees move through their business journey their support needs will change. While baby food was great when we were babies we now appreciate something more substantial.

Mature franchisees also don’t like being fed the same type of basic support they received when they were rookies. Field managers need to adjust their support to suit the sophistication and needs of each franchisee.

In summary, the field manager’s job is to ensure franchisees are given the right type of support so they do the right things and do things right.

The 10 habits explained Habit #1: Maintain personal vitality As a field manager the energy you project will make a huge difference to your credibility and whether franchisees decide to engage with you. The nature of your job, especially the travel involved and the uncertainty you face as you visit different people in their businesses, will place additional loads on your energy.

Effective field managers know how to look after their physical, mental and emotional energy. They pace themselves when necessary and regularly dip into the best of all sources of vitality – a strong sense of conviction that what they do is important.

Habit #2: Be comfortable in your own skin The operations managers we interviewed regularly referred to a certain ease and confidence that helped their best field managers function in difficult environments. They said this relaxed

Habit #3: Deliver constructive feedback on brand alignment Another word for your brand is your reputation and this largely comes from the direct experience of customers dealing with your franchisees. It only takes one badly delivered customer experience to produce a social media backlash for an entire network. Brand alignment means all elements of a franchisee’s business are consistent internally and with all the other businesses in your network.

Effective field consultants understand what the brand stands for and can explain in a logical and persuasive way how this translates into practice.

They use this knowledge to discuss compliance problems and to bring franchisees back into alignment when necessary. This depersonalises the feedback and makes it more of a business, than a power or control, issue.

Habit #4: Keep discussions solution focused The financial anxiety and performance pressures that franchisees often face, means they can easily slip into an emotional and pessimistic frame of mind. While dwelling on details of past frustrations and disappointments may seem to be useful, it seldom is.

Research into coaching conversations has consistently found the best results occur when discussions are solution rather than problem focused. So the best field managers know how to skilfully shift negative conversations into a more positive direction. They do this by drawing on the first two habits and using solution focused questions that get franchisees thinking about what they want and how they can take action to make this happen.

BUSINESSFRANCHISOR 31

Greg Nathan

Habit #5: Stimulate franchisee commitment to grow Sales growth is important for a franchisor’s revenue stream and for a franchisee’s profitability.

If sales are not growing as fast as costs, profits will decline. Ray Kroc, of McDonald’s fame, apparently coined the phrase, “When you’re green, you’re growing. When you’re ripe you rot.”

So franchisees need to grow their knowledge and capability as well as that of their team. A business that starts to outgrow its owner or the people that run it will quickly become stunted.

There are many reasons why franchisees may not want to grow. They may have become complacent, they may be lacking the motivation or energy to grow, or they may lack the confidence to manage a larger business. Field managers need to understand these barriers and build the confidence and capability of their franchisees to maintain a growth mindset.

Habit #6: Maintain a metrics perspective Franchisees can become so embroiled working on day-to-day operational problems, they fail to make the time to take a bird’s eye view of their business. When we asked franchisees, operations managers and field managers to describe the most important attributes of a field manager, they all mentioned being able to understand finances and the drivers of profitability.

Because numbers don’t lie, a field manager who can read the financial health indicators of a business will quickly identify threats and opportunities for improvement. Such discussions are extremely useful for franchisees who want to maximise their profitability (which will be most of them) or for franchisees who have been making excuses about taking needed action to protect the viability of their business.

Habit #7: Hold franchisees accountable to their goals Every successful franchisee we have interviewed is able to clearly articulate their short term and longer term goals. Goals that are specific and meaningful focus the mind and provide a path that unifies the energy of everyone in a business.

One of the most useful services a field manager

32 BUSINESSFRANCHISOR

can provide is to help franchisees clarify what they want and how they will go about achieving it. Weaving these goals into business discussions can help to remind franchisees why they are in business and motivate them to take action when they get stuck. Often the field manager will be the only person in a franchisee’s life that asks them important questions such as “What do you want?” and “What’s holding you back from doing what you said you’d do?”

Habit #8: Be organised and reliable The number of businesses under a field manager’s care can range from 5 to 100 depending on the business model and their specific responsibilities.

The breadth of responsibilities is also typically wide and varied. Staying organised is essential.

Being reliable and responding promptly to phone calls and emails is critical for establishing trust and credibility because it communicates to franchisees you care about them and the success of their business. Effective field managers factor in time each day to plan ahead and follow up on their commitments. They also use whatever tools are available to help them maintain their efficiency.

Habit #9: Encourage sharing of useful ideas Franchisees report one of the most useful services their field manager offers is to bring them ideas that are working for other franchisees.

This is just one of many ways a field manager can encourage the sharing of ideas. They can also facilitate direct discussions between franchisees, for instance at regional meetings through panels, case studies and round tables.

Effective field managers also collect franchisees ideas and concerns, synthesise them and feed them back to support office. This ability to share feedback from the field takes courage and persistence because the feedback is not always welcome. If you feel like you are sometimes “the meat in the sandwich” you might like to state this, as well as reminding your colleagues that without the meat, you don’t have a sandwich - just two bland pieces of bread! Also refer to habit #2.

Habit #10: Cultivate a professional mind set I have always believed that franchise field managers are a part of an emerging profession.

Professions are usually associated with shared, specialised knowledge that is used to help others. Professionals have an obligation to keep their skills up to date and to use their knowledge for the benefit of their clients. Field managers with a professional mindset maintain a certain formality with their franchisees. They understand the difference between being friendly and being friends.

A common area of confusion for field managers is they have a duty of care to multiple parties – their franchisor, their franchisees and the customers of the brand. Professional guidelines are useful here. For instance, while a field manager may want to support a franchisee’s creative initiatives, they also have an overriding responsibility not to condone anything that could undermine the brand. Also refer to habit #3.

While this article has just scratched the surface on what these 10 habits mean in practice, I hope this article will stimulate further discussion on how field managers can continue to make a difference through their important work.

Greg Nathan is a psychologist, founder of the Franchise Relationships Institute and author of several popular franchising texts including, The Franchisors Guide to Improving Field Visits. FRI conduct regular training programs to improve the capability of field managers. To find out more contact: E: info@franchiserelationships.com W: www.franchiserelationships.com

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Franchisee Recruitment An Ageing Challenge

A

ccording to the current Franchising Australia Survey, the ability to recruit suitable franchisees remains the franchising sector’s greatest challenge.

Franchisors report recruitment issues as a hindrance to network growth in 77 per cent of franchise systems and most would agree that the success of a franchise is determined largely by the quality of the franchisees selected for the business. Yet franchising continues to grow at a better rate than other small business. Perhaps the issue is less about the availability of franchise recruits and more about the ways franchisors

are recruiting, and for that matter, who they are targeting. With this in mind, one aspect to consider is the age demographic of franchisee recruits and addressing the generational shifts in the workforce.

Adapting to generational shifts Authors of ‘The 2020 workplace: how innovative companies attract, develop and keep tomorrow’s employees today’ points out there has never been four generations — much less five — in the workplace that bring such vastly different sets of values, beliefs, and expectations. Also, this is the first time a generation has entered the workplace using technologies so far ahead of those typically embraced by its employer. Franchisors are increasingly finding themselves in unchartered territory but many are embracing the shift by incorporating the following strategies: • Understand that the generational balance of the workplace is shifting; • Recognise the defining characteristics of each generation; • Learn to communicate in different ways to reach different groups; • Take proactive steps to bridge generational gaps and manage franchisees of different generations; and • Keep in mind that as Generation Y and Z become a larger percentage of the workforce they are politically aware, involved socially, tech-savvy, committed to learning and driven to innovate.

Italian restaurant franchise La Porchetta has

34 BUSINESSFRANCHISOR

a network of franchisees largely made up of Generation X - a group drawn to the appeal of becoming a restaurateur in today’s foodie culture and happy to work hard in the seven-day a week labour intensive industry. CEO Sara Pantaleo says this lifestyle is not necessarily appealing for Generation Y, who have a different work ethic and limited capital to invest in La Porchetta’s full franchise offer. She says they are in the process of adapting in order to attract both groups.

“We are working on a new franchise model that focuses on take-away and delivery with a reduced menu. This will be far less labour intensive than a full restaurant and will require less franchisee investment, likely to appeal to Gen Y.”

Generational Characteristics for Recruitment In terms of recruiting, it is important for franchise systems to carefully select appropriate franchisees rather than sell franchise businesses purely to achieve growth. However, this needs to be balanced against your franchise offer. It is crucial that your brand and associated public relations are positioned to attract the right franchisees and across multiple generations.

Consider how your current franchise offer addresses generational differences. Perhaps your franchise system is simply not attractive or visible to all generations as a result of how your offer is communicated or how your brand is positioned.

Baby Boomers • Influenced by: Evidential experts • Marketing strategies: Above the line, traditional, mass media

GEN Y

BABY BOOMERS GEN X

• Purchase stimulus: Authorities • Ideal leaders: Commanding thinkers • Learning format: Relaxed and structured • Values: Work ethic, questioning, participation, informality, individualism.

Gen X • Influenced by: Pragmatic practitioners • Marketing strategies: Below the line, direct, targeted media

requires public relations outside of traditional advertising.

“Word of mouth is important, many of our franchisees have been referred by an existing restaurant or have been customers and fans of the product, where social media plays a key role.”

Zambreros is mindful to work with the existing strengths of franchisee groups, and then provides support where needed via training.

• Values: Work-life balance, independence, priority of family.

“Gen Y and Gen X don’t tend to have a food retail background, so we provide extensive training, from customer loyalty to rolling the perfect burrito. However, many do have an interest or background in marketing, so we encourage proactive engagement with the brand on all levels across all mediums - from social networks to local area marketing.”

Gen Y

Who are today’s franchisees?

• Influenced by: Experiential peers

Source: McCrindle Research 2012

Looking at recent small business statistics, and then applying them to generational demographics, shows that over 50 per cent of small business operators belong to Generation X. This group is currently aged between 35 and 50 years of age.

The next largest group is the Baby Boomers, aged 50 to 70, representing just over 20 per cent.

And finally, the much spoken about Generation Y, holding approximately 13 per cent, who incidentally are all grown up and are now aged between 20 and 35.

Mexican franchise Zambrero is successfully recruiting Generation Y and X in almost equal numbers given its various restaurant models, from kiosk to large drive-through, and the related investment ranges. General Manager, Karim Messih, says attracting younger generations

These statistics hold significance to franchisors when investing in franchisee recruitment and retention strategies given that this is now being radically redefined by major workplace shifts including the aging population and the transitioning generations at work. Franchise

• Purchase stimulus: Experts • Ideal leaders: Coordinating doers • Learning format: Spontaneous and interactive

• Marketing strategies: Through peers, viral, electronic media • Purchase stimulus: Friends • Ideal leaders: Empowering collaborators • Learning format: Multi-sensory and visual • Values: Enjoyment, diversity, social awareness, friendship.

systems need to review these strategies to ensure they are keeping up with the changing face of Australia’s workforce.

CEO of Barry Plant Real Estate, Mike McCarthy, says strong succession planning within the franchise group is the key to attracting and retaining younger franchisees and responding to the generational shift.

“Franchisors that take responsibility for identifying and growing up and coming talent already in the business have the advantage of facilitating their next generation of franchisees. Encouraging older franchisees to put younger employees in equity positions and mentoring them secures talent within the brand and provides smoother exit plans for boomers with a view to selling their business over time. As a franchisor we help identify opportunities for younger employees either with their current employer or within the brand with their employer’s blessing so they are not lost to a competitor.”

Mike says this approach has been very effective for Barry Plant and also breeds a generation of younger franchisees that through experience have a realistic and tempered expectation of what the franchise can offer them. Yet to embrace the shifting workforce fully, the franchisor must continually evolve and develop the franchise offer.

“Historically the brand alone was enough to satisfy franchisees but the younger generations are more demanding in terms of the support they expect from the franchisor. We need to keep abreast of business trends and ensure we are delivering value to franchisees in all areas such as marketing, communications, training and in particular, technology.”

BUSINESSFRANCHISOR 35

Corina Vucic

Embracing Generational Diversity “Start with empathy. Start by understanding how each generation sees the world. That’s the key.” Mark McQueen, Social Researcher.

Baby Boomers should not however be disregarded when reviewing recruitment strategy. Based on demographic trends, for the first time in Australia’s history there will be more people aged over 60 than aged under 20 in the next 10 to 15 years. It is no secret that our population is aging, however it is aging well. Today’s Baby Boomers are the ultimate down-agers, redefining life stages, and reinventing retirement. They have adult children at home longer, they’re buying and selling property later in life, and remaining active in the workforce later than ever before.

Remember, the boomers value work ethic and participation and will be attracted by proven franchise systems run by experts that allows for some individual freedom.

Whilst Generation X account for well over half of small business operators, this group will be active in the workforce for another 20 to 30 years, meaning they will remain the backbone of small

36 BUSINESSFRANCHISOR

business for many years to come. Generation X are well suited to the coordinated framework of a franchise system and will appreciate franchisor support that enables them to achieve a healthy work-life balance.

Franchisee recruitment strategy should actively target Generation X with direct marketing messages supported by experts in the field.

Generation Y are the least represented in small business and this is where franchisors need to step up their franchise offer and attract the next generation of successful operators. This group and the generations to follow are digital natives, hyper-connected and cannot live without mobile technology in all areas of life, including the workplace. Franchisors need to recruit with this in mind and then back up the franchise offer with sophisticated business technologies. Also, ensure you demonstrate corporate social responsibility; your social, ethical and environmental agenda will either enhance or undermine your ability to attract quality franchisees in this group.

Generation Y is driven by peer influences and knowledge sharing, therefore this needs to be considered when creating supportive franchise

networks that collaborate rather than dictate and embrace technological connectivity.

Franchisee recruitment and retention is franchising’s greatest challenge even without the added complexity of a shifting workforce.

FC Business Solutions are leaders in the field of generational issues impacting the franchise sector and offer expert consultation and training programs that support franchisors successfully manage the change.

Corina Vucic is Director of FC Business Solutions. She has been involved in the franchising industry for more than 20 years and is dedicated to the growth and development of the systems and individuals she works with.

Corina is the 2012 FCA Woman in Franchising (Vic/Tas), Victorian committee member for the Victorian Chapter and an active member of the special interest group for women in franchising.

Corina is an experienced and highly qualified mentor, trainer and business coach.

Contact Corina on: P: 03 9533 0028 E: corina@fcbusinesssolutions.com.au W: www.fcbusinesssolutions.com.au

R • • •

• • • •

r

t

r Uluru Me Tjuta - both places of

r

efforts of the Mutitjulu Found meet with an Anangu, local aboriginal representative.

BUSINESSFRANCHISOR 37

franchising expo

Expo attracts visitors ready to do business

T

he Franchising & Business Opportunities Expo had a great start to the year in Sydney, with more than 3,500 people attending over the show’s three days in March.

“We were very pleased with the number of visitors, but more importantly it was good to see so many people who were genuinely keen to find out more about buying or expanding a franchise,” says Exhibition Manager Fiona Stacey.

Exhibitors agreed. “I thought this one was brilliant!” says Neil McMillan, Brand Development Manager at Fifo Capital. “In my opinion the quality of the visitors was much higher than prior years, and I’m sure we will progress with a number of applicants.”

Stephanie Wells from the Franchise Council of Australia adds she found the visitors were knowledgeable, had done their homework and were genuinely interested in franchising; while first-time exhibitor Kelvin Wiles from Findit Smart, says the show exceeded all his expectations.

The Sydney Franchising & Business Opportunities Expo is the first in a series of three expos held annually around Australia. The next show is in Brisbane 19-20 July, followed by Melbourne 22-24 August.

As in previous years, the free daily seminar sessions were a popular feature, with many visitors taking advantage of the chance to hear presentations from franchisees, franchisors, consultants, and other business experts.

But Fiona Stacey says the exhibitors’ stands were the main attraction for visitors. “The stands were colourful, professional, and you could see how much effort and energy went into their design,” she says. The preparation and effort paid off for exhibitors, with most reporting a very successful show.

“We always find the shows very good, although exhausting!” says Jane Lombard from The

38 BUSINESSFRANCHISOR

Franchise Shop. “Good quality people were there and now we have lots of leads to follow up. With Expos it is about how you use all the tools available to make it successful – we always send out the tickets to our clientbase, make appointments to see people there and really use the stand to get as much out of it as we can.”

Chris Jutt from Minuteman Press was keen to generate interest from potential franchisees – a mission accomplished at the show. “We finished the show with 275 leads!” he says, adding that his team made 55 appointments just for the week following the show.

Jonathan Payne says Xpresso Mobile Coffee also had a successful show. “We had about 20 solid leads and I think this will turn into 3-4 franchises sold, which is an excellent return on investment,” he says.

Fiona Stacey says organisers are gearing up for another exciting two-day show in Brisbane this July, followed by three days in Melbourne in August.

Pre-registration is available online for the Brisbane and Melbourne shows, and Stacey says companies wishing to exhibit will need to contact her right away to secure the best stands.

“The Franchising and Business Opportunities Expo is an event where the industry comes together to educate, inform and network – it’s the highlight of the year for many franchisors,” she says.

Free pre-registration is available at http://www. franchisingexpo.com.au/. For information about participating in the 2014 Franchising & Business Opportunities Expo contact Fiona Stacey on 03 9999 5464 or email Fiona@specialisedevents. com.au

Diary dates: Brisbane 19-20 July 2014 at Brisbane Convention & Exhibition Centre Melbourne 22-24 August 2014 at Melbourne Exhibition Centre Sydney 27-29 March 2015 at Royal Hall of Industries, Moore Park

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NFI084BUSINESSFRANCHISOR

keep left pr

The role of public relations in the franchise system to your website. Perhaps historically, this has fallen to your advertising and marketing briefs?

Now more and more franchisors are realising the benefits of PR in driving editorial and/or word of mouth about your product or service.

T

he most successful and viable businesses leverage the role of public relations (PR) not just within their marketing communications strategy, but as part of their wider business models.

audience. PR tactics could include anything from

But what does the role of PR actually consist of?

local franchises for close to a decade, we know

There is no cookie cutter approach and when it comes to franchise businesses it’s vital that PR delivers return for the franchisor and its franchisees.

that the objectives behind a PR strategy often fall

So let’s say you decide to hire a PR Manager or engage a PR agency – what would they do for you and your franchisees day to day? How will they benefit your business?

• brand reputation.

It boils down to your target audience, your main objective and your key message. Once you are clear on those, the PR manager or agency can pick the best channels and tactics to reach that

Growing awareness of your product or service

40 BUSINESSFRANCHISOR

traditional media relations through to social media campaigns or the development and seeding of a viral video.

Having worked for a number of iconic global and

under one or more of these three categories: • increasing product or service awareness, • franchisee recruitment; and

Growing product or service awareness among consumers amongst consumers is often the number one priority for franchisors – it’s what drives footfall into stores, makes the phone ring or sends people

For example, we were engaged this year by Australia’s favourite day spa, endota spa, to help promote the launch of a new product, rolling out in endota’s spas nationally. To do this we approached women’s interest and lifestyle magazines and influencers (celebrities or media personalities) to educate them about endota’s latest product and its benefits (via phone, email and in person). We encouraged them to share these products with their readers or social media audiences. By securing product mentions in the ‘must-try’ beauty pages of magazines like Marie Claire and SHOP Til You Drop as well as the Twitter pages of influencers like Zoe Foster Blake, word of mouth about these products quickly spread, helping to drive in-spa foot traffic and sales.

If franchisee recruitment is your goal Attracting franchisees to your brand and growing your network often works best when it happens hand in hand with an overarching reputation building program for your brand and business (more on this to come). There are also some PR tactics that might help drive immediate leads and inbound enquiries from potential recruits.

We have worked with iconic bakery franchise Bakers Delight for more than seven years supporting them on their product, brand building and recruitment campaigns. When it comes

to recruitment, we have helped them with everything from hiring apprentices through to new franchisees. The first step is always to fully understand the type of franchisees they want to attract to the network and the peak recruitment milestones for these audiences. For example, we know that towards the end of the school year is the best time to run a media campaign for apprentices and that the end of financial year and start of the calendar year is when more experienced candidates are reassessing their career paths and looking at the potential of business ownership.

reputation amongst consumers.

For logistics and courier company PACK & SEND we’re challenged with building the reputation of the business as a viable alternative to big names like Australia Post, so we use PACK & SEND’s founder and CEO Michael Paul as the face of the company and as an expert commentator in business media. For example, he has recently been commenting on the impact the growth of online shopping has had on the logistics space – this kind of commentary positions PACK & SEND as an expert in its field and as an innovative company that’s adapting to external trends.

By harnessing existing success stories within the Bakers Delight network as media case studies and by looking at external trends such as unemployment rates and the personal career drivers of our audience, we’ve been able to tailor media stories to directly target potential recruits.

But the role of PR doesn’t just end there. PR is not just an external mouth piece; it often plays a large role in internal communications too.

As with any good PR campaign, these stories have always been underpinned with key messages about the benefits that come with joining the Bakers Delight network.

Communicating the success of the business and brand to the outside world is important, but what about to your franchisees and other staff? Do they feel proud to work for you and would they recommend someone else buys into your franchise? Often a simple internal communications strategy keeping the network updated on the success of the business can be an effective tool for building your reputation. After all, your franchisees and other employees are a mouth piece for the brand.

Further to this, Bakers Delight has worked steadily to grow its reputation amongst consumers, and this has had a flow-on effect to franchisees, and their staff, who prefer to work for established brands with a proven track record. There’s something more appealing about buying into an iconic Aussie brand - but what if your brand reputation isn’t there yet?

Reputation building Growing your reputation, especially from the ground up, requires a consistent and steady approach. It’s not just about making sure your brand stays top of mind but that it is the number one choice for consumers.

Real estate franchise hockingstuart does just this. Engaging with us for more than three years, we have acted as their eyes and ears, positioning them to media and consumers as the go-to real estate experts.

We did this by selecting and training a pool of agents to become spokespeople for the brand.

We then put them forward as expert or on-theground commentators to property reporters who began to rely on them as talent for their stories.

With the company consistently in the property sections of major newspapers and news sites, awareness of the brand and its expertise grew phenomenally; establishing hockingstuart’s

When it comes to engaging franchisees

In addition, franchisees are a great source of PRmaterial, but franchisors are often too time-poor to gather the stories from within the business themselves. The PR manager or agency plays a valuable role in mining the organisations for success stories and gathering the fun and quirky stories that media love (and consumers love to read) and packaging them up for journalists – as well as for social media channels. The PR manager or agency can also play a role in analysing business data and looking for trends that are interesting to media.

We are often in constant communication with franchisees assisting the franchisor in educating them about the role of PR in the marketing mix and taking them on the journey too. Some of the early-stage PR skeptics have even become the strongest PR advocates along the way!

of PR activity and understand its purpose is a key role. If you have an external agency, you need to ensure they operate as an extended arm of the business, helping to engage franchisees.

2. Don’t assume franchisees know what PR is – just because you may understand the intricacies of a PR program, don’t assume that your franchisees do; we often need to educate franchisees about the role we play and how it helps their business.

3. Know when to back off – as with any franchisor initiative not all franchisees are going to be engaged. We help to keep franchisees informed, but know that only some may grasp the value and dedicate time to it at first. Through fostering the next two steps however, we can often change this.

4. Stay in close contact – common franchise models see marketing and PR spend drawn from a group fund; franchisees are understandably interested to see return on investment. We encourage franchisors to be in direct contact as much as possible through e-newsletters and conferences – helping to remind franchisees of the value they are getting from PR. Every PR win – particularly in the early stages of a program - needs to be communicated and shared.

5. Be mindful of their objective – when demonstrating value it’s all about how PR helps the franchisee and so we work to educate them on how the PR program fits into their own business objectives. For example, growing product or service awareness helps to drive footfall to their own stores or website, recruitment can attract staff to their franchise, and reputation building improves the trust in the brand among customers and staff.

The role of PR is varied, but one thing remains – when used properly, it can bring immense value to your business, internally and externally.

So how do we help get franchises to this level of franchisee engagement?

Verity Lowe is the Head of Franchising at cross-media public relations agency Keep Left. With a specialist team dedicated to franchising, Keep Left has worked with a variety of global and local brands in the franchise sector for close to a decade, helping them leverage the value of PR and communications across their businesses.

1. Keep them informed – as communication experts, ensuring franchisees are kept abreast

For more information visit: W: keepleft.com.au.

BUSINESSFRANCHISOR 41

Michael Paul

Innovation –

the Key to Growth

G

rowth is an imperative for every business. It is the ultimate measure as to whether a company is offering something of value to the community. For franchisors, growth creates value for customers, the brand, and franchisees. How then can franchise companies ensure ongoing and sustainable growth when operating in a competitive market?

One key component to achieving growth is innovation. Franchisors and franchisees need to recognise that creativity and change is essential to achieving growth. There must be mutual

42 BUSINESSFRANCHISOR

understanding of the constant requirement to anticipate and respond to changing customer needs through evolution and innovation of the business model.

Industry innovation The couriering and logistics industry is one of those markets that is experiencing organic growth. In today’s world of online shopping, there continues to be more and more goods being shipped by businesses and consumers than ever before. According to the respected market research company IBISWorld, it is

forecasted that the $6.9 billion revenue of the courier parcel industry will increase to $8.2 billion in 2018-19. Yet, in a competitive environment some companies in the logistics industry are not growing whilst others are thriving. The difference largely comes down to innovation that responds to changing customer needs.

PACK & SEND is one of those companies in the logistics industry seeing good growth. For example, in the first 3 quarters of the 2013/14 financial year, our company experienced a 39 per cent increase in the number of international shipments. In January alone, the international

shipping for PACK & SEND increased 34 per cent year on year. A key contributing factor to this growth was our ability to respond to the growing customer demand for more choice and convenience. Today, we offer our customers the option to book parcel and freight deliveries over the phone, in person at a retail service centre or online. This is offered by no other company, creating a point of difference to competitors, and it is this level of innovation and fresh logistics thinking that has enabled us to experience strong growth.

Thinking ahead The rise in e-commerce and online shopping has placed challenges on the logistics industry with regards to the delivery of parcels to homes.

Missed deliveries of parcels because no one is at home to receive the goods is a common place occurrence and is essentially a cost in money and time to carriers, retailers and the consumer.

Customers want more predictability around their home deliveries and this has resulted in retail locations being innovatively used as alternate delivery locations – providing customers with the convenience of being able to collect their parcels from such locations close to their home at a time that suits their schedules.

PACK & SEND’s established retail network and freight expertise enables us to offer an alternative delivery location better than most – but we also recognise we can further innovate by supplementing our retail network with the opening of satellite kiosk services within other retail locations. Stepping up the levels of service you provide to customers doesn’t necessarily mean more hands on deck at a service centre or a new smartphone app. Innovating cleverly and creatively and keeping your business top of mind in situations where customers most need your services can change the perceptions of your business automatically.

Innovation in online marketplace On the other hand, technological innovation is still imperative to improving business services

in an age where people turn to the internet for answers, advice and ideas. We have an incredibly useful online service channel for PACK & SEND, but the question for us as an innovative business was how to take this offering one step further. As a result, the idea for PowerSender was developed – a solution for businesses that regularly send up to 100 parcels per week, giving them access to time saving features in their booking process to quickly and easily send repeat packages to different recipients. We are now developing an eBay integration option for retailers using eBay as a sales platform, allowing sellers to post their packages with a couple of clicks. This innovation is a significant and new area of opportunity for the couriering and logistics industry, and will allow our franchisees to leverage off this platform.

The future is now Thinking forwards to what your industry might look like in 20 years’ time is a tactic that has proven effective for PACK & SEND within couriering and logistics. What technologies will we have available to us that will change the way we do business, or make our services quicker and more effective? What are the social and business trends of the future? Companies around the world are working on the next generation of driverless cars and technology that will manage our roads so congestion becomes a thing of the past. The possibilities that this sort of information holds for an industry that relies on road transport like couriering and logistics are exciting and create a plethora of questions about how we might operate our business in the future. Even if new technologies are years away and could take decades in the making, the businesses who are already thinking about how change might be handled will be at the head of their game innovating now for what might come in the future.

Being future ready isn’t something that happens in the future.

All businesses face competition, thus customers always have a choice. In order to stay on top of your game, innovation is the key to maintaining success and being the first choice for your customers. Franchisors have a responsibility

to innovate for the benefit of their franchisees, and a prerogative to innovate for their new and existing customer bases. When it comes to maintaining and growing market share under increasing business pressures, defining what it is that makes your brand stand out, capitalising on those features and continuing to be innovative in your service delivery can set your brand aside as one of the best.

Michael Paul is the CEO and founder of Australian company Pack & Send. He established the business in 1993 after noticing that businesses and consumers were looking for one-stop-shop solutions for sending anything, anywhere – that also included a convenient packaging service (especially for items that were fragile, large, awkward and valuable). Michael has over 20 years experience in the franchising and retail industries.

PACK & SEND opened its first Service Centre in Parramatta, New South Wales in 1993 and has since grown to a $37.4 million international business with 300 people employed under the brand and a network of more than 130 Retail Service Centres in Australia, New Zealand and the United Kingdom.

Contact: P: 1300 668 000 W: www.packsend.com.au

BUSINESSFRANCHISOR 43

TANIA ALLEN

How to reduce everyday overwhe and thrive in business

R

emember when you first started in

Some people say success is easy, you’ve got to

what we don’t realise is staying stuck in

business, you thought it would be the

know what steps to take and in what order to

overwhelm is literally robbing you blind of trying to

most rewarding thing you’ve ever done.

take them. When it comes to franchising you’ve

achieve the dreams and goals you’ve set for your

My guess is it’s also one of the hardest things

been told it’s as simple as “following the system”

business and for yourself.

you’ve ever done.

but what if you’re doing all of that and you’re still

Overwhelm is simply a state of mind that can

At times, owning and running a business can be

stressed, filled with fear, worry and everyday

sabotage your long-term success. If you are

daunting, stressful and outright overwhelming

overwhelm? How do you get out of overwhelm

someone who finds yourself very smart and

and for some it becomes all too much. When you

and into a place where both you and the business

capable but constantly in a state of stress and

have more on your plate than you can handle it

can not only survive but thrive.

overwhelm then you are probably doing one of the

can derail even the best of us. If the overwhelm

It’s one thing to get overwhelmed, it’s another

most common triggers that cause you to become

continues you can get to a point of really feeling stuck.

Owning a business doesn’t have to be this way.

44 BUSINESSFRANCHISOR

to stay overwhelmed and as much as we can

overwhelmed and keep you overwhelmed.

probably admit to feeling stressed, overloaded

What I’d like to share with you today is four key

and in a state of overwhelm more than once,

triggers that cause you to get overwhelmed and

elm

stuff. The key to stopping the busy addiction is to understand the difference between being busy and being productive. Somewhere in your subconscious mind you haven’t realised that being busy isn’t getting you anywhere and being productive is what it’s going to take to move ahead. People who are busy addicted have a bad sense of time for themselves, they have low boundaries and have no system for doing or completing tasks and projects.

Where do you need to say no and make a start towards taking bite size chunks? You wouldn’t shove a whole block of chocolate in your mouth would you? My guess is you would break a square or two and eat it in smaller bite size chunks.

2. Doing it Alone.

When we start in business we can be wearing up to ten or more various hats. We are looking after lead generation, sales, fulfilment, accounts, customer care, marketing and management and more. We become stuck in a rut and want to do it all ourselves and then when it comes to the time to recruit staff and delegate tasks and activities sometimes the mindset of “no one else can do it better than me” can lead to overload and overwhelm as we are trying to be everything to everyone. It’s important to understand that there will always be more to do than you alone can ever get done.

“Doing it alone is one of the biggest triggers to overwhelm.”

the things that keep you there, which ultimately can sabotage your success and then also some ways you can overcome everyday overwhelm in your business and your life.

OVERWHELM TRIGGERS 1. Busyness Addiction and Over Commitment. In other words biting off more than you can chew.

Busyness is literally when you are doing everything you can to move ahead, you are so driven and so compelled to do more and have more that you literally fill your life up with

Doing it alone for too long costs you and costs the business. It takes its toll on you, your mind, your body and your business. If you’re doing it alone and your business grows rapidly then it will implode on you or it doesn’t flourish because there’s so much going on and you’re doing it all yourself.

3. Clutter and Disorganisation.

If you’re currently spending countless hours looking for something in your office or desk or your environment is messy, cluttered and has no system or sense of order to it chances are you are overwhelmed in some way, shape or form. When your environment is cluttered it’s like everything that’s going on in your environment is pulling at your eyes, there’s

simply no opportunity to give your mind a break and work with ease.

Clutter in general can create chaos in your mind and your environment. That chaos is one of the biggest contributors to feeling overwhelmed.

Take a quick look at the filing systems that support you, both electronic and paper filing systems, and be sure you make some shifts to clear up the clutter as your environment is dictating your outcome.

4. Boundary Issues.

One of the biggest triggers to overwhelm is not being able to say no and having weak or no boundaries. We do see this mainly in service based businesses but it can also happen in multi location businesses where the owner is managing more staff, attending more meetings etc. When you don’t value your time, or what’s important to you it’s easy to lose your boundaries. They can get stretched or worn completely thin. Loose or no boundaries can lead to busyness addiction, complication and extreme overwhelm. There is an easy solution to this and that is stop being a yes person and know when it’s ok to say no.

THE FASTEST WAY TO GET OUT OF OVERWHELM Overwhelm happens to all of us. What should you do when it strikes you and starts to sabotage your success? Let’s explore some ways you can eliminate everyday overwhelm: • Create space and stop overcommitting.

If you make a standard in your business that you only have a certain number of meetings a day or you only work a certain number of days or certain times, then you will become more productive in the time that you do work.

Stretching your commitments out by a day or two will have a massive impact on your levels of overwhelm and will certainly make a big difference in your everyday.

• Learn when it’s ok to say NO. One thing I learned in business is the more disciplined I am with my time, the more I get done. It’s important to know where your boundaries are being stretched. Most of us have very loose boundaries. New business or marketing ventures and other commitments require time and focus. If you have too many things to manage all at one time you simply won’t be at your best. Spread them out and be clear about how many you will say yes to in a

BUSINESSFRANCHISOR 45

TANIA ALLEN

• Release things that no longer serve you.

Letting things go can be challenging until you realise that if it’s no longer serving and supporting your bigger vision then it’s just holding you back. This can be staff, your emotions, your habits, your clients and even your family and friends.

• Start your day off right.

One of the best ways to prevent overwhelm is to start your day with exercise and/or meditation. When you set your mind and body on the right frequency for the day your brain will hone in on better choices and your body will feel energised.

• Take time away from your business to recharge every week.

One of the best ways to prevent overwhelm is to make sure you take time out every week to really recharge your batteries.

Tania Allen is the founder of Vision Alliance and author of Franchise Profits. month. Here’s a tip: ask yourself; “If I say yes to this, how is it going to get me closer to my ultimate goal? How will this make me money?

What will I be saying NO to if I say YES to this?”

• Set Higher Standards and Value You. A commitment to high standards will always serve and support you.

• Self-care and Time Out. Make sure you get enough sleep and fuel your body with good nourishment and exercise every day.

• Systems.

Systems are essential to reducing overwhelm for you, your team and the overall business.

What systems do you need to support you in operating at a higher standard?

• Under commit and over perform.

Be willing to start under committing and you will be amazed at how your performance levels will soar.

• Stop Doing it Alone.

Stop wearing all the hats in your business and be willing to get the right help to take the pressure off. Having others support you in

46 BUSINESSFRANCHISOR

the day to day operations of the business will support faster growth, increased profits and a reduction in overwhelm.

Vision Alliance is a business growth and franchise consulting firm that helps franchisors and franchisees get more out of business and more out of life.

• Set realistic expectations for how much you can get done.

For more information about how Tania and her team can support you contact:

One of the overwhelm triggers is thinking that you can get everything done in a short period of time. Start looking at what’s already on your calendar BEFORE you set deadlines for yourself.

If you have to double the time estimated on all tasks until you start truly knowing how long things actually do take then do it.

P: 1300 76 49 20 or 0419 481 203 E: tania@vision-alliance.com W: www.vision-alliance.com

• Simplify how you run your business.

If you have a habit of complicating things then you might need help with simplifying your operations. Complication leads to overwhelm so it’s time to get back to ‘Keeping It Simple Sweetheart.’ J Sometimes the simplest solution is often the best.

• Schedule tasks in your calendar.

Develop a habit of scheduling your tasks from checking email and voice mails to completing other tasks. This will prevent you from running your day from your To Do List or worse still your INBOX.

book review

the franchise relationships book of

tips

Greg Nathan, an internationally respected psychologist and Founder of Franchise Relationships Institute (FRI), has turned his ‘Tips’ into one inspirational volume.

Greg Nathan, an internationally respected psychologist and Founder of Franchise Relationships Institute (FRI), has turned his ‘Tips’ into one inspirational volume.

Containing 79 of his most popular tips, they are designed to stimulate new ways of thinking and inspire positive leadership values.

With Tip titles such as ‘Thanks but I already have a family’ and ‘Life lessons from a Las Vegas taxi driver’, the book is a hit with franchisors across the country.

John O’Brien, CEO of Poolwerx says, “I’ve been in franchising for over 30 years and Greg’s Tips are the only thing that I stop to read every time- they nearly always remind me of something important or give me a new angle of thinking.”

2013 FCA Franchise Woman of the Year and Director of Narellan Pools, Debb Meyer also adds, “We love reading Greg’s sharp, punchy Tips which are a fabulous gift to franchising. They really make us think about how we can operate as a world class franchisor.”

Writing his tips over the years, and combined with useful insights from research, including his own work with FRI, this publication brings thought provoking stories plus insights and strategies on how to be a great franchisor, and you are guaranteed a unique and entertaining read.

The Franchise Relationships Book of Tips is available to purchase from

TIP 52 My break fa

O

st at the M

agic Café

ne Saturday m orning my wife and I decided many cafes at to have breakf th e market whe wooden door, ast in one of th re we were sh a young guy w e opping. As w ho in the eye and e opened the had been wip ing tables stoo brown said “Hi” as th ough he had be d up straight, looked me The place was en expecting us. buzzing. A yo ung woman in somewhere to an apron cam sit. She had th e over and he at speeches, sim lped us find ply paying at te similar, friendly st yle. No hype, no rehe ntion as though older woman arsed , clearly the m she was there anager, gave just for us. A our order at th us the same fr vibrant, e counter. In iendly at tentio fact, ever y st ef ficiency and n as she took af f member ha concentration. d the same ai r of relaxed W henever I co me across a w ell run busine paper and eatin ss I pay at tent g breakfast I ion. So while also kept an ey reading the One of the kitc e on what was hen staf f cam going on arou e from out ba nd me. finished an ea ck . He looked tir rly shift and w ed, as though as on his way front door each he had home. As he of headed woman behind the 10 or so staf f gave him a wave, nod or towards the the counter ca lled out to him farewell and th morning.” Her . “Andrew, th e demeanour w anks, we’ll se as the same as at tentive, frie e you in the it had been w ndly and genu hen she took ine. I thought day. our order – what a nice w ay to finish yo ur work for th This was a ca e fé w relaxed, welco ith an uplif ting culture and it washed over me and valued us making us . Culture does immediate w feel that. it af fect ays. The déco s you in very r was old, the fo ex traordinar y. real and od was okay But the culture and the coffee was magic. was nothing The best defin ition of culture is ‘T he way w it’s the habits e do things ar , behaviour an ound here’. In d at their work. It a workplace comes from th titudes that people naturally e adopt as they le In any organisa ader – in this go about case the wom tion, big or sm an behind the all, people are what’s import counter. looking at thei ant. Like it or r leaders for cl not, if you are say that coun ues on a leader, it’s w ts, just like th hat you do, no e words on th watching you. t what you e Sting song, “E ” very move yo u make, I’ll be

www.franchiserelationships.com.

BUSINESSFRANCHISOR 47

PaolA Tanner

The Franchise dilemma T

48 BUSINESSFRANCHISOR

here is cultural shift with customers

However, there is a fine balance between

deciding how and when they want to

demonstrating value through national marketing

be communicated to. This is putting

campaign management, and being a burden on

pressure on the franchisor-franchisee

local sites to actually execute these campaigns

relationship and is shifting the way businesses

themselves at a store level.

are communicating with their customers.

This dilemma is increasingly prevalent in

Franchisees are constantly looking for support

franchises and requires the role of head office to

and transparency around the value they are

be more of an enabler, helping local sites market

receiving from paying royalties and management

to their customers in a more agile and dynamic

fees to franchisors.

way.

For franchisors, the challenge is managing the

Paola Tanner, who has been partnering with

day-to-day operations of the business - while

franchise chains for over 15 years through her role

demonstrating to their franchise network the

as director of marketing platform provider Fuse,

value they provide in terms of systems and

believes the secret of demonstrating value lies

marketing support.

in empowering franchisees to localise marketing

can save thousands by leveraging the buying power of the network, rather than ordering point of sale in dribs and drabs.”

Franchises also are grappling with the idea of embracing new marketing technology such as SMS, email marketing and social media and are wanting to explore multi-channel marketing campaigns.

“We are seeing many franchisees wanting to embrace new digital tools to drive customers to their store, and franchisors need to provide tools that are easy to use. Every store is different, what may work in one area may not work in another, but every store needs access to the best possible tools to help them experiment and see what combination works for them.

“There are hundreds of conversations about businesses occurring on websites such as Facebook, Instagram and Foursquare, and franchisees and marketing departments are often faced with the dilemma of not knowing where to start. Is it the role of head office to manage the social media presence of a business or is it the individual store’s prerogative to own their digital footprint? Either way, the franchise needs the right tools to manage digital and think about brand compliance issues that may emerge,” says Tanner.

It is an exciting time for franchising and the fast-paced evolution of local marketing will increasingly add pressure to the franchisorfranchisee relationship. Head office will increasingly need to demonstrate value by providing tools and technology to enable local sites, whilst retaining ultimate control for the good of the brand. campaigns to tailor messages to their customers

that is relevant to each local area” explains

in a seamless way.

Tanner.

“Franchisees want support, and they expect

Implementation is also a critical factor in

head office to help empower them with tools

empowering franchisees. Franchisees need a

to drive more customers to their stores. Head office creates national campaigns, but often the local business owners are overwhelmed with the administration involved to execute the campaign in their store.”

quick turn around on point of sale orders, while head office need to work with longer lead times so they can get bulk buy cost efficiencies for the network. Cost efficiencies and speed to market aren’t always easy to reconcile, so many franchise marketing teams put these opportunities in the

Franchisors need to provide local sites with

‘too hard basket’.

the autonomy to customise local activities to

Tanner believes, “A little planning can go along

their community. “The best way I have seen

way, as can having the tools to facilitate quick

this executed is giving local sites the ability to

communication between franchisees and head

participate in national campaigns with collateral

office on point of sale requirements. Franchises

Paola Tanner is the sole director at Fuse www.fusepartners.com.au, Australia’s leading multi-location specialist agency focusing on marketing implementation.

Fuse has developed a best of breed marketing portal to help multi-site businesses implement national and local marketing campaigns.

Providing a centralised marketing platform creates huge efficiencies in retail marketing operation and provides best practice campaign execution for franchise chains at local and national level.

P: 02 9008 8500 E: info@fusepartners.com.au W: www.fusepartners.com.au

BUSINESSFRANCHISOR 49

peter buckingham

pop up into second short term outlet, as a lead generator or to cover a certain period in the market.

The idea of the pop up comes from a low set up or entry cost. New ideas are constantly being put forward, changing from a few clothes racks and trestle tables, to properly engineered marketing furniture that is light and easily removable, and in some cases even recyclable. If the cost of fit out is greatly reduced, or can be removed and reused, then a pop up becomes much more palatable.

P

op ups are a phenomena that is now becoming a regular part of the retail landscape. Overseas and locally we are

seeing pop ups in many places, and maybe an after effect of the recent global financial crisis (GFC) has been that it gives Lessors with

3. A new product launch.

4. A trial for an area, or in a shopping centre or strip that you want to see the take up.

5. Use of the window as purely a display, or even for use with the web and QR codes.

In Australia, a short term lease falls outside of the Retail Leasing Act, so a short term commitment can be made, with possibly if successful, a longer term commitment to come. From a landlord’s

I was in Hong Kong, and the classic was Shanghai Tang – a very famous retailer who was displaced from their traditional store in Central on Hong Kong Island. They had resorted to a series of pop ups in Hong Kong until they could secure a new long term arrangement. Even their staff wore tee shirts describing them as ‘The Nomads of Hong Kong’.

view, if they have a shop sitting vacant for two

Pop ups can be used in many different ways within a marketing landscape:

good aesthetics or other purposes, turned into

years, and are offered a three month tenancy, that may lead onto a longer term arrangement, it could be quite attractive.

Short term leasing is something shopping centres have been using for some years. Whilst the long term tenants may not be all that happy, we have seen wide spaces that were originally built for short term book sales, Chinese massage areas and small kiosks for mortgage brokers amongst

Many franchisors are encouraging their

1. The very seasonal store that has a few months of life. Examples of this can be Christmas cards, Easter eggs or ice cream through the summer period at a beach resort.

franchisees to consider pop ups, often as a

2. A special sale to put out reduced price stock.

see this as an attractive revenue source, with

closed retail space another option to at least have a short term tenant.

50 BUSINESSFRANCHISOR

others, where the cost of set up is very minimal.

All that may be needed is a desk, a few trestle tables and partitions. Shopping centres now

o retail some setting up short term leasing divisions accordingly.

Zambrero’s CEO, Stuart Cook told the Franchise Council of Australia’s breakfast in Melbourne last year how they are rolling out a new modular fit out that can be installed (or removed) overnight!

This will give them the flexibility to undertake pop up type concepts, as well as not be held to ransom on future rentals due to their sunk fit out costs. It will be very interesting to see if other franchise systems follow Stuart’s thinking, and also give them this flexibility.

Pop ups need the link to make it happen, as whilst most real estate agents will have seen it or thought about it, and many retailers will also have looked at the concept, most people cannot see where to start.

Pop Union (popunion.com) ‘popped up’ late last year as a company that services and supports pop up as an industry. According to Director

Bec McHenry, Pop Union is set to become the “permanent part of pop up” – “here to industrialise and strengthen the growing pop up movement and transform it from a ‘trend’ to a ‘trade’.”

Pop ups could serve as a powerful way to reinvigorate main street shopping strips. Bec has been engaged to work on a reactivation project in collaboration with the Bridge Road Traders Association and the City of Yarra, taking place on Bridge Road in Richmond, VIC. This project combines pop ups with creative marketing strategies, and aims to kick start the Bridge Road shopping strip, which has suffered quite a deal due to all the reasons retail is hurting.

For those who haven’t visited in a while (which safe to say is a fair few of you), Bridge Road has, in the past, been a celebrated discount and sale area. The shift to online shopping, the emergence of DFO outlets, and the GFC broadly, all had a grave impact on the strip.

The reactivation project sees this project as an opportunity for Bridge Road to explore new opportunities and test new identities.

A store sitting vacant, or using its window space to draw attention to products for sale, either physically or via the net is much better for a frustrated landlord, who has had a vacant shop for a couple of years!

Think of pop up as a way to test an area, test the market, or sell items that are very seasonal without you committing to a long term lease for 12 months or more.

Pop ups are becoming part of the new retail landscape.

Peter Buckingham is the Managing Director of Spectrum Analysis Australia Pty Ltd, a Melbourne based mapping and statistics consultancy, a Certified Management Consultant, and Victorian Chapter President of the Institute of Management Consultants.

Spectrum specialises in assisting clients with decisions relating to retail location, using various statistical techniques.

P:

03 9882 6488

E:

peterb@spectrumanalysis.com.au

BUSINESSFRANCHISOR 51

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52 BUSINESSFRANCHISOR

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LEAVING A LASTING IMPRESSION Jejak Graphics is a freelance graphic design business based in Melbourne, Australia working with clients worldwide. With over 18 years experience in the design and print industry specialising in magazine layout and advert design as well as offering a number of other graphic design services and print solutions including: t $PSQPSBUF TUBUJPOFSZ t #SPDIVSFT BOE nZFST t 1PTUFS BOE CBOOFS EFTJHO t &EVDBUJPOBM NBOVBMT t 4QPSUT QSPHSBNT t .POUIMZ /FXTMFUUFST t 1SPEVDU MBCFMT BOE QBDLBHJOH Artwork is tailored to your brand and focused on your message and target BVEJFODF /P KPC JT UPP CJH PS TNBMM $POUBDU NF UPEBZ UP EJTDVTT IPX +FKBL (SBQIJDT DBO NBLF ZPVS DPNQBOZ or organisation leave ‘a lasting impression’.

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