Business Franchisor Nov 17 - Feb 18

Australian & new zealand

Franchisor B u s i n e s s

VOL 06 ISSUE 01, 2017

passport to success Finance innovation solves franchisee problem

laying the foundations for the future

the grit it takes to be an entrepreneur

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Australian & new zealand BUSINESS FRANCHISOR VOLUME 6 ISSUE 1 CGB Publishing Pty Ltd TEL: 03 9787 8077 (AUS) 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 PUBLISHER’S ASSISTANT: Jorgia Rice PRODUCTION: production@cgbpublishing.com.au

Franchisor B u s i n e s s

from the

Editor The franchise industry has recently celebrated the best and brightest at the Franchise Council of Australia’s 2017 MYOB FCA Excellence in Franchising Awards.

Held at the RACV Royal Pines Resort on the Gold Coast, the three-day spectacular culminated with the Gala Dinner. Big winners on the night were G.J. Gardner Homes, named Australian Established Franchisor of the Year, as well as winning the Excellence in International Franchising and Franchisor Social Responsibility categories. Other winners include Soul Origin, named Australian Emerging Franchisor of the Year and after a presentation judged by FCA Hall of Fame members, the 2017 NextGen in Franchising FranShark winner was announced as founder and CEO of KX Pilates Aaron Smith. Read more on page 36.

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

ACCOUNTS: accounts@cgbpublishing.com.au GRAPHIC DESIGN: Jejak Graphics (03) 5977 8804 jejak@bigpond.com ON THE COVER: elcano finance

industry. Among them, we have Brad Adams from The HR Dept on page 14 who discusses the similarities between the UK and Australia and a few of the challenges faced when bringing an overseas franchise into Australia. In an ever-changing environment, there is greater competition than ever in attracting franchisees into your network. James Young, Head of Recruitment at DC Strategy advises how the right lead generation strategy and recruitment process will grow your brand on page 18.

Our cover showcases Elcano Finance. Managing Director Darren Lelliott is solving the disconnect between franchisors and the banks. Recognising that almost 100 per cent of franchisee finance is debt, increasing difficulties regarding small business finance are well

TO SUBSCRIBE:

documented and Elcano Finance are addressing those issues. Read more on page 6.

PLEASE CONTACT

As always, there’s all this and much more, we hope you enjoy the read.

CGB PUBLISHING

Joanne Tuffy

PO BOX 968

Editor

MT ELIZA, VICTORIA 3930 Email: cgb@cgbpublishing.com.au www.businessfranchiseaustralia.com.au

SUPPLIER FORUM

The information and contents in this publication are believed by the publisher to be true, correct and accurate but no independent investigation has been undertaken. Accordingly the publisher does not represent or warrant that the information and contents are true, correct or accurate and recommends that each reader seek appropriate professional advice, guidance and direction before acting or relying on all information contained herein. Opinions expressed in the articles contained in this publication are not necessarily those of the publisher. The publication is sold subject to the terms and conditions that it shall not be copied in whole or part, resold, hired out, without the express permission of the publisher.

Franchisor B u s i n e s s

8

volume 6, issue 1, 2017

12

CONTENTS

14

On the Cover

ALSO IN THIS ISSUE

6

IFC

The Energy Alliance

Elcano Finance

4

News items: Announcements from the industry

Laying the Foundations for the Future

16

Profile: FC Business Solutions

14

Profile: Franchising Expo

36

NFC17: 2017 MYOB FCA Excellence in Franchising Award Winners honoured on the Gold Coast

40

A-Z Directory

Cover Story: Finance Innovation Solves Franchisee Problem

8

Update from the Franchise Council of Australia

14

Passport to Success

Brad Adams, The HR Dept

32

The Grit It Takes to be an Entrepreneur

Adam McNamee, True Grit

IBC Jejak Graphics OBC Walker Wayland (WA)

18 2 BUSINESSFRANCHISOR

18

18

22

24

28

32

Expert Advice 10

12

18

22

24

26

28

30

Make Your Brand Stand Out in a Competitive Market Pamela Jabbour, Total Image Group

Higher Penalties and Liabilities now in force for all Employers Andrew Spiteri, Employsure

How the Right Lead Generation Strategy and Recruitment Process will Grow Your Brand James Young, DC Strategy

The Internet of Things Mark Blower, Empired

Why you need a Genius Zone to Increase Profitability Matt Malouf

From the Coffee Cart to Franchise Success Boaz Keeda, Fibonacci Coffee

How well do you understand your Millennial Consumer?

Anastasia Lloyd-Wallis, Retail Doctor Group

Government Crackdown on Businesses Rising from the Ashes Mark Molesworth, BDO

10 BUSINESSFRANCHISOR 3

business franchisor

NEWSitems Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 The Turnbull Government’s protecting vulnerable workers amendment bill has now passed the Senate and will become effective shortly.

The legislation targets the Franchise industry, where there have been numerous Fair Work Cases where employers have been acting unscrupulously.

Aussies voting with their feet over card restrictions Australian businesses could be losing up to 56 per cent of customers due to minimum spends or not accepting card as a payment method.

Australians are becoming more reluctant to fall victim to stores enforcing minimum spends or not accepting cards as a payment method, with 56 per cent choosing a different store if faced with restrictions on how they choose to pay.

In the increasingly competitive Australian retail landscape, this figure should be of concern for small Australian businesses as revenue may be seriously impacted over time. Bricks-and-mortar businesses need to re-evaluate their offerings in order to stay both competitive and attractive to existing and new customers.

A study commissioned by Mastercard revealed that four out of five Australians agreed that they resent restrictions such as minimum spends and charges when making payment by card - equating to 80 per cent of customers having a negative experience. Business owners cannot ignore the implications of not offering their customers choice.

To put this to the test and prove that minimum spends can harm revenue, Mastercard conducted the ‘Limit Test’ at the University of New South Wales. The experiment involved setting up two identical coffee carts, with the same prices, menu and coffee, but one crucial difference – one cart carried a $10 minimum card spend and the other a $0 minimum spend.

A significant difference was monitored in the choice consumers made between coffee carts. The $10 minimum spend cart received poor sales totaling $21. In contrast, the $0 minimum spend cart took sales of $240, further highlighting how important it is for businesses owners to rethink their payment procedures.

You can see the ‘Limit Test’ here: https://no-minimums.com.au/

4 BUSINESSFRANCHISOR

The new law means penalties have increased tenfold! For ‘serious contraventions’: $630,000 for a Corporation and $126,000 for an individual; Failure of record keeping/payslips, $63,000 for a Corporation and $12,600 for individuals.

Vanessa Giannos

The Protecting Vulnerable Workers Amendments, include: • Makes franchisors and holding companies responsible for breaches of the Fair Work Act. Where a franchisor has a degree of influence or control over their business networks, the legislation holds the franchisors responsible for underpayments by their franchisees, where they knew or should have reasonably known of the contraventions and failed to act to prevent the practices.

• The legislation puts the onus of proof onto the employer. Employers will be forced to prove they pay their staff correctly if they are investigated.

• Expressly prohibits employers from unreasonably requiring employees to make ‘cash-back’ arrangements.

• Strengthening the evidence gathering powers of the Fair Work Ombudsman.

• New penalties for providing Fair Work inspectors with false or misleading information or records, and new prohibitions for hindering or obstructing them.

What should business owners do now?

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Franchisors and franchisees are recommended conduct an extensive Audit to ensure full compliance immediately. HR Experts International offer a comprehensive online HR Audit Tool for FREE for a limited time. http://www.hr-xperts.com/hr-audit-tool/

Intuit launches its global Franchise Program in Australia

Hire A Hubby launches end-to-end franchising software Recognising a gap in the franchising industry for a cost effective, all-in-one franchising solution, leading Australian franchisor, Hire A Hubby, has launched cloud-based franchising system, Franchise Cloud Solutions.

Leveraging cloud-based Salesforce software and accessible on all devices, Franchise Cloud Solutions is an end-to-end franchising system with the capability to manage every possible function in a franchise. With the potential to replace all out-of-date and inefficient franchisor legacy systems, the solution offers franchisors real-time reporting, a single source of truth for data, accounting integration, benchmarking capability, Franchise Code compliance and marketing automation.

Recognising that there are hundreds of expensive and clunky franchising IT systems being built and used in isolation, Franchise Cloud Solutions was developed as a cost effective and best practice industry solution.

MD of Franchise Cloud Solutions and CEO of Hire A Hubby, Brendan Green, suggests that since the system has been developed by franchisors, with the unique needs of franchisors in mind, it is unlike anything else on the market.

Intuit has launched its global Franchise Program in Australia to help franchise businesses set up for success and bolster the growth of the nation’s local small business sector.

The Franchise Program was first launched in the US in 2008. Intuit today now has 500 franchise brands that have more than 90,000 franchisees globally, and Australia is now the third market in which the global program is being implemented.

The program was launched in Canada late last year. To date, more than 40 new franchisors have become Intuit Franchise Program partners.

“Six years ago, Hire A Hubby embarked on a digital transformation project to develop a bespoke franchising system to manage every part of our business digitally,” says Green. “We set out to develop a system which would give us the tools to improve franchisee retention and recruitment, provide better transparency over franchisee operations and ensure simpler franchisor compliance.

The launch of the program is directly related to Intuit Australia’s strategy to become the market leader in the next five years.

“During the development and rollout, we quickly realised that the system had huge untapped potential to become a cost effective, flexible and scalable industry wide solution.

“Many franchisors are still using traditional accounting software to manage their franchisees, or software platforms incompatible with those used by their franchisees. We know this results in hours of wasted time and inefficient compliance management,” said Ms Maury.

“We realised just how valuable it would be to have a franchising system on the market which is actually developed and tested by franchisors. As a franchisor, we understand the unique pain points and opportunities for franchisors, because we’ve experienced them too.”

Hire A Hubby won the 2017 FCA Excellence in Franchising Award in the Franchise Innovation category for the team’s work on Franchise Cloud Solutions, and was shortlisted in three other categories including Franchisor of the Year.

Vice President and Country Manager of Intuit Australia, Nicolette Maury, said: “While Australia’s franchise sector is large, contributing 9 per cent to Australia’s GDP and $146 billion in sales turnover, there is plenty of room to improve the efficiency between franchisors and franchisees.

“We have more than 500 franchise brands around the world that use QuickBooks as their accounting software. As a result, these franchisors are witnessing greater adoption by and retention of their franchisees.

“Our aim is to help improve efficiencies in this sector, making life easier for franchisors, and in the process, help franchise owners set up the right foundations for long-term success and educate them about technology which will help them prosper.”

BUSINESSFRANCHISOR 5

COVER STORY

Finance innovation solves franchisee problem Darren Lelliott, Managing Director of Elcano Finance, is solving the disconnect between franchisors and the banks, opening the way to double the number of franchises with lender accreditation and fixing the second largest impediment to franchisor growth.

With almost 100% of franchisee finance being debt, difficult lending conditions have long been a serious and structural drag on franchisors and the entire sector. It adds to franchisor costs with up to 30 per cent of candidates not getting finance, restricting the franchisor’s growth potential and adding to their own business risk.

Franchisee financing is a subset of small business financing. The increasing difficulties in small business finance are well documented, so why should franchisee finance be any different?

At least, that appears to be the attitude, with the sector resigned to the situation.

Graham Hart AM, former CEO of the Bank of Queensland, does not think it is a problem that the sector should simply accept. “I was the CEO that introduced the franchise structure to Bank of Queensland and I have even been

Darren Lelliott

6 BUSINESSFRANCHISOR

We are looking for whole-of-franchise and whole-of-sector finance solutions.”

Bank priorities change frequently, for very sound reasons, which can leave even Australia’s biggest franchisors with a zombie accreditation.” a franchisee myself. Franchising is a different business model to other small business, most lenders have not yet realised that.”

Hart co-founded Elcano Finance and the Franchise Finance Market to overcome franchise finance problems.

“Through our network of franchise-experienced finance brokers we have been providing specialised franchise lending for some time, but we kept coming up against the same issues for franchisors,” said Lelliott.

What they identified is that an experienced finance broker may create an excellent single franchisee solution, but that solution is never carried over to benefit the entire franchise group.

“I think of it as the finance broker being brilliant at looking at a single tree, the franchisee transaction, but fails to see the forest, the entire franchise system.”

Elcano Finance is not like any other finance broking business, and with a board comprising a past bank CEO, the former SE Asian head of corporate banking for CitiGroup, a director of the finance brokers association, and Lelliott with a corporate advisory and finance background, it was never going to be.

“Elcano Finance is more strategic in its focus.

We are looking for whole-of-franchise and whole-of-sector finance solutions,” explained Lelliott.

For a franchisor, the best way to overcome the franchisee financing problem is by having a bank provide a whole-of-franchise pre-approval, known as a bank or lender accreditation. In Australia less than ten percent of franchises have a bank accreditation.

“Lender accreditation is thought to be the holy grail of franchisee finance but the truth is that no one in the franchise sector knows what is available or happening across the sector. Even the banks don’t know what their competitors are doing.”

“Franchisors are not lenders and vice versa.

As such franchisors and banks often don’t understand each other’s priorities and limitations. For example, most franchisors

believe that if they finally achieve a lender accreditation, they will have overcome the problem. They don’t realise that bank priorities change frequently, for very sound reasons, which can leave even Australia’s biggest franchisors with a zombie accreditation.”

According to Lelliott a zombie accreditation is one whereby the banks will not lend to that franchise regardless of the accreditation; through no fault of the franchise and often without the franchisor even being aware of the change.

In addition to its finance broking services, Elcano Finance is now offering Accreditation Solutions, a new service that works with both franchisors and banks to achieve the best possible finance solutions for the franchise group.

“The banks support our new Accreditation Solutions service because we have the finance industry experience to know how they think and what they are looking for, but at the same time we are engaged by franchisors to act on their behalf. We have strict confidentiality arrangements with our franchise clients and with the banks. Elcano Finance now has Australia’s most comprehensive Lender Accreditation database populated with bank supplied data.”

One of the benefits Lelliott identified is that banks are able, under confidentiality, to advise him of lending changes that could result in zombie accreditations in circumstances where they are not in a position to directly advise the franchisor. This enables Elcano to quickly take action for their clients to either amend the finance application or redirect it to another lender.

“Creating an expertise level between the parties is actually better for both franchisor and lender, because the banks don’t actually want to annoy franchisors, but they can’t always be frank in their discussions. However they can feel comfortable talking to us, because we speak the same language and we are contractually unable to directly pass on their comments. We are able to use this information to assist our clients avoid the potential disruptions.”

Graham Hart

Elcano also wants to increase the level of transparency in lender accreditation practices by conducting the industry’s first Lender Accreditation Survey.

“There can be discrepancies between what the lenders say they are doing and what franchisors are actually receiving. This is to be expected when a process is shrouded in secrecy.

Through the Lender Accreditation Survey we hope to shed some light on this space.”

The survey is now open at Lender Accreditation Survey on the Franchise Finance Market website. Each franchise group that completes the survey is entitled to the Lender Accreditation Report (value $500) and a complimentary initial accreditation consultancy (valued at $500).

But Elcano has by no means finished innovating.

“We were originally a boutique private equity business and we do see ourselves heading back down that path with the franchise sector, as this is a successful model in the U.S. and Canada.”

They are now working with the accounting firm BDO on a number of franchise sector projects including a new financing product and facilitation of BDO’s franchisee feasibility service.

“BDO were always the logical choice for us to work with because they understand franchising better than any other accounting firm and have a strong focus in the space,”said Hart.

Finally, innovation has arrived for franchise finance. www.franchisefinance.market www.elcanofinance.com.au

BUSINESSFRANCHISOR 7

FCA

Laying the foundations for the future As 2017 draws to a close, the Franchise Council of Australia reflects on a year that has seen the legislative landscape change for the sector but also one that has seen the sector’s peak body lay strong foundations for the future.

While there is no doubt the sector has faced its challenges this year, FCA members continue to demonstrate their commitment to best practice.

8 BUSINESSFRANCHISOR

This can be seen through the take-up of participation in the Certified Franchise Executive (CFE) program, the only internationally recognised accreditation program for franchise executives. Since the FCA launched the program in Australia in 2012, around 120 participants have either enrolled in or completed the CFE program, including the 24 franchise professionals who have gained their accreditation in 2017.

The calibre of entrants in this year’s MYOB FCA Excellence in Franchising Awards has also been outstanding. There is no better advertisement for the strength of franchising as a vehicle for innovation and entrepreneurship than the women and men whose achievements are

showcased at the Awards. We congratulate all the winners, finalists and entrants for their success and contributions to franchising.

It is important to recognise these success stories, and the FCA is committed to providing the opportunities for the people and businesses that comprise this vibrant sector to flourish.

As an organisation, we are committed to finding new avenues for our members to demonstrate their leadership and to gain recognition for their achievements. We are therefore delighted to launch the new ‘Leaders of Franchising’ membership category and ‘Refer for Recognition’ program as the FCA’s latest offerings to recognise outstanding contributions to franchising and the FCA.

The FCA is now pleased to introduce a new membership category, Leaders of Franchising, which is designed specifically for franchisors who share the FCA’s vision for promoting, supporting and developing franchising as a key driver of economic and entrepreneurial success.”

Members who qualify for the Leaders of

Fair Work Amendment (Protecting Vulnerable Workers) Act 2017

Franchising membership category will have

With the Federal Parliament in September

demonstrated a willingness to share their

passing amendments to the Fair Work Act

insights and contribute to building a positive

that make franchisors jointly liable for the

public profile for the franchise sector and

underpayment of workers by franchisees, it’s

Franchise Council of Australia. In return, our

imperative that franchisors understand their

supporting and developing franchising as a key driver of economic and entrepreneurial success.

Leaders of Franchising will gain access to the benefits of branding, resources to help grow their franchise systems and access to key politicians and stakeholders.

The FCA has engaged with select franchise systems that have demonstrated their commitment to franchising excellence to become the first Leaders of Franchising. The initial response to the launch of this initiative has been overwhelmingly positive and we look forward to working with and for our inaugural Leaders of Franchising members to promote and grow the franchising business model in Australia.

Leaders of Franchising Whether through the Excellence in Franchising Awards, or education offered through the CFE and events such as the annual National Franchise Convention, the FCA is committed to promoting best practice in all aspects of franchising.

For franchisors and suppliers to the sector, FCA membership demonstrates a commitment to maintaining the good name of the franchising industry within Australia.

new obligations and responsibilities.

These new obligations extending liability for underpayment and other breaches in franchise and subsidiary networks to franchise head offices commence on 28 October 2017. The amended Act also introduced new, higher penalties for serious contraventions of workplace laws and record keeping breaches, which came into effect during September.

At the time of writing, the FWO had begun work to develop the policies, tools and resources to assist industry in meeting new responsibilities and obligations under the Act and is very much looking forward to working with industry to

Refer for Recognition

make compliance as easy as possible.

We are also pleased to announce another new

The FCA is engaging constructively and

program that is designed to recognise members

cooperatively with the FWO to ensure

for supporting the FCA and encourage those

members are provided with the resources to

involved in the sector to become FCA members

understand and meet their new responsibilities

and gain the benefits of education, networking,

and obligations and to ensure the franchise

representation, recognition and credibility that

community understands their new obligations

come with membership.

under the Act and can demonstrate a

Through the Refer for Recognition program,

compliance culture that builds great confidence

the FCA is offering our members a chance to

in this successful and economically important

nominate new franchisor and/or franchisee

model of entrepreneurship.

The FCA is now pleased to introduce a new

members in return for prizes, credit towards

Damian Paull, CEO,

membership category, Leaders of Franchising,

membership fees, and the opportunity to be

Franchise Council of Australia.

which is designed specifically for franchisors

recognised at the National Franchise Convention

who share the FCA’s vision for promoting,

as key supporters of the Association.

www.franchise.org.au

BUSINESSFRANCHISOR 9

Pamela Jabbour

Make your brand stand out in a competitive market We’re a culture based on first impressions, and in a market that’s more competitive than ever, it’s important to make your brand stand out in the crowd.

Leading franchises ensure their environment, team, marketing and messaging are consistent, and that all elements to do with their brand are a clear representation of the ethos or culture of the company. Staff uniforms are a large part of this messaging given they are the first impression the consumer has of the brand, yet they are often overlooked.

McDonald’s unveiled new uniforms for its employees in April this year and whilst there has been both positive and negative feedback on the new design, over 850,000 employees will start wearing the new uniform at all of McDonald’s 14,000 restaurants in the USA within a month of launch. The sheer volume and commitment required to execute this launch shows their dedication to brand, messaging and consistency and the impact this uniform overhaul will have in their market.

Uniforms reinforce the message your brand sends out to the market and ensures your team reflect the quality of product, level of service

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Pamela Jabbour is the founder and CEO of Total Image Group, which designs, sources and manufactures leading edge, quality uniforms for companies across Australia. With offices in Sydney, Melbourne and China, they dress over 250,000 workers a day, with clients including 13CABS and the Australian Olympic Team and officials.

and experience that can be expected when interacting with your franchise. And yet so many brands spend little or no time thinking about what their company uniform looks like and what message that’s sending out to the market. Is this causing lost sales?

A uniform refresh ensures you’re on trend and approachable, that your team stands out from the competition and is perceived as keeping up with the times. Considering many companies spend little time thinking about their uniform and its impact on branding, this refresh can provide an immediate point of difference.

Simply put, it’s a cost-effective marketing strategy to ensure your brand and team stand out. When considering a refresh, there’s key things to consider to ensure that you stand out: 1. Need Identification: Have a thorough understanding of the who, why, when

and where. Understanding your company requirements, who is wearing the uniform, why, when it is required and within what budget. The clearer the brief, the more fit for purpose the product and service. Ensure your team not only stands out but are happy with the new designs.

2. Colour, Fabric and Fit: Get suggestions on the latest fabrics and fits that have been tried and tested in your industry. Don’t try and reinvent the wheel as uniforms need to be fit for purpose and practical and if it works for others, it will work for your team. Ensure colours chosen are flattering to all skin tones and body shapes, consistent with branding and stand out in the environment they are being worn in. The colour scheme can make or break the design and take it from great to terrible very quickly.

Ensure there is a company uniform policy outlining dress standards. Should the shirt be worn tucked in or out?

What type and colour shoes are acceptable? What is the jewellery policy?

Unfortunately, common sense isn’t always common.”

3. Range Planning: Tell the whole story from top to toe. If you spend time creating a look it needs to consider all factors. Will staff need a winter wear option? What trousers are they expected to wear? Is there a requirement for a cap or beanie?

There is no point creating a fabulous shirt or polo only to have it covered up by a hot pink Jumper which is off brand and not communicating the consistent story of your brand.

4. The Devil is in the Detail: Ensure there is a company uniform policy outlining dress standards. Should the shirt be worn tucked in or out? What type and colour shoes are acceptable? What is the jewellery policy? Unfortunately, common sense isn’t always common and when taking the time to create your team image through uniform it is even more important to follow that through with the detail of how it should or shouldn’t be worn.

A carefully coordinated uniform reinforces the message created with the brand, marketing and work space and is one of the least expensive steps in the process to ensure brand image is being correctly and totally presented. A new logo, brand or office space without a uniform is like a cake without icing, or an outfit with the wrong shoes. It’s the finishing touch that brings it all together and ensures your company image is complete. Think about your current uniform and what it says about your brand. Is it in line with your current positioning? If not, it might be time for a refresh before the market changes first.

For more information visit www.totalimagegroup.com.au

BUSINESSFRANCHISOR 11

Andrew Spiteri

Higher penalties and liabilities now in force for all employers Andrew is a Senior Employment Relations Adviser at Employsure – Australia’s leading workplace relations firm. He advises small businesses on their employment obligations. Prior to this, he was a Work Health Safety Facilitator for the NSW Government, working to reduce lost time injuries and promote a culture of safety.

In September, the Government introduced harsher penalties for employers who fail to comply with the Fair Work Act and keep wage records in the Senate. Under this Bill, employers can face penalties by up to 10 times for a new category of ‘serious contraventions’.

Senior Employment Relations Adviser from Employsure Andrew Spiteri says “the newly introduced Bill shakes things up for all employers large and small.”

So, what are the changes?

Higher penalties for ‘serious contraventions’ of workplace laws The Bill substantially increases the maximum civil penalties that apply for certain ‘serious contraventions’ of the Fair Work Act. The maximum penalty will increase from $10,800 to

12 BUSINESSFRANCHISOR

$108,000 per contravention for individuals, and from $54,000 to $540,000 per contravention for corporations.

Andrew says the higher maximum penalties apply for deliberate contraventions relating to:

“The amendments are intended to deter the small minority of employers who deliberately fail to keep proper employment records, as part of the systemic underpayment of workers and cover-up of underpayments.

“However, if any employer does not keep or provide accurate payslips and records, and an employee makes an underpayment claim, the onus is on the employer to prove they have paid the employee correctly.”

Andrew advises: “keeping accurate records is the best defence against underpayment claims.”

- National Employment Standards

‘Cash-back’ bans

- Modern Awards

The Bill targets and explicitly prohibits ‘cashback’ arrangements, such as those uncovered during the 7-Eleven investigation. These arrangements typically involve employers requesting their employees to pay back a portion of their salary in unrecorded cash payments, as a means of disguising employee underpayments.

- Enterprise Agreements - a workplace determination - the minimum wage - method and frequency of payment - unreasonable requirements to spend an amount, and - employer obligations in relation to employee records and pay slips.

Higher penalties for record keeping failures In addition to raising the maximum civil penalties for ‘serious contraventions’, the Bill explicitly prohibits an employer from making or keeping employee records that the employer knows are false or misleading; or giving a pay slip that the employer knows is false or misleading.

With the new Bill in place, employers are banned from directly or indirectly requiring an employee to spend, or pay an amount of money or part of the employee’s wage if the requirement is unreasonable; and if the payment is directly or indirectly for the benefit of the employer.

“Asking an employee for a ‘cash-back’ payment under duress, coercion, as requirement of their employment, or with the purpose of undercutting their minimum entitlements is explicitly disallowed.”

Enhanced investigative powers for the Fair Work Ombudsman (FWO) The Bill provides the FWO with new investigative and information-gathering powers, which means the FWO will be able to issue a person with an ‘FWO Notice’ if the FWO reasonably believes that the person has information or documents relevant to an investigation. The FWO Notice may require the person to give information, produce documents or attend before the FWO to answer questions (with legal representation if the person so wishes).

Asking an employee for a ‘cash-back’ payment under duress, coercion, as requirement of their employment, or with the purpose of undercutting their minimum entitlements is explicitly disallowed.” workers. However, Andrew says: “it’s fair to assume that not all franchisors are intentionally non-compliant - some have either been blind to the problem or not taken sufficient action to ensure their network comply once it is brought to their attention.”

a franchisee. The increased penalties magnify

this Bill emphasises the importance that all

“The FWO has been particularly active in recent years in clamping down on franchise non-compliance with Award conditions,” Andrew says. For example, in a recent FWO prosecution, the Federal Circuit Court awarded a record penalty of over $400,000, together with orders for back-payment of wages, against the operator of a 7-Eleven store in Brisbane.

From 27 October 2017, Andrew says the Bill has important implications for franchisors in particular: “Franchisors will be exposed to legal liability and penalties where they could reasonably be expected to have known of the non-compliance. Practically speaking, it means a franchisor has increased responsibility to demonstrate they have taken ‘reasonable steps’ to prevent a breach by their franchisees.”

These new provisions in the Bill are aimed at franchisor/franchisee and holding company/ subsidiary arrangements that deliberately unpay

But franchisees aren’t off the hook either: “with the entire franchise sector under the spotlight, the FWO won’t overlook the legal obligations of

Extended liability for franchisors and holding companies

the impact on franchisees and validate that they are still liable for their workplace practices.”

Further, Andrew explains the wider implications: “beyond the franchise sector, employers irrespective of size or industry, are responsible for their obligations under the Fair Work Act and for the impact of the economic decisions that they make.”

For tailored advice on your employment and reconrd keeping obligations contact Employsure: 1300 651 415 www.employsure.com.au

BUSINESSFRANCHISOR 13

Brad Adams

Passport to Success Just over 18 months ago Gemma Tumelty left Sydney following her final reconnaissance trip from the UK. The managing director of The HR Dept had confirmed, after extensive research on both sides of the globe, that Australia was the ideal market to spearhead the international aspirations of the company founded by her mother.

The growth into Australia now marks an exciting time for the business and also for small businesses across the country who are looking for outsourced HR services and advice to help them manage their employees.

Of course, it also coincides with Brexit and

14 BUSINESSFRANCHISOR

may as such be seen as one of many British businesses which will soon look further afield than immediately past their own borders for opportunities to grow.

With the company’s UK heritage, any overseas expansion would need to mirror the core culture and values that have guided its approach and, in many ways, led to its success.

Exporting a brand There are obvious likenesses between the UK and Australia –the language, shared culture, some common legislation and a similarly high proportion of their employees working for SMEs. With a clear market opportunity to bring something unique to the Australian SME market there was confidence in our ability to successfully export IP, systems and corporate identity from the UK. The business model and systems were in place to meet the needs of a substantial SME market, however the missing ingredient was

an Australian partner who would embrace and build on the values and culture.

The two great strengths of The HR Dept are its brand – personal and expert service on a local scale – and its collaborative network, with franchisees sharing knowledge and contributing input to the development of the company.

Finding the right people The first essential was therefore for the UK management to find an individual who was able to continue the growth of the brand in Australia and also instil in new franchisees the service and values ethos initiated by our founder, Sue Tumelty, when she started the business and which still permeate the company today. “What would Sue do?” remains the go-to response to any tricky decisions throughout the business!

From the start, I have appreciated the strength of the brand and recognised that other franchisees would need the right HR acumen and the ability to collaborate with colleagues to help the company grow.

This collaboration even extends between the UK business and our operation here.

Both parties have jointly invested in the new company in Australia, in a true business partnership which will hopefully see the brand’s success providing a blueprint for continued international expansion.

In finding new franchisees, it would be easy to say yes to potential businesspeople who want to become part of the model. However, as well as being highly experience HR practitioners they need to fit the brand. Our franchisees value that in the recruitment process and are relieved to know that their investment is protected by the rigour we apply to selection.

Logistics and infrastructure To establish viability for the venture, Gemma and I have worked closely with trade bodies in the UK and Australia.

At the time, the British Government’s UK Trade and Investment agency was running a programme called Passport to Export, giving small businesses like ours advice necessary for developing an international or export strategy.

Initially, we used a franchise broker to facilitate initial introductions between myself, Sue, Gemma and the UK office team.

Modern technology now makes it simpler to do business with a company on the other side of the world. Both parties have travelled between the UK and Australia, however regular faceto-face communication via video conferencing technology has maintained a sense of team connection without the need for multiple journeys.

Working in a franchise model is a new experience for me, requiring learning on my part. I have used advisors here in Australia to help manage the knowledge and cultural transfer. We had external advice from third parties – franchise advice and franchising legal expertise – to help us make sure the joint investment would prove successful. With the strong franchising legislation in Australia, our membership of the FCA has also provided helpful guidance.

Getting the legalities right There have three primary aspects of the legal requirements to consider. Firstly, the joint venture approach between the UK and Australia in launching the Master Franchise here; second, the differences between the two countries in terms of the arrangement between franchisor

Brad Adams is a new market entry specialist with a background in business management and transformation and an MBA from Macquarie Graduate School of Management. He is the Managing Director of The HR Dept in Australia.

and franchisee; thirdly, the adaptation of the various services transferring over to Australia to ensure they adhere to Australian employment law.

This last point is significant and fundamental to bringing the business model to market. Our ongoing relationship with employment law specialist partners Hall and Wilcox has not only produced the required documentation but will also see management and maintenance of these documents as legislation changes, ensuring our franchisees always have upto-date products to offer their clients. Hall and Wilcox, under our employers’ indemnity insurance offering, also look after The HR Dept’s clients should an employee matter progress to a Fair Work Commission claim or settlement.

and processes. Such changes can be difficult to justify when related to an aspect of something which has already been proved to be successful. There is though also the opportunity for fresh eyes to drive innovation and we have some of the models we have implemented here being exported back to the UK. Australia is an early adopter of technology and follows a fast rate of technology refresh. This became an important aspect to the launch of The HR Dept here as, while proven franchise systems and customer applications were available, the Australian opportunity enabled a new perspective and drove investment in new partners. This in turn allowed us to leverage the existing market share of these partners, to strengthen our model.

The experience of the UK business was invaluable in bringing this unique product to market, dealing with the significant localisation and negotiation necessary with the insurance underwriter Lloyds Australia Underwriting.

To wrap up

Practical differences

Different businesses will take different approaches on the goods, products or services they are looking to export and franchise. But for a company whose clear objective is to ensure small business owners are abreast of legal and compliance obligations, along with productivity measures pertaining to employees, it makes sense to ensure that our brand identity was placed front and centre of efforts to establish ourselves in a new domain.

The time difference, of course, is an issue to overcome. Both parties have become used to committing to early mornings and late nights, making the balance of work and home life difficult to achieve. The UK is starting its day as we are looking to wind down and it makes it tempting to continue working while the UK office is open.

It also means potentially long turnarounds or response times, if people you are trying to contact are only available by email or telephone call during certain hours, rather than being in the same office.

There are business attitudes and social norms to consider. I have found Australian businesspeople to be more ready to drop what they are doing to accept a meeting. We have different approaches to business and casual dress and we differ in our ways of socialising with prospects, customers and suppliers.

From time to time it may become necessary to tweak the UK company’s business models

In conclusion, we are confident that all the effort put into establishing The HR Dept’s brand in Australia will provide good foundations for the company’s success here.

Whatever your company and no matter what you are looking to franchise from abroad, it is important to identify and enhance the similarities in what your target markets want from you, and separate and overcome the differences between the business cultures in the two nations in question.

The HR Dept launched Australia in August with franchises in Perth and Sydney.

Originally founded in 2003, it today has over 60 franchisees servicing some 6000 small businesses in the UK and Ireland. www.hrdept.com.au

BUSINESSFRANCHISOR 15

FC business solutions

Do you want more franchise leads?

2

Develop a clear digital advertising funnel

Make sure that your funnel is clear, concise and includes three main components; brand awareness, service/ product awareness, and lead generators.

3

Develop engaging artwork and copyright that is engaging

Ok, so I’ve got your attention. Franchise recruitment is one of those topics that are always hot – I bet there aren’t many franchise brands that you can think of that have hit saturation. Not even McDonald’s or Subway…

With the generation of franchise recruitment leads becoming increasingly difficult, in the current market some of Australia’s largest franchise systems are taking advantage of digital channels by driving leads directly through various social media platforms.

So, how does it work? We don’t want teenagers applying for businesses they can’t afford.

We’ll focus on Facebook as that’s where we see the greatest successes in lead generation.

No doubt we’ve all seen Facebook ads, but do you really understand why you’re seeing them? Facebook’s Ad Manager has over 1,000 characteristics, interests and behaviours that allow advertisers to find their target demographic.

16 BUSINESSFRANCHISOR

If you want to target a married female, who has a mortgage and interests in tech or travel. You can. Everything that a user likes, comments or follows guides the targeted advertisements they see in their newsfeeds.

We’ve seen some great results by creating campaigns with sniper like precision to those who we think would be a good fit for our franchise clients. Not only have we generated quality leads, we have also managed to increase the number of leads generated whilst also reducing cost per lead.

So, what should you do from here? Here are five tips to get your started on your Facebook lead generation journey.

1

Identify your key target market/s

Before you start advertising to anyone you need to understand who it actually is that you are advertising to. Are they tech savvy? Do they like colourful images? Why are they going to buy into your system?

Ideally you should build two to three ‘personas’ that you can begin marketing your franchise to.

Your artwork and copywrite should vary depending on your target audiences, locations and offer. Make sure that you clearly identify why you are using fonts and images depending who you are trying to attract.

4

Automate the sales where you can

Depending on the type of system and the resources that are available to you, either try to make contact as soon as possible or implement an automatic email, message or video thanking them for their enquiry and letting them know that someone will be in contact shortly.

5

Test, test, and test some more

No matter whether you’re spending $1 a day (Facebook’s minimum ad spend) or $1,000 a week, make sure that you are always testing to ensure that advertisements are reaching their maximum potential.

For more information on how FC Business Solutions can assist with your Facebook advertising contact: 03 9533 0028 hello@fcbs.com.au www.fcbs.com.au

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(03) 9533 0028 hello@fcbs.com.au www.fcbs.com.au

james young

How the right lead generation strategy and recruitment process will grow your brand

“Franchisors get the franchisees they deserve!”

- Rod Young

Lead generation and recruitment in the franchise space are changing. There is greater competition than ever before in attracting quality franchisees to your network. The long-term success of your network is being determined the minute you start reaching out to the market and generating leads.

18 BUSINESSFRANCHISOR

Whether you’re a young start-up business looking for your first franchise partner, or an existing network looking to reinvigorate your franchise sales program, there is always something to learn. Don’t underestimate the importance of getting your messaging and recruitment process right from the start. It has a huge impact on a franchisee’s performance once they become part of the family.

In my experience, there are four steps to

Having represented over 40 franchise brands worldwide, and granting several hundred franchises – single and multiple unit and masters – I’ve learnt what makes some franchise brands succeed and others fail. It shouldn’t surprise anyone but it all starts from how you attract and bring franchisees into your network.

you need to consider what type of person you’re

consider before you take off or re-launch your lead generation and recruitment program.

1

Who is your perfect franchisee?

Before you start directory listing, Facebook advertising, exhibiting at expos, driving interest through social media, print or radio advertising, looking for. What is this person doing currently, what influences and gets them excited, whom do they trust? You need to ensure your franchise opportunity speaks to the heart of what they’re looking for.

Create a franchisee avatar of who the perfect

person is, listing the attitudes and attributes you need. Consider carefully what has made you successful. Questions you must know the answer to before launching your franchise lead generation program are:

James Young heads up the recruitment division at DC Strategy, recruiting franchisees for well over 40 major franchise networks in Australia and internationally.

Previously a State Development Licensee in two states and a multi-unit franchisee for Hairhouse Warehouse, with roles in both national recruitment and leasing. A licenced business broker, James assists franchisors with exit strategies and negotiations.

• Do they believe in the same values as your brand?

• What skills and experience do they need to have to be successful?

• Are they willing and able to comply – with your systems, your direction and the agreement?

It can be very hard to walk away from someone willing to pay you a franchise fee and it’s very flattering that they believe in your brand. But it is even harder to repair the damage that an unsuccessful grant of a franchise has on your brand and future growth.”

• Where do they live and does this match where you want to grow? Don’t open somewhere just because a candidate wants you to!

• What is their personality type - does this match the profile you are looking for?

• How much borrowing ability do they have?

• Do they align culturally to the empire you are trying to create?

There are no perfect franchises but there’s a perfect franchise for the right franchisee.

franchisee. The goal of a franchise recruiter should be that six months into a franchisee running their business, they are delivering all the things the franchisor requires. And just as importantly that they are getting exactly what they thought they would from head office and the business.

2

3

• Are they willing to work hard and fight to improve your brands standing?

• Are they committed to working in the business? (Especially the first 12 months).

What’s your story?

Over-promising during the franchise recruitment process creates huge problems once a franchisee is in the network — and it is usually the operations team that are left to deal with the mess.

The picture that is painted in the lead generation and recruitment stage - and how closely this matches up to their eventual experience - will directly impact a franchisee’s happiness, performance and profitability. It is no longer a sales process. Recruiters look to source the best candidates in order to screen and qualify them for the grant of a franchise.

Knowing what your recruitment person is saying about you and your offer is critical from a legal and cultural aspect and again directly impacts the relationship your franchisees will have with your head office team in the future.

So present the facts and ensure your team can deliver.

How do you find and recruit the right people who will perform as you envisage? Lead generation needs to sell the dream but also ensure it presents a realistic view of life as a

Should you outsource or work in-house?

Both have the ability to add great value to an organisation and in equal measure create future problems for your brand. The key elements to success are the same whether you outsource or recruit in-house. The recruiter has to understand what makes a successful franchisee and they have to respect and fight to protect your brand.

One of the mistakes franchisors make is out-sourcing their recruitment to brokers or suppliers who do not have a passion for their brand or intimate knowledge of what makes a franchise business or brand unique. Outsourced partners need to spend the time learning about your business from the inside. And then creating a specific franchise lead generation and recruitment process for your brand that by the end of the process, ensures it has educated, tested and delivered a franchise candidate primed for success.

Do not allow an outsourced partner to dictate your lead generation and recruitment process without considering your overall long term

objective for your network. The right outsourced partner will take the time to understand and tailor the information that reaches your target audience and presents your offer and your brand authentically.

Throughout the screening process candidates need to be tested for their ability to comply with your operational and brand procedures, to determine they have the necessary passion to commit on average seven years to your network, and to understand what life will be like once they are a franchisee in your business.

Allowing the wrong brokers to be involved in your re-sales process or even your greenfield grants has huge implications. Franchisors need to control this as much as possible by participating in profiling their ideal candidates, approving the lead generation and selection process and determining who they want.

Partnering with an organisation that is just focused on “getting a sale” is a huge mistake.

Outsourcing to a third party to do your franchise recruitment can be very successful but the secret is ensuring they are willing to represent your brand values with integrity. They are often the first face of your brand and your voice in presenting your opportunity, so they need to invest the time to understand who you are, why you do what you do and who you are looking for.

They need to understand the DNA of your brand and your vision and work with you in creating the franchise recruitment process that will

BUSINESSFRANCHISOR 19

Franchise recruiters with some experience have a saying “If it’s a maybe, it is a NO.”

Are they suited to franchising? Can they follow systems, are they team players? If a candidate won’t follow your franchise recruitment process, they won’t follow your franchise systems, procedures or agreement. If they are late to meetings and don’t do what they say they will, in the time they say they will in the franchise recruitment process, nothing is going to change after they are in the network! In fact most times they get worse.

Franchise recruiters with some experience have a saying “If it’s a maybe, it is a NO”.

Take the time to understand who your franchise partners need to be in order to succeed. The clearer your picture of the franchisee you want, the more time and cost effective you will be in both finding and screening them.

attract and qualify the best possible candidates and get that right time after time with each recruit.

The potential issues with in-house recruiters are that they may not have the experience to ensure the legal requirements are met in both the representations they make or in explaining the legal processes under the Franchising Code.

Allocating adequate time and retaining focus on recruitment is also a challenge for an in-house resource because the day-to-day demands and pressures of running the network inevitably take precedence. And if you have a dedicated recruitment person at head office, the fixed cost of employment may not be justified by the number of franchises you grant each year, particularly in the early stages.

Incentivising your franchise recruiter (in-house or outsourced) in the wrong way, ie: purely by the number of sales will almost certainly set your organisation up for failure.

Have you considered your operations team ranking the readiness of the franchisee to start the business? Do the new franchisee’s expectations match reality? How are they performing after three or six months? Could you link incentives based on what they bring to the network once they are operational?

There are so many questions that need answers, so you need to be ready before you recruit. Again, a good in-house recruiter who understands the importance of bringing the

20 BUSINESSFRANCHISOR

right partner is a huge asset to your business.

Another question to consider is who decides the criteria and approves your potential franchise partners? Is anyone who will pay the franchise fee approved? Is it the recruiter’s decision? Is it one director’s decision? There will be different answers for everyone but I suggest that the operations team should have a say, as they will keep your whole team genuinely focused on the outcome that has the best chance of working.

4

Pay attention. How a candidate behaves during the recruitment process is how they will behave as a franchisee.

It can be very hard to walk away from someone willing to pay you a franchise fee and it’s very flattering that they believe in your brand. But it is even harder to repair the damage that an unsuccessful grant of a franchise has on your brand and future growth. Just because they want to join doesn’t make them magically fit the criteria of the ideal franchisee that you should have created with your ‘franchisee avatar’.

Don’t compromise. Go talk to any established franchisor and I guarantee they would tell you to protect your brand with everything you have.

And will no doubt have stories of the costly waste of time and resources a mistake in the recruitment process had on their business.

Make sure the team or person finding and talking to them during the initial stages also understands this and that their goal is to bring on board the very best candidates for your business.

This in turn makes these candidates more likely to be successful and happy so they become your best ambassadors, not only to your customers but to incoming franchisees considering joining. This leads to higher levels of profitability for them, for you and your network.

Do not compromise and remember: the road to building a long-term thriving franchise network is getting your recruitment right from the start.

DC Strategy is the only end-to-end franchise consulting, legal, recruitment, franchise brokerage and brand, marketing and technology firm. For over 30 years their experienced specialist teams have developed franchise programs for many of the most successful national franchises, many of which they’ve taken to the world.

In the last decade alone they have built over $1.8 billion in enterprise value for their clients. They have also brought many well known international franchise brands to Australia and assisted many franchise networks to exit. DCS’s expert franchise lawyers offer fixed fee franchisee legal reviews.

Contact James on: 0404 078 782 james.young@dcstrategy.com www.dcstrategy.com

Business Franchisor Australia & New Zealand is part of the global network of CGB Publishing

With over 30 years’ experience in providing high quality business information, with a particularly strong focus on franchising, our global presence allows opportunity for international franchise marketing solutions.

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Mark Blower

The Internet of Things: there are no great rewards without some risk

The Internet of Things (IoT) has gone from being a futuristic buzzword to a business reality in a short time, and it presents significant opportunities for franchisors who can harness it’s capabilities and manage the associated risks.

The IoT refers to the plethora of connected devices that transmit data over the internet with little or no human intervention. There are already plenty of examples of IoT applications in use around the world. Home automation solutions have proven popular: for example, smart thermostats that learn the routine of a family and automatically adjust the temperature based on weather conditions as well as when the family is at home or out, sleeping or awake, etc.

Future applications could include things like smart parking systems, where a driver who

22 BUSINESSFRANCHISOR

Mark Blower has more than 15 years’ experience working in the ICT industry with the last six years working as a national manager of networks and security teams, providing services to over 20 clients with more than 5000 network devices.

enters a parking station is immediately notified of the location of available parking spaces, which are sent to the car’s GPS or smartphone.

The driver is then guided directly to that spot.

This can remove much of the stress and inefficiency associated with trying to find a carpark, particularly during busy times of the year.

Earlier this year, Gartner predicted that Australia will triple its use of IoT devices in the next three years. Throughout the world, there will be more than 20 billion connected IoT devices by 2020.

The growth rate is phenomenal and customers will be responsible for 63 per cent of these installations, while businesses are responsible for the rest.1

IoT devices and sensors create myriad business opportunities. Importantly, they can help reduce operating costs. For example, smart sensors can change the settings of a restaurant based on how busy it is. So, rather than have the air conditioning on high all summer, and the lights simply on or off, smart sensors can tell the air conditioner to take a break when there’s not many people in the restaurant, and can dim the lights when the sun is shining bright. This reduces energy costs without impacting the customer experience.

For businesses that have inventory on hand or in storage, manual processes such as stock-takes will become a thing of the past because IoT devise can track inventory and identify changes,

even going so far as to automatically order more stock when required.

With business experts united in their assessment that the IoT will help rather than hinder businesses of all types, the next question for many business owners is not whether to implement IoT devices but when, and what type.

However, the question most often overlooked by businesses is how to maintain strong cybersecurity in a landscape with so many billions of connections.

Each individual device creates a potential entry point for malicious hackers to target an organisation. The risk of being attacked now includes anyone plugging any device into a company’s network. This makes it difficult for businesses to secure their networks with any degree of certainty.

The risk is exacerbated by bring your own device (BYOD) policies embraced by so many organisations. Business leaders and IT managers are still struggling to manage employees’ desire to use their personal devices, including laptops and mobile phones, without control over the hardware or software installed, and limited password protection to safeguard valuable company information. IT teams struggle to offer the same level of protection across the many different devices plugged into the network.

IoT devices aren’t necessarily built with strong security in mind and many businesses simply connect them to the network without even changing the factory settings. This creates massive vulnerabilities in the network for hackers to gain access. They simply use an easily-available piece of software that scans the internet for devices that haven’t had their factory security settings changed. They can then use that device to launch a distributed denial of service (DDoS) attack. This approach has already brought down large sections of the internet.

Numerous IoT devices may be unnecessarily implemented by organisations that do not have a true understanding of security, introducing vulnerabilities for malicious attacks. For example, Empired recently had a customer whose point of sale system was attacked and customer credit card details were stolen.

The hacker gained access through the air conditioning system, which was connected to the network for monitoring purposes. There are also famous examples of connected light

IoT devices and sensors create myriad business opportunities. Importantly, they can help reduce operating costs.

For example, smart sensors can change the settings of a restaurant based on how busy it is.” bulbs providing easy entry points for malicious hackers.

Organisations must be cautious of any device connected to their network that is not considered a corporate device. For example, wearable technology such as watches and fitness trackers, plus closed-circuit television (CCTV), programmable logic controllers (PLC), and operational technology (OT) can all post a potential security risk if not properly secured.

However, it’s impossible to secure these devices if the organisation doesn’t know they’re being connected. This means education is crucial to network defence.

To protect the network, businesses should implement a policy of nominated individuals who must approve how, when, and what technology can be plugged into the network.

Employees must be frequently reminded of this policy.

It’s important for employees to understand that every device connected to the network has the potential to bring the company into disrepute by introducing risk and allowing hackers into the environment.

Organisations must constantly be on the lookout for anything that may be vulnerable and for new technologies to implement to ensure the company is protected against IoT

connectivity hackers. At an absolute minimum, businesses should demand that the factory security settings of any device, whether an employee-owned or company-owned device, be changed. This includes changing device passwords and, where practicable, introducing two-factor authentication.

Franchisors should have policies and procedures in place to cope with breaches regardless of the source. They should follow an internal threat management process to mitigate the risk and prevent further breaches.

Reference: (1) http://www.gartner.com/newsroom/id/3598917

Empired provides information technology solutions across Australia, New Zealand and North America. Specialising in the design, development and integration of business knowledge, information technology and creativity, Empired works with organisations to improve productivity, empower staff, streamline and automate business processes, and deliver operational efficiencies for businesses in all industries.

08 6333 2200 contact@empired.com www.empired.com

BUSINESSFRANCHISOR 23

Matt Malouf

Why you need a Genius Zone to increase profitability The ultimate goal of the Stop Doing List system is to help you spend more time in your Genius Zone. Your Genius Zone is the three to five major tasks you own in the business and that you invest the majority of your time into in order to generate maximum return.

A genius task meets the following three criteria:

1. It’s something you’re passionate about.

First and foremost, a genius task needs to be something you enjoy, something you love doing. Without that passion, you’re not going to put in the time, energy and effort required to push your business to new heights.

2. It’s something that is essential to the business. It must be done, even if nothing else is done all day. Your business hinges on this task being completed, and being done right.

3. It needs to contribute directly to the profit of the business. As you begin to value your time, it’ll become increasingly important to you to spend your time on profitable tasks.

The four zones I first learnt this method of categorising tasks from my studies of Dan Sullivan, founder of the Strategic Coach program and an international author, speaker and coach. I slightly altered his definitions as I began implementing the Stop Doing List system for myself and others. Please note that these are definitions to be applied to tasks or activities only and are by no means a definition of your intelligence or abilities.

Tasks fall into one of the following four zones: 1. Incompetence 2. Competence 3. Excellence 4. Genius.

For most, the Genius Zone is where they should spend most of their time, as it’s where most of the profit will be made. Yet most business owners I meet are often spending very little, if any, time in this zone.

The ultimate goal is to spend the majority of your time on ‘genius’ tasks, with a bit of time on ‘excellence’ tasks, and the rest of the tasks now become your Stop Doing List. When you stop doing these tasks, you’ll find you are now focusing on areas that will ultimately provide more profit.

If you aren’t good at a task, you delegate it to someone who can be excellent at it. Meanwhile you’re freed up to spend more time on what you love doing, and you’ll gain more passion for your business. You’ll find more freedom in your business and find more time for family, health and personal passions.

I’ve been discussing genius a bit, and for good reason. When you begin to focus your time on your genius, not only do you start growing your business faster and generating more profit,

24 BUSINESSFRANCHISOR

Matt Malouf is a passionate speaker, author, entrepreneur and business coach on a mission to help fellow entrepreneurs around the world break the shackles of mediocrity and reach new levels of business success.

but you also start enjoying business more. The tasks you choose to do every day contribute to your overall enjoyment when working, and the time being reclaimed will bring balance back into your life.

Incompetence Tasks that are placed into the Incompetence Zone are tasks that you know have to be done, but don’t know how to do them yourself. To give you an example from when we implemented a piece of software in our business called Time Trade, I had received the link from someone else, did some quick research and saw it would be a great fit for our business. It could save us both time and money, but I had no idea how to implement it properly. It’s simply not my genius.

I suggested the new system to my virtual assistant, and got her to research it, try it out and make a recommendation as to whether or not it was the right fit. It then became her responsibility to integrate it within the business, tying it in with our existing systems. I didn’t need to know how to use it myself, other than telling clients how to book an appointment with me. (Which is pretty simple — click the link and book a time!) We then made sure the system was documented. This was all put in place by my virtual assistant, who is the one using it most of the time. Thanks to the documentation, it can be picked up by anyone in our business in the event my virtual assistant is sick or leaves the company.

When we are learning anything new it often takes a long time and requires a lot of focused energy to implement. These tasks are often low value and create negative energy when you implement them (stress, angst, frustration). The goal is for you to spend zero per cent of your time performing incompetence tasks.

Competence Tasks placed into the Competence Zone are tasks you know how to do but are not very good at or loathe doing. These tasks really drain you of energy. For most business owners this is administration, filing, bookkeeping, or many of the current technology needs a business has, such as social media, search engine optimisation or Google AdWords. These are tasks you can do, but you really shouldn’t.

Not only will it take longer for you to do it than someone operating in their genius, but it will also often add to your overall lack of satisfaction in your business.

In my work with clients I see a lot of tasks deemed ‘urgent’ falling within the competence category. There is inevitably a long list of these tasks, and business owners tend to procrastinate or avoid doing them which causes them to build up and create even more stress.

Many of these tasks can be performed by someone else for a fraction of your hourly rate.

Again, the goal is for you to spend zero per cent of your time doing competence tasks.

Excellence Tasks that are placed into the Excellence Zone are tasks you’re really good at, that are valuable to the business, but you don’t necessarily love doing. An example of this for myself is spreadsheets and financial models. As a trained accountant, I am capable of doing them to a high level of excellence — but I don’t love doing them. Excellence tasks can be stopped; however, in my experience you will generally need to invest a little more money into a person or system to achieve this.

The goal is to spend 30 to 40 per cent of your time doing excellence tasks. This leaves 60 to 70 per cent of your time for the Genius Zone.

Tasks that are placed into the Excellence Zone are tasks you’re really good at, that are valuable to the business, but you don’t necessarily love doing.”

Genius The simplest way to describe your Genius Zone is tasks or activities you love to do and are really good at, and if your day was filled with these tasks or activities you would feel energised and happy. Genius Zone tasks are generally easy for you to do and you tend to do them naturally. Your genius zone tasks also tend to be highly profitable.

You will often hear yourself saying ‘If only I had more time to XYZ, then we would make significantly more money.’ Owners of fast growing companies understand this philosophy and understand that the more time spent in the Genius Zone, the faster the company will grow.

One of my genius tasks is one-on-one coaching.

I absolutely love coaching, I can (and do, at times) coach all day and my energy at the end of the day is the same, if not higher, than when I started. When you have a day doing the things you love, your energy never seems to waver — in fact, the more you do it the more energy you seem to create. Remember, you should end up with no more than three to five genius tasks. You want to focus your time on these and delegate the rest.

Edited extract from The Stop Doing List (Wiley $27.95) by business strategist Matt Malouf, now available where all good books are sold.

For more information on Matt Malouf visit www.mattmalouf.com.au

BUSINESSFRANCHISOR 25

a new startup

From the coffee cart to franchise success: The Fibonacci Coffee story

I remember arriving in Australia vividly, it was 1999 and it was just before the Olympic Games in Sydney. I had spent four years working in security in my native Israel and I thought that I could use my experience here in Australia professionally.

As is often the case in life, the best laid plans sometimes don’t come to fruition. The security teams for the Olympics were already allocated and I found myself searching for work, unsure of what my next steps would be.

It seems a large leap to go from being a security specialist to working in hospitality, but there are similarities. I had learned from my previous work to take a people first approach and always wanted to make a positive difference in my work environment. I started working in a local coffee shop in Parramatta and fell in love with

the industry. For many Australians, the coffee shop is more than a place that serves hot beverages – it is where they congregate to socialise and share stories.

A good coffee shop can become the centre of a community and this appealed to me greatly.

After a period of working in this coffee shop, I was offered the opportunity to buy the business and started my own cart serving people in Parramatta. The hours were long and the work was demanding, but I quickly learned the key steps of operating my own business, even if it was a relatively humble beginning. My ethos then with my small cart was the same as it is now; I wanted to give my customers a brilliant experience, not only with the coffee I served but also how they were treated by my staff.

Soon, I was expanding and opening other coffee businesses in Sydney, and my brothers travelled from Israel to join the business and help me. There are growing pains involved in any business, especially if it grows as quickly as ours did. A crucial learning early in our journey was that as a business, we were only as good as the team that we hired. If we didn’t invest in our teams, we would fail as a business completely.

We were asked on several occasions if we would consider franchising our business. In each case, our answer was an emphatic no. We were put off by the high levels of bureaucracy and fees involved for any potential franchisee.

However, this all changed in 2009, when we met our friend Tal Avni. Together, we started to think differently about the franchise model.

What if we could give people an opportunity of owning a franchise with all of the positive aspects and none of the negatives? It was a tall order, but we persisted. We wanted to provide a supportive model for our franchisees

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that would ultimately benefit our whole team, without any prohibitive fees or bureaucracy often associated with owning a franchise.

We created the Fibonacci Coffee brand to stand for quality and a brilliant experience, regardless of the store that you enter into. I understand that working in our industry is not easy and there is an impetus on each owner to create a supportive environment for their team. We are passionate about creating opportunities not only for young Australians, but also the older workforce who may have been overlooked in employment previously.

A key facet of Fibonacci is how we look after our staff, and in turn we expect our franchisees to support them. The hospitality industry is founded on talented teams. Whether you have one coffee shop or a hundred, you will come unstuck if you do not have a talented and indeed committed team. How can we expect our teams to deliver amazing experiences for our customers if we are neglecting them?

At every level of our business, we listen to our team and franchise owners and work hard to make sure they feel supported. Without a motivated and committed team, Fibonacci Coffee would not be able to operate at any level.

When you’re running a business it’s inevitable that there will be failures along the way and my 18 years in the industry has taught me that the learning process continues every single day. We like to share our experience with our staff and franchisees and also hear their thoughts on how we can continue to improve as a business.

We have set ambitious targets for Fibonacci –

our first Victoria and Western Australia stores will be open by the end of this year and we want to open 150 stores across New South Wales, Victoria, Queensland and Western Australia. We currently employ 25 local people in our head office and 100 local people in our franchises, we are hoping to increase this number substantially with our planned franchises. Fibonacci is growing rapidly and we need to make sure that our high standards are maintained. One bad experience in any store from a customer can damage your brand irrevocably.

We have used the Australian Government’s immediate deductions for small businesses to buy essential equipment that will not only make our teams’ lives that bit easier, but ensure that every cup of coffee served at Fibonacci is almost perfect, wherever it is in Australia.

We were never going to grow without the best possible equipment for our franchises and Australian Government support was a way to fund this without reducing investment in other key areas like staff. We have purchased ovens, coffee machines and display fridges for all of our franchises. We want all of our teams to feel pride when they come into work every day, and we have been able to achieve this with our new equipment.

Small businesses with a turnover less than $10 million can purchase assets costing less than $20,000 each for their business and deduct the full amount immediately from their income, reducing their tax burden for that year. In our case, we used the equipment to make sure that our customers and staff were being given the

best possible experience in all of our stores and to fuel our growth.

It is essential for every small business owner in Australia to understand that there is support available. When running a franchise business, it is impossible to do it alone, and using www. business.gov.au/smallbusiness you can find out what support is available for your business.

We are proud of the success of each Fibonacci store, but not only for their sales figures. We are proud that some of our staff have been with us for nearly a decade and have gone on to create highly successful careers within our organisation. Our initial scepticism on the franchise model has been eradicated as we have seen our team expand and their skills grow in each of our stores.

Our business continues to grow – we are inundated with enquiries from potential franchisees. The energy and enthusiasm I see when I meet potential franchisees reminds me of my first days with my first coffee business.

If they share our passion and commitment to providing an incredible experience for their team and customers, then we are always excited to hear more.

We are ready to bring the Fibonacci brand throughout Australia, and are excited to bring our talented team and our loyal customers along on the journey.

Boaz Keeda, Fibonacci Coffee Contact details: 0404 473 564 boaz@fibonaccicoffee.com.au www.fibonaccicoffee.com.au

BUSINESSFRANCHISOR 27

Anastasia Lloyd-Wallis

How well do you understand your millennial consumer?

We have recently conducted research, with our global partners, Ebeltoft Group, into the shopping behaviours of Australian millennials.

For a few years, we have seen many retailers struggle to connect with millennials for a number of reasons. Many have found themselves distracted and left confused by millennial myths floating around the industry, about this supposedly ‘indecisive’ and ‘un-loyal’ market. Others have tried and failed to capture the attention of millennials through traditional methods of advertising.

Millennials represent an increasing percentage of the buying power in our economy, and many retailers are chasing a ‘magic’ formula solution.

But unfortunately, there isn’t a ‘magical’ formula as such, especially in this age in which you can no longer define your retail audience by pure demographics.

What or Who Are Millennials?

• Millennials are those between the ages of 18-34 in 2015, born after 1980 and before 2000.

• Expected to represent an estimated 50 per cent of the global workforce by 2020.

• The first digital natives: millennials have grown up with the internet and smartphones in an always-on digital world.

• The online world - and social media in particular - have given millennials a platform to reach the world.

• Lower employment levels and smaller incomes have left younger millennials with less money than previous generations.

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Anastasia Lloyd-Wallis leads the Consumer Insights division of Retail Doctor Group (RDG). With a strong technical background as a scientific analyst, Anastasia has recently been growing and broadening the consumer insights division of RDG, developing a unique and proprietary approach to help retailers understand their customers better than ever.

• Different priorities: With less to spend, we’re seeing millennials putting off commitments like marriage and home ownerships.

Why are Millennials Important to Retailers?

One of the largest generations in history is about to move into its prime spending years.

Millennials are poised to reshape the economy; their unique experiences will change the ways we buy and sell, forcing companies to examine how they do business for decades to come.

Millennials’ affinity for technology is already reshaping the retail sector. With product information, reviews and price comparisons at their fingertips, millennials are turning to brands that can offer maximum convenience at the lowest cost.

Millennials have been reluctant to buy items such as cars, music and luxury goods. Instead, they’re turning to a new set of services that provide access to products without the burdens of ownership, giving rise to what’s being called a “sharing economy”.

It is important to acknowledge again that millennials as a market are currently anything from an 18-year-old university student to a home-owning corporate in their mid-30s.

Consider the broad range of personality and emotion-based drivers, social, environmental

and psychological influences relevant to an individual in this market and it’s easy to see how standard demographical segmentation is no longer a strong basis for a retail strategy… however it is a valuable step in the journey.

A vital step to business success or as we call it, ‘business fitness™’ always starts by truly understanding your customer’s unique needs and drivers by investing in a foundation of your own personalised consumer insights research.

Tools such as neuro-psychological consumer personality profiling, focusing on the ‘who’ we are rather than ‘what’ we are, is a good place to start. Standard data will tell us what customers buy, where they buy it and how frequently however what is really beneficial to retailers is why they buy it. Understanding the “Why” provides the missing link to identifying the real drivers of customer behaviour and how this affects brand strategy and retail operations.

How Can We Better Understand Millennials?

Ninety-five per cent of decision making occurs below the radar of our conscious minds, in the limbic system of our brains, by our subconscious… and rationalised after. That is why I purchased my fifth pair of black sparkly shoes that I “had to have” and then regretted it later when checking my credit card statement at home!

Products are sold because they solve a problem or fill a need.

Understanding problems and needs involves understanding customers and what makes them tick.” - Steve Black

We are not rational beings, we are rationalising beings: • Our senses take in about 11 million bits of information every second • Only 40 bits per second can be processed by our conscious brains The limbic system processes information 200 times faster than the cognitive brain and this is important when we stand in front of a supermarket shelf e.g. – besides habitualised shopping for the brand we always go for, when we don’t have that, we grab what subconsciously immediately appeals to us with all its cues and codes. It decides when we enter a store why we turn around and walk out again because we just feel it’s not for us.

That’s why it becomes harder and harder for brands to cut through all the noise that is out there – because the big question is: how do we appeal to consumers on a subconscious level?

So How Do We, As Retailers, Appeal to Millennials?

While they are certainly the first generation of ‘digital natives’, our research study demonstrates the value of the bricks and mortar store experience to this audience. It also confirms the importance of the multi-

channelled ecosystem for both male and female Australian millennials. While they often prefer to shop via bricks and mortar, millennials are channel promiscuous.

Retailers must ensure a seamless customer experience across all touch points, including inventory transparency, seamless offers, pricing and customer service. Evolving your business into a retail ecosystem with complete transparency across multiple channels can be daunting, let alone a challenge internally.

However, beginning this process with a strategic review to establish your internal and external capabilities and current financial forecast, will lead you into constructing a sustainable and strategic implementation plan. We have embarked on this journey with hundreds of retail businesses who’s bottom line, and customers, are now reaping the benefits.

This data shows us there is great need for Australian retailers in all sectors to provide a better shopping experience for male and female millennial consumers. Up to 67 per cent of Australian millennials feel the shopping experience they currently receive does not meet their needs, and therefore retailers are losing out in the potential of one of the largest generations in history about to move into its prime spending years.

Ask yourself: • What are the needs of my millennial consumer?

• What do they expect from my business?

• What do my millennial consumers value most out of their shopping experience with my business?

• What key personality profiles does my business and product offer appeal to?

If you are not 100 per cent certain of how you’d answer these questions, there is a chance you’re not correctly serving your millennial consumer.

Combining market research, mystery shopping insights and neurosciences with retail expertise, RDG utilises these insights into consumer personalities, motivations and behavior’s to inform retail strategy and deployment for retailers globally.

To request a copy of the research into Australian Millennials or to learn more about understanding and appealing to your customer on an emotional level Anastasia can be contacted on: 02 9460 2882 anastasia@retaildoctor.com.au

BUSINESSFRANCHISOR 29

MARK MOLESWORTH

Government crackdown on businesses rising from the ashes

Mark Molesworth is a Tax Partner with BDO in Brisbane. His legal and accounting training provides the basis for a comprehensive understanding of taxation laws. He is a key author of BDO’s analysis of the Federal Budget and a regular commentator on a range of tax issues.

The Government has recently released further detail in relation to action to crack down on illegal phoenixing activity.

Phoenixing activity occurs where a business owner allows a business to fail owing money (particularly to the Australian Tax Office – ‘ATO’) and then immediately restarts the same business in a new entity. It may also involve using ‘straw man’ directors of the failing

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companies to shield the real business owners from liabilities.

The government has proposed a package of reforms including: • the introduction of a Director Identification Number (DIN); • implementing a specific phoenix hotline for reporting of suspected phoenix activity;

Phoenixing activity occurs where a business owner allows a business to fail owing money and then immediately restarts the same business in a new entity.”

• creating a phoenixing offence; • not allowing sole directors to resign and not allowing directors to backdate their resignations; • extending penalties to promoters and advisers who assist in the implementation of phoenix activities; • removing the current 21 day waiting period before the ATO can enforce a director penalty notice which makes directors liable for unpaid Pay-as-you-go (PAYG) withholding tax and superannuation guarantee obligations; • making directors liable for unpaid GST liabilities of companies under the director penalty notice provisions; and • strengthening the rules requiring entities perceived to be at high risk of phoenixing to provide security deposits to the ATO. In our view, the introduction of the DIN, if done well, should be supported. Identity crime is a rising issue and anything that the regulators can do to seamlessly prevent such crime is to be encouraged. Of course, this will require that the security of the DIN system is first rate otherwise it runs the risk of identity fraud itself.

The provision preventing directors from resigning where that will leave no directors for an entity, may lead to a ‘last director standing’ rush in situations where a company is showing signs of failure. That is, compared to the current law, directors may be more likely to want to resign earlier because, if they happen to be the last director, they will not be able to resign. This also has implications where the directors of a company fall out with the shareholders and the board is spilled.

One of the more controversial proposals will be the extension of the director penalty

notice regime to GST liabilities. This regime has historically been used to ensure payment of ‘other people’s money’ – such as PAYG withholding and superannuation guarantee. This is a defendable reason to pierce the corporate veil and make directors personally liable.

Extending that personal liability to other tax liabilities of the entity even where there is no evidence of phoenix activity is a large step because: • It militates against ordinary businesses and directors having a ‘licence to fail’ – which the government itself acknowledges is important in encouraging entrepreneurship and innovation.

• It makes the government more likely to collect money out of an insolvency than ordinary creditors and, in some cases, employees.

The removal of the current 21 day waiting period for enforcement of director penalty notices is proposed to only apply to directors who are considered at high risk of being a phoenix operator. As such, this draconian provision is unlikely to affect the vast majority of law abiding directors and companies.

The ATO already has the power to require security deposits where it considers that an entity is at high risk of not meeting its tax liabilities. However, the enforcement of these security deposits was difficult for the ATO and not always successful. The proposed changes will make it considerably easier for the ATO to ensure that taxpayers perceived to be at risk of not meeting their obligations are made to put real money on the line.

It will be important to ensure that the proposed rules, when enacted, strike the right balance

between penalising criminal behaviour and not stifling entrepreneurship. Excessively broad provisions that unfairly target directors of entities that fail in the ordinary course of operations, without any hint of phoenixing, is not a recipe for encouraging entrepreneurial behaviour.

Further, some of the proposals risk reinstating a right for the ATO to rank ahead of other creditors where phoenixing occurs. Where the other creditors are related to the real business owner, this is unobjectionable. However, where the other creditors are innocent third parties, any such preference in creditor ranking runs the risk of making the business community less likely to trade with one another. That cannot be considered a desirable outcome.

The proposals are open for consultation until 27 October 2017. If you are interested in contributing ideas to a submission, or would like to discuss the proposed amendments further, please do not hesitate to get in touch.

Mark Molesworth is a Tax Partner with BDO in Brisbane. His legal and accounting training provides the basis for a comprehensive understanding of taxation laws. He is a key author of BDO’s analysis of the Federal Budget and a regular commentator on a range of tax issues.

BDO offers a wide range of business and corporate advisory services to large corporate organisations, Government & Public Sector entities, private businesses, entrepreneurs, and individual clients across a wide range of industry sectors.

07 3237 5999 Mark.Molesworth@bdo.com.au www.bdo.com.au

BUSINESSFRANCHISOR 31

Adam M cNamee

The grit it takes to be an entrepreneur Entrepreneurialism can be a bit of a formula. I think it takes a certain kind of mindset, a large amount of passion, a lot of help and extensive amounts of grit.

If you have all of those things then you are well on your way to being an entrepreneur.

I should probably tell you a little bit about myself and my background.

Prior to being an entrepreneur and running True Grit, I had a 15 year career in the Australian Defence Force (ADF), 10 years of which

My push to become an entrepreneur came when I realised that I had reached all my goals in the military and decided that I needed to move on to the next challenge. The Mud Run / Obstacle Race phenomenon had just reached Australia and my background in obstacle courses, risk management and running operations seemed a perfect fit!

I think a lot of individuals that transition from the military find it difficult to take that first step, as they don’t find that job/role that replaces what they had in the military, whether it be comradery, adrenalin or sense of purpose. I think I was lucky in the fact that I found a role that has challenged me on every level.

final role in the ADF was being in charge of

Identifying a gap in the market took a lot of research and listening to what people had to say. Looking at the competition and knowing that we could deliver something we knew people would want.

Special Forces Selection and Recruiting.

When my partner and I started our business,

was as a Commando Officer, reaching the rank of Major. I completed eight operational deployments in Iraq, Afghanistan, Timor-Leste and in domestic Counter Terrorism roles. My

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we noticed that a lot of people complained that most races were just cross country running courses with a few obstacles.

We already knew that we wanted to bring participants to locations that were iconic to Australian landscapes and give them more obstacles to complete. We conceived obstacles that challenged participants to overcome some of their psychological fears, such as heights, confined spaces and cold water. Turns out that’s exactly the challenge our target audience dreamed of.

I’m not going to tell you there’s a road map to guaranteeing success, but I will share with you some key principles I believe everyone who wants to innovate and become a business tycoon should think about before investing their time and energy.

1. This is vital! Get independent financial advice about your business model. You may think you have the greatest idea in the world, but

Adam McNamee is a co-founder of True Grit.

He has over 15 years’ experience in the Australian Army with the last ten as a Special Operations Commando in a variety of hot-spot locations.

Adam’s last position was in charge of recruiting and selection of Special Forces in the Australian Defence Force. Adam understands the physical and psychological requirements of select individuals to undertake special operations.

Now, success and growth of your business once it’s up and running is another thing Success in your start-up will only come if you believe in it wholeheartedly. This is where the grit comes in. Although every decision you make might not be the right one, learning from mistakes and growing from it is the key.

From an operational perspective, event management is very similar to the military.

Event days run to a schedule, with managing race waves, medical elements, car parking, festival areas and volunteers, just to name a few components. The sell or marketing of events has been the hardest aspect, especially as new competitors have entered the market.

unless you’ve considered all the risks to your business, your idea might not actually be feasible.

2. Seeking advice from your industry experts is key. We came from an operational background but had no experience in marketing or social media. The learning curve can be steep in these areas, so seek guidance from those in the know.

3. Having a lean start up. Being able to start the business and not relying on a wage for a full year aided our business in keeping costs down and our head above water.

4. Be prepared to get your hands dirty. If you’re not prepared to do the boring, monotonous, dirty work for the business, you probably won’t succeed. You’ll often see us emptying rubbish bins at the event, covered in all sorts of things! Being an entrepreneur takes grit and resilience.

Knowing your market and industry is also a big thing. You should know your ‘avatar’ of who your participant is and what platforms are best to get them to your product. You should also know who and what your competitors are providing in your industry. Knowing all these things will give you the grit to succeed.

Once you’ve reached success well then how do you grow it? Everyone always says your business is like a plant - give it nutrients, water and sun and it will thrive. I think the best way of describing a business is actually as a forest.

There are so many elements to running a business that, from time to time, trees will fall down. If you make smart business decisions along the way and don’t get too scared of asking for help then your forest will prosper.

I was lucky in that I have a business partner with a similar background that can be my sounding board when I come up with a new idea and likewise for him. We also provide each other, and the business, a level of realism and safety when it comes to the courses and what we can and can’t do.

If you don’t have a business partner, you do have a support network around you such as family, friends and even local small businesses.

Ask your local coffee shop owner their advice on running a business – god knows they’re in a competitive market. There are also a lot of free resources on offer that you just have to go and look for.

When you’ve grown so much that you need some extra hands, bring on people who are good at what you aren’t. Make sure you’re picky with who you hire because they are ultimately going to represent the work you’ve done thus far. Always, always, always pick someone who is passionate about what you do and your business strategy.

In summary, the following are my four golden rules to being an entrepreneur.

1. Find a gap in the market and know what your competitors lack.

2. Have grit and passion when it comes to your business because if you don’t believe in it or work through hard times, the success won’t be worth it.

3. When expanding your business, take small steps and don’t get so confident that you can’t stop and ask for advice. That’s been a saviour for me and True Grit. And lastly, 4. Being an entrepreneur can be as tasking as the courses we design! You’re only as good as your last successful piece of work, so always look to innovate, create and update every aspect of your business to remain competitive.

True Grit is the first Australian designed military style obstacle course. The course is 10-12km long with over 30 obstacles.

The event is offered in most capital cities.

The course is designed to test mental strength and endurance. The course layouts are based on the company’s military background, by utilising unique obstacles tailored around the vegetation and terrain of the land. True Grit aim to deliver a truly unique experience to those that participate. www.truegrit.com.au

BUSINESSFRANCHISOR 33

Franchising Expo

Exciting year of Franchising Expos ahead With a string of successful shows in Sydney, Brisbane, Perth and Melbourne this year, organisers of the Franchising Expo are looking forward to an even more exciting year in 2018.

“In this our 30th anniversary year, we have been very happy with the response of all the shows and are looking forward to kicking off 2018 in March at ICC Sydney,” says Exhibition Manager Fiona Stacey.

“Over the past three decades many franchise companies have built their businesses by exhibiting at the Franchising & Business Opportunities Expo,” she adds. “It is also a place where the industry comes together to network, discover new trends, and learn ways to improve their business.”

The recent Melbourne Franchising & Business Opportunities Expo held in August was a great success, with a wide range of exhibitors and thousands of visitors thronging through the Melbourne Exhibition Centre.

First time exhibitor Sam Di Salvo from Twisted Sista Café says he was very happy with the show. “Being at the Expo is part of our plan to take the business to the next level,” he explains.

“We definitely found the right people were coming over to our stand. We even had enquiries from visitors from Queensland and New Zealand!”

Kim O’Donnell became franchisor of Gecko Sports early this year, and says exhibiting at the

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Franchising Expo was a key part of her growth strategy.

“It’s an important branding and recruitment exercise for us, but also very beneficial in terms of networking,” she says. “I think it is an invaluable experience being here as a new franchisor. Doing these shows this year I have met many people who have assisted me in my business, and I have learned a lot from them.”

O’Donnell adds that the Melbourne show was a success for Gecko Sports and she was very happy with the high calibre of visitors. “We met more than 20 people who are interested and a very good fit for our business.”

Kevin Bugeja from Franchise 4U is an experienced exhibitor, who remarks he is pleased to see the show going from strength to strength. “The Franchising Expo always delivers, but this year has been especially good, I think it’s a testament to the excellent marketing and advertising campaign,” he says.

“I always find it’s a good return on investment being here in terms of good leads and good opportunities. People here are looking for a business opportunity, they are serious and are ready to make a decision.”

Fiona Stacey says exhibitors have been quick to snap up space in the 2018 Expos in Sydney, Perth, Brisbane and Melbourne.

“Sydney is really filling fast, following a brilliant show at the new Darling Harbour venue earlier this year,” she reports. “I advise anyone wishing to exhibit in 2018 to speak to our team as soon as possible to secure the ideal stand to help meet your recruitment targets for the year ahead.”

Kim O’Donnell from Gecko Sports says exhibiting is an invaluable experience as a new franchisor

Franchising & Business Opportunities Expo 2018: Sydney: 17-18 March at International Convention Centre, Darling Harbour Perth: 6 May at Crown Perth Brisbane: 21-22 July at Brisbane Convention & Exhibition Centre, South Bank Melbourne: 25-26 August at Melbourne Exhibition Centre, South Wharf For more information go to www.franchisingexpo.com.au Contact Fiona Stacey for more information on exhibiting, phone 03 9999 5464 or email fiona@specialisedevents.com.au

NFC17

2017 MYOB FCA Excellence in Franchising Award winners honoured on the Gold Coast

The Franchise Council of Australia recently honoured franchising’s best and brightest at the MYOB FCA Excellence in Franchising Awards Gala Dinner at the RACV Royal Pines Resort on the Gold Coast.

Awards tonight and it’s really thanks to the

The big winner on the night was G.J. Gardner Homes, which was named Australian Established Franchisor of the Year and won the Excellence in International Franchising and Franchisor Social Responsibility categories.

is just great for business,” added Lee Moore,

From humble beginnings in 1983 in Queensland as an independent building firm, G.J. Gardner Homes now has more than 100 franchisees operating throughout the world.

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team - our franchisees, our master franchisees and our strategic partners,” said G. J. Gardner Homes’ CEO and Managing Director, Darren Wallis.

“It’s a massive recognition of the effort our team has put in over the years we’ve been franchising. It’s just so good to be recognised by our peers and by the franchising industry.”

“Winning a Franchise Council of Australia award General Manager of G.J. Gardner Homes. “From an international perspective it’ll mean that new franchisees will see us as a leading franchisor in the business. Certainly, from a social and community responsibility perspective, it’s great for our customers to see we are really involved in the community.”

Food and coffee franchise Soul Origin was

And whether it is planting 15 trees for every house they build in Victoria, an initiative that has seen G.J. Gardner homes plant 30,000 trees over the past seven years, or successful international expansion that has included entry into the United States of America, G.J. Gardner Homes demonstrated excellence across the board in their Award submissions.

named the Australian Emerging Franchisor of

“We’ve been so fortunate to take out three

Soul Origin.

the Year. With 80 stores and a presence in most Australian states, Soul Origin is a rapidly growing franchise system that serves nutritious food on the go.

“I’m a little bit overwhelmed at the moment because we didn’t expect to win this award tonight,” said Chris Mavris, General Manager of

“To be recognised by our peers in such a way gives us real credibility in the industry and for them to say ‘guys, you’ve done a great job’ means more to me than anything we’ve ever achieved so far.”

Fastway Couriers celebrated their 25th anniversary of operating in Australia by taking home the award for the International Franchisor of the Year for the second time in three years.

“The award really recognises all the hard work that goes on not only in our franchise support office but in our 27 regional franchise locations across the country,” said Richard Thame, CEO of Fastway Couriers in Australia.

“And of course, for all our courier franchisees.

They’re the ones who are getting up early every morning and working really long days to build businesses. Our franchisees have done a terrific job of embracing the technology that’s out there today and really taken advantage of a surge in online retail. That’s really put us on the radar so that we are now doing business with some of the main retail brands in Australia. And that’s something we’re all very, very proud of at Fastway.”

It was also a successful evening for handyman franchise Hire A Hubby, which won the Excellence in Marketing and Franchise Innovation categories at the Awards.

Ryan Willsher of Finn Franchise Brokers, North Perth and Regional Western Australia, was honoured as the 2017 Multi-Unit Franchisee of the Year, as well as taking home the Franchisee Community Responsibility and Contribution Award.

“Winning these Awards means a lot for both me and my team, but also our brand. We’re still a relatively young brand so to be able to receive an Award like this means a lot for everyone involved. It will definitely help us win business, I think. People will trust us more and it will give us a lot of credibility,” said Ryan.

The awards also included the induction of a new member into the Franchise Hall of Fame – Rod Young. Rod is considered one of the world’s foremost franchising consultants and is the current Chairman and Global CEO of the $250 million Cartridge World group.

Aaron Smith, founder and CEO of KX Pilates was named the winner of the 2017 NextGen in Franchising FranShark competition. The competition is designed to assist young entrepreneurs who are looking to grow their businesses by franchising. It is supported and judged by the FCA Hall of Fame.

A total of 14 Excellence in Franchising Awards were presented on the evening, plus the 2017 Hall of Fame inductee, and NextGen in

Luke Rattigan, Executive General Manager - Clients & Partners at MYOB

Franchising winner. MYOB proudly sponsored the event, which saw successful individuals and businesses recognised across a range of functions including franchisees, support staff and franchise systems. www.franchise.org.au

BUSINESSFRANCHISOR 37

MYOB FCA Excellence in Franchising Award 2017 Winners Australian Established Franchisor of the Year: G.J. Gardner Homes Australian Emerging Franchisor of the Year: Soul Origin International Franchisor of the Year: Fastway Couriers Multi-Unit Franchisee of the Year: Ryan Willsher

Finn Franchise Brokers, North Perth and Regional WA

Left to Right: Bruce Billson, Executive Chair, Franchise Council of Australia; Rod Young, Chairman, DC Strategy Group and FCA Hall of Fame 2017 inductee; Suzanne Jarzabkowska, CEO, DC Strategy; Julie Hoffman-Green, Franchise Development Manager, MYOB; Damian Paull, CEO, Franchise Council of Australia

Single Unit Franchisee of the Year, two or more staff: Nellie Dicks Bank of Queensland, Richmond

Single Unit Franchisee of the Year, less than two staff: Beverley Taylor InXpress, Bondi

Franchise Woman of the Year: Sandra Carrington FAD Cheer and Dance

Field Manager of the Year: Eric Celik Pack & Send

Supplier of the Year: MST Lawyers Darren Wallis, CEO and Managing Director, G. J. Gardner Homes

Sandra Carrington, Managing Director,FAD Cheer and Dance and 2017 Franchise Woman of the Year

Excellence in Marketing: Hire A Hubby Excellence in International Franchising: G.J. Gardner Homes Franchise Innovation: Hire A Hubby Franchisor Social Responsibility: G.J. Gardner Homes Franchisee Community Responsibility and Contribution: G.J. Gardner Homes

Franchise Hall of Fame Inductee 2017: Rod Young

Left to Right: Louise Wolf, Senior Associate, MST Lawyers; Raynia Theodore, Principal, MST Lawyers; Julie Hoffman-Green, Franchise Development Manager, MYOB

38 BUSINESSFRANCHISOR

NextGen in Franchising, FranShark Competition winner: Aaron Smith KX Pilates

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

Franchise BUSINESS

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

To subscribe visit: www.businessfranchiseaustralia.com.au

A-z directory ELCANO FINANCE & FRANCHISE FINANCE MARKET Our purpose: solve the franchisee finance problem.

Solutions: getting and managing lender accreditations for franchises; operating Australia’s only network of franchise lending brokers; provide Australia’s only online platform to speed up finance, increase transparency and lower support costs for franchise managers; consolidate franchise finance data increasing lender competition, improving finance

FC business solutions FC Business Solutions is a multi-discipline franchise consultancy with a dedicated team of professionals focusing on the development of franchise businesses.

With services including documentation standards; marketing, communications and PR; action based training; executive recruitment; system development; business operations and HR solutions, FC Business Solutions have the team and resources to assist you in all aspects of your franchise business.

Franchising & Business Opportunities Expo The Franchising & Business Opportunities Expo is an exciting event that brings together the best franchise and business systems with potential franchisees and investors.

It is the only exhibition endorsed by the Franchise

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products; operate franchise private equity funds; and ongoing franchise finance innovation.

Like any exceptional franchise manager, Elcano is focused on the big picture.

Now you can stop financing one franchisee at a time and accelerate to all-of-franchise finance solutions.

More details: Darren Lelliott 1300 30 20 71 darren@elcano.com.au. www.franchisefinance.market or www.elcanofinance.com.au

The team are actively involved members of the Franchise Council of Australia (FCA), regularly attending events, participating in committees and ensuring their skills and knowledge remain cutting edge and current.

With a solid reputation based on relationships and results and a dedication to raising the profile of franchising in Australia, FC Business Solutions stand by their motto of “We help businesses grow”.

For more information contact: 03 9533 0028 www.fcbs.com.au

Council of Australia and has been delivering great results since 1987.

The show runs annually in Sydney (March), Perth (May), Brisbane (July) and Melbourne (August).

For further information please contact Fiona Stacey on tel 03 9999 5464, email fiona@specialisedevents.com.au or visit our website www.franchisingexpo.com.au.

• You will receive independent and experienced energy advice

Who are we?

• A National Energy Management Company • We have been at the forefront of energy brokering since 2000 • We have negotiated electricity and gas deals for some of the largest franchise groups in Australia • We take the pressure off your business and manage all aspects of your energy needs What we do?

• Negotiate electricity and gas pricing on your behalf • We go to a large range of energy retailers so you receive the best market rates

• We closely monitor your energy usage

Walker Wayland WA

• Growth strategies

Walker Wayland WA is an independent firm of Perth based Chartered Accountants and Business Advisors who provides a friendly, efficient and professional service for both developing and established franchises.

• Marketing fund audits

We can assist you with: • Fixed priced service packages - including all bookkeeping, tax and accounting needs • Due diligence services when you are thinking about buying - or selling

Target 40 – reduce your overall consumption by up to 40% How? - Solar Energy - including a no cost installation option - LED lighting - Battery Storage - Power Factor Correction - Voltage Optimization For more information contact Sam Wallace on 03 9872 6869 or admin@energyalliance.net.au

• Business planning and structuring Walker Wayland has offices based in every Australian mainland State and in New Zealand.

Please call 08 9364 9988 to find your nearest Walker Wayland franchise-qualified accountant, email johnd@ww-wa.com.au or visit www.ww-wa.com.au

BUSINESSFRANCHISOR 40

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