Franchising Jan/Feb 2015

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FRANCHISING

Franchising YOUR ESSENTIAL GUIDE TO BUYING A FRANCHISE | WWW.FRANCHISEBUSINESS.COM.AU JAN/FEB 2015 VOL.28/NO.1

Sweet indulgence

WHAT TO LOOK FOR IN A FRANCHISE AGREEMENT

AUSTRALIA’S TASTE FOR DESSERT DESTINATIONS JAN/FEB 2015 PR I N T P O S T A PPR OV E D 10 0 0 0 8121

WWW.FRANCHISEBUSINESS.COM.AU

AUS $6.95|NZ $7.95

LAW ENFORCER

HOME LOANS

BEWARE!

P.28

P.36

P.120

The new rules in franchising

Should your family bankroll your business?

Cheat’s guide to scams

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CONTENTS

COV E R STORY

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12 FRANCHISE BUYING PROCESS 72 FOCUS ON FINANCE Which route will you take to owning a franchise?

What can you expect if you want to invest in the financial services arena?

14 EMPIRE BUILDING

76 TIME TO LEARN

How multi-unit franchisees account for their success

18 PUTTING A PRICE ON YOUR TIME

Should new franchisees pay themselves a salary?

22 TEN HABITS

Award winning franchisees share their business practices

The education sector has plenty of potential in early learning, extra curricular and tutoring

76

25 PASSION AND ATTITUDE

The right approach counts for a lot when it comes to running a franchise

28 WHAT YOU NEED TO KNOW ABOUT THE CODE

Tips from the ACCC on understanding the new rules

MORE DESSERT, PLEASE Dessert sector snapshot with Chocolateria San Churro founder and CFO, Giro Maurici on the cover.

REGULARS

5 6 120 124 126 132 134 136 150

WELCOME INSIGHTS LEGALESE SKETCH

32 HIGH ROLLERS

With premium sites in demand, what are the key questions to pose to the landlord?

Bridgestone flags 300 stores

The pros and cons of getting a loan from your nearest and dearest

Award winning Shingle Inn franchisees share their experiences

42

98 A NEW TAKE ON FITNESS

Lawyer Emma Jervis highlights the most important clauses to consider before you sign

108 THE BUSINESS OF DRUGS

WHAT TO LOOK FOR IN A FRANCHISE AGREEMENT

48

DIRECTORY

What makes a viable franchise business?

We look at how to recognise the signs

ADVERTISERS INDEX

88 DRIVING FORCE

92 BUILDING A SUCCESSFUL

BANKROLL YOUR BUSINESS?

HOW TO SPOT A GREAT FRANCHISE SYSTEM

CHECKLIST

Franchisors are diversifying their offers to bring fresh business models to the market

36 SHOULD YOUR FAMILY

LEADERSHIP GLOSSARY

82 NEW MODELS

54 GETTING OUT OF YOUR FRANCHISE

Raynia Theodore looks at the legal issues surrounding the sale of your franchise business JAN/FEB 2015 | 3 | WWW.FRANCHISEBUSINESS.COM.AU

CAFE BUSINESS

The KX Pilates approach

A look behind the scenes at The Drug Detection Agency

114 LOK LOK JOINS THE FRANCHISE GAME

The Dumpling Bar is the latest Asian food franchise

128

WHAT’S GOING TO HAPPEN IN 2015?

Franchisors look to the year ahead

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Are YOU Looking For...

•

Opportunity to create a successful business.

•

Competitive compensation package, including equity.

•

Insurance policies tailored to meet customers’ needs.

•

Innovative and rewarding incentives.

•

Technology and Process support.

•

On-going support opportunities for your business.

•

Access to marketing collateral.

If the answer is YES...

Now you can become part of our future. While not a franchise, you have an opportunity of becoming a Corporate Authorised Representative (Principal Agent) of ACE Insurance Limited (ACE). Combined Insurance, a division of ACE Insurance Limited (ACE), has been providing Australians with peace of mind through our insurance products since 1960.

As a Principal Agent you will be able to run and build your own operation and, while being authorised under the ACE’s Australian Financial Services Licence, advise on, distribute and sell Combined Insurance products underwritten by ACE. So, if you want to run your own business and build equity with strong support and minimal start-up up costs, then look no further.

Contact Adam Brazda on: Phone: (07) 3839 4733 Mobile: 0418 487 412 Email: opportunity@combined.com.au Web: www.combined.com.au/partnerwithus

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( WELCOME )

W

elcome to a new year, and the prospect of investing in your own business. This could be the year that you package up all those dreams of running a business and turn them into real plans, and this is a great place to start.

If this year is the year you say goodbye to being an employee, farewell your boss and set up your own business, then franchising could be the ideal way to progress.

The joy of franchising is the opportunity to tap into someone else’s experience, an existing brand, a support structure and a network of like-minded individuals.

Whether or not you know what type of business you would like to be heading up, whether or not you have a clear idea of what being a franchisee is really like, whether or not you are ready to invest, Franchising magazine offers you valuable insights, market information, trends, news, opportunities, case studies and tips, and opinion.

In this issue we look ahead to what 2015 might hold for the franchising sector and take a fun, easy look at the process of buying a franchise.

We find out some good habits from awardwinning franchisees, get some tips on how to achieve good multi-unit franchising, discover the pros and cons of your family bankrolling your franchise investment, and investigate how you can put a

PUBLISHER Raffael Fernandes P: 02 8484 0754 raffael.fernandes@cirrusmedia.com.au EDITOR Sarah Stowe P: 02 8484 0900 sarah.stowe@cirrusmedia.com.au JOURNALIST Brea Carter P: 02 8484 0661 brea.carter@cirrusmedia.com.au ART DIRECTOR Justine Dunn P: 02 8484 0757 designer2@cirrusmedia.com.au

SARAH STOWE EDITOR

price on your time when it comes to paying yourself a salary.

By the time you read this, the new Franchising Code of Conduct will have become law and in this edition the Australian Competition and Consumer Commission, which regulates the Code, highlights the most important elements you need to understand as a potential franchisee.

Of course we have plenty of inspirational case studies of both franchisees and franchisors for you to enjoy.

If you want find out more about some of the franchises in the market, turn to our supplement The Profiler, free with this issue.

This publication gives you the chance to read the key messages from select franchisors, in their own words.

And to dig deeper into the market and find out exactly what opportunities are out there in your chosen field, price bracket and desired location, visit the online arm of Franchising magazine, www.franchisebusiness.com.au.

The joy of franchising is the opportunity to tap into someone else’s experience, an existing brand, a support structure and a network of likeminded individuals

Make this year count!

NATIONAL SALES AND MARKETING MANAGER David Strong P: 02 8484 0905 david.strong@cirrusmedia.com.au ACCOUNT MANAGER Kate Robinson P: (02) 8484 0696 kate.robinson@cirrusmedia.com.au BUSINESS DEVELOPMENT MANAGER Jesse Hopwood P: (02) 8484 0740 jesse.hopwood@cirrusmedia.com.au CLIENT SUCCESS MANAGERS My Do P: 02 8484 0927 my.do@cirrusmedia.com.au

Kim Church P: (02) 8484 0963 kim.church@cirrusmedia.com.au PRODUCTION CO-ORDINATOR Tracy Engle P: 02 8484 0707 tracy.engle@cirrusmedia.com.au For subscription enquiries call customer service: 1300 360 126 ISSN: 1321-408X

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Average Net Distribution Period ending Sep ‘14 - 6,581 PRINTED BY: BLUESTAR PRINT 83 DERBY STREET, SILVERWATER NSW 2128 P: 02 9748 3411

ALL FRANCHISING MATERIAL IS COPYRIGHT. REPRODUCTION IN WHOLE OR IN PART IS NOT ALLOWED WITHOUT WRITTEN PERMISSION FROM THE EDITOR. OPINIONS EXPRESSED IN FRANCHISING ARE NOT NECESSARILY THOSE OF FRANCHISING OR CIRRUS MEDIA. © COPYRIGHT CIRRUS MEDIA, 2014

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INSIGHTS

FRANCHISOR ONLINE SALES: ARE YOU SELLING ONLINE NOW?

NO 55.3%

YES 44.7%

DO YOU PLAN TO SELL ONLINE?

NO 66.2%

YES 33.8%

FRANCHISING AUSTRALIA 2014, ASIA PACIFIC CENTRE FOR FRANCHISING EXCELLENCE, GRIFFITH UNIVERSITY

WHO’S EXPANDING THIS YEAR? BRAZILIAN BEAUTY The salon franchise plans to open another 30 salons across Australia over the next five years, with five sites already scheduled to open their doors this year.

Two salons will be located in Sydney and Melbourne’s city centres, a reflection of the brand’s expansion strategy – it is looking to secure convenient and easily accessible sites with high levels of foot traffic.

RAW ENERGY Raw Energy is looking to open another 24 outlets within the next five years, bringing its total number of sites to 30.

The figure will include the company’s original cafe model as well as its new concept, Raw2Go. The focus will be on opening new sites in regional QLD and entering the NSW market.

The future of Pie Face unknown leading into 2015 At the end of November last year it was announced Pie Face would close 18 companyowned stores and two franchised outlets. At the time of print the company’s remaining 12 corporate stores and 39 franchise units were still operating.

Administrator Jirsch Sutherland made the announcement after assessing the company’s financial position following its entry into voluntary administration the week before, owing creditors more than $20 million.

Sule Arnautovic, managing partner of Jirsch Sutherland and joint administrator of the Pie Face companies said “There has been some necessary rationalisation, and as a result of these closures, approximately 130 part time employees will have their employment terminated. The closures and terminations are being made in order to preserve the ongoing business.”

At around the same time, The Australian reported that Pie Face in the US was in a legal stoush with a New York builder who claimed the fast food company had unpaid bills. Pie Face denied the charges.

In an effort to cut back production costs and increase sales of its smiley-faced pies, in December Pie Face was said to be in talks with supermarket giant Woolworths about selling frozen product.

According to Fairfax media, at the time of print 15 stores were already trialling pie packs and a decision on whether to develop this strategy further is expected early this year. The report suggested this was one of several strategies being considered.

High cost of goods and costly rents have been cited as possible causes for the collapse of Pie Face.

JAN/FEB 2015 | 6 | WWW.FRANCHISEBUSINESS.COM.AU

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Looking to own your own fitness business?

Welcome to the world of EnVie Women’s fitness is an underserved niche market and EnVie Fitness is the perfect solution. EnVie offers a modern, safe and fully equipped fitness center with extended hours and a variety of training options - exactly the environment ladies are looking for.

EnVie offers franchsees: • An affordable initial investment with leasing and financing options available for a turn-key solution.

• Advanced operating and security systems, reducing staffing needs and allowing you to manage your fitness centre remotely.

• Complete training and ongoing support in marketing, operations, finance, people, technology retention and sales - from a fitness franchise team truly vested in your success.

To learn more or for information on ways we can work together, visit enviefranchise.com.au or call 02 9332 2824.

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INSIGHTS

FRANCHISORS IN HOT WATER ELLA ROUGE The director of Ella Rouge Beauty, Ali Hammoud pleaded guilty to dishonestly misusing his position as a director, and to making a false statement to obtain a financial advantage. He appeared in a local Sydney court on 25 November, 2014 following an investigation by the Australian Securities & Investments Commission (ASIC).

Look for an established franchisor that has stability and a track record you can see and understand their journey Andrew Moffatt, managing director, Bridgestone Australia and New Zealand

GETTING TO GRIPS WITH THE FRANCHISE AGREEMENT The franchise agreement will be central to your business as a franchisee; it is a legal contract and needs careful attention.

Australian Small Business Commissioner Mark Brennan offers a simple tip for potential franchisees to help make sense of this document.

WWW.YOUTUBE.COM/USER/FRANCHISINGONLINE

View the video, along with many others at www.youtube.com/user/ franchisingonline

HAVE YOU SEEN OUR NEW WEBSITE? Are you looking for the most comprehensive digital listing of franchise opportunities for sale? An ever-growing list of franchises to buy can be easily accessed on Australia's leading franchising website.

FRANCHISE BUSINESS

Check out www.franchisebusiness.com.au to find a franchise, read Franchising magazine's market leading content and visit the official directory of the Franchise Council of Australia.

The new site helps you find your way through all the stages of understanding and buying a franchise, features expert advice on franchising issues and legal concerns, and makes it easy to source franchise opportunities.

Visit: www.franchisebusiness.com.au JAN/FEB 2015 | 8 | WWW.FRANCHISEBUSINESS.COM.AU

ASIC alleges that Hammoud had misappropriated for his own use more than $2.6m from Ella Rouge Beauty International Pty Ltd, a company that was later liquidated.

EUROPCAR The Australian Competition and Consumer Commission (ACCC) is taking CLA Trading Pty Ltd, which trades as vehicle hire franchise Europcar Australia, to court in February.

The allegations relate to the company’s vehicle rental contracts as well as a section on its website that includes information around the liability cover provided to car hire customers.

COVERALL CLEANING CONCEPTS The Federal Court has found that South East Melbourne Cleaning Pty Ltd (in liquidation) (formerly Coverall Cleaning Concepts South East Melbourne Pty Ltd) (Coverall Melbourne), the former Victorian franchisor of a national cleaning services franchise, engaged in misleading conduct and made false or misleading representations in regards to its "Coverall Australasia Franchise Plan," which was presented to two franchisees.

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Dodo Connect is on a nationwide search for franchise partners Help us grow the hundreds of thousands of existing Dodo customers already enjoying our great value products and services.

Be a part of Dodo Connect’s retail expansion to 150 major locations in Australia

Represent Dodo’s huge range of great value home services including telecommunications, energy and insurance

Enjoy the benefits of our simple business format with low-cost entry

Reap the rewards of your sales success through the opportunity of earning uncapped income

Join the flock!

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INSIGHTS

customers have come to enjoy, remains unchanged,” said owner, John Gdanski.

BHG is seeking franchisees that are enthusiastic and energetic, and while they need to have a passion for hospitality, prior experience in the industry isn’t necessarily required.

AMBER TILES EXPANDS INTO NEW WAREHOUSE FACILITY

ITALIAN RESTAURANT BUSINESS TO FRANCHISE Bayside Hospitality Group (BHG) is set to franchise its 43-year old Melbourne-based Pinocchio restaurant business.

Pinocchio specialises in the delivery of rustic Italian fare in a family-friendly environment, and it currently operates within two Melbourne suburbs – South Yarra and Hampton.

In an effort to keep up with customer demand and maintain quality and consistency, BHG has opted to franchise new Pinocchio restaurants moving forward.

“After numerous approaches from within the food industry, we’ve decided to expand the brand further, and believe that franchising is the best way to grow whilst ensuring the Pinocchio quality our

Amber Tiles has signed a seven year lease for 10,000 square metres of Blacktown Distribution Centre for a new headquarters and warehouse. The group has moved into the Bessemer St, Blacktown site, owned by Goodman Group, a site previously occupied by Metcash for its main NSW grocery distribution centre servicing IGA Supermarkets and other independent supermarkets.

Amber Tiles now supplies its 26 franchised and company owned stores across NSW and the ACT, as well as three stores in Queensland, from the Blacktown distribution centre.

The Blacktown warehouse now contains 7,000 pallets of

tiles and pavers which provide 150,000 square metres, which are being shipped in and out in keeping with Amber Tiles’ frequent launches of new product ranges.

The larger premises are located close to the major M7 and M4 motorways.

Amber Tiles has already experienced an uplift in its operational efficiencies with the re-location to the new premises.

CHANGE AT CHOICE HOTELS Choice Hotels Australasia has appointed Daniel Kitch to the role of general manager, development, to focus on expanding the portfolio of properties.

Kitch has more than seven years’ experience in the hotel industry including a development role at Quest Serviced Apartments.

He will oversee the growth strategy for the hotel group across Australia and New Zealand, and lead the team’s retention of existing properties and development of new and rebranded properties.

The franchised hotel group has also recently added another five hotels to its Australian business. The new properties in New South Wales, Queensland and Victoria brings the total number of additions to the chain to 26 in 2014, across all of its four brands.

Franchising is not fairy dust and rigorous due diligence remains the franchisee's best friend

In Queensland, the Econo Lodge brand is expanded with a property in Rockhampton; three regional venues have been added in New South Wales at Wagga Wagga (the Econo Lodge Heritage label), and Comfort Inns at Gundagai and Blackheath.

In Bairnsdale in Victoria there’s a new Ascend Hotel Collection boutique property.

Andrew Terry, Professor of Business Regulation, University of Sydney

JAN/FEB 2015 | 10 | WWW.FRANCHISEBUSINESS.COM.AU

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GLOBAL

TREAT

YOURSELF

TO SUCCESS!

BRAND LOCAL OPPORTUNITIES FOR OVER 69 YEARS BASKIN-ROBBINS™ HAS BEEN CREATING IRRESISTIBLE TREATS TO MAKE YOU SMILE AND FEEL GOOD INSIDE AND OUT. WE’VE PERFECTED THE COMBINATION OF DELICIOUS TREATS AND A FUN ATMOSPHERE.

Baskin-Robbins™ is looking for people with drive, creativity and passion. We believe that people are the most important ingredient in a successful business. Ideal key qualities for prospective Franchisees include: • The ability to make people smile • Excited to be a part of a team and the Baskin-Robbins™ system • Ambition to succeed and grow your business • Outstanding guest service focus • Passion for the Baskin-Robbins™ brand We’re confident that once you get to know our product you’ll be in love with Baskin-Robbins™, just like we are.

For further information, please contact Michael Payne on 0417 077 633 or michael@palmoasisventures.com or visit www.baskinrobbins.com.au

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cure a ec o se to path to tread ne on ys an th these jourrne here is more follow one of t; l, en ve m tra st u ve er road yo franchise in up. Whichev d e bl en ta u ofi yo pr re , ul essf and see whe lf with a succ u find yourse we hope yo e business. and enjoyabl

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JAN/FEB 2015 | 12 | WWW.FRANCHISEBUSINESS.COM.AU

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The quickest way from A to B You’ve honed in on the brand you want, and committed to the system.

You obviously know your own mind…. but perhaps you need to consider a little more research to be confi dent that your choice will turn out right. There’s no need to rush. Researching the sector to ensure there is enough business growth there, and fi nding out what the franchisees think of the system and the franchisor will serve you well. There’s more to a successful business than a brand. And don’t forget to get legal and fi nancial advice! There aren’t any shortcuts to investing wisely.

Taking the high road Looking for a franchise isn’t always easy, and you’ve given yourself a good start by researching the sector fi rst before selecting a brand and then visiting franchisees within the system to see fi rst hand what the role entails. Going back to the franchisor with more questions is a great idea but you might want to do some more research on the opportunity itself and its location or territory, and the fi nancial statements. You understand the importance of seeking fi nancial and legal advice – it really is worth paying for expert opinion to protect your investment before you sign up to a franchise.

The long and winding road Congratulations! You’ve really put some effort and time into fi nding out if franchising is right for you, choosing a sector with potential, and picking out the right brand. As you have discovered, the fi rst few brands may not suit your needs, so it’s wise to start again and look for the business that will be a good match. Conducting research on the franchisor helps you uncover more about the business too. You haven’t relied on the franchisor for all the information – speaking to franchisees and researching the location yourself – you also know when expert advice is essential. Good luck with your franchise!

JAN/FEB 2015 | 13 | WWW.FRANCHISEBUSINESS.COM.AU

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EMPIRE

building

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ranchisees who want to build their business into a multiple site operation require a different set of skills from those needed to be a successful single unit operator, as these multi-unit franchisees attest.

Getting to grips with the running of a franchise system is one thing; it is quite another to take that understanding, the knowledge of how to operate a single business and extend the skills to be able to perform at a high level and to take a more strategic role in the business. Increasingly franchisors see the value in encouraging their good franchisees to take on a bigger role within the network, but not every fran-

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chisor is geared up for this nor is every great single unit operator suitable for a multiple unit role.

THE IMPORTANCE OF STAFF Brad and Matt Walker have won multiple awards from the Franchise Council of Australia for their business skills. As the national FCA Multi-unit Franchisee of the year for 2014,

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the pair has shown talents in operating two Grill’d casual dining outlets.

“Being a great communicator helps. It’s important to be able to deliver your goals and plans precisely and effectively,” says Brad Walker.

Bakers Delight franchisee Tony Kaye agrees. He admits “Being a person who likes to be in control and have an influence on the daily operations of the business my biggest obstacle was trying to be in two places at once.

“As a single unit operator you have the luxury of building a team around you and you have the ability to make yourself a key person in that team if you desire.

Once your business expands this luxury is taken away and you need to develop a hierarchy for each individual site with key people who can communicate direction,” he explains.

Brad and Matt Walker discovered that getting the right people on board was vitally important for the smooth running of their business. And key to this was to really understand both the brand, and the franchise business, to evaluate exactly what skills the roles demanded.

“You need to know your brand and business really well before you employ someone, what they need to be doing in the business,” says Brad. “In the early stages, the biggest challenge was growth. We spent more time in the newer store so we had to make sure the existing business didn’t slow its growth - having the right people on board was critical.

one store to two outlets was the biggest learning curve for the brothers. “You are spreading yourself so you can’t be hands on,” he says. “You need to be able to trust your team. We promoted from within our business and this helped us understand the skill sets and we were able to mould the people. We helped mentor them and they were like-minded.”

Tony and Isla Kaye were named the FCA New South Wales and ACT multi-unit franchisees for 2014.

“They need to have the right skill set and fit into the Grill’d brand. It’s pretty hard to get it spot on every time.”

“You need to be able to create your own universe and invite your team of staff to fill it with their great ideas. By engaging with staff and encouraging and supporting their development, they will become key contributors to your overall vision for the business,” says Tony.

He says that stepping up from

And communication is two way.

You need to be able to create your own universe and invite your team of staff to fill it with their great ideas

о!

о!

JJoin tthe

Healthy Habits is all about feeling good, about the food we eat, our bodies, and our lives.

Now's the time to start feeling good about yourself and help change the face of Australian fast food - one sandwich at a time.

To find out more about Healthy Habits or to enquire about 'joining the revolution' head to our website www.healthyhabits.com.au/franchising

JAN/FEB 2015 | 15 | WWW.FRANCHISEBUSINESS.COM.AU

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RIGHT: BRAD AND MATT WALKER FAR RIGHT: TONY AND ISLA KAYE

“Creating an open, honest line of communication with a willingness to evolve your business in the direction that your brand navigates is what provides a strong foundation to a healthy relationship with your franchisor. The franchisor provides systems and direction and as a franchisee it is your responsibility to follow the franchisor’s guidance. In doing so you will uphold your brands image and ensure consistency throughout the network,” he adds.

The Kayes believe there are many elements that aid success as a multi-unit franchisee. Time management, people management and leadership qualities are all skills that need constant review and improvement, the pair suggests.

Tony says organisation is paramount. If he had the time again, he says, “I would be more organised. I really underestimated the power of forward planning for those initial first few months and the type of issues I might have to encounter, not only from an operational perspective but also a staffing perspective.”

There is no doubt the franchisor can ease the transition to multiple unit operation, and Kaye found Bakers Delight stepped up to this.

I really underestimated the power of forward planning for those initial first few months and the type of issues I might have to encounter, not only from an operational perspective but also a staffing perspective

“With the assistance of the area manager, we were able to accelerate the rate in which we improved and maintained operational standards in the business. This was a task made easier with the assistance provided to me from the franchisor. Without the assistance of the area manager, a task that took time to improve would have taken considerably longer.”

PLAN FOR SUCCESS “If I could pass on some advice to anyone who is thinking about becoming a multi-unit franchisee, it would be to take some time out of your usual routine and really plan for your success carefully. Plot your first 12 weeks of trade and allocate time to analyse your businesses performance.”

Walker also has some guidance for anyone considering a multiunit profile: make sure you get business advice on setting up the business correctly from the very beginning.

“We were a bit short sighted setting up the financials, now we look longer term,” he says.

“We have two personal goals: the growth and development of our people, and the financial success of our business. The two go hand-in-hand.”

JAN/FEB 2015 | 16 | WWW.FRANCHISEBUSINESS.COM.AU

There are specific challenges, and benefits, to being a franchisee with a partner, and these can be accentuated as multi-unit franchisees. Brad Walker sees the capacity for him and his brother to operate separate areas of the business as a distinct advantage.

“Matt and I have benefitted from our relationship because we have different personalities and strengths. I’m more people based and HR, Matt has a financial, operations and strategic background.”

So would the pair have done anything differently if they were starting out again as multiple operators?

“We would probably have bought on vested interest moving from one store to two stores. That would allow for expansion and fill in some gaps,” says Walker.

While the brothers brought experience running large operations and multiple unit business to the Grill’d franchise, they say it is essential to have a good relationship with the franchisor to be able to take the next steps as a franchisee.

“Trust and belief is key. We know and trust the franchisor is making the correct decisions to grow the brand.”

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ranchisees often ask us whether they should take a wage, and how much. It’s an important question to consider.

We tend to encounter two views on this topic: one is that a franchisee should take a wage; the other is that they should initially forgo paying themselves a salary and focus on paying off debt.

Which is right? As is often the case, the answer is, it depends.

Certainly it is paramount to pay off debt on borrowings to finance the business usually well within the franchise term, as this reduces risk and costs. But we think it is usually impractical and inappropriate for a business owner to go for long without a wage. At the same time, all business people need to think carefully about how much they take out of a business and when.

TAKE A REGULAR WAGE There are several problems if a franchisee doesn’t take a wage. Here are two of the main ones.

1. IT’S JUST NOT PRACTICAL What will the franchisee live on? They will need money for personal living expenses (rent or mortgage, groceries, car, school fees etc) and this has to come from somewhere.

Money for day-to-day living expenses could come from savings, at least for a short while. But many people put all their savings into the franchise. So, unless there’s money from other sources, such as a spouse or partner’s salary, the business has to be able to pay the owner from the business.

2. A SENSE OF SECURITY Beyond the practical matter of meeting personal expenses, a salary provides a sense of security and confidence that basic needs can be met. Most people are uncomfortable without a regular income and if this makes them anxious, it can affect their work and relationships. That’s another reason it’s so important to build up a business to the point where the owner can take a regular income that’s sufficient for their needs.

So, yes, in principle a franchisee should take a salary.

HOW MUCH IS ENOUGH? For new franchisees, it’s best to only take the minimum wage needed to live on until the profitability of the business can be properly assessed.

In many cases it’s a very good idea for the new owner to have money put aside to cover several month’s living expenses.

This means they won’t need to take money out of the business at first. Clearly such savings are vital if the business is unlikely to make a profit for a period of time, or won’t make enough to cover the owner’s personal living expenses.

For anyone starting out in a franchise, the way to assess what the business could afford to pay them is with a conservative budget and cashflow forecast. The task then becomes to run the business to achieve the financial targets.

Once the business is established and profitable then it is acceptable to increase the take-home pay.

That’s not to say franchisees should splurge on luxury living as soon as there’s money in the bank. A business owner’s wages should always be within what the business can afford and their lifestyle appropriate.

If the business can’t support the lifestyle, franchisees have two options: reduce personal living costs or increase the profit of the business.

A good general guide is to set the salary at the level it would cost to pay a manager to do the same work.

But a note of warning! It is wise for franchisees to resist the to take urge every cent out of the business – even if profits are healthy. It’s best to leave some money in the business in case there is a downturn.

As with a new business, the way to work out how much it’s appropriate to take in salary is using the annual budget and cashflow forecast.

ABOVE AND BEYOND A MINIMUM WAGE A franchise owner is not only an employee.

As a business owner a franchisee is actually an investor, and an investor looks to make a return on the money they’ve put into the business. This is their compensation for taking the risk.

The aim should be to run the business so JAN/FEB 2015 | 19 | WWW.FRANCHISEBUSINESS.COM.AU

It’s best to only take a minimum wage needed to live on until the profitability of the business can be properly assessed

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For anyone starting out in a franchise, the way to assess what the business could afford to pay them is with a conservative budget and cashflow forecast. The task then becomes to run the business to achieve the financial targets

it makes more than is required to cover the costs, repay loans and pay a franchisee wage. This profit can be returned to the franchisee as a dividend.

This leads again to the question “What return should be expected?” Again, this depends on the business. The return on investment will be a different amount depending on the risk of the business – and how well it is run.

HOW THE INVESTMENT AFFECTS THE FRANCHISEE WAGE It’s important to understand that the amount invested in a franchise doesn’t always reflect the wages the business can afford to pay the owner. Some franchises can be highly profitable with low initial investments, others might have a high entry cost and relatively lower wages and profit potential.

However, when a franchisee invests in a business, a main aim is to repay any loans and money invested. So a higher investment equates to more capacity to repay loans and the investment in the business.

DON’T SPEND ALL THE PROFITS What if the franchise turns out to be an excellent money-maker? Some franchises are profitable right from start, and others become highly profitable.

The good news is that it’s okay to enjoy the financial rewards from a good business, through higher wages, or dividends paid from profits.

But before a franchisee spends the money it’s important to take future commitments into account and ensure these are covered first. For instance upcoming bills,

expansion plans or refurbishment.

Franchisees also need to remember that when their business makes a profit there will be tax to pay, so they need to put money aside for that. One of the best ways they can ensure tax and other commitments are covered is by doing some planning as part of a franchise annual review meeting with a franchise accountant.

GET PROFESSIONAL ADVICE FIRST Having said all this, each business and individual’s personal and tax circumstances are different. This means it’s essential for a franchisee to take professional advice on how to structure any payments from a business to the owner or owners.

This includes seeking advice before personal expenses are paid through the business, since benefits paid on behalf of owner attract FBT. And because franchising has some characteristics that other independent business doesn’t, it’s best to seek advice from a qualified accountant who understands franchising!

The question of when and how much a franchisee should take in wages needs thought and benefits from good advice. But a franchisee’s business should operate so that over its lifespan it can cover its costs and pay a salary that covers their cost of living and helps them stay motivated.

PETER KNIGHT, FCPA AND KATE GROOM ARE CO-FOUNDERS OF SMART FRANCHISE AND THE FRANCHISE ACCOUNTANTS NETWORK. THEY SPECIALISE IN BUSINESS AND FINANCIAL EDUCATION FOR FRANCHISEES. WWW.SMARTFRANCHISE.COM.AU WWW.FRANCHISEACCOUNTANTS.NET.AU

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SWEET REWARDS of becoming a Gelatissimo franchisee To change your lifestyle through investing in a business that is fun, flexible and rewarding contact Karen at Gelatissimo on (02) 8845 0100 or email franchise@gelatissimo.com.au.

gelatissimo.com.au

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10

HABITS OF SUCCESSFUL

FRANCHISEES

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f you want to be a first class franchisee, what does it take?

Once you’ve signed up, trained and opened the doors, your daily behaviour is going to help drive your success as these award winning franchisees explain.

Franchisees Nicki Nesbitt, Wiesiek Lewandowski and April and Tony Carnie have had time to reflect on the determination it’s taken to create a successful business at Shingle Inn Mt Ommaney since receiving the 2014 Franchisee of the Year (two or more staff) award by the Franchise Council of Australia (FCA).

“We would tell anyone looking to buy a franchise ‘don’t go into the business with too many high hopes’,” says April. “Go in with a planned strategy and be prepared to work long hours.

“I think one of the most important things to remember is that the market won’t come to you,” says Nicki. “You really do have to go to the market and build up your database of customers or clients. Be diligent about your marketing efforts, making sure you’re focusing on the areas that will give you the highest rate of return which aren’t necessarily the ones that cost the most.”

You can read more about this successful quartet on page 92; here we find out from five other franchised businesses how they stay ahead of the competition: retail based Rowan Prendergast is an OPSM franchisee, and the 2014 FCA Franchisee of the Year (less than two staff); Mister Minit’s Ben Curran is also a retail franchisee, taking out the award for NSW/ACT Franchisee of the Year (less than two staff) in 2014; Rob Tyndall, is an EFM franchisee and the SA Franchisee of the Year (less than two staff); Alistair Borg and John Wilmot from The Cheesecake Shop were named WA Franchisee of the Year (more than two staff) and Car Care’s Jim Hawley, is the WA Franchisee of the Year (less than two staff).

ROWAN PRENDERGAST, OPSM

to other corporate staff who work alongside my franchise business. The habit I practice most is monitoring customer satisfaction. This is done using emailed surveys, verbal followups on products and purchases, and by establishing an open and genuine relationship with every customer to the furthest extent possible.

I regard the marketing of my business as something I do to three distinct groups: customers, employees and the franchisor.

Marketing myself and my business to all these groups and promoting a positive and mutually beneficial relationship has led to unexpected business growth opportunities.

In the first two years of my franchise, I focused heavily on local marketing in an effort to leverage the national marketing and customer awareness already provided

by OPSM. I am constantly looking to improve the knowledge and competencies of my staff. My current focus for the business is examining opportunities to buy further into the franchisor’s network in order to fuel sustainable growth and eventually a passive income.

MOTIVATION Customer satisfaction is my primary motivator. There is nothing more satisfying for me than a new customer who comes in happily telling us that we were recommended by a friend or relative.

Our reputation in the community is my utmost consideration and it motivates me constantly to think that every single interaction we have with a customer, existing or potential, has the capacity to build or erode that reputation.

I have a very supportive wife and extended family. Discussing business decisions at home allows for perspective to be placed on opportunities or actions taken. I am conscious of building a sustainable culture in my business with excellent employees so that I can take time out of the business to be with my family without the business slowing down. My succession planning and staff training is designed to allow me to eventually step away from direct daily involvement but maintain profit growth.

The ultimate goal of this is to thereby spend more time enjoying home life!

COMMUNICATION

BEN CURRAN, MISTER MINIT

I have specific, measurable and realistic operational targets for both the short-term and longer-term performance of my business. I communicate these to my employee as well as

ATTENTION TO DETAIL First and foremost my shops must look inviting to the customer. That first

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impression ultimately sets the tone for the experience. It’s imperative that each customer is afforded the same service and we show consistency across the board. Return customers are what we want to achieve.

I like to ensure that my team is ready and focused, shows attention to detail and goes that extra step to enhance our offer. Whether it be polishing the shoes on a heel repair or cleaning a watch with the battery refit, we must show pride in what we are doing.

Operating in a mature industry means that growth must be driven from ongoing category and service innovation. Therefore, we must do this better than our competitors.

Being a service based business the quality of the people is directly linked to the quality of the offer, my customer is my ultimate focus and my team and I must ensure that we offer a first rate experience, quality workmanship and value for money.

TEAMWORK Given my success and results I have been able to leverage and mentor other franchisees to improve their business. This I feel is a very important part of franchising as it gives other franchisees the same opportunities that I was fortunate to have.

I am a strong believer in a work/life balance. I ensure that my team and I only work a five day week, this not only ensures a balance but also enables the team to start the week fresh. I have a strong team behind me that has allowed me to expand my business from one franchise to three.

I empower my team to make decisions and ensure that whatever decision they make I back 100 percent. This I believe builds confidence and develops them as leaders.

ROB TYNDALL, EFM HEALTH CLUBS DAILY HABITS Daily habits include monitoring access to both members and the franchisor along with those items necessary for the running of the business.

I keep a calendar log of action items with cut-off date at the end of the week or month.

This log is monitored daily to action those items that are able to be done rather than wait for the end of week or month logjam.

These may include accounts, marketing or member communication.

With our area manager, franchisor and external business coach, we analyse our strengths and weaknesses, derive our goals and develop an action plan to achieve these TIME OUT This is the difficult bit. I would recommend to anyone to get some personal time. This may just be an afternoon at home doing the books or catching up on some shopping but it needs to be something you want to do rather than have to do. Whilst we may love what we are doing there needs to be some down time. My goal since setting up the business was to put the business in a position to be able to spend a shift away from the business (eg. Saturday morning), then an additional shift, Friday night and now Friday morning. Whilst I generally use this time to work on the business it gives me some breathing space.

ALISTAIR BORG AND JOHN WILMOT, THE CHEESECAKE SHOP CUSTOMER SERVICE Placing emphasis on improving customer service through team member training has been paramount to our success and critical to taking our business to the next level. Working with the WA support office and our external business coach, we have undertaken internal staff training in crucial areas of our business.

CONTINUAL IMPROVEMENT Setting goals and developing strategies has allowed us to consistently move our business in the right direction.

Together with our area manager, franchisor and external business coach, we analyse our strengths and weaknesses, derive our goals and develop an action plan to achieve these.

Learning and challenging ourselves is crucial to staying motivated. On a continual basis, we personally undergo training to develop our knowledge in sales and production. We seek out opportunities JAN/FEB 2015 | 24 | WWW.FRANCHISEBUSINESS.COM.AU

to learn about new sales techniques and developments in training so that we can further improve our customer service and the motivation of our staff.

JIM HAWLEY, CAR CARE PLANNING ACTIVITY The key factor for me is the need to plan my activity. With a service business you can often find that your customers can start to control your work flow. Whilst you need to be flexible you also have to organise your day in the most efficient way as, in my business, I am essentially exchanging time for money and there are only so many hours that it is possible to work.

The great thing about our system is that I am in control of when and where I work so I plan my jobs to ensure I minimise travel time between jobs. I also need to build in some flexibility to allow for jobs that take longer than I might expect.

FRANCHISOR ENGAGEMENT I see a lot of franchisees that cut themselves off from the franchisor and others in the system. I am always ringing up my franchisor with ideas and feedback on the system. This has two benefits: it broadens my understanding of the ideas from their point of view and it let’s them see that I am engaged with the system and my own business.

As a result of this is, I am often asked my opinion on ideas that the franchisor has.

As a franchisee you are at the ‘coal face’ so it is likely that most of the issues that affect the business will be more apparent to you than the franchisor.

I find this keeps me motivated as it allows me to see my business as greater than just a car detailer.

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All across Australia people are becoming increasingly conscious of their health and lifestyle and are making better food choices for themselves and their families.

While food trends come and go the desire to embrace a healthy diet and active lifestyle are here to stay. These well-educated consumers are creating huge demand for fresh, good quality food and juices and this will only increase over time.

Raw Energy is the perfect healthy business and an integral part of people’s healthy lifestyle.

If you’re interested in: • Creating a healthy lifestyle • Building a healthy business • Joining a winning franchise system Please give our CEO (Chief Energy Officer) Matthew Hope a call on (07) 5444 1099.

Matt will be more than happy to answer any questions and discuss the franchising system in further detail.

WWW.RAWENERGY.COM.AU

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Why you need

PASSION ATTITUDE P

assion and attitude: do you have both in spades? Because when any franchisor is asked what he or she looks for in a franchisee, these two attributes come top of mind every time. Add in some business skills and that's a dream package. Of course you might need technical skills for certain roles, and that’s where training comes into play. But whether franchisors are seeking operators with existing knowledge and experience in their field of business or individuals changing careers and in need of technical assistance, they are all searching for the traits that cannot be learned.

The importance of a passion for what you do as a franchisee cannot be overstated: how else will you motivate yourself and enjoy the challenge of running your own business if you don’t love it? It doesn’t matter what the passion is for – it could be customer service, solving problems, working with children, repairing vehicles, being your own boss – what counts is having the desire to turn up every day and do the job.

And attitude goes hand in hand with passion – how will you face the tough times if you don’t have a positive approach and a willingness to go to any lengths to fix problems and make your

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business work? A great attitude builds and boosts relationships with customers, staff, the franchisor and other franchisees in the network.

THREE TOP TRAITS GAVIN CULMSEE, GENERAL MANAGER AT BEDSHED, HIGHLIGHTS ASPECTS HE BELIEVES ARE ESSENTIAL FOR FRANCHISEE SUCCESS: Although franchisees are a diverse bunch from a variety of different backgrounds, there are three qualities most successful franchisees regularly share. ✱ Passion for the industry

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✱ Can-do attitude ✱ Strong set of business skills PASSION

Franchisees need to be driven by a clear sense of purpose and passion in order to achieve success

Franchisees need to be driven by a clear sense of purpose and passion in order to achieve success. A belief for the company’s specific mission is the vital first step to a franchise succeeding. The second step is having the drive to build the business and achieve an end result.

Starting a franchise will never be easy, there will almost certainly be long hours and hard work. Without a passion for the business the prospect of succeeding may not be enough,

franchisees need to be driven by something intrinsic.

ATTITUDE A franchisee needs to be enthusiastic and resilient, even when it seems hard. This attitude will encourage staff to act in a similar manner as they will find you approachable and be willing to work hard for the business.

The right attitude will help franchisees to deal with not only staff, but also managing customer and other business relationships. Loyalty and trust are important characteristics which make these relationships last.

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SKILLS There are a number of skills that contribute to success, however two main areas not yet touched on here are time management and decision-making.

To run a successful franchise, a franchisee must demonstrate a strong sense of organisation and structure. This includes knowing when to prioritise tasks and when to delegate work.

No skill is more important than being a practical problem solver. This is something that cannot be learned from a book, it has to be learned through experience, common sense and accumulated knowledge.

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Deciphering the DR MICHAEL SCHAPER Is deputy chair of the Australian Competition and Consumer Commission

W

hether it’s grooming pets, calculating tax returns or running a gym, franchising is an attractive option for many people. It offers the opportunity to be your own boss with the support and security of an established business model. However, being part of a franchise means you have to play by the rules of the system and you don’t have the same flexibility to make changes as an independent business does.

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THE CODE The mandatory Franchising Code of Conduct recognises that franchising success hinges on transparency, commitment and relationships.

In setting out the rights and obligations of both franchisors and franchisees, the Code acknowledges that the franchising relationship is a two-way street.

The Code also reflects the reality that like any relationship, it pays to start on the right foot, conflict needs to be dealt with and sometimes things can end unexpectedly.

DISCLOSURE FROM THE START The Franchising Code spells out some basic information requirements.

For example, franchisors have to provide prospective franchisees with a disclosure document containing financial information and details about the system.

This information allows prospective franchisees and their professional ad-

visors to apply due diligence and make an informed decision about buying a franchise.

It also allows the franchisor to put all the requirements of the system on the table.

A BINDING AGREEMENT The Code also requires franchisors to provide prospective franchisees with a copy of the franchise agreement – the contract that underpins each party’s rights and responsibilities.

When an agreement is signed it becomes a legally binding contract between the franchisee and a franchisor. So, it is essential that you seek legal advice to explain what you are signing.

In fact, the Code requires you to provide a statement that you have sought independent legal, business or accounting advice. Alternatively, you can sign a statement that you have been told that this advice should be sought and have decided not to seek it.

WHAT TO LOOK FOR When reviewing a disclosure document and the franchise agreement, pay close attention to: • • • • • • •

Fees Franchise territory site selection Leasing arrangements Training and support Market expansion End of term arrangements

GENUINE MEDIATION The Code also deals with disputes. The Franchising Code states that parties should first try to resolve their dispute with each other.

If they can’t agree on an outcome within three weeks, the Code provides for mediation.

Mediation involves an informal negotiation between the parties facilitated by an

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Xpresso.com.au facebook.com/XpressoMobileCafe JAN/FEB 2015 | 29 | WWW.FRANCHISEBUSINESS.COM.AU

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THE CODE AT A GLANCE

Infringement notices will allow us to move swiftly to deal with what we believe to be breaches of the Code, while the court penalties will provide more teeth in deterring rogue operators

independent third party.

Either party may refer a dispute to mediation.

Once mediation is requested, it becomes mandatory for both sides to attend and to genuinely try to resolve the dispute.

The Office of the Franchising Mediation Adviser (www.franchisingmediationadviser. com.au) exists under the Code to provide a cost-effective dispute resolution solution to the industry.

Acting for an ulterior purpose, or in a way that undermines or denies the other party the benefits of the contract, are examples of conduct that may qualify as bad faith.

While good faith requires you to have regard to the rights and interests of the other party, it does not prevent you from acting in your own legitimate commercial interests.

There is likely to be some uncertainty around the meaning of good faith in the franchising context until it is clarified further through the courts.

ENDING A FRANCHISE As the saying goes, ‘all good things must come to an end’.

The Code requires a franchisor to inform a franchisee at least six months before the end of franchise agreement of its decision on whether or not to renew the agreement or enter into a new one.

The Code also spells out conditions around termination of the agreement.

For instance, if a franchisor wishes to terminate the franchise early because of a breach, they must give reasonable notice, say what needs to be done to fix it and allow reasonable time for this to occur.

If a breach is fixed within this time, the franchisor will be unable to terminate the franchise on this ground.

GOOD FAITH The Government recently introduced an obligation of good faith into the Code, which came into effect on 1 January 2015.

Fundamentally, good faith will require both parties to a franchise agreement to remain loyal to the contract they have entered into.

ENFORCING THE CODE The Code has the full force of the law. The ACCC is responsible for enforcing the Code and has the power to investigate and prosecute breaches.

A new chapter of the Code began on 1 January.

For the first time, the ACCC has powers to issue infringement notices of $8,500 for body corporates (otherwise $1,700) and seek penalties up to $51,000 in the Federal Court for serious breaches of the Code.

These changes are likely to go unnoticed by franchisors and franchisees who do the right thing. However, the new powers play an important role in achieving compliance with the Code.

Infringement notices allow us to move swiftly to deal with what we believe to be breaches of the Code, while the court penalties provide more teeth in deterring rogue operators.

While there will not be a moratorium period, we will apply our discretion in line with our Compliance and Enforcement Policy in deciding whether to take enforcement action.

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In 1998, the Australian Government introduced the Franchising Code of Conduct as a mandatory industry code.

As a prescribed industry code of conduct, the Code has the force of law and is binding on franchisors and franchisees.

The Code aims to regulate the conduct of participants in franchising towards each other and aims to ensure that franchisees are suffi ciently informed about the franchise before entering into it.

The Code also provides a mechanism for franchisees and franchisors to try to resolve disputes by using a cost-effective dispute resolution procedure.

As always, we will take a common sense approach to the use of our regulatory powers.

The ACCC will focus on particularly serious conduct, including breaches of the key pillars of the revised Code.

This will include failure to act in good faith, failure to provide a disclosure document, refusal to attend mediation and unlawful termination of a franchise agreement.

PRE-ENTRY TRAINING The ACCC also plays an education role. We work to ensure franchise participants are aware of their rights and obligations under the Code.

We believe disputes can be reduced if prospective franchisees know their rights and obligations under the Code before they enter into a franchise agreement.

Since 2010, the ACCC has funded a free online pre-entry education program run

by Griffith University.

The course has proven successful with more than 6,700 participants enrolled in the program.

More information is available at www.accc.gov.au/franchising or by calling the ACCC small business helpline on 1300 302 021.

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Ongoing training and support for franchisees and their teams.

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Call 1300 131 888 or visit: dominos.com.au/franchising

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HIGH ROLLERS

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hat trends are there in leasing that potential franchisees need to know? We find out what are the hot topics, and some key questions to pose before signing a lease.

The success of retail business owes much to site location and rental costs. So what are the experts seeing in the market and how can franchise buyers best approach the gnarly subject of landlords and leasing?

There’s now a better leasing sentiment in the market place, more activity and demand for space according to Gavin Nixon, development manager at Hairhouse Warehouse.

That’s in part due to a major shift in the demand for space with international brands such as Zara and H&M coming in to the Australian market. Their appetite for space is on the increase.

Add to this the concentration in shopping centres on the specific retail mix that brings in the customers.

As Ange Kondos of Leasewise explains, “There is a huge push toward food tenancies and creating ELP areas (entertainment leisure precincts) by the shopping centres as food and lifestyle is the single most important category that is showing growth.

Every new development is based on ELP and many existing malls are remixing fashion and general merchandise to introduce this.

“Franchises in this category have never been better placed to take advantage of the demand the market has for what they have to offer. We have seen double digit growth for Degani and Schnitz in this space,” Kondos says.

Always start with what you believe sales are going to be, then work backwards when evaluating what level of rent you can afford to pay

Competition is going to remain fierce, Nixon believes.

“There is no back-off or let-up in sight. There are a lot of publicly listed companies and they are measured in terms of how profitable they are, and organic growth.

That means expanding their retail reach.”

In order to meet demand, rather than building greenfield venues, shopping centre owners are redeveloping existing centres. And while that creates extra space to bring in new tenants, there remains pressure on square metrage, Nixon says.

He emphasises that for any franchise buyer, when looking at leasing space the key consideration it that it is all about supply and demand. “When space is in demand you will find rentals are stronger than when demand is low and leasing vacancy levels are high.”

The reality is that not everyone is getting same store sales growth and in most systems there is a focus on increasing customer traffic and basket spend through JAN/FEB 2015 | 33 | WWW.FRANCHISEBUSINESS.COM.AU

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WHAT ARE THE TOP FIVE QUESTIONS A FRANCHISE BUYER SHOULD ASK THEIR FRANCHISOR AND LANDLORD? 1. Are these standard commercial terms? Ensure what’s negotiated is in fact what’s in the lease.

2. What tenancy mix is earmarked around where my store is located?

3. Are there any planned developments or construction to the shopping centre which may affect the store?

4. What is the estimated traffic fl ow of the shopping centre or supermarket sales productivity?

5. What are the core trading hours of the shopping centre; can I trade after hours and if so, what are the costs to do so?

Gavin Nixon, Hairhouse Warehouse

marketing campaigns.

But there is “bullish optimism” says Nixon, because low interest rates are helping access to finance to develop franchise networks.

“Franchise brands accredited with the big four banks can have a cashflow lend on the capital cost of the business,” he says. “It’s easier for more franchise brands to lease because of the cost of funding, though the cost of entry remains the same.”

As landlords have kept a tight rein on the rents, so franchisors have adapted to find alternatives to the high cost sites. Kiosks are a typical response but even these mini locations are now in high demand and consequently, have seen prices rise, says Nixon.

There are advantages of course to being in a franchise system when it comes to lease negotiation but the big brands can still lose a location to a competitor happy to pay above the market rate for a site.

“Landlords are in the rental business, their job is to maintain and increase rent and increase value,” Nixon says.

“Another common fact is that they can offer a nice soft deal to open up a site, but they will claw back the money at renewal,” he suggests.

Once a franchisee is invested in the business and the location it is hard to pull out. That’s something that franchise buyers need to be aware of before signing up to a high priced location.

It isn’t all doom and gloom at retail because there are signs that there’s a consumer spending revival, he says, but financial decisions such as lease agreements should

be approached with a realistic understanding of what can happen down the track.

“A lot of landlords will say, the space is worth $250,000. But don’t worry about that.

What you say is “our model works off a 10% rent to turnover cost [for instance] and that fits, or doesn’t fit the model”.

“Always start with what you believe sales are going to be, then work backwards when evaluating what level of rent you can afford to pay. In others words start with expected sales when looking at any space in shopping centre and consider what rent you can afford to pay, then equate that to a suitable occupancy cost to then start negotiating the rent.”

Nixon advises franchise buyers to be on the front foot when it comes to dealing with landlords. “Always ask the landlord what the rental expectation for space is, never have them ask you what you can afford to pay, as this may not work in your favour with the landlord taking advantage of greater rents per square for space than is the actual market rate for the total area.”

It is also important to question franchisors about the site selection criteria they used to determine their site and what comparable evidence they obtained to ascertain that the rent and incentives are within market, says Kondos.

“The power of the ‘good’ retailer has never been greater in my experience. Are they aware of good information available on the net such as the Rentwise report? This tells you what rent each category should be paying in each shopping centre across Australia as well as customer traffic info, average spend, spend per square matte and whether car parking is available.”

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SHOULD YOUR

BANKROLL YOUR BUSINESS?

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any would-be franchisees turn to family members for a loan when they’re raising money for a business – and this arrangement can have significant benefits on both sides, writes Domini Stuart.

Borrowers will generally pay a lower interest rate and have fewer add-on costs, and it’s common for family members to have a more flexible approach to repayments than a bank. Lenders might earn relatively high interest even if they’re charging a lower rate than the banks. And there’s the satisfaction that comes from helping a family member to establish a successful career.

But there’s also a potential downside.

“If the borrowers are struggling to make the repayments, they could feel a lot of extra emotional pressure,” says Gess Rambaldi, a partner specialising in Business Recovery and Insolvency at Pitcher Partners. “The lenders might think they have a right to be much more involved in the business than the borrowers would like. And, of course, there’s always the risk that the lenders will lose their money. All of this could put a lot of strain on the relationship.”

DIFFERENT SCENARIOS Families most commonly step in when there’s a shortfall between the money raised and the cost of the franchise.

“Depending on the business, most banks will only lend 40 to 50 percent of its purchase price,” says Akash Lodhia, managing director of Lodhia Lawyers and a solicitor specialising in commercial and property law. “If you have borrowed as much as you can from the bank and there is still a shortfall, your only option might be to borrow from someone in the family.”

At the other end of the scale, Lodhia has seen family members, usually parents, come up with the full amount.

“If the banks have refused to lend any money, or will only lend a limited amount, I would strongly encourage them to investigate the business first because the banks will have had a good reason for their decision,” says Lodhia. “For example, the JAN/FEB 2015 | 37 | WWW.FRANCHISEBUSINESS.COM.AU

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If the business should become insolvent and unable to pay all of its creditors, a franchisor or bank will take priority over family members because they are likely to have security over the business assets

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proposed business may not be as valuable as it appears because there’s a limited time left on the premises lease, old equipment need to be replaced or there’s been an application for a competing business close by. However trustworthy your relative, he or she may not be able to pay back the loan if the business is not sound.”

There is also a spectrum of repayment options.

“These range from ‘you pay me back when you can’ and ‘I won’t charge interest’ to an arrangement that is in line with one you would have with a bank,” Lodhia continues. “Some family members go a step further by becoming shareholders, so they are not technically lending money but they have equal responsibility if the business should fail.”

wealth to give a bank sufficient comfort, so their parents might provide third party security to the bank, either in the form of a personal guarantee or a mortgage against their home.”

DOCUMENTATION Every loan, whatever its nature, should be well documented.

“One of the most common problems we see in distressed businesses where money has been borrowed from the family is that the loan is not properly – or, sometimes, legally – documented,” says Rambaldi.

Rather than hand over cash, some family members put their assets at risk.

“A family member may have lent the acquisition cost of the business but, unless that is well documented and the loan is registered under the Personal Property Securities Act, the liquidator will not consider that family member to be a secured creditor,” adds Lodhia.

“A common example is where young adults want to go into their first business venture as a franchisee,” says Rambaldi. “They’re unlikely to have the experience or personal

Further protection is available, most commonly some form of security over either the assets of the business itself or over assets that are not part of the business,

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such as the borrower’s real estate.

“If the business should become insolvent and unable to pay all of its creditors, a franchisor or bank will take priority over family members because they are likely to have security over the business assets,” says Rambaldi. “Family members could also take security for a loan given to a business.

This is still likely to rank behind that of a bank or franchisor but they will still have a better prospect of receiving some payment than ordinary unsecured creditors.”

Family members can have very similar protection to a bank – for example, a personal guarantee will give them the power to enforce payments from the borrower personally and to seek judgement which could lead to bankruptcy proceedings. The question is would they be prepared to go that far?

Some even find it difficult to ask for that level of protection in the first place.

“I had a client who said he trusted his son but not his daughter-in-law,” says Lodhia.

“He wanted the security of a mortgage

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Both parties need to think very carefully about the worst case scenario where the money cannot be repaid. It’s not just money on the line, it’s the whole relationship

on their property and also a personal guarantee, but he felt so uncomfortable about telling them that he asked me to recommend it.

“From a lawyer’s perspective I would always recommend having some sort of security but, ultimately, it comes down to whether you really trust the person – not just their personal integrity but their ability to run a business. Both parties need to think very carefully about the worst case scenario where the money cannot be repaid. It’s not just money on the line, it’s the whole relationship.”

KEEPING BUSINESS IN THE FAMILY Tom Spence has been a Battery World franchisee for 14 years and now owns two stores. When his son Mark decided to quit his job working underground in gold mines to spend more time with his family, Tom was more than happy to support the move. He first employed Mark in one of his stores then helped him into a franchise of his own by covering the cost of the stock.

“I had my own money but I still wouldn’t have been able to buy into a franchise without that help,” says Mark.

Mark and his wife repaid the loan as agreed over the next two years.

“They worked incredibly hard and we had a lot of meetings in that time to make sure that they were on the right track,” says Tom. “They also gave me full disclosure, including access to their computers, so I could keep an eye on their margins.

It worked well for me because I now have a son and daughter-in-law who are JAN/FEB 2015 | 40 | WWW.FRANCHISEBUSINESS.COM.AU

devoted to the business and I’m happy I was able to help shape their future in positive way.”

Tom was confident he’d get his money back but still thought very carefully about all possible outcomes.

“My first concern was our relationship,” he says. “Whatever happened, I didn’t want that to be at risk.”

TAKING OUT THE EMOTION Fear of losing the relationship could put pressure on a family to agree to a loan in the first place.

“In that situation, I think you’d want to take as much emotion out of the equation as possible,” says Tom. “The first thing I’d do is ask whoever wants to borrow the money to develop a business plan. That will give you an insight into their capability and the direction they want to take over the short to medium term. If you have any doubts, present them with the facts and focus on being rational.”

Both Tom and Mark recommend including a spouse or partner in the negotiations.

“You both need to be committed if the business is going to work,” says Mark.

Any tension between a partner and the lender should also be taken into account.

“A loan could deepen the rift, with the person who borrowed the money caught in the middle,” Mark continues. “These kinds of things not only threaten relationships, they would also make it a lot harder to run a business successfully.

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WHAT TO LOOK for in a

FRANCHISE AGREEMENT

EMMA JERVIS Emma is a legal practice director and head of franchise law at Legal Vision ILP, a law fi rm that specialises in franchise law.

I

f you’re considering entering into a franchise agreement, it is important that you understand the first rule of franchise law: read every document before signing – even the fine print, writes Emma Jervis.

WHAT IS A FRANCHISE AGREEMENT? A franchise agreement constitutes a legally binding contract that oversees the terms of the relationship between you and your prospective franchisor. Usually lasting anywhere from five to 10 years with an optional renewal JAN/FEB 2015 | 42 | WWW.FRANCHISEBUSINESS.COM.AU

clause, franchises are lengthy investments. Following the breach of a franchise agreement, the non-breaching party will generally enjoy a right to require the breach be remedied and then a right to terminate. Understanding your contractual obligations is paramount to being able to continue operating.

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By law, a franchisor is required to provide you with: ✱ A disclosure document ✱ A copy of the Franchising Code of Conduct ✱ A copy of your franchise agreement.

Most importantly, take the time to read the disclosure document

Before you sign anything, read through the agreement with a lawyer who can explain the more complex provisions. Most importantly, take the time to read the disclosure document, which should direct you to the most important provisions of the agreement and provide you with an insight into the financial position and experience of the franchisor.

The agreement should explain the terms of your territory, and whether it is shared or exclusive.

WHAT ARE THE VARIOUS CLAUSES?

FIT OUT

Although each franchise agreement is unique, many will share common clauses.

It might also detail the necessary expenditure for fitting out the store, plus any additional

TERRITORY

expenses. The financial responsibilities are normally located in an annexure to the agreement.

SUPPLIES

Fees: the agreement also specifies any up-front fees you will have to pay, along with any ongoing royalties and marketing fund contributions.

The franchisor or the nominated supplier will ordinarily provide supplies. Insurance will be required for the business to operate, and accounts/books will need to be maintained.

The franchisor’s right of inspection also, more often than not, forms part of the agreement.

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RESTRAINT Usually, franchisees are restrained from starting similar businesses once they’ve left the franchise. It is likely you will be prevented from sharing certain (not all) details about the franchise, both during operation and following departure.

TERMINATION If you (or the franchisor) choose not to renew, the agreement should explain the next steps.

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It might be that the franchisor has rights in the agreement to repossess equipment, fittings or stock of the franchised outlet, so be aware of this possibility.

As a franchisee, you will seldom be entitled to any goodwill of the business after your departure.

The right to sell is not uncommon to franchisees, although the ‘first right of refusal’ of franchisors features in the agreement just as frequently, giving franchisors the right to buy the business back from you rather than allowing it to be sold to a third party.

The terms and conditions of termination should also be clearly explained, and certain dispute resolution provisions must be included in the agreement, according to the Franchising Code.

WHAT ARE THE IMPORTANT CLAUSES? The Franchising Code excludes certain clauses from any agreement, such as release of liability clauses that indemnify the franchisor against the franchisee. Waivers of any representations (verbal or otherwise) are also prohibited in franchise agreements. Also, franchisors cannot stop franchisees from associating with each other for any lawful purpose.

WHAT IS AN OPERATIONS MANUAL? In most franchises, an operations manual dictates the dayto-day running of the business (like trading hours) and must be complied with. Generally, franchisors retain the right to amend the operations manual when required, so be aware of this possibility.

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CONCLUSION Once you have read the agreement, you will most likely have several follow-up questions.

Make a list and seek independent advice from a franchise lawyer, an accountant and perhaps even a business consultant.

On top of this, speak with other franchisees who are currently operating their own outlet and work out which clauses, if any, have caused them problems.

You should always find the contact details of all current franchisees in the disclosure document, along with some of the previous franchisees.

Moving forward, raise any concerns you have regarding the agreement with the franchisor.

Negotiation is always an option.

Whatever you do, just make sure you’re prepared.

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HOW TO SPOT

A GREAT

FRANCHISE SYSTEM

T

here are plenty of franchise opportunities to choose from in every category, young and established, small to large. So how can you compare? How do you decide which franchise opportunity is right for you? John Di Natale, managing director of Axis Advisory and BIGthink! Business Booster provides some insights and practical guidance.

So you’ve decided that the nine to five drudgery of employee land is no longer for you and you’re going into business.

A franchise business nonetheless, because you’ve done a little homework and think you could use the support of a franchisor to make your journey to success just that little bit smoother. That’s a good start, as the facts do tell us that you have a greater chance of success in a franchise

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system, especially if this is your first business venture.

But really, your work has just begun. You now have perhaps your most important decisions to make – which franchise?

Not all franchise systems are born equal and sifting through them to find the perfect match for you can be a daunting task.

What type of business should you get into and how do you assess the risks, benefits,

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opportunities and potential for any particular opportunity promoted by a franchisor or franchise marketer? As with most comparison processes, it pays to set some criteria for your evaluation early in the process.

Perhaps the very first question is “why a franchise opportunity?” Like most things in life, there are pros and cons to selecting a franchise to get involved in rather than going it alone. So let’s have a very quick look at how a franchise opportunity (in general) stacks up. In a good franchise system you should expect to reap the rewards of the positive aspects. Of course, not every franchise system delivers on all of these things all of the time and sadly, some don’t deliver at all. So on the right hand side here are some of the not-so-exciting possibilities and realities:

PROS

CONS

A well recognised and respected brand

Your franchisor may not provide the level of support you wanted and expected

Good operating systems and processes that make it easier for you to successfully manage your business

Your business may be affected by the poor performance of other franchisees or damage to the brand outside your control You don’t have total decision making autonomy – e.g. promotions, suppliers, product selection, pricing

Economies of scale that enable you to buy more economically and operate a more profitable business

You may not agree with some of the decisions made

Ongoing training and support from your franchisor to make sure you stay on top of the game

You don’t have total decision making autonomy – e.g. promotions, suppliers, product selection, pricing

Larger scale marketing and advertising generating stronger customer awareness than you would be able to achieve on your own

You may not agree with some of the decisions made

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Which franchise is right for me?

Let’s have a look at a few criteria that will help you sort the great from the bad.

VALUE PROPOSITION The ultimate test of a franchise, and the single biggest discriminator, will be the answers to the following two questions: 1. “How much money do I have to put on the table?”

2. “How much money will I make?”

The answers to these two questions are absolutely crucial to your future. The return on your invested capital and time will provide you with an understanding of what’s in it for you and will go a long way towards determining if this particular franchise is the right one for you.

SECTOR This is one of the most important decisions you will make. In researching online and in magazines and talking to your friends, relatives and business colleagues, what are the trends that you

see emerging that have the potential to grow significantly over the next five to 10 years?

Of course, many franchise opportunities are in the food sector. There are the wellestablished franchises we all know – Zambrero, Brumby’s Bakery or Sumo Salad for instance. Then there are the emerging ones; some internationals beginning to make inroads into Australia such as Pita Pit and even smaller, regionally based franchises that offer a business opportunity as well as a tree-change such as BK’s Takeaway. Other sectors that have enjoyed longer-term positive trends are hair and beauty, leisure, fitness and wellbeing, healthcare, aged care and children’s products and services.

Choosing a product or service that is on-trend and playing into a growing market will typically deliver greater longer term value in both profit and goodwill than those segments that are maturing or in decline.

So, before you pick up the phone and call the many franchise opportunities in this magazine, give some thought to where a

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product or service might fit in the marketplace and, importantly, where it might be in the next few years.

BRAND Brand is a powerful key to success in any franchise system and great brands don’t happen by accident. Franchises with strong brands have invested in their brand strategy, worked hard to deliver on their customer promise and have probably engaged the services of specialists in brand development, online marketing and customer engagement.

Does the franchise you are considering appear to be one that people know, like and trust and will come back to again and again? When you look at all the messaging, advertising and marketing materials, does it make you feel like you want to buy? If it does, you can tick that box!

MARKETING Marketing is made up of those activities designed to bring customers to your doorstep.

If the business is in a shopp-

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GOOD HAIR HAS ITS REWARDS JOIN THE LEADING HAIR AND BEAUTY BRAND

HAIRHOUSE WAREHOUSE is Australia’s leading hair & beauty brand, with plans to expand its network by 20% over the next 3 years, across the nation.

We are looking for passionate people with a desire

Do you have what it takes to be successful?

to strive for results and take control of their own destiny. Whilst hairdressing experience is not required,

Franchisees are able to own their piece of one of

strong work ethic and drive is essential.

Australia’s largest retailer, and build their business

What sets us apart from the rest?

faster. So if you want to start achieving your goals, now is the time to join, with Hairhouse Warehouse

• A proven profitable turnkey operation

offering up to 30% reduction in the entry costs for

• Multiple revenue streams, including retail,

all new stores. Locations are available in all states

hair salon, piercing and beauty services

and territories in Australia.

• Extensive training and support from a dedicated team of professionals • Exclusive stockists of world leading brands and the most lucrative merchandising terms

CONTACT PETER FIASCO for a confidential discussion on 0451 370 060 hairhousefranchising.com.au

hairhousefranchising.com.au

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You should ask the question “Who will buy my franchise and why?” before you make your final decision

ing centre, it will depend on traffic and many businesses in this situation confine their marketing to merchandising and point of sale materials.

If the franchise is a B2B opportunity, mobile operation or based in a strip location, consideration of the franchisor’s skill in creating opportunities or bringing people to your door becomes even more important.

views on their business and the franchisor, but don’t rely on one or two good reports. In fact, you should ask the franchisor “who is your most unhappy franchisee, and why?” It will be worthwhile spending a little time talking to that person and making an assessment of whether it is the franchisee or the system that is left wanting.

Good franchisors understand the importance of marketing and its role in supporting sales as well as the brand. If the marketing doesn’t engage you, excite you and motivate you to respond, then you should probably ask lots of questions or cross that one off your list.

Ultimately, the value of every business is crystallised when you sell it. This is often not taken into consideration in the decision-making process but can translate to hundreds of thousands of dollars over a number of years. You should ask the question “Who will buy my franchise and why?” before you make your final decision. Are the same things that attract you to the business

PEOPLE Great franchises are built with passionate, motivated principals, staff and franchise owners.

If you’re inspired by the people who own and manage the franchise, that’s a good start! The franchisees are the face of the business and a visit to them will tell you much about its future potential. If you want to soar with the eagles, there’s no point joining a gang of turkeys…

EXIT POTENTIAL

likely to still be in place in five years or could the market change substantially and leave the business behind? This is a tricky one to predict of course, but asking the question is still a worthwhile exercise.

Ultimately, our choice of business should be a reflection of your personal style and its day-to-day operations should interest and excite you. When you combine that with a sensible analysis of the opportunities, you’ll be in a better position to achieve the maximum benefit for you – and after all, isn’t that what business is all about?

JOHN DI NATALE IS MANAGING DIRECTOR OF AXIS ADVISORY AXISADVISORY.COM.AU AND BIGTHINK! BUSINESS BOOSTER BIGTHINKBUSINESSBOOSTER.COM.AU AND A WELL-KNOWN BUSINESS GROWTH SPECIALIST.

FRANCHISEE SATISFACTION It’s important to have a good look at the relationship current franchisees have with the franchisor. Franchisees are generally happy to discuss their JAN/FEB 2015 | 52 | WWW.FRANCHISEBUSINESS.COM.AU

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TAKE YOUR PICK! 2 business opportunities from Swimart.

Work for yourself and be part of the Swimart success story.

Tired of working on the tools or in an office for someone else?

If you love the outdoors and have a passion for customer service, you could be running your own successful franchise business with Swimart.

1 Own

2 Own a Swimart

YOUR OWN Swimart Store

Mobile Pool Services business

With over 30 years experience in the industry and a huge network of independently owned stores, we’re Australia’s leading pool and spa specialist.

A Swimart franchise offers: - Strong gross profits and low operational costs - Low fixed fees - Comprehensive training - Professional support including marketing, TV advertising and business training.

A brand new business opportunity from Swimart.

- In specially selected regional and rural areas - At last, the chance to open a business in the area you love to live in!

Get with the strength When you become a Swimart franchisee, you’ll benefit from: - Strong brand awareness and a powerful marketing program including TV advertising hosted by Susie O’Neill - Comprehensive initial and ongoing training through the Swimart Training Academy - Exclusive Territory - The backing of a franchisor with 30 years in the business.

- Customer database of pools in your area.

ng “Nothing beats achievi success in the pool” Susie O’Neill

To find out more, call Chris Fitzmaurice on 02 9898 8608

swimartfranchise.com.au SWI2243-R

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RA AYN NIA A THE EOD ODOR ORE Ray ynia ia a is is a pri pr inci p nc cipa c pal a a att MST M ST Lawy MS aw wy yers e s an a d has ex ha has exten ten ensiv en siive exp xperie xpe rience rie nce nc nce ce in in corpo co rp co rpo p rat ra rate, ate,, f ra fra franch anch nc chisi ch isi sing ng a and nd d le leasi ass ng g law law w. H Her er c er cliliient en ent ntss in iinc nclud nc l ud de majo ajo aj j r na ati tiona onall f ran ra a chi ch h sor so o s and an nd d fra fr rranch nchise hise se ees es. s.

A

franchise agreement is a long term agreement and it is rare to find provisions in a franchise agreement that allow a franchisee to withdraw from the franchise agreement by simply giving notice to the franchisor.

Accordingly, in most cases during the term of a franchise agreement the franchisee’s only way out is to sell.

Franchisees must create and put in place a strategy for one day exiting their business.

When caught up in the excitement of entering into a new business opportunity, many franchisees find it difficult to look further ahead. However, franchisees should be aware that every franchise

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agreement eventually comes to an end and the best time to start preparing for that day is when it is a long way off and the relationship with the franchisor is just beginning.

It is imperative that suitable structures and documentation are put in place from the outset to ensure the franchisee can exit the franchised business in a tax effective manner.

Franchisees should also ensure that their franchised business is ready for sale at any point in time. This will require undertaking an audit or a due diligence of the franchised business. Such due diligence is vital because a purchaser franchisee is more likely to pay a premium for a franchised business (or is less likely to seek a reduction to the purchase price of the franchised business) where the franchised business has been appropriately conducted. Franchisees should ensure they have up to date, accurate, easily accessible financial information, books of account, employee and other records as well as valid and subsisting supply agreements, permits, licences and leases.

The key issues that a franchisee must consider when selling their franchised business include the following:

FRANCHISOR’S CONSENT A franchisee cannot ordinarily transfer its rights under a franchise agreement and sell the franchised business without the franchisor’s prior approval. The Franchising Code of Conduct provides that a franchisor must not unreasonably withhold its approval to a request for a transfer.

The franchise agreement often sets out a procedure that must be followed by a franchisee and the conditions that must be satisfied to obtain the franchisor’s approval to a transfer. A franchisee should familiarise itself with these conditions from the outset.

FRANCHISOR’S FIRST RIGHT OF REFUSAL The franchise agreement usually contains a provision granting the franchisor the first option to buy the franchised business before the franchisee can offer it for sale to third parties. The franchisor is given a period of time to consider and respond to a franchisee’s offer to sell, which can delay the sale process.

TRANSFER FEE Many franchise agreements require the JAN/FEB 2015 | 56 | WWW.FRANCHISEBUSINESS.COM.AU

It is imperative that suitable structures and documentation are put in place from the outset to ensure the franchisee can exit the business in a tax efffective manner

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Some obligations imposed under a franchise agreement do not end when the franchise agreement ends

franchisee to pay a transfer fee or assignment fee upon the sale of the franchised business. Such fees can be a fixed amount, a percentage of the purchase price or a proportion of any upfront franchise fee payable under the franchisor’s standard franchise agreement current at the time of sale. Sometimes the fee is higher if the business is being sold within the first few years of operation. Franchisees should consider factoring such a fee into the purchase price for the business or negotiating to pass on the fee to the purchaser franchisee.

SALE CONTRACT The vendor franchisee’s lawyer should prepare a sale contract dealing with all relevant aspects of the transfer. The finalisation of the terms of the sale contract can be a time consuming and costly process, especially if the terms are extensively contested or negotiated with the purchaser franchisee. Some franchisors require the franchisee to provide a copy of the proposed sale contract to them and the franchisor may require changes.

LEASE If the business operates from premises and the franchisee holds the lease or sublease of the premises, it will be necessary to transfer the lease or sublease to the purchaser franchisee. This will require transfer documentation to be prepared at the vendor franchisee’s cost.

If the franchisor holds the lease and the franchisee is granted a licence to occupy, the purchaser franchisee may be required to enter into a new occupancy licence and the landlord’s consent may also need to be obtained to such a licence.

TAX CONSIDERATIONS It is critical for the franchisee to think about the tax consequences of the transfer.

Potential tax benefits could dictate whether the transfer is effected by way of a sale of the business assets or a sale of the shares in the franchisee company. The franchisee should consider any Capital Gains Tax liabilities which may be triggered by the sale and, if the business is not being sold as a going concern, any GST payable.

RESTRAINTS Franchisees are often bound by a restraint of trade for a period of time after the transfer of the franchised business. Such restraints may mean the franchisee is prevented from operating or being involved in a similar or competing business, or from canvassing any customers, suppliers or employees of the franchised business.

The purchaser franchisee may require similar restraints be included in the sale contract. Before selling, a franchisee should consider the employment or business ventures it intends to undertake following the sale to ensure it does not breach any enforceable restraints.

ONGOING OBLIGATIONS Some obligations imposed under a franchise agreement do not end when the franchise agreement ends. The franchisee may continue to be bound by certain provisions, for instance those dealing with the use of confidential information or intellectual property.

In addition to the key points above, there are a plethora of other issues arising from the sale of a franchised business.

Franchisees should take care to ensure they comply with all relevant obligations and seek appropriate accounting and legal advice.

MST LAWYERS HAS EXTENSIVE EXPERIENCE IN ASSISTING FRANCHISEES TO COMPLY WITH FRANCHISE AGREEMENTS AND IN BUYING AND SELLING FRANCHISED BUSINESSES. PLEASE CONTACT FRANCHISE@MST.COM.AU FOR FURTHER INFORMATION.

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Capital required - $80K - $100K Number of outlets - 1 Opportunities available - Nationally

Capital required - $220K - 350K Number of outlets - 15+ Opportunities available - Nationally

Capital required - $400K + Number of outlets - 15+ Opportunities available - Nationally

Capital required - $350K - $500K Number of outlets - 70 Opportunities available - Nationally

Capital required - $80K - $100K Number of stores - 33 Available opportunities – Nationally

Capital required - $200K - $250K Number of outlets - 170 Opportunities available -

Capital required - S100K - $450K Number of outlets - 15+ Opportunities available Nationally and Internationally

Capital required - $115K – $1 million+ Number of outlets - 27 Opportunities available - Nationally

Adelaide and regional SA, Regional WA, Darwin and surrounds, Albury / Wodonga, Wagga Wagga, Orange, Lismore, Port Macquarie and Goulburn

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Capital required - $400K – $600K Number of outlets - 25+ Opportunities available - Nationally

Capital required - $250K - $400K Number of outlets - 8 Opportunities available - Nationally

Capital required - $250K + Number of outlets - 45+ Opportunities available - Nationally

Capital required - $300K - $350K Number of outlets - 25 Opportunities available - Nationally

Capital required - $250K + Number of outlets - 600+ worldwide Opportunities available - Nationally (Except WA)

Capital required - $250K - $450K Number of outlets - 64+ Opportunities available - VIC only

Connecting people to opportunities.

Choose from Australia’s best selection.

Visit www.franchiseselection.com.au or Phone 1300 FRANCHISE (1300 372 624)

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ustralia’s desserts industry is thriving, and it's thanks in part to franchised brands that play in the space.

Today’s consumer is increasingly health conscious, so when they choose to treat themselves and indulge in a sweet treat they opt for premium quality products, and franchises are changing up their offering in response.

In IBISWorld’s Speciality chocolate stores in Australia industry report (September 2014) franchises such as San Churro are credited with transforming the shopping experience.

The report reads: “Specialty chocolate stores have positioned themselves as places to consume highquality food and beverage products and marketed themselves as a place to source premium products.

“Franchised specialty chocolate stores have also been more successful than their coffee shop equivalents, with consumers readily associating well-known brands with quality chocolate.”

The report states franchises have driven demand within the speciality chocolate stores industry over the current year, with revenue forecast to grow by 2.6 percent over 2014-15, to reach $297.6 million.

Additionally, it is forecast to grow at a compound annual rate of 2.7 percent over the five years through 2019-20, bringing revenue to $339.5 million.

When it comes to ice cream, customers are similarly seeking premium quality products, and healthier options are expected to gain momentum.

IBISWorld’s Ice cream stores in Australia industry report (August 2014) states: “Ice cream and gelato stores that offer premium and gourmet products are also expected to be more profitable than stores offering basic, generic ice cream products.”

Franchises in particular are fuelling growth within the sector, both in terms of revenue and outlet numbers.

IBISWorld’s ice cream report predicts: “the four largest companies operating in the industry, which have extensive franchising networks, will account for 30.2 percent of ice cream stores and 40.7 percent of industry revenue in 2014-15.”

In the five years through 2019-20, ice cream industry revenue is forecast to increase at an annualised 2.1 percent, to reach $593.2 million.

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More

DESSERT,

please

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ST LOUIS OFFERS BOTH WARM AND COLD SWEET TREATS

ST LOUIS St. Louis operates within both the ice cream and chocolate store sub-sectors – its offering includes ice cream, sorbet and yoghurt products, as well as those typical of a specialty chocolate store or cafe.

“We have a full dessert menu that includes sweet crepes, Belgian waffles, Churros and a range of cakes and patisserie products, which are made fresh daily,” explains operations manager Artemisia Karamalis.

She’s noticed an increase in demand for more indulgent items among customers, and says St. Louis has updated its offering in response. “Over the years, our clientele have told us they want more decadent, authentic desserts, and we have worked hard to perfect this.

“The dessert bar industry has blossomed of late, and we feel it can only improve and expand, as our clientele love to indulge.”

It makes sense then, that the brand’s most popular products are quite decadent, both in their flavour and presentation.

“Our clients are those who are happy to splurge on something yummy that is made from good ingredients – we don’t compromise on quality,” Karamalis says.

St Louis’s best-selling products include the Sweet Amalia Profiterole Journey, which comprises three different flavoured profiterole ice cream sandwiches – there’s Nutella, wild strawberry and choc-peanut butter, and they are drizzled with pure melted chocolate.

There’s also the Ferrero Waffle – a warm Belgian waffle which is again drizzled with pure melted chocolate and topped with crunchy chocolate coated wafer balls, melted Nutella and milk chocolate drops and served with French vanilla ice cream.

Karamalis explains the brand’s reach is quite broad, with its menu items enjoyed by a range of different people.

“They are most popular with young couples enjoying a late night chocolate hit, young children and their parents popping in for an after school treat, and the corporate clientele getting their caffeine fix in the late afternoon.”

She also sees the rise of the after-dinner dessert destination – where rather than order from a restaurant’s dessert menu, diners opt for a separate venue altogether. “[People are] actually entering entire other premises to satisfy their dessert needs.

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Our clients are those who are happy to splurge on something yummy that is made from good ingredients

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SUNDAES AND SHAKES BY BASKINROBBINS

“We also predict there to be a trend in the éclair in the coming months and hope to be a part of this trend.”

She explains St. Louis updates its menu on a seasonal basis, and that the brand offers great support and training. “Our franchisees receive a high level of support, guidance and training during all stages of the franchising process.

“We provide on-site training at our flagship

store and in-store training both prior to and during the early stages of opening. An ongoing support service is also offered to our franchisees.”

Franchisees don’t need any prior experience by virtue of the St. Louis model, which Karamalis says is simple and user-friendly.

“A passionate, well-motivated and driven individual will succeed in a St. Louis

Products and services segmentation 2014 - 2015

ICE CREAM STORES -2%

Hard-serve ice cream: 42%

-3%

Soft-serve ice cream: 14%

-1%

Ice cream sundaes: 6%

Healthier options including gelato, yoghurt products and sorbet are expected to account for a higher proportion of the sector, a reflection of people’s increased health consciousness

Gelato: 13%

+2%

Yoghurt: 11% Ice cream cakes: 7% Sorbet: 7%

+2% +1% +1%

Food and beverages

30.9%

Consumer profile 2014 - 2015

15-34: Premium chocolate:

BASKIN-ROBBINS General manager David Jordan says the Baskin-Robbins brand is built on desserts and sweet treats – customers can choose from 31 different ice cream flavours as well as sundaes, cakes and even beverages, such as blended ice-coffees and triple shakes.

While the brand operates globally, Jordan explains there are particular products that prove most popular on a local level.

“In Australia, we have some real local favourites, such as Chocolate Chip Cookie Dough, Cookies and Cream, and Hokey Pokey.”

He adds there’s also a focus on changing the brand’s offering in line with customer demand, and that the company’s Flavour of the Month initiative has proven particularly effective in this process.

“We listen to our guests requests for new flavours, identify new flavour trends and adjust our new product innovation to deliver against these guest insights.

SPECIALTY CHOCOLATE STORES Products and services 2014 - 2015

franchise. They must have great communication skills and most importantly, have a love for all things dessert,” she adds.

29.6% 35-54:

“The Flavour of the Month program has proven to be a highly successful method of introducing new flavour creations into stores, giving guests a new reason to visit regularly.”

43.3%

Baskin-Robbins’ range of Bright Choices ice creams are further testament to this – they cater to those looking to watch their waistlines.

[Source: IBISWorld: Ice cream stores in Australia industry report (August 2014) and IBISWorld: Specialty chocolate stores in Australia] Illustration Matt Norris

“[The range] includes premium no sugar added variants, frozen yoghurts and

Seasonal and boxed chocolates:

24.7%

41.1%

55+:

27.1% Other: 3.3%

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sorbets as well as frozen ice for the slightly more health conscious guest.

“Some of these products are permanent menu items, others are available for a period creating some new news for our health conscious guests too,” Jordan says.

Consumers are demanding quality, they want value, they want authenticity, but they also want a great experience

Baskin-Robbins is confident in the future of ice cream, and as such the brand plans to open 20 new stores in the next 12 months.

“We are listening to consumer demands and providing delicious quality ice-cream based treats that people can afford every day in a place they enjoy bringing their family and friends to.

“Consumers are demanding quality, they want value, they want authenticity, but they also want a great experience,” he adds.

New franchise partners take part in an initial three week training program that covers everything from in-store training and financial management to marketing and cake making, and Jordan explains franchisees receive ongoing training and support.

“We include our franchise partners in forward planning, holding two sessions a year in which the visions and strategies for the future are shared. Several franchise partner development programs are currently underway and these will be on a continuous basis moving forward.

“As part of this we host monthly business building webinar sessions on a variety of topics, including bringing industry experts into these meetings to discuss new areas of interest. We also hold monthly focus groups where interested franchise partners can discuss key topics and strategies, and assist us with strategy creation and implementation,” he says.

There’s also an online university for both franchisees and their staff, and the brand will continue to embrace the virtual realm in 2015 – a digital loyalty program and online ordering platform are set to be introduced throughout the year.

Customer service is at the forefront of the Baskin-Robbins brand, and it seeks people who exhibit a series of character traits. “In particular we’re looking for

for the retail and franchise industry 07 3352 6972 | 18 Hayward Street, Stafford QLD JAN/FEB 2015 | 67 | WWW.FRANCHISEBUSINESS.COM.AU

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franchise partners that are highly motivated and driven and want to inspire our guests and deliver excellence in every part of the Baskin-Robbins store experience,” adds Jordan.

CHOCOLATERIA SAN CHURRO Churros is Chocolateria San Churro’s signature product, however the chocolate cafe brand offers a range of other indulgent products including ice cream, sundaes, hot chocolate, chocolate flavoured shakes, cakes and chocolate fondue, says founder and CFO, Giro Maurici.

He explains the health conscious trend sweeping the nation was in fact alive and well nine years ago when the brand launched into franchising.

“At that time the hot buzz words in the franchising sector were health and wellness – we saw the emergence of brands like Boost Juice, Sumo Salad and Healthy Habits.

“It was interesting because we were targeting the same customer – they were very much health conscious, but they were also looking for those spots of indulgence. They were good to themselves during the week or during the day yet they also wanted to be able go out and have a place to meet their friends and indulge over something sweet, which is where we fit in,” Maurici explains.

The brand’s target market continues to operate in the same way today.

“Our customers aren’t looking for a McDonald’s sundae or something from the supermarket freezer; they are looking for a high quality, authentic and interesting experience.”

He explains people are consuming smaller portions, and they’ve shifted their focus to the quality of the desserts they eat.

“We aren’t sitting down and having big blocks of chocolate anymore, but we are quite happy to sit down and have a special truffle or a single origin bar – it’s not the volume that it once was but certainly of a much higher quality.”

TOP: ONE OF SAN CHURRO'S 'TASTE PLATES' BOTTOM: SAN CHURRO CAFES ARE DESIGNED TO BE WARM AND INVITING

The brand has its finger on the pulse when it comes to food trends, and Maurici says reality television programs such as MasterChef raise the bar when it comes to product innovation.

an almost five percent increase in sales across the group overnight, just for the trusty macaron,” he recalls.

“In the last year we’ve seen flavour profiles developed, and people are a lot more accepting of Spanish caramel, which comes off the back of everyone loving salted caramel. It’s not only a matter of bringing out new products but also looking at the flavour profiles of what people are jumping on board with as well,” Maurici adds.

He agrees with Karamalis that people are opting to eat dessert foods outside of the traditional restaurant setting.

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San Churro offers a six month training program for all new franchisees, most of which is facilitated at head office and the brand’s recently opened flagship store across the road.

While he recognises passion for the brand is important, Maurici explains franchisees need to be great leaders.

“Running a Sun Churro isn’t like opening the doors to a small lolly shop with only one or two staff members – the stores we’re opening now are open seven days a week until 11 or 12pm every night, so franchisees could be managing 20 or 30 staff.

“We are looking for that aptitude, not necessarily that experience but certainly that aptitude to be able to take a leadership role,” he adds.

COCOLAT “We’re finding that customers are more willing to get up after their main course and come and visit us for a coffee and indulgence.

“I think people are more adventurous to do that now – this segment offers an alternative.”

The social aspect is also an important part of the San Churro offering, says Maurici.

“Yes our product is front and centre, but we are very mindful of the fact that at the end of the day we provide people with a place where they can socialise.”

At Cocolat the focus is around three key offerings – handmade desserts, gelato and handmade chocolates and truffles, which the company’s product and branding manager Christine Robertson says are all made in Australia.

“Our collection of desserts range from the simple sweet treat to have with coffee to the more indulgent chocolate based offerings that are perfect for that indulgent moment,” she explains.

Roberston says the company’s new dessert domes are proving particularly popular

with customers, as is its gelato, which has been awarded the National Champions Trophy from Dairy Australia on more than one occasion.

“Our gelato is rich and creamy with over 20 different flavours available, including dairy free sorbets.

“We still offer our popular signature desserts that have been with us for many years, like our Wild Thing, which is topped with golden toffee,” she adds.

Cocolat’s approach to product innovation is underlined by customer demand as well as both existing and emerging food trends.

“We take into account all trends in the Australian lifestyle, from short term fads to longer term changes, like the current increase in health consciousness. We are highly aware of the need to provide offerings for all people,” says Roberston.

A prime example is Cocolat’s new range of more health conscious desserts, which have been well received by customers.

“Our recent introduction of a number of vegan, dairy free, gluten free and refined sugar free ‘raw’ cakes have proved extremely popular, allowing us to capture a share of the dessert market that others have yet to.”

Looking to the future, Robertson predicts two key trends will gain traction in the world of desserts.

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We will see the emergence of some old school flavours and dessert styles, things like Granny used to make but stylised with modern twists

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LEFT: A FLORENTINE BY COCOLAT TOP RIGHT: THE BRAND'S HAND MADE TRUFFLES BOTTOM RIGHT: COCOLAT'S NEW 'HARRY DOME' CREATION

“We will see the emergence of some old school flavours and dessert styles, things like Granny used to make but stylised with modern twists.

“We will also see a strong influence of ethnic culture in desserts and an increase in healthy dessert offerings,” she explains.

Cocolat’s operation is based around three key pillars – product, service and environment, and it is believed these enable the business to stand out from the crowd.

“We seek to always provide a superior product that is on trend, focused and of a high quality, superior service that is customer focused, and environments that are modern and comfortable, providing the perfect place to sit a while and indulge,” Roberston says.

“Cocolat is an established and successful brand that oozes that highly sought after ‘wow’ factor, backed up with proven JAN/FEB 2015 | 70 | WWW.FRANCHISEBUSINESS.COM.AU

operating and quality control systems.”

She explains franchisees can expect to receive high quality training and a wealth of support. “Cocolat provides a comprehensive training program delivered through qualified and experience registered training operators and via our in house training and operations team.

“The two week training program covers all operational aspects of Cocolat store management, customer service, business skills, branding and product knowledge.”

The ideal franchisee will be businessminded and passionate about the brand.

“Cocolat is looking for driven, enthusiastic and hardworking individuals who have a passion for great customer service, know and love the fact that food can be the way to anyone’s heart, have sound business acumen and who want to be a part of a national success story and the Cocolat family,” says Robertson.

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Dream Doors – Don’t let anyone Dream Doors – Don’t let anyone steal your dream… steal your dream…

Hi, my name is Derek Lilly and I am the worldwide co-founder of Dream Doors, an internationally proven franchise system with a 14 year history of success. I am now expanding into Australia via a network of Hi, my nameand is Derek andfor I am the worldwide co-founder of Dream Doors,and an Entrepreneurs internationally proven Franchisees I am Lilly looking Marketers, Business Innovators, Go-Getters to franchisethe system a 14 yearwith history success.

I am now expanding intokitchen, Australiabathroom, via a network develop brandwith in Australia me. of Dream Doors is different from other and of Franchisees and I amcompanies. looking for Marketers, Businessthe Innovators, Go-Getters to save bedroom renovation By simply replacing doors, drawer fronts,and andEntrepreneurs bench tops, we develop the brand in Australia with me.

Dream Doors is different other kitchen, bathroom, and the customers $1,000’s on their own renovation and therein is thefrom secret to our international success. bedroom renovation companies. By simply replacing the doors, drawer fronts, and bench tops, we save History of success: the customers $1,000’s on their own renovation and therein is the secret to our international success. t 50 Franchises in the UK where I co-founded the business What does it cost: t Territory Franchise areas available with t In 2007 I moved to New Zealand to start the Dream History of success: What initialdoes costs:it cost: Doors business tt 50 Franchises in thehappy UK where I co-founded the business tt Territory Franchise areas available capital with From $65,000 + GST + operating I have an extremely network of Franchisees t In 2007 I moved to New Zealand to start the Dream initial costs: t I look forward to sharing more of my in NZ and Australia (Just ask them) Doors business t From $65,000 story with you...+ GST + operating capital t I am now sharing my success and winning formula t Ithroughout have an extremely t I look forward to sharing more of my Australiahappy network of Franchisees NZ and Master AustraliaFranchise (Just asksold them) story with you...

Contact details t in Australian tt IQueensland am now sharing my success and winning formula Derek Lilly (Managing Director) Regional Master sold throughout Australia Contact details Dream Doors Australia Pty Ltd t7 3 x Australian Australian Franchise Franchise areas areassold sold(South Adelaide, t (Adelaide, Australian Master Franchise sold Derek Lilly (Managing Director) Address: Suite 3, Northern Beaches Sydney and xDandenong/ Melbourne, Sydney 2, Brisbane x 3) tt Queensland Master soldwork or not” is no Dream Doors Australia PtyBeach Ltd Rd, 203-205 Henley North Casey Regional Melbourne) The question “does this business tt 3 x Australian Franchise areas sold (South Adelaide, Address: Suite 3, Torrensville, SA 5031, Australia The question “does this business work or not” is no longer open for debate Northern Beaches Sydney and Dandenong/ 203-205 Tel: 1-800-373-263Henley Beach Rd, longer open for debate North Casey Melbourne) Torrensville, SA 5031, Australia Email: del@dreamdoors.com.au t The question “does this business work or not” is no Tel: 1-800-373-263 longer open for debate Email: del@dreamdoors.com.au

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A LICENCE

TO LEND

F

inance as a business sector is in the growth stage of its life cycle. The analysis firm IbisWorld estimates the value of the industry will increase each year by three percent up to 2019/20. However, it is also a mature industry with a high level of regulation.

The Finance in Australia 2014 report predicts there is scope for new products. “New and innovative payment systems are emerging with peer-to-peer lending becoming an alternative to traditional banking,” the report reads.

Neil McMillan at Fifo Capital can attest to the diversification in lending. A key trend in the business finance sector is the move away from traditional forms of borrowing, he says.

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JAN/FEB 2015 | 72 | WWW.FRANCHISEBUSINESS.COM.AU

“More and more SME owners are reluctant to put their house up as security for an overdraft and they are seeking alternative finance options that are less onerous on the business owners.

This has spurred the increase in invoice finance which is now a $60 billion industry in Australia and rapidly growing.”

Investing in a financial services franchise can be a highly rewarding venture, he believes.

“Exceptional levels of returns

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Invoice finance is now a $60 billion industry in Australia and rapidly growing

and lifestyle benefits mean the demand for these types of businesses is growing faster than ever before,” he says.

“In 2015, we can expect to see more franchisors entering the market and we can also expect to see the existing players significantly grow their brands.

Competition between franchisors for new franchisees is expected to increase significantly in 2015 and beyond.”

McMillan explains Fifo Capital is looking at innovative ways to provide funding to SMEs that doesn’t require bricks and mort-

ar security but facilitates great returns to its franchise network in a low risk environment.

The IbisWorld report highlights that demand for financial services is linked to economic conditions and the state of the financial market. While many financial service franchises have a niche basis for their business, increasingly we are seeing diversification of the product offer in the sector.

Fifo Capital has picked up on the trend.

“Fifo Capital dominates the invoice finance franchise space

having been voted the 30th fastest growing company in 2013 by BRW. In response to the anticipated competitive threat, Fifo Capital is looking to expand its product base giving its franchisees more financial products to offer to the market,” says McMillan.

“Now is a great time for anyone to invest into this sector.

"The emergence of the alternative finance sector coupled with the anticipated increase in franchise systems has made this the ideal time for potential franchisees to get involved," says McMillan.

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LEARN P

arents are signing up their children to both early learning and additional education programs in a bid to give them the best start in life in an increasingly competitive world.

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Education and training accounts for seven percent of franchisors in the Australian market, according to the industry survey just released, Franchising 2014, produced by Griffith University’s Asia-Pacific Centre for Franchising Excellence. And much of the education on offer starts at an early age.

BEGIN BRIGHT Tina Tower, the founder of Begin Bright, and the Telstra Young Businesswoman of the Year 2014, says school readiness is now much more on the agenda for parents.

“It used to be that people would only bring their kids if they had a lot of money or had children who were severely struggling.

Now people are strong on educational support outside school,” she says.

This is a business arena significantly shaped by governmental directives. The New Early Learning Framework of 2012, and the National Curriculum, for example, have had an impact on how learning is conducted. It has become less formal, for instance, but also put greater expectations on the knowledge students should have acquired in their first year.

Tower’s business steps in to fill the gap between the playful character of preschool and childcare, and the educational demands of kindergarten.

For instance in a weekly one-hour lesson that often supplements part time daycare, students learn the single letter sounds, how to spot words, how to recognise numbers.

“Our curriculum is based on the first year of school. We want them to start school, happy, smart and confident,” says Tower.

“The biggest challenge is finding awesome franchisees. Once the centres are up and running, it’s easy to keep the customers but this isn’t a franchise where you can employ a 16 year old.”

The franchisee’s role is based around people skills, she says, and how they interact with the teachers and parents.

Franchisees can expect to employ about 10 teachers, and have 150 students weekly.

Tower aims to grow the business to 100 centres by 2018 but will not expand beyond the Eastern Seaboard base until the network is 50-units strong.

While there is plenty of potential for this JAN/FEB 2015 | 77 | WWW.FRANCHISEBUSINESS.COM.AU

sector, there are still challenges to face.

Tower says, “We’ve had a lot of changes in education, and I’m always keeping my eyes open. When there are changes we have to adapt, and fill the void.”

At the moment the school readiness marketplace is spotted with single operators. New brands coming into the arena could be a threat, believes Tower.

LISTEN TO READ Catherine McLennan, co-founder of Listen to Read, agrees parents are looking for ways to help their children by supplementing their education. “The market is becoming quite competitive and parents are unsure how best to navigate the options: centre based programs or online/ app based programs? The challenges for franchisors are finding qualified, passionate people who are not daunted by the prospect of running their own businesses,” she says.

In a very competitive marketplace there are regular new franchises catering for pre-school children and senior high school students.

“I believe that the landscape will change dramatically in the next few years as time-poor parents will become more inclined to move towards online or app based programs rather than attending weekly sessions in tuition centres,” says McLennan.

Listen To Read is an Australian owned and developed reading/brain stimulation program which combines back to basics reading with the added stimulation of sound therapy. The sound therapy high frequency filtering stimulates the neural pathways to retrain the auditory centres in the brain, explains McLennan.

In this franchise parents can choose the option of weekly classes over an average 12 week term, or take the Home Listening Program option using a special listening device with support to improve the gaps in the child’s reading.

“Both options come with a money back guarantee which we offer with much confidence,” says McLennan.

The app based program is in the final stages of testing and will be available early in 2015.

At present there are three franchised areas in Sydney: the Sutherland shire, St.George

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EARLY LEARNING AT BEGIN BRIGHT

THE EDUCATIONAL LANDSCAPE Research from PwC shows that the biggest productivity benefit from increasing participation in quality childcare is the long-term gain from when children reach maturity and enter the workforce, adding to the short-term gains from increased workforce participation from parents.

PwC partner James van Smeerdijk says the report, Putting a value on Early Childhood Education and Care in Australia, reveals conventional approaches to valuing the benefits of early childhood education and care were too narrow.

“The long-term benefits from increasing childhood participation in quality early care and education have largely been ignored,” van Smeerdijk says.

He says the debate around the need for higher productivity often acknowledged the need for a highly educated workforce and various global studies show early education to be critical to a child’s later numeracy and literacy levels.

The aim is to ensure that all children, regardless of their economic circumstances, are able to participate in early childhood care and education services that are far more than “a glorified child minding service,” he says.

and the Southern Highlands.

“Our plans are to extend the availability of the program into other states and internationally.

“Ideally we want to get the program into all schools in Australia. Results from school trials have seen improvements in reading age of two years in just 12 weeks.

"We want to make the program available in prisons, juvenile justice centres and indigenous communities to improve the low levels of literacy in these institutions.”

McLennan sees potential in the US and South Africa too.

BRICKS 4 KIDZ The 13 years Steve Bealing and his wife spent in Singapore taught the pair how highly education is regarded there.

“The emphasis in Asia on education is enormous but Australia is increasingly aware of enriching above and beyond the classroom,” he says. “It’s a very nascent stage in this industry.”

And this awareness is not just about preschool learning but Bealing believes parents see an opportunity to extend their child’s skills throughout the whole schooling period.

“We see now how tutoring franchises are growing, parents like to give their children an edge. At Bricks 4 Kidz we use Lego to engage kids and teach them about machines, animals and how the world works.

“We haven’t found any other business in Australia concentrating on play. But we’re very aware always, and scanning the market to see what else is around.”

Bealing cites museums and major cultural sites such as the Sydney Opera House as occasional venues for fun educational programs, and also mentions how shopping centres are using free play Lego areas to encourage families to stay and shop. “But these don’t offer a specific program structure,” he says.

The brand originates from the US where it started in 2008; it now has a footprint in 35 countries, and regular research and development is conducted in JAN/FEB 2015 | 78 | WWW.FRANCHISEBUSINESS.COM.AU

Florida for its proprietary models.

In Australia the business is in New South Wales, Victoria, Perth and the Sunshine Coast.

Bricks 4 Kidz offers programs for afterschool, pre-school and school incursions as well as birthday parties, but it is the holiday program of half a day, a single day, or two days that provides the majority of the activity for the franchise chain, accounting for up to 60 percent of business.

“Parents are looking to stop the brain drain in the holidays. We get the kids building things in our workshops.”

Science, space and popular games like Minecraft are the themes for the building programs, and robotics is one of the new courses to launch next year.

KUMON Taking an entirely different approach to learning is one of the biggest names in tutoring. Kumon is now a global phenomenon and is an example of how the demand for childhood learning has increased with parents doing their research to find out what the different programs offer.

“Providers must be relevant and be able to deliver on what they promise or parents will simply go elsewhere,” says Jessica Varralla, Kumon spokesperson, Kumon Australia and New Zealand.

For such study centre-based franchises, maintaining a relevant and unique selling position in the market place, espe-

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LEARN THROUGH PLAY IS THE PREMISE OF BRICKS 4 KIDZ

EARLY LEARNING Preschool education in 2014-15 has brought in $2 billion, according to the latest IbisWorld report on this sector.

The industry from 2010 to 2015 has enjoyed an estimated annual growth rate of 14.4 percent, and seen profits of $43.2million.

So what’s challenging the market?

Intensifying competition from childcare services which can operate more fl exible hours to suit working parents.

The IbisWorld report reads: “The Federal Government’s aim to achieve universal access to early childhood education is anticipated to provide continued opportunities for preschools, but childcare centres will also be a large part of the solution.”

Large centres providing childcare, healthcare and support services could be one solution. And childcare centres will increasingly provide early education programs, the report suggests.

[Preschool Education in Australia, September 2014]

cially with the proliferation of online programmes delivering more pricecompetitive offerings, is a challenge.

“Parents are also looking for a program that can respond to their child’s unique learning ability. While we have always catered to children in need of remedial assistance, many children are now coming to Kumon with a keen interest in maths or English and are looking to extend themselves beyond the work they are doing at school. This is another challenge learning providers must meet.”

There’s no doubt the market is highly competitive, and the customer base is diverse. “More Anglo-Australian families are seeking out supplementary programs to help their children be confident in the classroom and have a positive academic experience. Immigration from China, Southeast, and South Asia will continue to grow and this will boost demand. More programs are likely to become available to meet this demand."

While the childhood learning marketplace will become increasingly competitive, people trust in long-established and proven methods of learning, says Varalla.

“This year we reached our highest-ever number of students with 45,000 learning with us. We can see trends where students are coming to Kumon at a younger age, particularly to enrol in the Kumon English Programme, which develops reading comprehension ability.”

The franchise has almost one fifth of preschool students enrolled in its English program and is predicting a similar turn out for maths.

Word of mouth and reputation does much to build the business, but this is boosted with free trial campaigns through the year.

The increased demand means the brand is expanding into new suburbs.

Varalla says, “We now have 275 centres across Australia (centres in every state and territory) and in New Zealand where we are also expanding our operations. Our strategy is simply to put the best person in the best location. We will continue to open up education centres in a combination of commercial premises and in noncommercial locations, such as busy, central community centres.”

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their children a head start. The Art and NonVocational Education in Australia 2014 report reads: “This trend is expected to continue over the next five years as discretionary income increases. IBISWorld forecasts that industry revenue will increase at an annualised two percent over the five years through 2019-20, to $5.9 billion.”

Caroline Finch, IBISWorld senior industry analyst, points out that tutoring services are often run by individuals or small operations and success in this self-regulating sector is dependent on the tutors' skills.

“Tutoring is usually arranged on a private, one-to-one basis, although more formal establishments have emerged," she says.

"Larger operators, such as National Education Advancement Programs, offer group review sessions for year 12 students prior to exams.

“Over the past five years, this segment has grown to represent an estimated 18.2 percent of industry revenue, due to strong demand for tutoring services. An increasingly competitive school environment has resulted in many students undertaking tuition in order to boost subject scores.

There has also been growth in the franchising of tutoring businesses and online tutoring services.”

It’s an industry that is both dependent on disposable income and at the same time cost conscious but, the report authors write, “The majority of tutoring businesses in Australia endured the global financial crisis fairly well. This is because parents who enrol their children in tutoring tend to view it as a necessity rather than a discretionary item.”

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A number of franchised brands are embracing a range of new and unique models in an effort to differentiate themselves from their competitors, and in most cases they offer many benefits for the franchisee.

and Kick Juice Bars, launched its Back2Back model in 2009 after it found the two franchised brands complemented one another very well.

“From the success of the first Back2Back store in Broome WA, we noticed just how much potential this healthy food combination had," says the company’s national marketing manager, Kate McMahon.

BENEFITS McMahon explains the positives for franchisees include: ✱ Franchisees have two stores and two revenue streams, yet they only pay one lease as the stores operate on the same site ✱ Sites can be as small as 35sqm ✱ Franchisees can take advantage of the Manage to Own Program, an initiative that sees the company finance up to 60 percent of the set-up costs for franchisees

GO SUSHI/KICK JUICE BARS Pacific Retail Management, the umbrella company of Go Sushi

COLD ROCK EXPRESS Franchised Food Company’s (FFCo) Cold Rock Express brand

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operates within both Video Ezy and Souvlaki Hut stores, and Trampoline Gelato is soon to adopt a similar model. “The beauty of the co-branding model is that it includes the presentation and offering of multiple brands and their individual products to consumers, all neatly packaged with a defined single strategy and marketing plan,” says CEO, Stan Gordon.

BENEFITS Gordon explains the co-branded model can benefit franchisees in many ways: ✱ Cold Rock Express is more affordable than the Cold Rock brand – prices start from $50,000 including the franchise fee ✱ Franchisees have the opportunity to generate a second revenue stream ✱ Customers have double the reason to visit the store, which may also see them spend twice as much ✱ Stores are transformed into a one-stop shop, which can see franchisees attract a broader customer base ✱ By sharing tenure at a shopping centre franchisees can split their fixed costs

In September last year coffee chain, Hudsons launched its first food truck in the form of a 1970s Citroen H Van. The model isn’t franchised yet; however there are plans to do so in the near future.

“We wanted something that was different to the norm – we are not traditionally in shopping centres or malls, and when we were looking at that path for the business we didn’t want to go down the stock standard kiosk model, we wanted something that was fun and funky and had that ‘wow’ factor,” says managing director, Adam Summerville.

BENEFITS Affordability and flexibility underline the new model, Summerville explains:

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✱ It is 33 percent cheaper than traditional Hudsons stores – a food truck costs around $200,000 as opposed to $300,000 ✱ Adaptable – the food truck can operate on a footprint as small as 10 square metres ✱ It is fully self-contained except for power ✱ It offers both of the company's coffee blends ✱ It stands out from traditional kiosk-style businesses by virtue of its eyecatching design

While the pilot project is still under review and not franchised as yet, The Coffee Club’s general manager, Arif Khan says: “We expect it to be a versatile option for the future.

“We continually look to new and innovative ways to fit our stores into new locations and markets,” he adds.

BENEFITS Khan explains if the model goes ahead the potential benefits for franchisees could include: ✱ Lower cost – it's more affordable than the brand’s cafe or kiosk model ✱ Flexibility – they can operate as satellite stores as is the case at Brisbane airport ✱ Business growth – existing franchisees could add the concept to their portfolio by making use of the resources available to them at the store/s they already own. For example, they could use the kitchen facilities of their fully-functional store to prepare products for the shipping container store

Since its launch last year the Crust Mobile Pizza Bar has appeared at numerous events across the country, from the BMW Sydney Carnival and V8 supercars to music festivals.

“Crust is always looking for innovative ways to show new people our brand and give them a chance to try our delicious gourmet pizzas,” says Renee North, Crust’s general manager.

BENEFITS While the pizza bar, which is described as a branded event experience, isn’t available for franchising, North explains franchisees can nevertheless expect to benefit from the model. ✱ It raises awareness of the Crust brand ✱ The pizza bar introduces people to Crust’s product range, which can prompt customers to visit their local outlet ✱ It has grown to include three models, enabling it to pop-up at additional events and further raise awareness of the brand “Now with three Mobile Pizza Bars in various sizes at our disposal, we are taking requests from our franchisees with the intent of supporting as many events that will have a positive impact on brand awareness and customer engagement in their local area as possible,” adds North.

Mobile beverage catering franchise, Kubarz is the only business of its type in Australia. “We specialise in bringing bespoke corporate and social events to clients throughout NSW, Queensland and Victoria,” says director Drew Davies.

BENEFITS Davies associates the mobile model with a number of benefits:

The Coffee Club launched its shipping container store model at Brisbane airport in June last year, and there are currently three operating on the premises.

✱ Franchisees work for themselves, yet they become part of a team ✱ Flexibility – franchisees choose the hours they work ✱ It offers large territories, which means there is less competition – Kubarz only ever wants to be a small, niche operation ✱ There is customised head office support by virtue of the company's small operation ✱ Variety – franchisees have the opportunity to service a range of different events in various different locations

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DRIVING FORCE: BRIDGESTONE FLAGS 300 STORES

B

ridgestone Select is on track for its 300th store, no mean feat for any retailer in today’s economic climate. The Grafton store is being converted from an independent auto workshop, and given the Bridgestone treatment. “It’s not quick to do,” says Andrew Moffatt, Bridgestone’s managing director for Australia and New Zealand. But high standards are important to this company, which has been operating in Australia for 70 years, and franchising its brand since the 1980s.

The Select model was launched in 2006 and as a full format franchise is suited to metro and larger regional locations.

The smaller service centre model works well in more rural settings with a smaller customer base and population. Some of these franchise units cater for truck and agricultural vehicles.

stores, pricing can be horrific. The franchisee needs to have financial sustainability, to be able to afford the rent, run profitably and have a customer base.”

The location of choice is a standalone site, Moffatt says. “We have to consider the property costs. In large sites with many

He explains the franchise fee incorporates set-up and initial training and the interior fit-out of the store. The franchisor

While Moffatt declines to discuss numbers, he insists the Select model is “not enormously expensive, it’s a modest option.”

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takes care of, and retains ownership of, the exterior signage.

“We have standards regarding our equipment in store, and the showroom itself. Our customers need to be satisfied with the whole experience,” says Moffatt.

The showrooms are tyre-free, customer friendly spaces that have freshly brewed coffee and WiFi connections on hand, with clean bathrooms and a TV for waiting

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customers, these are a far cry from the traditional tyre sales environment and represent the high standards expected by the franchisor.

“Select is constantly changing its model, it has to evolve to meet market needs and customer expectations.”

Moffatt says the company has good environmental standards which are important to the customer, as well as high safety standards. Bridgestone is a trusted brand, he says, backed up by a Readers Digest people’s vote.

“We’re a long term, stable franchisor.

We know what we’re doing. We have a clear direction, we are continuing to invest in product development, we are expanding auto services into stores to assist franchisees so they become a one-stop shop.

“The customer is always looking for a good deal, so remaining competitive is important, it’s a buyer’s market. The franchisees need to understand what’s happening in the market so our communication is vital.

“We have to tweak all the time. We see a flood of cheap, inferior product which can draw a customer initially, until they experience the effects of a poor product. We have to make sure our model delivers good customer service and high quality products.”

Franchisees are drawn from all walks of life, and bring their own perspectives and fresh ideas to the business, says Moffatt. “We are open to listening to new ideas. It can be quite refreshing to see people from different backgrounds.”

We’re a long term, stable franchisor.

We know what we’re doing. We have a clear direction

4 TIPS FOR BUYING A FRANCHISE 1. Look at the franchisors and find out who you will be dealing with.

What is their reputation? What is their longevity? You can easily find out information online.

2. Look for an established franchisor that has stability and a track record you can see and understand their journey.

3. Consider what consumers want. Do customers trust the brand and the company?

4. Look at the support systems on offer. Is there educational, technical and product training? Can you talk to someone if there is a problem?

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2014-08-25T15:01:40+10:00

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I

t’s been five years and Shingle Inn’s Mt Ommaney franchisees continue to kick professional goals.

Last October the Franchise Council of Australia (FCA) presented Shingle Inn franchisees Nicki Nesbitt, Wiesiek Lewandowski and April and Tony Carnie the prestigious 2014 Franchise of the Year (two or more staff) title.

It seems the four franchisees and friends, who together own and operate an outlet at Mt Ommaney in Queensland, had much to celebrate last year – apart from their award win they celebrated five successful years in business in December.

FRANCHISING: THERE’S NO NEED TO REINVENT THE WHEEL Nicki explains she and her business partners chose a franchise over an independent business for peace of mind. “The business model was proven and the Shingle Inn brand was known in the market.

“We also bought into a culture. We liked the idea of becoming a part of what was already firmly established as a family business, and that’s what we wanted our business to be too.”

April adds there are a number of time and cost saving benefits associated with the franchise model. “You don’t have to create a business from the ground up, or spend time reinventing the wheel.

Speak to a variety of franchisees within the network you're considering, but also go and observe their businesses at different times

“Supply agreements are negotiated for you on much better terms than you could get as an independent, plus you have access to amazing support and expertise that would be impossible to fund in a start-up business,” she adds.

THE RESEARCH PROCESS “We always knew we wanted to be in business together so it was a matter of choosing exactly what we were going to do,” says Nicki, who came across the Shingle Inn brand after a flyer was dropped in her letterbox.

“Something about attention,” she adds.

it

caught

my

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FROM LEFT TO RIGHT: WIESIEK, NICKI, APRIL AND TONY

The initial letterbox drop prompted the pair to find out more about the cafe business.

“We spent a lot of time doing online research and we visited other Shingle Inn stores to get a feeling for the brand,” says April.

“I especially felt a strong pull towards the brand for its concentrated effort of gluten free products given that many of my family members are gluten intolerant,” explains Nicki.

THE FIGURES A Shingle Inn business can vary in cost from around $300,000 to $450,000, so how did they achieve their franchise dream?

“We funded our investment via a secure business loan from a major bank,” recalls Nicki.

April explains the business

proved successful from the start. “It took us 18 months to make a profit, however we drew wages from day one,” she says.

as we were in hospitality for example, you’ll be able to get a feel for what’s happening in the business.”

DUE DILIGENCE TIPS

OVERCOMING THE CHALLENGES

“Obviously we sought legal and accounting advice, but I would encourage potential franchisees to also trust their gut instinct,” says April.

She similarly stresses the importance of speaking with, and observing, existing franchisees. “Speak to a variety of franchisees within the network you’re considering, but also go and observe their businesses at different times.

“You’ll pick up a lot from that – what they’re like as an operator, if they’re all following the same system, what you like and don’t like about their brand and even as a novice,

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April explains their key challenge is around juggling personal and professional commitments. “There have been times when the business has been all-consuming and I think the greatest challenge for us, especially being so passionate, has been keeping a balance between work and home.”

She says the Red Day principles, which focus on how franchisees can spend more time working on their business rather than in it, have been particularly effective in this area.

“They have been hugely bene-

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ficial for us and we’ve done a lot of work over the years on training and developing our team so that the cafe can run without us being on site.”

They’ve also learned the importance of following the Shingle Inn system. “We’re happy to admit that we made mistakes in the early days by thinking we could do things better than the franchisor.

“We tell everyone about examples of those mistakes now because experience has told us that the proven Shingle Inn system works, you just need to follow it,” she says.

April adds following the system has enabled them to develop a healthy relationship with the franchisor.

“Shingle Inn operated eight company-owned stores before franchising as part of a second generation family hospitality business so that’s a lot of hands-on experience to tap into.

“They want our business to be successful and while it’s not their responsibility to make it that way – that’s our role – they will support us if we support them by following the proven business model.”

A STRONG WORK ETHIC IS REQUIRED April stresses running a franchise is hard work. “Don’t go into the business of owning a cafe with your eyes closed,” she says.

“Be prepared to work long hours, be self-motivated and open to learning.”

Patience, perseverance and organisation are also important in achieving success. “The market won’t come to you and there’s no magic bullet. Build your relationships one by one; one day at a time and a successful business comes from that.

“Be prepared and have a strategic plan but equally be open to accepting change with a positive attitude and look for mentors, either within the franchise or an external supplier,” April explains.

Nicki says its important franchisees have people skills. “They are vital, both from a leadership perspective as well as in the ability to build rapport with your customers and your team and being able to motivate them.”

April adds open-mindedness and a positive attitude are also essential. “There will be a lot of change in your lives if you want to move the business forward and you have to be prepared for that.”

NO TYPICAL DAY As with many franchises, there’s no such thing as an average day at Shingle Inn. “No two days are ever the same,” says April.

She and Nicki devote one day each week to working on the business, and they also spend a large chunk of their time in-store.

“There is always one day of the week that both Nicki and I work away from the business.

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This is our ‘red’ day where we focus on strategy and improving the business.

“We review and discuss marketing, plan team training and development, review monthly business performance and develop new processes or procedures for our team.”

When they are in the cafe, jobs vary considerably. “Our work is diverse, covering all aspects of operations, including quality assessment, customer service at the counter, talking to customers, preparing meals and training our team.”

MANAGING THE ROLES While there are four franchisees involved in the running of the business, each person has a set of clearly defined responsibilities.

The roles are split as follows: ✱ Nicki – marketing and business analysis, process and quality management. ✱ April – finance, MYOB and reporting. ✱ Wiesiek – maintenance, kitchen management. ✱ Tony – customer service and he is generally the duty manager each day.

“I think we’ve always done a great job of utilising our

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RIGHT: SHINGLE INN CAFES ARE FAMILY FRIENDLY

Wisewould

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individual strengths while ensuring we’ve cross-trained in each other’s areas for back-up on sick days, rostered days off or on the infrequent occasion we go on holidays,” says Nicki.

TRAINING AND SUPPORT Nicki says their area manager was particularly helpful in the early days. “They provided us with support across all areas of our business following our six weeks of training.

“The Shingle Inn system has progressed even further since then with a NESTer (National Establishment Store Team) working in-store to support franchisees for the first two weeks of business operation.”

She adds there’s also ongoing training and support. “There are quarterly Family Forums we attend with all the Shingle Inn franchisees from across the network as well as the Shingle Inn conference.”

MOVING FORWARD Nicki says their primary goal is to be debt free. “We’re always keen to improve our work/life

balance too,” she adds.

“Ultimately we’d like to be in a position to provide more input into product and menu development and trialing products for the Shingle Inn network so we’re particularly focused on staying true to the system and providing solutions and constructive feedback when opportunities arise as this is obviously the skill set Shingle Inn will need for the development of this extended role.”

“Our involvement in Shingle Inn’s Platinum Program – as a store that is meeting or exceeding all of the company’s benchmark KPIs – puts us in a great position to be able to achieve this goal in the near future,” Nicki explains.

Has franchising changed their lives for the better? “We could jokingly say that it has meant the loss of holidays, time with family at Christmas and drastically altered our social lives, but while this is true it’s also on the way to giving us financial freedom and has hugely enriched our lives via the people we’ve met and worked with," says Nicki.

FRANCHISE FRANCHISE SPECIALISTS SPECIALISTS

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KX PILATES: A NEW TAKE ON FITNESS

A

aron Smith is changing the way Australians think about fitness with his business KX Pilates, which specialises in the delivery of Pilates-style classes that involve the use of a reformer machine.

Smith first came across dynamic Pilates while living in London, and he was set on bringing a similar concept to Australia.

“I loved the style and concept behind dynamic Pilates, but I thought I could do it my way and a little bit better, so I came back to Australia and opened a studio in Melbourne in 2010.

“We opened another studio in 2011, a third in year three, and last year was our big year – we opened three companyowned studios in 2013 and now we’ve got six franchises as well,” he recalls.

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THE CLASSES KX Pilates instructors facilitate small group classes comprising between 10 and 12 people.

They perform movements with the aid of a reformer machine, which has been customised specifically to suit the company’s style.

“I kind of explain it [the company’s style] like a Pump class on a reformer machine, so people get the benefits of Pilates but at the same time a high endurance cardio element is added in there as well, so it is really quite fast paced – it is a

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KX PILATES CLASSES INVOLVE THE USE OF A REFORMER MACHINE

form of high intensity interval training (HIIT),” Smith says.

able to ‘freestyle’ their classes.

“I’ve got clients who have been coming in since I opened my first studio years ago; they still come every day or every second day.”

“HIIT is getting really, really popular because it works – not only do people burn more calories during their session, their metabolism gets elevated so they continue to burn calories afterwards too.”

Smith says followers of traditional Pilates aren’t exactly fans of the brand, however he believes the practice is in need of a shake-up.

“Normal Pilates people out there don’t really like us – pilates is very traditional and very ‘there is one way to do it right and the rest is wrong,’ so they kind of see us as the rebels who are doing it differently.

“I think the consumer is bored of normal Pilates – after five weeks they get over it and move on,” he explains.

To prevent the onset of boredom, Smith says KX Pilates classes are rarely the same.

“The workouts always vary and change, and our trainers are

I think the consumer is bored of normal Pilates – after five weeks they get over it and move on

Smith believes the company’s small class sizes, which usually include no more than 12 people, also differentiate it from other Pilates studios. “We run an average of 10 to 12 classes per day and there are three different levels of classes, so across the week there tends to be around 55 classes.

“The yoga and Pilates studios in Sydney have a minimum of 20 to 30 people, which from a business point of view is great; however it means each person is seen as a dollar sign. I wanted to create an experience around the classes and treat clients as people not numbers,” he adds.

the city to focus on expanding there further.

“We’ve got four territories locked down in Sydney and we are currently looking for sites. Bondi Junction is going to be the next studio [after Surry Hills], which should open in January,” he says.

“We hope to open 10 studios in Sydney within the next 12 months.”

Smith will cast his sights further afield next year, and hopes to secure locations in both Brisbane and Perth.

“We are going to start looking for sites in Brisbane by March or April next year, and probably 12 months from now we will move to Perth and do the same thing there,” he says.

GROWTH AND EXPANSION

Smith also owns four KX Barre studios and a yoga studio in Melbourne, and he runs fitness retreats in Bali, which are soon to expand into Vanuatu.

Smith recently opened his first Sydney studio in Surry Hills, and he has relocated to

“Barre is kind of like a dance version of Pilates,” he explains.

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“The yoga studio is fully assisted – there’s an instructor as well as a person who assists people with their technique.

increasing visible muscle mass.

“I think everyone is realising now that flexibility and core conditioning are really beneficial – gone are the days where people want to be big and bulky and just bench press and squat.”

“I am still deciding if we will franchise the yoga brand, and the barre studio is really good to add on to a pilates studio if there is enough room,” adds Smith.

THE IDEAL FRANCHISEE Smith says existing franchisees are either former clients or trainers; however franchisees don’t need to facilitate classes.

THE STATE OF THE INDUSTRY Smith explains the fitness industry is split into two at present. “There are the 24/7, $10 per week gyms where people sign up and if they don’t go it doesn’t really matter because it is only $10 per week, and then there is boutique fitness which is where we are – it’s personalised group instruction where people are treated as more than just a number.”

He predicts boutique fitness

will boom over the next 12 to 24 months in Australia. “If someone has a great idea and they package it into a boutique, architecturally designed studio their concept could go crazy.

“I think we will find fads will come in, but they will probably

die pretty quickly. That’s why we are confident in our brand – Pilates has been around for years, we’ve just put our spin on it.”

“They don’t have to be an instructor – we have franchisees who work front-ofhouse and do all of their work from a reception/admin point of view, and we have franchisees who do a combination of both,” he adds.

Smith adds people are shifting their focus to strength and conditioning as opposed to simply

Smith seeks people who demonstrate a passion for the brand and concept. “We say no

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Level 1, 109 Pitt St. Sydney, NSW, 2000

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high quality people – we are quite happy to hold off until we find the right person.”

COST A KX Pilates franchise costs between $150,000 and $200,000, Smith explains.

“We have a $50,000 upfront franchise fee, which includes everything from marketing materials and initial inventories to training for instructors, who go through our six week KX academy course, support with opening day, uniforms and more.

to people who just go ‘I have a couple of hundred grand to throw into something, what can I do?’ because we want people who will fit with our brand and personality.

WANTED! NEW FRANCHISE PARTNERS AUSTRALIA WIDE

“They need to love the brand and the style of fitness that we provide, and they need to be people orientated people that want to work in their business for a minimum of six to 12

months and really get to know their clients,” he explains.

“The remaining $100,000 to $150,000 is purely dependent on the space that franchisees find and how much it is going to cost to do the build.”

“Quality control in the service industry is really tough, and that’s why we look for really

He adds there’s an eight percent royalty and two percent marketing fee.

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Visit noodlebox.com.au/franchise & fill out enquiry form to receive an Information Kit. Or contact our Network Development Manager - Michael Standley on (03) 8851 4200 or 0416 256 338.

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ADVERTORIAL

Multi-Award Winning Franchise Launching in Australia Refresh’s awards to date include: • 2014 Deloitte Fast50 Award Winner (New Zealand)

• 2013 Interactive Media Award Winner: Best in Class (New York)

• 2012 NZ Franchise Association Business Service Provider of the Year Finalist 2012

• 2012 Summit International Marketing Effectiveness Platinum Award Winner • 2012 NZ Marketing Awards Emerging Business Award Finalist

• 2012 NZ Marketing Awards Judges Choice Award Finalist • 2011 Summit International Creative Silver Award Winner

Huge opportunity in a massive market Every year Australians spend around $30 billion on renovating their homes. Refresh Renovations is providing an opportunity for you to gain a foothold in this huge market.

A professional operation for business-oriented franchisees Refresh’s business model is sales, marketing and businessoriented. We’re looking for franchisees skilled in these areas.

You don’t need to be a builder to join Refresh. Successful renovation projects require clear expectation management and excellent communication throughout the process; from initial consultation, through the design stages, through the build, and right through to the handover of the completed project.

‘ You don’t need to be a builder to join Refresh’ To be awarded a Refresh franchise, you will be: • Inspired by building a company that delivers a better renovation experience • Driven to build a multi-million dollar business • Sales and marketing oriented • A great people manager

• Professional and well presented • Customer service focused

• Enthusiastic and eager to learn

‘Refresh is the established market leader in New Zealand, and is now launching in Australia’

Some of the benefits of owning a Refresh franchise include:

We currently have 35 franchisees operating nationwide across New Zealand and are still growing fast.

• A unique position in the market

As a Refresh Renovations franchisee, you will gain access to best-practice IP and systems, which you can use and leverage to build a significant income and business asset.

The revenue potential is huge, and being service based, the establishment costs for a Refresh franchise are far lower than most retail-oriented franchises. You will have a revenue target to build a $3-5 million business within 3-5 years of starting your franchise.

Refresh’s core target market for renovation projects is 35-65 year old mid-upper income female homeowners. The offer revolves around a professional sales process. Refresh franchise ownership is equally suited to males and females.

Refresh was established and is owned by Traffic (www. traffic.net.nz). Traffic is New Zealand’s leading business growth and strategy provider to the building industry. Traffic is a marketing specialist, and has over 20 staff involved in supporting the Refresh franchise system model. This is the kind of substance that you should look for in any franchise you’re considering. www.refreshrenovations.com.au

• An opportunity to build a significant business asset

• Differentiated by Refresh’s strong offer and customer service • Access to a huge market with enormous potential

• Low start-up costs (no up-front premises or fit-out costs)

• Full initial training and well-structured ongoing support

• Fully integrated, custom designed, cloud-based IT system • Very strong branding and marketing

• Be part of the innovative, market leading Refresh network

What are the building industry requirements?

If you purchased a café or restaurant you would employ a chef. With Refresh, you will be required to employ at least one licenced builder. In Victoria, that licenced builder must also be a director of your company, so if you’re based in Victoria, you might like to consider partnering up with a builder.

Contact Refresh Renovations: Does this sound like a franchise that you’d like to be involved with? If you’d like to find out more email Jon Bridge; jon.bridge@refreshrenovations.com.au or visit Refresh’s website; www.refreshrenovations.com.au.

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$30 billion renovation market WESTERN AUSTRALIA $4 billion

NORTHERN TERRITORY $0.3 billion

QUEENSLAND $7.2 billion

ACT $0.4 billion SOUTH AUSTRALIA $2 billion

NEW SOUTH WALES $8.9 billion

VICTORIA $6.7 billion TASMANIA $0.8 billion

Do you want a share of this?

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The secret to

FRANCHISEE

SUCCESS? VERSATILITY AND DISCIPLINE

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Y

ou'll achieve success in franchising if you stick to your plan and follow the system, says First Class Accounts franchisee Stuart Jaeschke.

A redundancy and personal interest in numbers prompted Stuart, who was named the company’s 2014 Franchisee of the Year, to invest in First Class Accounts.

Stuart tells Franchising about his journey…

TRAINING, SUPPORT, REPUTATION There were three why reasons I chose First Class Accounts.

1. One was the comprehensive training the brand offered to new franchisees. I had no prior experience in bookkeeping so it was important I learned those skills prior to starting my business.

2. Secondly, the technical support that First Class Accounts offers to all its franchisees is really strong. If there is ever an issue, I can call them for assistance and guidance.

3. Lastly, there was the benefit of working with an established company that had a good reputation. I knew that I had a better chance of succeeding with First Class Accounts than with a lesser known brand.

THE RESEARCH PROCESS: 3 THINGS TO CONSIDER 1. The franchisor is obliged to give potential franchisees the names and numbers of existing franchisees, so make sure you ask for them, and give a few existing franchisees a call. See what they think of the business, what their jobs entail and how they’ve found the franchisor has been to work for – it will reveal a lot about the business you may not otherwise experience.

2. Have a solicitor look at the contract before you sign it.

3. Talk to a financial planner. They will give you advice on the financial benefit you can expect out of your franchise.

CHALLENGE #1: MARKETING The biggest challenge for me has been marketing.

Thankfully, First Class Accounts does provide extensive marketing training, which has helped me a lot.

They taught me about a whole range of marketing solutions including letterbox drops, advertising, writing letters to councils or businesses that might need a bookkeeper, and cold calling. It’s still a challenging part of the business for me, but I am better equipped to deal with it now.

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STUART JAESCHKE

LOOKING TO INVEST? CREATE A PLAN For those looking to invest in a franchise: ✱ Have a plan and stick to the plan. When there are so many things to do it’s easy to get distracted, but if you have a good plan and you follow it, you can’t go wrong. ✱ It can take a while to get established, to get your name out and to get customers and referrals, which can tempt people into being sidetracked. But it does happen over time, so be patient and stick to the system and the success will follow.

A FIRST CLASS TRAINING APPROACH First Class provides three levels of training: 1. The initial training covers

per year. These are possibly the most useful, as they provide a great opportunity to talk to other franchisees about the business, which is always very productive. We share information and discuss issues. Often we have experienced similar problems, and are able to give each other solutions or advice.

THE SECRET TO SUCCESS IN FRANCHISING You need to be versatile – especially if you’re a sole trader.

You have to do everything yourself, from the administration to the marketing.

all of the day to day processes, including marketing training and there’s also an overview of a 12 week marketing plan.

2. The next level of training revolves around ongoing business support for fran-

chisees. First Class Accounts provides support for franchisees, and you can always call and ask for advice or information.

3. First Class Accounts also organises four training days

The other skill you need is discipline. You need to be disciplined in order to get everything done, but you also need to maintain a balance. It’s easy to get swept away in the work – the challenge is to find time for non-work activities as well.

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ensure the business is not entirely dependent on me.

THE FRANCHISEE FRANCHISOR RELATIONSHIP

Of course, I also have the opportunity to sell the business as part of a long-term exit strategy when I want to retire as well.

I’ve found that to maintain a healthy relationship, be aware that franchisors only really want two things – they want you to follow the processes and they want you to talk to them.

THE UPSIDE OF OWNING A FRANCHISE

Although I’ve never had any problems myself, I know of another franchisee that got quite ill and had to take a few weeks off work. He spoke to the franchisors, and they organised franchisees from the surrounding areas to look after the franchisee’s clients while he was absent.

It’s just about making sure that you keep the franchisor in the loop.

Being in a franchise is like being a part of a family. We’re not in competition; we’re here

Being a franchisee can make life more flexible, although in reality we work the hours our clients need in this business.

to help each other.

BUILDING THE BUSINESS Looking to the future, I am hoping to build the business up

a bit more and get another one or two people on board.

I am getting towards retirement, so I am currently setting up systems that will allow me to cut back my hours and

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Franchising has also given me a better appreciation for the different roles involved in running a business – marketing, promotion, business development – there are just so many aspects to it.

In addition, I have developed a variety of skills in several areas that I wouldn’t have if I hadn’t got involved with First Class Accounts.

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The business of

DRUGS T

he Drug Detection Agency (TDDA) was established in New Zealand in 2005 and the company secured its first Australian franchisee in 2012.

As its name suggests, the company specialises in the provision of drug detection services – predominantly to employers who want to ensure their employees are drug and alcohol free while on the job.

TDDA CEO Kirk Hardy explains he formed the business in an effort to make a difference in the community.

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“I’ve seen first-hand the negative effect drugs can have on the workplace – they destroy businesses and rip families apart. “With TDDA I saw an opportunity to help organisations and individuals within these organisations to reduce their lost moments in life and revenue because of alcohol and drugs.�

He says franchisees can similarly play a part in changing people’s lives for the better. “The environment we work within at TDDA is unique and life changing. “Where else can you own a business that has the potential to save lives in creating drug-free environments?�

THE REACH TDDA has national coverage in both Australia, where it operates as The Australian Drug Detection Agency (TDDA Australia) and New Zealand, where it is known as The New Zealand Drug Detection Agency (TDDA NZ). “There are plans to increase TDDA’s critical mass throughout Australasia,� Hardy says.

“Territories are still available in all states of Australia. We are a global brand and intend to continue with our global growth.�

“This is our DNA and you can’t change that. You either have it or you don’t.

What makes our organisation so special is the people and its why we do what we do, it’s why I still get out of bed in the morning and continue to work 11 plus hour days and enjoy every moment,�

Hardy adds.

A PEOPLE BUSINESS Hardy describes the TDDA model as innovative, fast moving, exciting and challenging, and explains its values are incredibly important.

TDDA’s Botany, Sydney franchisee, Rebecca Randall saw this approach as a particularly positive aspect of the brand.

“We are a people business and we have people who share our DNA (values).

Integrity is a huge thing for us.�

“TDDA was not prepared to sell a franchise to someone who did not fit their criteria and that to me spoke volumes about their professionalism,� she says.

He says the company’s values are: âœą Taking ownership with no excuses âœą Straight up, straight forward, no short cuts âœą Defining excellence through innovation, market leadership and integrity âœą Creating positive change in people’s lives âœą People like us

DRUG DETECTION: THE RESPONSIBILITY OF THE FRANCHISEE? First and foremost, TDDA franchisees are responsible for their own territory. “One thing we have learned over the years is that the greatest determinant of success in any TDDA territory is the franchisee themselves. The harder they work, the more they are rewarded,� says Hardy.

“Great people are a key element of TDDA’s continued success. We can teach people about the processes and what drugs do and what the emerging technologies are, but we can’t teach honesty and integrity.

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MEMBERS OF THE TDDA TEAM

As owners of their own TDDA territory, franchisees are responsible for a range of different tasks, from drug testing and training to public speaking.

“Days are varied and never the same.

A franchisee could conduct employee drug testing at a workplace, a preemployment hair test at a lawyer’s office or property drug screening for a client prior to them purchasing a house, as well as train managers and supervisors at companies on how to deal with volatile situations in the workplace involving drugs and alcohol affected employees, or they might speak at industry conferences on workplace drug testing,” he explains.

“Then you have a business to run on top of this, and some of our franchisees can have up to a dozen team members working for them. It is certainly not a dull working environment and it is very rewarding.”

Franchisee Rob Foran, who heads up the Dandenong North territory in Victoria, agrees no two days are ever the same.

“One morning I’ll have a meeting with a potential new client that I need to follow up on that same day, I’ll also follow up on some calls I made the previous week and I will have testing scheduled for the following morning,” he says.

“Every day is different and that is what is so fantastic about this business,” adds Rebecca.

THE TYPICAL CLIENT TDDA’s customer base spans a broad range of industries including trucking, forestry, fishing, airlines, education and manufacturing, says Hardy.

“Traditionally demand for TDDA’s services has come from the blue-collar sector, largely with a strong safety focus, the kind of industry whereby drugs, alcohol and any kind of machinery don’t mix.

“We are seeing our market also move into the white-collar sector, where drug testing is now a legitimate risk mitigation tool,” he explains.

A UNIQUE APPROACH TO TRAINING TDDA prides itself on the training program it provides franchisees, which includes an initial and ongoing component.

fully competent and compliant with all aspects of the business,” says Hardy.

While these ongoing training sessions are suitable for new franchisees, they also operate as refresher courses for existing franchisees such as Errol Brain, who invested in the brand before the introduction of the 100 day initiative.

“We have a very good national support officer who helped us through the first few months and continues to do so,” he says.

Rebecca recalls TDDA’s initial training and support was phenomenal, and says the 100 day training program prompted her investment.

THE FIRST FOUR WEEKS “It is what ‘sealed the deal’ for me.

When a franchisee first enters the business they take part in a four week residential course in Auckland, which is delivered by a number of experts in the field.

“New franchisees are introduced to all aspects of the business; from the technical side of testing to the TDDA culture, how best to grow their own business, IT training, public speaking, sales and marketing training and more.

“The 100 day training program covered testing procedures, government legislation and rules and regulations that we as collectors are governed by, and I gained a certificate in Certificate IV in Pathology,” she explains.

THE FRANCHISEE

ONE HUNDRED DAYS OF TRAINING

TDDA franchisees come from a range of different backgrounds – Rebecca worked for the Department of Corrective Services for 16 years before she invested in the brand, Rob was involved in the food ingredient industry and Errol is a former professional rugby coach.

Training continues long after the four week program comes to an end – franchisees receive a total of 100 days of training.

Despite their varying backgrounds, all three franchisees opted to invest in TDDA for similar reasons.

“Franchisees receive support from their master franchisee, who ensures they are

“My wife and I were looking for a business that made a difference in the community

“It’s all designed to give the franchisees the best introduction they can get into their new business,” Hardy explains.

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FRANCHISE SPECIALIST ROBERT TOTH has moved!

The new Franchise Code begins 1st January 2015 “What you need to know and do” Email Robert for a complimentary guide for Franchisors.

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Providing advice to: 1. International Franchisors 2. Master Franchising 3. Dispute Resolutions - solutions and strategies 4. Franchisee Advice - Fixed Fee Reports 5. Sale / Purchase Franchise systems 6. IP / Trademark Advice 7. Company Structure & Tax Advice 8. Network of Franchise Consultants We offer fixed fees based on scope of work for our clients.

Contact Robert Toth: p: 03 9604 9400 | m: 0412 673 757 e: rxt@marshmaher.com.au | www.marshmaher.com.au

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TDDA CEO, KIRK HARDY

and a business in a growth industry,” says Errol.

dealing with the public directly that will hold you in good stead,” he adds.

“We were very impressed with the professionalism shown by everyone involved in the business from the national support office to collecting technicians.”

Errol agrees: “This business is all about people. You have to have a real passion for people and also be passionate about making a difference. This franchise has a lot of upsides and can be very rewarding,” he explains.

Rob explains “It drew my attention straight away as I hadn’t seen a franchise opportunity like it before. After meeting with Kirk and Glenn [Dobson, TDDA’s international franchise and business development manager] a number of times I knew I could work with them as they were straight up and confident TDDA would grow."

The training and support on offer was a major drawcard for Rebecca, who says: “I found that TDDA not only offered amazing opportunities in regards to continued growth, ongoing training and support across all levels of the business but it stood for something important and the team were passionate about their brand and business.”

LOOKING TO INVEST? FRANCHISEE ADVICE While it seems prior experience in the industry isn’t necessary, the franchisees offer their advice for those looking to invest.

Rebecca says franchisees can trust the TDDA team. “You can believe in what you are being told in relation to what TDDA can offer you and where you can take your franchise.

“There was no sugar coating involved, I was told straight up the way the company works and what was expected of me as a franchisee. It is hard; however with a little patience, dedication and vision, you will get there.”

WOULD THEY INVEST AGAIN? They’ve been with TDDA for varying periods, and all three franchisees say they would invest in the brand again.

“We are very happy with our decision and love every single day as this business is all about people,” says Errol.

“I would invest again, I can see the opportunities we have/are working on,” explains Rob.

“Make sure you have an honest, up-front approach – I have found clients like to know all about drug and alcohol testing.

Being able to speak to a group of people is also advantageous,” says Rob.

She’s only been with TDDA for five months, however Rebecca is already looking to expand her business. “Without a doubt, this was the right choice for me.

“TDDA provides an important service to companies, it is a business to business service however it is just as much a people to people business as you deal with the employees directly. If you are good at

“It is only early days, however if things keep progressing the way they are, I will be (territory availability permitting) pursuing a second territory in the near future," she adds.

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The Experts in Leather & Plastic Restoration

Why Fibrenew?

The ever-growing consumer-driven need for the repair and restoration of leather, plastics and vinyl represents a huge opportunity for all franchise owners.

Seeking franchise partners throughout Australia Single Operator or Fleet A Fibrenew franchise can operate as a single operator or as a fleet. Our flat-fee franchise model and low overhead make it a great fit for budding entrepreneurs.

First-Rate Support & Products Fibrenew scored a 99% satisfaction rate with existing franchisees regarding the ongoing support, products and service that are provided.

An Eco-Friendly Business Fibrenew offers a business solution to a serious environmental problem. Our products and services help preserve mother nature.

Fibrenew-Franchising.com.au Visit our website to learn more about the opportunity to start your franchise. Fibrenew is a proud member of the IFA.

www.fibrenew-franchising.com.au

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Rosie Leskie R

osie Leskie is The Coffee Guy’s fifth Queensland franchisee, and she services the area of Geebung in Brisbane.

Rosie looked into a number of brands before she came across The Coffee Guy during an online search.

“It sounded like a great opportunity so we started looking into our area, whether the model was going to be viable and what existing franchisees were saying about it.”

While she conducted a wealth of research into the brand prior to investing, Rosie also focused on its suitability within her local area.

“I looked into what companies already operated in the area and how successful they were, so I knew what to expect.”

AN AFFORDABLE OPPORTUNITY Rosie opted for The Coffee Guy for two key reasons – the first being price, because it meant she didn’t have to take out a loan.

“The Coffee Guy was definitely one of the cheapest franchises on the market. I was also pleased that I wasn’t buying the van as I didn’t know what I would do with it when I decided to give the business up,” she explains.

“I funded my franchise myself.

I had some savings and I borrowed a bit from my family.

The price point for The Coffee Guy is so good that I didn’t need to get a loan.”

THE LIFESTYLE BENEFITS Rosie was also set on being her own boss. “I’ve always dreamed of owning a coffee store, but I wasn’t ready to go that big. I also really liked the idea of having an asset and owning a business.

and serving people.

“Before we purchased our franchise, I was typically quite shy but now I can converse with anyone easily.

“I’ve also learned how to negotiate a range of different scenarios, which has helped me in many other aspects of my life,” she adds.

Aside from increased confidence, Rosie has consistently met the sales targets she establishes for herself. “I set myself targets for how many coffees I want to sell in a week and I beat my target in the first week.

THE COFFEE GUY'S ROSIE LESKIE

“I love the lifestyle it gives me – the ability to work when I want for as long as I want,” she says.

A LEARNING EXPERIENCE Rosie explains becoming a franchisee has required that she fine tune her people skills.

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“I like to keep updating my targets as I go so there’s always something to strive for.

I’ve far exceeded my expectations there.”

DO YOUR RESEARCH She advises potential franchisees do their research before they invest. “Make sure you’re fully aware of what’s expected of you and what you expect.

“Also, know your area – understand who the competition is and whether it’s going to be viable for you. Don’t be afraid to try something new,” adds Rosie.

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JOIN THE

DREAM TEAM

Vendor finance now available* *Available to approved applicants.

We are looking for dynamic people who love dealing with others and are passionate about retailing.

The Snooze brand has a strong history of over 30 years in retailing and has built a very solid franchise system.

We provide franchise partners with a stable platform to start their business and offer support across the entire business including: • Marketing and Promotional Support • Product Development and Buying Power • Proven operating system that includes comprehensive product and sales training • Business Management support from our on the ground field team • Assistance in site selection and property negotiations • Business finance available to approved applicants

For more details visit snooze.com.au or call Alistair Browne, our Franchise Network Development Manager on 0427 401 169

It’s amazing what a little snooze can do. snooze.com.au

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joins the

ASIAN FOOD

FRANCHISE GAME

I

n an effort to expand its reach, family owned Asian food business the Lokvale Group has recently started franchising its Lok Lok Dumpling Bar brand.

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Established in 2010, Lokvale Group has grown its empire to include 12 Lok Lok Dumpling stores and two Mama’s Wok restaurants – its second opened in January.

CEO Ava Zhang says extensive expansion, including in international markets, is on the cards.

“For the immediate future, our goals are to move on a nationwide scale.”

There’s also Lok Lok Dumpling Express, which is an extension of the Lok Lok Dumpling Bar brand. “It represents another business model that may also be franchised,” Zhang says.

THE DECISION TO FRANCHISE Zhang explains the company has an extensive scope; however at the same time it is aware of the need to tailor products to suit specific markets and individual preferences.

“Lokvale Group has a grand vision to apply our wealth of knowledge and experience of Asian food on a global scale.

“The best way to do this is of course through franchising. Not only will this help us achieve our vision, it will speed up the process while ensuring each individual market receives a high quality product,” she adds.

TOP: DEEP FRIED FISH FILLET HOT POT FROM MAMA'S WOK BOTTOM: A LOK LOK STORE

THE FOOD The Lokvale Group has established a simple food philosophy for its brands. “We want to serve healthy, great tasting food and put a beautiful smile on every guest’s face. We’re all about leaving happy memories.

“Australians everywhere are increasingly embracing Chinese culture and cuisine – it is our wish at Lokvale Group to lead this expansion of Asian tastes worldwide,” says Zhang.

She explains the food itself represents a fusion of Asian

and Australian cultures. “We maintain the integrity of every ingredient and respect the roots of the two distinguished worlds.

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beautiful fusion of two cultures to diners.”

Zhang says the company has employed a wealth of expertise and research data to support is expansion efforts, and The Good Business Sense Eating Habits 2014 National

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Study has particularly influenced the company’s approach to its food.

“The study investigated seasonal harvesting and eating patterns, and focused on connecting Eastern and Western lifestyle habits, as well as healthful practices.

“Lokvale Group has been utilising the wonderful research data in our restaurants to raise the standards of the food we offer. We have tailored our menus to suit the seasons, and to use organically grown ingredients and spices in our dishes.”

THE POINT OF DIFFERENCE Zhang explains the Lokvale Group is focused on differentiating its offering from the rest through a focus on both the customer and the quality of its products.

We offer so much more than noodles or rice in a clear plastic box

“We want to become the best in our industry and to always put our customers as our top priority. If something is not up to standard, we will work tirelessly to change and correct it – we’re not satisfied unless our customers are.

“Most people associate Asian food with the traditional Chinese takeaway. We offer so much more than noodles or rice in a clear plastic box,” she adds.

“Lokvale Group specialises in the entire experience, not just the food. For us, customer satisfaction ranks as high as the food itself.”

Zhang is well aware of the increasing popularity of Asian food in Australia, as well as people’s expectations when they dine out. “Not only are Australians demanding higher quality food, they are also showing interest in how the dishes are made.

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“This is great to see, as it is exactly what we stand for. We want our customers to appreciate every aspect of the dish – from the ingredients and cooking process to the taste.”

THE FRANCHISEE OFFERING Zhang says support is provided to franchisees from the day they join the business.

“As soon as franchisees join the Lokvale Group team,

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backing to the franchisee.

LOK LOK'S MENU INCLUDES STEAMED BBQ PORK BUNS, SALT AND PEPPER POPCORN CHICKEN, FRIED NOODLES, SZECHUAN MINCED PORK NOODLES AND MORE.

“This will include up to 30 days of supplementary training, where the franchisee works under on-site supervision immediately after the launch,” says Zhang.

“There will be ongoing regular visits to each franchised business, along with reporting, sales, marketing and technical advice available by phone every working day.”

ARE YOU THE RIGHT FIT? “Prospective franchisees will ideally have experience in the food, catering, dining or related industries,” says Zhang. they will have all the help and support they need to get started and on track to running a successful franchise.”

To begin, new franchisees take part in an initial training

program which is delivered by experienced staff. “There is a 30 day initial training program covering all aspects of the establishment and operation of a Lok Lok Dumpling Bar franchise business,” she explains.

There’s also assistance before and after the opening of the franchisee’s store. “We fully support the opening of every new Lokvale Group operation, and will provide further onsite training and operational

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“They will have entrepreneurial and/or managerial credentials, drive, dedication and a commitment to Lokvale Group’s values, and be focused on delivering exceptional customer service.”

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JAN/FEB 2015 | 119 | WWW.FRANCHISEBUSINESS.COM.AU

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LEGALESE

BEWARE! STUART JEBB is a lawyer at MST Lawyers

Cheatâ&#x20AC;&#x2122;s guide to scam franchises

T

he Australian Competition and Consumer Commission reported that in 2013 almost 90 million dollars were lost as a result of scams in Australia. For many people the idea of being self-employed and running their own business makes franchise opportunities very appealing. However, prospective franchisees should be aware that some franchise opportunities advertised may be too good to be true and are in fact scams.

Franchise scams are usually pitched as an opportunity for investors to produce high returns with very little effort or an opportunity to be involved in a highly successful business model with guaranteed returns.

In order to determine the legitimacy of a franchise system, prospective franchisees should conduct extensive due diligence before entering into any agreement or making a monetary payment.

WARNING SIGN 2: INSUFFICIENT DETAILS Minimal details are provided about the franchisor or the franchise system - if limited information is offered about the franchisor or the franchise system this should raise a red flag. For instance, the franchisor does not provide details of its registered office,

Potential warning signs that a franchise business may be a scam include:

WARNING SIGN 1: UNDER PRESSURE The prospective franchisee is placed under significant pressure to make a quick decision to sign an agreement and pay upfront - many scams are sold on the basis that an offer is only open for a very limited short period of time. This should be a clear warning sign that the offer is a potential scam. The Franchising Code of Conduct requires that a franchisor give to the prospective franchisee a copy of the franchise agreement, a disclosure statement and a copy of the Code at least 14 days before the franchisee enters into a franchise agreement or makes a non-refundable payment. As a result, requiring a franchisee to quickly enter into a franchise agreement is prohibited under the Code.

Reputable franchisors generally shy away from giving any income projections to prospective franchisees

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9588 RedCat Franchise Directory D1 paths.indd 1

2013-11-28T16:17:07+11:00

27/11/13 5:30 PM

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its ACN/ABN or details about existing franchisees.

The Code requires franchisors to make disclosures about the franchisor, its directors and officers and existing franchisees, including the business address and business phone number of existing franchisees. Prospective franchisees are encouraged to contact existing franchisees to ask questions about the franchise system before entering into a franchise agreement or making a payment.

WARNING SIGN 3: HIGH INCOME GUARANTEE A guaranteed high rate of return or weekly income - franchise scams are often sold on the basis that the franchisee will earn a certain income amount.

However, in reality, particularly in the current economic climate, there is no guarantee that a business will perform to a particular level. Repu-table franchisors generally shy away from giving any income projections to prospective franchisees given that there can be significant financial penalties if such representations are later found to be mislead-

ing and deceptive. Prospective franchisees should be cautious and seek financial advice when earnings projections are provided by a franchisor to encourage them to enter into a franchise agreement.

Occasionally, franchisors do give income guarantees to franchisees for set periods of time to give the franchisee an income whilst the franchisee is establishing the franchise business, especially if the franchised business is a greenfield business. It is important that such guarantees should be reflected in the franchise agreement and any conditions for qualifying for the guaranteed income amount should be clearly spelled out.

As a general rule a reputable franchise system should speak for itself without the assistance of fancy promotional deals and marketing puffery.

Prospective franchisees should be aware that typically a franchise system is established not with the intent to make a new business successful, but rather to expand an already well-established and successful business. Buyers beware.

Minimal details are provided about the franchisor or the franchise system

JAN/FEB 2015 | 122 | WWW.FRANCHISEBUSINESS.COM.AU

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Australia’s premier 7HVW DQG 7DJ IUDQFKLVH KDV RSSRUWXQLWLHV IRU SDVVLRQDWH IUDQFKLVHHV $XVWUDOLD ZLGH

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Full training provided – no electrical experience required

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FCA National Franchisee of the Year 2013

Top Franchisor 2010

BRW Fast Franchises 2009, 2010, 2011, 2012, 2013

For further information visit

appliancetaggingservices.com.au or contact Steve Wren 0401 655 655 steve@ats.com.au

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TRENDS

What you need to know about 2015 ANDREW TERRY Professor of Business Regulation, The University of Sydney Business School

D

espite the warning of Niels Bohr that predictions are very difficult, especially if they’re about the future, there are a number of trends which seem highly likely to impact on the Australian franchise sector in the New Year. From a franchising perspective it would be surprising if issues that have dominated the news as 2014 rolled to an end did not remain influential throughout 2015: the well-publicised problems of a number of prominent franchise systems, the state of the economy, the new Franchising Code and the apparent trend to consolidation.

THE PROBLEMS The media publicity that franchising attracted in late 2014 was not all positive. The problems faced by Pie Face received massive media coverage for all the wrong reasons. Whatever the reasons – too rapid expansion, too high rents, the product offering have all been suggested as factors – the reality is that high profile investors and sustained media publicity are not enough to sustain a franchise system if the underlying model is not proven and viable. The lesson of Pie Face for prospective franchisees is that franchising is not fairy dust and that rigorous due diligence remains the franchisee’s best friend.

Although Australian franchisees are protected by the world’s strongest laws, acquiring a franchise is ultimately a commercial decision that must be made carefully and conscientiously with full knowledge of the possible consequences. In matters of love - and franchising - we have to look behind the pretty face.

THE NEW CODE The previous paragraph provides a segue to the most obvious development in 2015 – the introduction of the new, or at least revised, Franchising Code of Conduct. Franchisees, and prospective franchisees, are the primary beneficiaries of the new Code both directly through provisions such as the legislated good faith obligation and indirectly through the enhanced enforcement tools given to the ACCC. The good faith provision has attracted most attention and its impact, potential or real, will play out in 2015 and, I expect, for a considerable time thereafter until the High Court clarifies the extent of the apparent legislative largesse.

The concern is that franchisors and franchisees will interpret the obligation to act in good faith quite differently. Franchisors may underestimate its impact. Fran-

chisees may overestimate its impact. There will inevitably be a sustained period of uncertainty as this new provision beds down. While franchisees would be mistaken to assume that good faith is the Holy Grail for every real or imagined problem they should take comfort from its introduction. Franchisees will also benefit, albeit indirectly, from new ACCC powers – to issue infringement notices, and to seek civil pecuniary penalties, Code breaches. In combination with existing powers to, among other things, conduct random audits of franchisors and to require substantiation, the ACCC’s role as the franchisee’s best friend is firmly entrenched.

THE ECONOMY The end of 2014 delivered less than encouraging news about the state of the Australian economy. While bad economic news is not good for anyone, franchisees can take some comfort from the reality that the news is probably worse for independent business operators.

The experience from past economic downturns is that good franchise systems outperform independent operations. In a more challenging economic climate the brands, the systems, the support, the economies of scale, the technologies and the management of franchise systems deliver real competitive advantages which are always there but may be less obvious in buoyant times.

CONSOLIDATION The trend to consolidation noted in the latest Griffith University (a 1.7 percent decline in the number of franchisors but an 8.2 percent increase in the number of franchisees) is a sign of a maturing sector. Our proud boast that we have more systems per capita than any other major economy disguises a long tail of small systems many of which struggle to achieve critical mass and the trend to fewer but more viable systems is to be welcomed.

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Want to be in the drivers seat? …err easy chair?

Do you want to really take control? The Leather Doctor franchise is Australia’s largest mobile leather care company and part of a larger group that specialise in mobile furniture repair.

Leather Doctors have been the respected name in mobile leather repair for around 20 years. Established throughout Australia and now overseas we have a proven system mostly servicing the furniture market which is a huge, $7Billion p.a. (IBISWorld’s Furniture

• 50 Franchisees in Australia, 5 in Dubai • 20 year history • Contracts with Australia’s leading furniture retailers • Proven system ensure success Give us a call and we can help you take the drivers seat in your future… or in our case the easy chair.

Retailing market research 2012)

The Leather Doctor offers a proven system that ensures success. We have a national customer base of major furniture retailers and manufacturers as well as a well recognised brand within the private market.

This is backed up by the fact that our growth has continued each year despite economic conditions.

1300 453 284 Email: info@theleatherdoctor.net.au

www.myleatherdoctor.com.au

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National Marketing Manager: Dean Reid - 0438 844 238

27/07/12 5:21 PM

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LEADERSHIP

Are you ready for a new start KARLI FURMAGE is a trainer, coach and writer. Contact karli@goglobal. consulting

T

here is something magical about a new year. A clean slate, the chance to start again. It fizzes with possibility.

And for some the idea of starting a business is one of the most exciting possibilities.

You may have added being a business owner to the ‘one day’ list, or you may be taking firm steps to make that possibility a reality.

JOINING A FRANCHISE There is some security in joining a franchise. There is the benefit of a proven system.

And being surrounded by a peer group who can support you is incredibly valuable.

There are also risks in joining a franchise.

Not just the risks you take on as a business owner. Franchisors fail or they may sell their business. Events you will have no say in, but have to deal with.

There is a lot to consider. Most of us have enjoyed a break this time of year. We’ve had some ‘clear air’ to do some thinking, reflecting and planning.

DO YOU REALLY, REALLY WANT THIS? The festivities are all over. After weeks of social events, buying

presents, decorating, preparing the house for guests, going to school concerts and graduations, and the Big Day itself, it’s back to work. Work may be full on. You may be over it and the idea of being a business owner, master of your own destiny, is like a lifeline.

There is a freedom that comes with being your own boss. But there is also a lot of responsibility and accountability.

How realistic are you? Can you separate the dream of owning a business [setting your own hours, being you own boss] with the reality [hard work, wearing many hats, being completely accountable].

You might get to the dream, but the start up of any business is all consuming. ✱ How well do you understand exactly what is involved in running a business? ✱ Do you know all the compliance requirements? ✱ Do you have the time and energy to get your new business off the ground? The hard slog can

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last for six months, 12 months, the entire journey… Up for it?

CAN YOU INVEST THE TIME TO RESEARCH THOROUGHLY? One of the most devastating things I see in our sector is franchisees who have not investigated their business thoroughly enough. Some get swept up in the dream and then blind sided by the reality.

Good investigation takes time.

Are you prepared to make the commitment necessary to thoroughly investigate the legal, accounting, financial, marketing, operations and staffing aspects of the franchise systems you are interested in?

DOES YOUR FAMILY SUPPORT YOU? We place a lot of focus on family this time of year. Becoming a franchisee won’t just impact you, but all your nearest and dearest.

Regardless of your personal situation, there will be family and those close to you to consider in your decisions.

These are the four big questions for your family: 1. What information does your family need to support your decision to consider being a franchisee?

2. What would the impact be on you, your family and current lifestyle?

3. What’s the best possible outcome you could have as a franchisee?

4. What’s the worst possible outcome? How would you recover?

When your family and friends are getting back to their familiar routines and you’re asked what’s your plan for 2015, what will you say?

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FOR SALE!

s r e h t o r B n a i d n I Restaurant NOW Franchises available NOW

LATEST NEWS!

Welcome to our news panel. Indian Brothers continues to expand across Queensland and now into the southern states. Three new stores are due to open over the coming months in Morningside, Waterford West and Munno Para in South Australia.

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Want to open an Indian Brothers in Mission Beach, Cooparoo, Ayr or Ipswich? Call now.

And if you have relatives down south, Interstate opportunities include Melbourne, Adelaide and Sydney. Great locations on offer.

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The Indian Brothers system has been built from the ground up to comply with the Franchising Code of Conduct in Australia.

Complying with the code is mandatory and provides protection for both the franchisor and franchisee. Thereâ&#x20AC;&#x2122;s safety in a system!

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If you are thinking about buying a franchise, speak to the team at Indian brothers. As members of the Franchising Council of Australia we have a reliable system you can trust.

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WHAT’S GOING

TO HAPPEN

IN 2015?

W

ill the economy get a boost? How will politics have an impact on the franchise sector? Will there be businesses going bust? Which sectors look set for a good year? How will the new Code of Conduct affect the industry? We asked some franchisors to look into their crystal balls and share their insights with us.

1. SERGE INFANTI, FOODCO – JAMAICA BLUE, MUFFIN BREAK, DREAMY DONUTS I believe there will be a slowdown of growth in the overall food and beverage market in 2015 and therefore

some challenges for the franchising niche as well. There is also a continuation of the current cost pressures caused by high wages and penalty rates in our labour awards and rising operational and compliance costs in Australia. These cost pressures will result in a

number of smaller food and beverage franchised brands and independent businesses struggling for market share and profitability. The need to invest in infrastructure, innovation in product and design and marketing is greater than ever and some of the smaller franchise systems will struggle as a result.

markets, and rise in unemployment, is creating nervousness in the economy and undermining consumer confidence and therefore spending. Traffic numbers are declining in the majority of the shopping malls and online ecommerce continues to attract the consumer dollar as they search for the best value for money options.

There’s still a degree of weakness in the economy and fixing the financial mess facing Australia is challenging for the government, particularly with a hostile senate. This uncertainty, together with talk of a possible slowdown in housing and share

Whilst I do believe that the economy and the franchising sector has a challenging year ahead. I’m also firm in the view that it will be the franchise systems with the financial strength and ability to respond to those challenges who will continue to prosper.

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2. SARA PANTALEO, LA PORCHETTA In the last 12 months, we’ve seen some franchise systems go into administration. While there have been a number of reasons for this, I believe that in some cases at least, they undertook aggressive expansion plans without first putting in place a strong infrastructure. Some Australian brands also seem to want to grow very fast internationally, again, without all the requisite building blocks in place.

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I think this consolidation will continue and there will also be a number of acquisitions, as more major franchisors move towards a multi-brand system. This has been happening in America for some years and the trend is now well and truly taking off in Australia.

The yoghurt trend is set to continue and Mexican food brands will continue to grow.

In the service industry, I believe there will be growth in beauty and wellbeing.

The café culture will also continue and this is a particularly interesting space to watch, because coffee is no longer just something we consume as a pick-me-up or social drink. Now more and more consumers are treating it as they do wine, wanting to try different blends and specialist brews.

At this year’s Franchise Council of Australia conference, it was clear to me that the appetite for franchising is strong. While growth through acquisitions will continue, many systems will work independently towards sustainable growth by looking at how to better assist their franchisees increase profits.

3. MICHAEL RUSSELL, MORTGAGE CHOICE It’s a good time to be part of a franchise; consumers the world over love and trust brands. As such, the benefits of being part of a branded franchise business are tremendous – benefits such

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as greater brand awareness, tried and tested support systems, large networks and so on. With that said, I expect the franchising sector to strengthen tenfold in the short to long term.

4. AJIT PONNAMBALAM, SNAP-ON TOOLS AUSTRALIA AND NEW ZEALAND The franchising sector has shown strong growth – more than eight per cent in the past few years – even as Australia’s economic growth has been below trend. The franchising sector is a small but dynamic part of the economy, and it is a vital one.

We can look forward to strong performance in the year ahead.

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5. NIGEL MILLER, PLUS FITNESS I believe that we will continue to see solid growth across the franchising sector in 2015.

I also believe that we will see an increase in Gen Y investors as they appear to be experiencing an increasingly higher disposable income; this is something we have already witnessed within our network. Based on a continuing increase in awareness of health, nutrition and wellbeing I would predict that franchisees in these spaces will perform strongly in 2015 and that we will also see a number of new franchise systems launched. I also believe that we will continue to see an

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increase in aged care services and recreation services for older people in 2015.

Consolidation will continue and there will also be a number of acquisitions, as more major franchisors move towards a multi-brand system

6. GLEN MCKAY, INXPRESS AUSTRALIA I think the majority of the growth will come from similar industries as we’ve seen develop in 2014: health, courier services, home services and of course food retail. Overall the franchising sector is looking extremely positive throughout 2015.

7. PIPPA HALLAS, ELLA BACHE The franchising sector is consistently gaining more traction as the preferred method of going into business, as a tried and tested method of business ownership that provides continued support and training, and 2015 will see an increased level of interest from prospective franchisees across all sectors.

The franchised beauty industry in particular is also set to continue expanding, thanks to the ongoing empowerment of women and the valuable role they play in society, as well as the increasing number of men who are becoming mindful of the importance of taking care of their skin.

8. DANIELLE ROBERTSON, DIAL AN ANGEL There may be some consolidation as people are being wary

about the franchising sector after seeing what’s happened in some industries; I’m thinking of Pie Face, for instance. I think those who have a niche idea with great systems will be successful. Others may find expanding rapidly quite difficult.

9. SARAH ALLEN, APPLIANCE TAGGING SYSTEMS We believe strong franchise systems that are committed to the ongoing development of their franchisees and their

franchise model will see growth in 2015. The vast majority of good franchise systems should need to make little change to their franchise models following the changes to the Code, and it therefore should be “business as usual” for those franchisors currently operating best practice systems.

The introduction of more stringent disclosure requirements may see the demise of some less professional franchise systems which can only improve the quality and performance of the franchise sector over time.

Is LMA the business you’ve been looking for?

Leadership Management Australia (LMA) has been creating exceptional results through people for over 40 years.

You have an exclusive opportunity to become a recognised leader of training and development in Australia.

Leadership Management Australia (LMA) is a professional white collar B2B company in the $3.5 billion dollar training and development industry.

Invest with LMA to invest in you

Receive everything needed to kick start your business

Through building client relationships and changing people’s lives, you will have the opportunity to enjoy the freedom that owning your own business offers, while capitalising on high margins and building the future value of your business.

Proven success strategies, training and support

Work-life balance some only dream about

Opportunities are limited - Contact our New Licensee support team today Bob McCarthy m 0417 778 030 e bmccarthy@lma.biz

Michelle Ioannidis t 03 9834 4566 e mioannidis@lma.biz

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DIRECTORY

ASIA-PACIFIC CENTRE FOR FRANCHISING EXCELLENCE A pre-entry franchise education program is available for free and online through this centre. Funded by the ACCC this course aims to help franchisees understand the process of due diligence and have realistic expectations of what it means to be a franchisee.

The Centre was launched by Griffith University in 2008 and undertakes research on franchising best practice. The research helps inform policy and team members regularly engage with government bodies and franchise associations across the Asia-Pacific.

VISIT: WWW.FRANCHISE.EDU.AU

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION (ACCC) The ACCC is an independent Commonwealth statutory authority that is responsible for enforcing the Competition and Consumer Act 2010 as well as legislation, promoting competition, fair trading and regulating national infrastructure.

directory of government and business associations, planning templates, business videos, and business checklists.

Business topics include emergency management and recovery, finance, recruitment, environmental management, fair trading, taxation, online business, franchising, importing and exporting, intellectual property and training.

VISIT: WWW.BUSINESS.GOV.AU

FRANCHISE COUNCIL OF AUSTRALIA (FCA) The FCA is the main body for representing franchisees, franchisors and service providers in the $131 billion franchise sector in Australia.

Becoming a member of the FCA is voluntary and is available for any organisation or anyone involved in the franchise industry including franchisees.

VISIT: WWW.FRANCHISE.ORG.AU

FRANCHISE BUSINESS

Its role is to protect, strengthen and improve the way competition works in Australian markets and industries. The ACCC also regulates the Franchising Code of Conduct (Code) which is a mandatory industry code that applies to parties involved in a franchise agreement, namely the franchisor and franchisee. The purpose of the Code is to regulate the conduct of the parties involved and if allegedly breached prompts investigations by the ACCC.

As the online arm of Franchising magazine, this website is focused on providing essential advice and information for anyone looking to invest in a franchise - short and snappy business tips and news, video interviews, industry commentary and market reports.

VISIT: WWW.ACCC.GOV.AU

Franchise Business is also the official directory of the FCA and lists franchising opportunities available in Australia and New Zealand. Potential franchisees looking to move into the franchising sphere can explore by location opportunities that currently exist in the market and enquire about the franchisor or brand.

BUSINESS.GOV.AU This website is an online government resource for the Australian business community which gives the public access to government information, forms and services for all things business. It is aimed at assisting individuals or a group of people to plan, start and grow their business.

New business owners can access the advice finder, events calendar, grants and assistance finder, a

Financial, legal and business guidance are key components of the independent, authorative editorial that helps potential franchisees make their purchasing decision.

Users also have access to franchise consultants and advisors who can assist prospective or existing franchisees or franchisors with any legal, financial, education and training, IT and other services.

VISIT: WWW.FRANCHISEBUSINESS.COM.AU

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GLOSSARY

DISCLOSURE DOCUMENT: this document provides information about a franchise system, the franchisor and the franchised business.

It must be supplied to a prospective franchisee, in accordance with the Franchising Code of Conduct.

DUE DILIGENCE: a thorough examination of the franchise business before purchase.

FRANCHISE: a business model with four criteria – a franchise agreement, a trademark or symbol, payment of a fee, and a system or marketing plan. A franchise business falls under the jurisdiction of the Franchising Code of Conduct and franchisors have certain obligations to fulfil.

FRANCHISE AGREEMENT: the business contract between the franchisor and franchisee.

FRANCHISEE: an individual who runs the franchised business using the intellectual property of the franchisor.

FRANCHISE FEE: this is an up-front cost paid to the franchisor and covers the use of the brand name and operating system required to operate the business.

FRANCHISOR: grants permission to the franchisee to conduct business using its intellectual property; brand name, methods of operation and marketing.

FRANCHISE TERM: this is the period granted for trading under the franchise agreement. Most franchise terms are on a renewable three or five year term but they can vary from one year to perpetuity.

GREENFIELD new site.

SITE: a brand

LICENSE: the right to use intellectual property in business, such as sales rights in a territory, manufacturing technology or access to a trademark. A license is not the same as a franchise.

LOCAL AREA MARKETING: [LAM] this is marketing the franchisee is responsible for conducting in the franchise territory or designated marketing area.

MARKETING AND ADVERTISING LEVY: a regular flat or percentage based fee paid into a centralised advertising or marketing fund.

MASTER FRANCHISEE: a franchisee who is responsible for a large territory, appointing other franchisees within the territory with direct agreements, and ensuring that the franchisor’s systems and methods are applied.

MULTI-UNIT FRANCHISEE: a franchisee granted the rights to operate more than one franchise outlet. Not every franchise system allows for franchisees to be multiple operators.

OPERATIONS MANUAL: the franchisee’s guide to operating the franchise business. The franchisor may produce several manuals for different areas of the business, and should regularly update the information.

REGIONAL FRANCHISEE: similar to master franchisees, regional franchisees operate a large territory and appoints franchisees within the area.

RENEWAL: once a franchise term nears its end, franchisees may or may not be given a right to renew their agreement for a further

term. This process is bound by the Franchising Code of Conduct and there is no automatic right of renewal.

ROYALTY: fee paid by the franchisee to the franchisor for the ongoing use of the brand and systems, management and technical support. It may be a flat fee or a percentage of sales or profit.

TERMINATION: the ending of the franchise contract between franchisee and franchisor, usually for breach of contract. Some franchise agreements allow the franchisor to terminate the agreement even if the franchisee has not breached the agreement.

THE FRANCHISING CODE OF CONDUCT: a mandatory Code that governs franchising in Australia and is designed to guide the behaviour of franchisors and provide certain protections to franchisees. It is administered through the Australian Competition and Consumer Commission (ACCC).

TOTAL INVESTMENT: the total amount of money a franchisee requires to set up in business.

This includes the franchise fee, working capital and any equipment purchases required.

TURNKEY FRANCHISE: a franchise package that includes all the equipment, information and systems required for a franchisee to open up the business and start trading.

WORKING CAPITAL: the funds required by any business to pay its costs before it starts making a profit, and as ongoing cash flow to counter any dips in business activity.

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CHECKLIST

20

THINGS TO CHECK BEFORE YOU INVEST BEFORE YOU PURCHASE YOUR FRANCHISE YOU NEED TO TICK OFF ALL THE MUST-DO ITEMS. CHECK THE FOLLOWING:

Are you confident in the franchisor?

What are the franchisee and franchisor obligations?

Have you seen a disclosure document?

What training is available and who pays for it?

Have you evaluated the financial returns?

Who owns the intellectual property and what is licensed to the franchisee?

Do you know all the expenses franchisees are required to pay?

What marketing will the franchisor implement?

Have you worked out your operating costs?

Who pays for the marketing?

Do you know the term of the agreement?

What is the dispute resolution process?

Is the business operating from fixed or mobile premises?

Do you know what it is like to be a franchisee?

Are you working within a territory?

If so, is the area exclusive?

Can you assign the franchised business?

Are you restricted in your product purchase?

How can the franchisor or franchisee terminate the Franchise Agreement?

Are you required to reach a minimum performance level?

What restrictions are there on the franchisee and guarantor operating a similar business?

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24

STEPS TO OPENING YOUR FRANCHISE WHAT ARE THE PRACTICAL STEPS YOU NEED TO TAKE TO SET UP YOUR FRANCHISE? HERE IS A CALENDAR GUIDELINE TO OPEN DAY:

✓

Book franchisee training

✓

Sign the lease or licence agreement

Research your market

✓

Lease vehicle

Conduct due diligence on your franchisor

✓ ✓

1-3 MONTHS AHEAD

✓ ✓ ✓

Speak to franchisees

✓

Read the disclosure document

✓

Research the location

✓

Do a business plan

✓

✓

Get legal and accounting advice

✓

✓

Organise finance and working capital

✓

Decide on and set up your business structure

1-4 WEEKS AHEAD

✓ ✓

Sign the franchise agreement Register your business (Business Name, ABN, GST etc )

✓

✓ ✓ ✓ ✓ ✓

Organise fit-out for your store or office Order and check the delivery of any stationery, uniform and vehicle wrap required Clarify what support the franchisor will provide for opening and the first few days of trading Check what insurance policies you need to protect your business Check any relevant regulations or local by-laws Understand your tax liabilities Purchase a telecoms package and organise installation Open a business bank account If you will be an employee, start the staff recruitment process Start planning your local area marketing strategy

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Visit the new home of Franchising magazine online at FranchiseBusiness.com.au

nload Plus dow guide: E E R F r u yo the Choosing chise right fran • Access information and resources in our new Knowledge Centre • Research new franchise opportunities • Filter opportunities by location, category and investment level • Get mobile! Our new mobile compatible site makes it easy to enquire wherever you are

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A-Z LISTINGS

Phone: 1300 287 669 Fax: 1300 795 287 Contact: Steve Wren steve@ats.com.au www.appliancetaggingservices.com.au

Phone: 0417 077 633 Contact: Michael Payne michael@palmoasisventures.com www.baskinrobbins.com.au Start up costs from: $190,000

Start up costs from: $47,000 + GST PROFILE: Looking for a franchise with on-going repeat business, large territories and access to an existing client base to get you started?

ATS are Australia-wide specialists in Electrical Testing and Tagging in accordance with AS/NZS 3760:2010. Providing expert technical, admin, business and sales support, access to our National client base and comprehensive on and off-site training, ATS are committed to helping its 45 franchisees grow profitable and successful businesses.

No prior electrical experience is required - just a passion for safety and a commitment to growing your business. With low entry fees and minimal franchisee administration, an ATS franchise may just be the opportunity for you.

PROFILE: At Baskin-Robbins, we love ice cream. Everything we do is for the fun, indulgence and enjoyment that ice cream provides to our beloved guests around the world in over 7,500 locations – with our 1,000 unique and much-loved ice cream flavours, frozen drinks and famous range of ice-cream cakes, there’s a delicious treat for everyone.

Our world class training program will prepare you, our national marketing platforms and comprehensive Local Store Marketing programs will generate the brand awareness and our operations team are there to support and assist you.

If you love to have fun & put a smile on people’s faces and are as passionate about ice cream and the Baskin-Robbins brand as we are, then we want to hear from you.

Phone: 07 3373 1760 Fax: 07 3373 1770 Contact: Battery World Support Office admin@batteryworld.com.au www.batteryworld.com.au/franchising

Phone: 02 9232 3511 Fax: 02 9223 4625 Contact: Marwan Kojok info@baybridge.com.au www.baybridge.com.au

Start up costs from: $250,000 + GST PROFILE: Australia’s leading battery retailer Battery World is offering a unique retail opportunity with a great growth potential.

Battery World stores carry batteries for everything from mobile phones and laptops to vehicles and boats. With 82 stores throughout Australia we are the largest and most comprehensive retail franchise network focused on the battery category.

If you want to invest your time and money in a powerful franchise, Battery World offers a unique opportunity to tap into an ever-growing market.

Franchises are currently available throughout Australia for motivated individuals with strong communication skills and a love for retail.

PROFILE: Baybridge lawyers deliver a progressive and efficient approach to clients’ legal issues. Going beyond the traditional service offering, we act as legal representatives as well as trusted advisors on many initiatives, adding value at every step.

As leaders in the field, Baybridge Lawyers are able to identify solutions and opportunities that are both practical and timely. From working alongside a diverse range of clients including listed companies, national and international franchisors, small and medium businesses, and private individuals, we have the perspective and experience to continually add value.

Phone: 0419 494 480 Fax: 03 9439 5594 Contact: Rod Parker rparker@bedshed.com.au www.bedshed.com.au Start up costs: $500k plus PROFILE: Bedshed is one of Australia’s most successful and profitable bedding retailers.

Bedshed will assist with financing the right person to secure the right store where they will use our accredited franchise model. Our highly profitable franchise model has been tried, tested and perfected during our 30 plus years history and accredited with both Westpac and Bankwest, so you can rest easy.

We have over 30 stores nationally and are currently expanding our franchise network on the east coast of Australia. We are committed to securing the future of our franchisee partners by growing our network of stores and increasing our customer base. As Bedshed continues to expand, we gain marketing share and buying power for our franchisee partners.

Owning a Bedshed franchise enables you to secure your financial future and helps you choose your desired lifestyle.

®

School readiness and primary tutoring centre franchise

Phone: 0406 626 074 Contact: Mat Tower franchise@beginbright.com.au www.beginbright.com.au Start up costs: $60,000 - $70,000

PROFILE: Here at Begin Bright, we strive to give franchise owner’s financial freedom and success by making children happier, more confident and smarter.

You will gain a new lease on life by working fewer hours so you can re-discover your passions in life.

You receive a 4 day initial training followed by a weekly catch up while on your 12 week launch plan. There’s also monthly webinars, quarterly field visits in your first year and conference. We use software for timetables and accounting that you are also fully trained in.

Begin Bright has a very extensive and researched marketing plan. This is implemented in a combined effort between both franchisor and franchisee.

Every centre has 4 pages on the Begin Brightwebsite which is heavily promoted by Head Office as well as receiving marketing materials and campaign support.

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A-Z LISTINGS

Phone: 1800 634 227 Contact: Andrew info@briantracyglobal.com www.briantracyglobal.com

Phone: 07 3352 6972 Fax: 07 3352 7962 Contact: Danny Sinclair danny@bengadesigns.com.au www.bengadesigns.com.au

PROFILE: Benga Designs specialise in the design, manufacture and installation of custom made signage for retail shopfitting and national franchises, including but not limited to 3D illuminated signage, plastic fabrication, large format printed graphics and vehicle wraps.

We also produce a large range of “point of sale” products such as banners, flags, A-frames and corporate stationery.

Our success has been directly attributed to Benga’s refined project management skills. We pride ourselves on the attention given to upfront planning, communication and liaising with our clients and shopfitters.

Start up costs from: $79,950 + GST Includes inventory for fast ROI. PROFILE: The name Brian Tracy is synonymous with personal and professional success.

Our excellent reputation and highly-regarded programs are unrivalled and will give you brand credibility, prestige and trust in your business community.

We are searching for high-calibre individuals who are self-motivated thinkers, looking for a business opportunity beyond the generic franchise. If you are an innovative leader with a knack for business and you want to build a solid financial future, take the next step and find about more about the Brian Tracy International.

Benga Designs is a proud member of ASOFIA, ASGA, BAA, DIA and FCA.

Phone: 1300 99 55 12 Contact: Gavin Trewin gavin@buyaustralianproperties.com.au www.buyaustralianproperties.com.au /welcome/

Phone: 1300 659 676 Fax: 1300 659 675 Contact: James Scurr customerservice@cashflowit.com.au www.cashflowit.com.au

Start up costs: $50,000 - $110,000 plus GST PROFILE: Buy Australian Properties is the first professional franchised property investment company in Australia. We are leading the industry with safe, ethical and proven ways of investing in residential property with integrity. We supply quality approved direct property investments in brand new full turn key house and land packages, apartments, townhouses, units and row houses Australia wide.

PROFILE: Cashflow It specialises in equipment financing solutions for the franchise sector.

We have created a simple yet very effective 4 step client engagement process incorporating proven systems and procedures designed to produce outstanding results and highly satisfied clients every time we use them.

Cashflow It can get you pre-approved for finance so that you can find the best deal on the equipment you need from any supplier in Australia.

Franchisees have the opportunity to operate a very unique, first of its kind property investment business in Australia.

You can choose terms starting from just 12 months up to 5 years. At the end of the term you have the option to Continue Renting, Purchase Equipment, Rent To Own or Return Equipment.

• great work-life balance • work from your home office • a team of highly motivated and dedicated professionals • excellent company culture

• comprehensive initial and ongoing training

• unlimited growth and earnings potential • vendor finance available for a limited number of foundation members

It’s the smart way to finance the equipment you need in your business.

If you belong to a Cashflow It Accredited Franchise then you will enjoy additional products, benefits and cost savings.

Apply online today in less than 10 minutes.

Phone: 0401 805 096 Contact: Josh Lawson franchise@cocolat.com.au www.cocolat.com.au/ franchise-opportunities

Phone: 07 3839 4733 Contact: Adam Brazda opportunity@combined.com.au www.combined.com.au/ partnerwithus

Start up costs from: $295,500 - $455,000 + working capital PROFILE: The Cocolat concept was established in 1992 and during this time has attracted a growing and loyal following to become an icon in South Australia and winning many national and local food awards along the way.

Cocolat franchises can exist either as a café with seating or shopping centre kiosk preferably also with seating. Cocolat’s unique offering consists of award winning desserts, Cocolat’s own gelato, handmade chocolates and a range of savoury ciabatta rolls and pastries.

Our products are all made using only the finest quality ingredients and each product is as visually appealing as it is delicious.

PROFILE: Combined Insurance, a division of ACE Insurance Limited (ACE), has been providing Australians with peace of mind with our Accident and Sickness Insurance products. Now is your opportunity to become part of our future.

Please note this is not a franchise opportunity, but rather a chance to become a Corporate Authorised Representative (Principal Agent) of ACE. If you want to run your own business and build equity with strong support and minimal start-up up costs, then look no further.

Become a Principal Agent of ACE. As a Principal Agent, you will be able to build your own operation and engage Sub-Authorised Representatives while being authorised under the ACE Australian Financial Services Licence to advise on, distribute and sell the Combined Insurance Accident and Sickness products underwritten by ACE.

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A-Z LISTINGS

Phone: 0499 399 355 Contact: Bruce Miskin bruce@theconcretecutter.com.au www.theconcretecutter.com.au

Phone: 03 9417 5000 Fax: 03 9419 0937 Contact: Sarah Le Breton sales@displaydesign.com.au www.displaydesign.com.au

Start up costs from: $45,000 + GST + vehicle PROFILE: Established in Melbourne in 2001, The Concrete Cutter has nine long running franchises. We now seek to expand in Melbourne and duplicate the Melbourne success interstate. We invite enquiry from smart â&#x20AC;&#x2DC;hands on peopleâ&#x20AC;&#x2122; in good health who are easily understood on the telephone.

Most established franchisees regularly take over $2,500 p.w. The price includes equipment, sign writting, uniforms, stationery, training, and on-going support.

You will need to provide a white vehicle such as a one-tonner, van or small truck.

A second-hand vehicle is O.K. Please ring for information pack.

Phone: 03 9923 3514 Contact: Ross Malcomson franchise@dodo.com www.dodo.com/franchise

PROFILE: For over 25 years, Display Design has been helping businesses both large and small with their retail merchandising and display requirements. Specialising in the manufacture and supply of a vast range of products suitable for use in any retail, commercial or corporate environment, Display Designâ&#x20AC;&#x2122;s range includes: Wall display systems, freestanding merchandising units and racks, light boxes, showcases and counters, graphic display products, metal and acrylic accessories, suspended cable and rod display systems and sign connection components. In addition, the business also encompasses areas such as design, custom manufacture, project management, installation & fit out.

Phone: 1300 131 888 Contact: Ashleigh Williams Franchise.recruitment@dominos.com.au www.dominosfranchise.com.au Start up costs: $250,000

PROFILE: Dodo Connect is a fun, vibrant and energetic technology and home utilities driven business. Core to Dodoâ&#x20AC;&#x2122;s success has been the provision of extremely competitively priced products, along with superior customer service.

A Dodo Connect franchise provides you with low-cost entry, a simple business format, a wide range of products and services (including: internet, home phone, mobile phone and mobile wireless broadband, electricity and gas, plus vehicle, home and contents insurance.

Dodo is backed by an ASX listed powerhouse the M2 Group, in a dynamic and growing sector.

PROFILE: Looking for a new career path and want to be your own boss?

Join the success of the Number One Pizza Company in Australia- Dominoâ&#x20AC;&#x2122;s!

Our objective is to ensure every franchisee in the network is successful by offering; t 1SPWFO 4ZTUFNT BOE QSPDFEVSFT GPS TJOHMF VOJU BOE NVMUJ VOJU PQFSBUPST t $MFBS HSPXUI EFWFMPQNFOU TUSBUFHJFT t 6O 1BSBMMFMFE 4VQQPSU GSPN B EFEJDBUFE UFBN t $PNQSFIFOTJWF USBJOJOH QSPHSBNT t $POTUBOU JOOPWBUJPO t -FBEJOH .BSLFUJOH 4USBUFHJFT t 4VQQPSU UISPVHI BMM TUBHFT PG UIF TUPSF CVJMEJOH QSPDFTT t -PDBM GSBODIJTF DPOTVMUBOU UP IFMQ XJUI POHPJOH TUPSF PQFSBUJPOT Our stores generally cost between $300,000-$600,000 + GST for we require you to have approximately 40% of the total investment in cash and/or available equity.

Live your Dream and apply now.

Phone: 0408 444 734 Fax: 02 4321 0286 Contact: Jack Zervos jack@execucon.com.au www.drboom.com.au

Phone: 1800 373263 Contact: Cam Hadlow cam@dreamdoors.com.au www.dreamdoorskitchens.com Start up costs from: $65,000 + GST + operating capital

Start up costs on application

PROFILE: Dr Boom Communications pride themselves on being one of the longest established and most innovative mobile phone and tablet accessories and repairs specialists in Australia having commenced trading from a single kiosk site in 1987.

With eight well established stores in premium locations across Sydney, a modern central distribution, training and service centre and a secure exclusive supply chain including premium global brands we invite entrepreneurial, hardworking and committed people to leverage our experience, share in our success and build our future.

PROFILE: Dream Doors is different from other kitchen, bathroom and bedroom renovation companies. By simply replacing the doors, drawer fronts and benchtops we save the customers $1000â&#x20AC;&#x2122;s on their renovation and there in lies the secret to our universal success. We will give you 14 years worth of International experience and knowledge and help you run your local Dream Doors Franchise.

Working together is crucial to any new undertaking in the business arena and working with the company co-founder and the Australian Master Franchisee to set up and develop your own Franchise Territory will be a major advantage to the growth of your business. Long term this relationship will flourish because it is absolutely in the interest of both parties to make this business work together.

Our joint incomes depend on it.

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A-Z LISTINGS

Phone: 1300 FASTWAY Fax: 02 9264 4966 fastway.com.au

Phone: 02 9332 2824 Contact: David Hundt dave@enviefitness.com.au enviefitness.com.au

Start up costs from: $25,000 Start up costs from: $100,000 + monthly leases PROFILE: Don’t buy a fitness franchise without exploring this exciting opportunity. EnVie is the innovative new approach to inspirational Women’s Health and Fitness.

With sites ready for opening across the eastern seaboard we are seeking enthusiastic and passionate business owners NOW; with a determination to succeed and a passion for health and fitness.

Incorporating the best elements from a range of franchise models an EnVie business is completely systemised. An innovative new franchise model means franchisee and franchisor have the mutual goal of your SUCCESS. The business is further supported by extensive training and ongoing coaching from a team of fitness, business, franchise operations, marketing and sales experts with a combined 127 years of experience in the franchise and fitness industries.

PROFILE: Run your own rewarding business and take control of your future as a Fastway Courier Franchisee. As a market leader in nationwide courier services, our multi-award winning franchisees enjoy: t Guaranteed income package* t Low start up costs t No weekend work t Ongoing business support & training t Exclusive territories t Perpetual franchise agreement with no ongoing fees No prior business experience is needed, just a great attitude and an ability to talk to people. So, if you’re ready for a positive change, we’d love to hear from you. *Conditions apply

Phone: 1300 362 994 Contact: Glen Jenkins info@fibrenew.com.au www.fibrenew-franchising.com.au

Phone: 1800 PT for U (783 678) Contact: Scott Hunt franchise@fitnessenhancement.com www.fitnessenhancement.com

Start up costs from: $75,000 + GST

Start up costs: From $29,000 including all equipment, training and advertising

PROFILE: Fibrenew is the industry leader in the restoration of leather, plastic and vinyl.

We are a mobile service that caters to the aviation, automobile, commercial, insurance, marine, medical and residential markets. With the diversity of all these opportunities across so many markets, our company and franchisees have grown and thrived through every rise and fall of the economy. That really speaks to the fact that there is always a need for our services.

Right now, there are franchise territories available throughout Australia. This is your chance at an exceptional business opportunity with potential for great income.

To find out more about joining our franchise team, visit: www.fibrenew-franchising.com.au

PROFILE: A low cost fitness franchise where the average customer spends over $5,000 and many have spent over $30,000! Established in 1999, Fitness Enhancement is Australia’s third largest Personal Training company.

You don’t have to be a Gym junkie to be an amazing Personal Trainer, we can get you qualified with your franchise purchase and teach you our award winning skills that have seen our clients lose up to 100kg. All you need is a passion for a fit and healthy life and helping others change their lives.

Our Mobile and Studio franchises offer unlimited growth and expansion opportunities with unparalleled head office support.

Phone: 02 8845 0100 Fax: 02 8845 0199 Contact: Karen Pollard franchise@gelatissimo.com.au www.gelatissimo.com.au

Phone: 1300 FRANCHISE Fax: 03 8640 0688 Contact: Kevin Bugeja kevin@franchiseselection.com.au www.franchiseselection.com.au PROFILE: Franchise Selection is the leading franchisee recruitment company in Australia that assists potential franchisees through the interview and selection process.

We offer potential franchisees a wide selection of franchises covering all industries including retail, food, automotive, telecommunications, construction and even service franchises.

We pride ourselves in being leaders in our industry and our approach is not to sell franchises but to educate and assist buyers in finding the right business opportunity for them and to assist franchisors in selecting the very best franchisees.

Start up costs from: $350,000 PROFILE: Australia’s leading gelato franchise is looking for outstanding franchisees.

Prior food experience is not necessary however franchisees must have passion for the system and brand, leadership skills, and enthusiasm for delivering quality products through excellent customer service.

Multi award winning Gelatissimo provides full training and on-going support from dedicated operational, marketing and development teams enabling them to produce artisan gelato fresh in store using a simple and proven system.

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Phone: 07 5515 0119 Fax: 07 5500 3716 Contact: Geoff Biddle mail@groutpro.com.au www.groutpro.com.au

Phone: 0451 370 060 Contact: Peter Fiasco franchising@hairhousewarehouse.com.au www.hairhousewarehouse.com.au/franchanising

Start up costs from: $29,950 + GST & vehicle Start up costs from: $200,000 - $400,000 PROFILE: Earn between $50 and $200 per hour and get a high return on investment in the booming Home Improvement Industry with LOW SETUP COSTS & little competition.

GroutPro specialises in the after-market care of tiles and grout to homeowners and businesses. Offering a range of professional services from stain protection of new tile and grout installations to our flagship grout “colourseal” application which rejuvenates and re-colours old grout saving customers time and money without having to re-tile.

Specialists use GroutPro’s own branded range of professional quality products including cleaners, sealers, tile Anti-Slip treatments and shower glass restoration and sealer coatings. This is a complete package to get you up and running in your own business fast. Call us today for more information.

Avoid the January price increase and commit before 31st December

Phone: 02 9224 0460 Fax: 02 9224 0469 Contact: Mark Buckland office@healthyhabits.com.au www.healthyhabits.com.au

PROFILE: Hairhouse Warehouse is Australia’s leader in the hair and beauty industry, with over 140 stores across Australia. A belief in your ability to change your life and courage to do it is all you need. Our culture and business has developed from over 21 years of success and mastery. Hairhouse Warehouse is built on passion and creativity. t Extensive and ongoing training programs t A proven turnkey operation t A focus on world class service t Multiple revenue streams, including retail, salon, piercing and beauty services t Exclusive stockists of world leading brands with the most lucrative merchandise trading terms worldwide

Phone: 0427 208 462 Contact: Steve Potter franchising@indianbrothers.com.au www.indianbrothers.com.au Start up costs from: $160,000

PROFILE: We are all about feeling good. Feeling good about our bodies, the food we eat, our life and the impact we have on the environment. Everything we do is centred around this approach - maximising the opportunity for bring healthy, feel good products to the market. We could talk about obesity - and it is a problem but ultimately our brand is about positivity. We know that people will make choices that are good for them when they have the choice. Our goal is to provide that choice.

PROFILE: Indian Brothers restaurants began in 2002 with a simple philosophy – to bring the authentic taste of North India to Australia. Our first restaurant became a local institution in Queensland, offering tasty meals cooked to perfection. Using the freshest ingredients, traditional spices and only genuine Tandoor ovens enabled us to offer an Indian experience like few others.

Today, Indian Brothers Restaurants provide opportunities for motivated individuals to own and operate their own Indian take away food business.

Our unique system has been designed from the ground up to meet the increasing demand from time poor customers who are looking for instant, value for money, fresh and tasty food.

Phone: 0418 600 919 Contact: Meredith Ham sales.au@inxpress.com inxpress.com inxpress.com.au/franchising

Phone: 1300 989 366 Contact: Drew Davies info@kubarz.com.au www.kubarz.com.au

Start up costs from: $49,000 +GST

Start up costs from: $19,990 - $49,990 (ex GST) depending on territory size, location and equipment

PROFILE: InXpress provides a revolutionary concept delivering customers with express freight advantages to gain a competitive edge in the marketplace. InXpress is an authorised sales partner for the world class courier company, DHL. Domestically, InXpress partners with companies such as Toll and TNT to offer a complete suite of courier and freight solutions, providing increased value and service, saving valuable time and money.

Operating in 15 countries with over 250 franchisees globally, InXpress is now accepting applications to grow the Australian business. Benefits to franchisees include: t Low entry costs t Low risk t No inventory/warehousing

t Minimal employee base t High income potential t Ongoing training and support

For more information about becoming an InXpress franchisee contact us now.

PROFILE: Kubarz is Australia’s premier and original beverage catering and mobile bar company established in 2003 and we have now limited territories available in this boutique franchise network across Australia.

With everything included from training, operations manuals, equipment, marketing and more – all you have to bring is the right attitude!

We have successfully been servicing clients with our professional and stylish beverage and mobile bar catering services for functions, parties and events for over 10 years and are looking for the right people to take advantage of our clients demand to take our service nationally.

With minimal royalty fees, extensive ongoing head office support and already a handful of territories secured now is the chance to get into this exciting and rewarding industry whilst enjoying a flexible lifestyle.

Contact us today for an obligation chat about our limited opportunities!

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Phone: 03 9822 1301 Contact: Bob McCarthy bmccarthy@lma.biz www.lma.biz/license

Phone: 1300 453 284 Fax: 07 5564 9045 Contact: Dean Reid marketing@mobileservices.net.au www.myleatherdoctor.com.au

Start up costs: $50,000 + working capital

PROFILE: You have an exciting opportunity to become a recognised leader of training and development in Australia.

Leadership Management Australia (LMA) is a professional white collar B2B company in the $3.5 billion dollar training and development industry.

Through building client relationships and changing people’s lives, you will have the opportunity to enjoy the freedom that owning your own business offers, while capitalising on high margins and building the future value of your business.

Start up costs: $55,000 (plus GST) PROFILE: The Leather Doctor is the leading international brand in Australia for mobile leather repairs. With over 60 franchisees in Australia and teams in New Zealand and Dubai, this is truly a turn-key business with proven success. No previous experience required.

All training included. For a unique business opportunity with little competition, great income and amazing support, call today for an information pack.

Contact us today to find out more info and begin the next chapter of your life.

Phone: +61 3 8540 0200 Fax: +61 3 8540 0202 Contact: John Sier john.sier@mst.com.au www.mst.com.au

Phone: 03 9604 9400 Fax: 03 9600 3313 Contact: Robert Toth rxt@marshmaher.com.au www.marshmaher.com.au PROFILE: PROFILE: Well recognised and published franchise specialist with over 30 years industry knowledge now head of franchise group at Marsh & Maher.

Providing advice to: 1. International Franchisors 2. Master Franchising 3. Dispute Resolutions – solutions and strategies 4. Franchisee Advice 5. Sale / Purchase Franchise systems 6. IP / Trademark Advice 7. Company Structure & Tax Advice

MST Lawyers is widely recognised as one of Australia’s leading franchising law firms advising participants in the franchising sector, Australia wide, on all aspects of franchising.

We assist both emerging and established franchisors with their franchise strategy and structures, including acting for franchisors acquiring, selling or restructuring franchise networks, drafting franchise documentation, managing franchise transactions, Franchising Code and consumer law compliance, leasing, employment law, intellectual property and dispute resolution.

We also assist many overseas franchisors in entering the Australian market, including reviewing, adapting and drafting necessary franchise documents and advising in relation to Australian legal compliance.

MST Lawyers also act for franchisees providing advice in respect of sales and purchases of franchise businesses, advising on franchise documents and leases and providing advice and services on the full range of commercial and other legal matters relevant to small business owners.

Our international affiliations allow us to stay in touch with global franchising trends and assist our clients with their international expansion strategies.

We offer fixed fee based on scope of work.

Phone: 03 8851 4200 Fax: 03 8851 4277 Contact: Michael Standley franchise@noodlebox.com.au noodlebox.com.au/franchise

Phone: 1800 776 747 Fax: 1800 194 525 Contact Name: Brad Dixon info@mynfib.com.au Mynfib.com.au

Start up costs from: $250,000 - $280,000

PROFILE: NFIB meets the Australian demand for a dedicated 24/7 online provider of insurance cover for franchisors and their franchisees.

Our service is fully automated, compliant and provides you with full documentation.

Put simply, NFIB is the fastest, most affordable way to get the most appropriate level of cover you need to protect your business.

PROFILE: Noodle Box is an Australian owned franchised QSR, delivering fresh, Asian-style street food specially crafted for the Australian palate. Locally owned and operated, Noodle Box has a strong network of franchise partners throughout Australia and internationally.

Noodle Box provides an integrated offering for franchise partners, including a sophisticated training centre, award-winning online training platforms, highly experienced QSR management team, marketing support and strength of a recognised brand.

Noodle Box is expanding. We are seeking enthusiastic, passionate franchise partners to join our network. We provide competitive entry-level investment and true partnership thinking, because we know that your success is also ours.

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Phone: 02 9822 5622 / 0423 052 456 Contact: Kate Bird franchise@packsend.com.au www.packsend.com.au

Phone: 02 4648 2099 Fax: 02 8572 8222 Contact: Nigel Miller franchising@plusfitness.com.au www.plusfitness.com.au

Start up costs from: $160,000 - $170,000 + working capital (ex GST)

Start up costs from: $249,000

PROFILE: Servicing one of the world’s fastest growing markets, PACK & SEND is an award winning, full service logistics operation servicing corporate and small business clients, as well as householders.

Established for 20 years with over 100 Australian stores – along with international networks in New Zealand and the United Kingdom – there is no other franchise system like PACK & SEND! With cutting-edge technology and a thriving e-Commerce network, customers can simply send anything, anywhere through an array of sales channels. With the exponential growth of online purchasing, the parcel and freight industry is among the top to benefit.

Our innovative approach and developed infrastructure creates a future-forward franchise platform with ‘no limits’ to success.

PROFILE: Plus Fitness 24/7 offers a true turnkey, 24 hour gym franchise. A Plus Fitness 24/7 franchise will cost you from as little as $249k including all gym equipment, aesthetic fit-out, signage, access control, marketing, training and franchisee support. The Plus Fitness 24/7 business franchise model offers low staffing, fast break evens and impressive returns in one of the fastest growing industries within the franchising sector. With over 100 gyms open across Australia and a further 50 territories sold, Plus Fitness has a clear goal of establishing over 200 gyms by end 2015.

Phone: 07 3456 4255 Fax: 07 3456 4299 Contact: Phil Hill phil.hill@tic.com.au propertyclub.com.au

Phone: 07 5444 1099 Fax: 07 5444 0069 Contact: Matthew Hope matt@rawenergy.com.au www.rawenergy.com.au

Start up costs from: $98,000

Start up cost approx: $250,000

PROFILE: The Property Club is a division of The Investors Club. Since its establishment in 1994, The Property Club has assisted in the sale of over 17,000 properties throughout Australia and New Zealand and are looking to expand further in these markets.

Property Club prides itself on providing investment opportunities and deals and a one-stop-shop to access property related services for its members.

The company currently has 18 Franchises and 300 Property Mentors, as well as a head office with 40 staff specialising in all areas of Property Investment.

Phone: 1300 4 REDCAT (1300 4 733 228) Fax: 03 9696 1553 info@redcat.com.au www.redcat.com.au

PROFILE: RedCat provides end-to-end, point of sale, accounting and business management solutions that gives users total control of their business.

RedCat supplies integrated software and hardware solutions that can manage sales, staff, stock, payroll, through to accounts, GST, customer loyalty, and web based multi-site reporting to provide a complete business management system.

Franchised groups can benefit from their flexible centralised management capability that permits multiple levels of control and reporting.

RedCat are also able to provide online ordering systems. Customers order and pay through a uniquely branded app, the order is then automatically integrated into the point of sale system.

PROFILE: Raw Energy is not just about healthy eating, it’s about a healthy lifestyle. Raw Energy has created a niche in the health food franchise market and perfectly suits those interested in creating a healthy lifestyle for themselves, their families and their communities. Raw Energy provides a fantastic range of healthy food, juices and smoothies.

Phone: 1300 139 557 Contact: Jon Bridge jonb@traffic.net.nz www.refreshrenovations.com.au/ get-in-touch/franchise-opportunity

PROFILE: Professional design and build renovation service. Refresh provides one point of contact and a clear process for consumers to receive an outstanding renovation experience.

Refresh delivers cost effective, low stress renovations to homeowners. Refresh undertakes all types of renovations, from kitchens and bathrooms, to loft conversions and extensive house renovations. You will leverage the existing trade skills in the market but provide an overarching process which maximises efficiencies and facilitates quality. You don’t need to be a builder to join Refresh.

Our head office infrastructure and support will help you extract maximum value from your operations.

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Phone: 02 8417 2668 Contact: Josh Franklin apsales@revelsystems.com

Phone: 07 5591 3242 Fax: 07 5591 9021 Contact: Michelle Connor michelle.connor@rfg.com.au www.rfg.com.au

http://revelsystems.com.au Start up costs from: $1000

PROFILE: Get Amazing Control, Stop Money Leakage, Save Time and Increase Your Turnover.

Upgrade Your Business With Revel iPad POS. Revel is a true business solution, developed from the ground up to be the world’s leading fully featured iPad POS. Available for single terminals to Enterprise and Global Franchises, Revel runs from an iPad connecting to the cloud with local back up, delivering incredible reliability that empowers you to access every single feature from anywhere with internet.

Our features are designed to protect & increase your profit margins, automatically reduce mistakes, increase sales and improve efficiency.

Fish, Chips & Gourmet Eats

PROFILE: RFG is Australia’s largest multi-food franchise operator with more than 105 million customer visits each year across the Donut King, bb’s Café, Brumby’s, Michel’s Patisserie, Esquire’s Coffee, Pizza Capers, Crust Gourmet Pizza, The Coffee Guy and Cafe2U Franchise Systems.

Today, RFG has more than 1,600 outlets across Australia, New Zealand, Great Britain, Papa New Guinea, China, Malaysia, the Middle East, South Africa and the USA. Our premium product offering combined with our successful franchise systems and innovative brands are key strengths which have positioned RFG as a leader in the retail food franchise industry.

Phone: (03) 9508 4476 Fax: (03) 9508 4499 Contact: Hollie Thomson Hollie.thomson@salsas.com.au www.salsas.com.au

Phone: 0409 631 870 Contact: Hayley hayley@rpsfish.com.au www.rpsfish.com.au Start up costs: $200,000+

Start up costs range from: $430K - $650K + GST

PROFILE: Why not join Australia’s leading fish and chip brand and boost your business success?

PROFILE: Joining Salsa’s Fresh Mex makes you part of the largest fresh Mexican food franchise in Australia. It’s the brand that’s cooking up fast, delicious Mexican food that people can’t get enough off.

Fish and chips have been a staple dish of the western world for centuries.

Just imagine the business potential of a product already so firmly entrenched within the market place, coupled with the power of franchising.

Our famous burritos are bursting with fragrant flavours and packed with value, that’s why Salsa’s is the new and exciting food court alternative that is ‘wowing’ everyone around the country!

Our innovative approach has seen us develop successful business models for every situation from takeaway stores, to QSR’s, drive thrus, as well as express models designed specifically for events.

Our vision is to establish more than 100 Salsa’s Fresh Mex stores over the next 5 years. With over 50 locations now open across Australia and a combined average partner turnover in excess of $1.1 million, it’s easy to understand why people want to be a part of the Salsa’s family!!

You could be in your very own Rock Paper Scissors store for as little as $200,000.

Contact the RPS team today. Rock Paper Scissors - fast, healthy, delicious!

Salsa’s has adopted the same proven growth platform, systems and structures that saw Boost Juice’s meteoritic rise to over 217 locations across Australia and can now be enjoyed in 12 countries around the world. Salsa’s Fresh Mex, the pleasure of a great investment.

FOLLOW, LIKE AND SUBSCRIBE TO FRANCHISE BUSINESS TODAY! Our social channels are brimming with unique and exclusive content from some of Australia’s largest franchises, including videos, editorial pieces and the latest news!

Facebook.com/Franchisingau |

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Phone: 0427 401 169 Fax: 03 9888 6327 Contact: Alistair Browne alistairb@snooze.com.au www.snooze.com.au Start up costs from: $450,000 PROFILE: As one of Australia’s longest-running, most successful and innovative franchised business, Snooze’s experience in the bedding industry is second to none.

With over 70 stores nationwide and a commitment to continued growth and development, Snooze offers great return on investment.

Snoozes offers a personable, flexible business solution with expertise and support every step of the way, including: t Vendor finance assistance t NAB & ANZ accreditation t Sales and product training

t Business management support t A national marketing program t IT services

Phone: 08 8376 3016 Contact: George Karamalis info@st-louis.com.au www.st-louis.com.au Start up costs from: $350,000

PROFILE: St. Louis franchisees will find comfort in the support and guidance they receive once they become part of the St. Louis family and take the first steps into owning their own business.

With full training and on-going assistance franchisees will learn the art to producing the highest quality, premium ice cream and dessert creations, and much more in store, using a simple, user-friendly model.

We are looking for franchisees who are passionate about dessert, have a love for all things sweet and decadent, and who believe in never compromising on quality.

Change your lifestyle. Invest in something that warms you from the inside out.

Phone: Toll Free Australia - 1800 630 355 New Zealand - 0800 444 618 Fax: 07 3852 4081 Contact: Franchise Administrator ssa@subway.com www.subway.com

Phone: 02 9898 8608 Contact: Chris Fitzmaurice enquiries@swimart.com.au www.swimartfranchise.com.au Start up costs from: Retail - $175,000 - $250,000 Mobile - $85,000 - $90,000

Start up costs from: Varies by site PROFILE: Subway® is the world’s largest restaurant chain with more locations than any other chain. We offer business owners simple operations, ongoing field support and a defined marketing structure, along with providing customers with a variety of freshly made menu options.

PROFILE: Swimart operates in the pool and spa industry providing owners with all their pool and spa needs from filtration equipment and chemicals to pool cleaners, accessories, spare parts and leisure products. We also provide extensive, in home services, such as pool cleaning and maintenance.

For over 47 years, the SUBWAY® brand has been helping individuals build their own independently operated business – run by people just like you! From step one, throughout the entire franchise process, the Subway® system provides training and guidance that aids in the operation of each restaurant.

Established in 1983, Swimart has over 70 retail stores and more than 250 service vehicles across both Australia & New Zealand and is a fully owned subsidiary of Waterco Ltd, a publicly listed Australian company with operations in over eight countries around the globe. We offer both retail and mobile franchises with set up costs starting from as little as $85,000. If you’re looking for either a retail or service business that delivers solid revenues with high margins and low fees, just ask Swimart!

Join the winning team with the #1 Franchise! Register your interest today.

Phone: +61 439 222 422 (AUS) +64 21 917 148 (NZ) Contact: Glenn Dobson glenn.dobson@tdda.com www.tdda.com

PROFILE: The Drug Detection Agency (TDDA) is rapidly establishing itself as the largest and most dominant provider of workplace drug detection services in Australia & New Zealand, with a fast growing list of major corporate clients.

With workplace drug screening becoming a necessity for most businesses for safety, legal and productivity reasons, the opportunities are endless to win contracts with Local, State and National businesses.

You will also benefit from State Office support and large-scale clients that need services in your area.

TDDA wants highly motivated and business oriented individuals to join the team to share in the success of this proven business model.

If you are seeking a next generation business opportunity with huge potential then contact us now to find out more.

Phone: 02 9723 1011 Fax: 02 9727 6771 Contact: Nick Avgerinos franchise@cheesecake.com.au www.cheesecake.com.au Start up costs from: $200,000 - $800,000

PROFILE: The Cheesecake Shop opened in 1991 and has developed into an Australian favourite with a massive network of almost 200 stores across Australasia.

Our award winning system makes for one of the simplest businesses to operate.

Our systems guide you on how many cakes you need to produce each week and how much of each ingredient to order.

Our cakes are baked from easy to follow recipes. You don’t need to be a chef or a baker, its so easy!

If you love to bake cakes for the kids then here is your chance to turn your passion into profit.

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Phone: 07 3827 8010 Fax: 07 3803 2320 Contact: Kerry Edwards kerry.edwards@spanbild.com.au www.totalspan.com.au

Phone: 1300 139 557 Contact: Grant Garraway grant@thefranchiseshop.com.au www.timeforyou.cleaning Start up costs: $32,000 + GST

Start up costs from: $20,000 + GST

PROFILE: No cleaning done by you, ever, as this is a Management Franchise. Work from home, means no more commuting. No staff worries, so you keep all your profits.

No invoicing to do which makes life simple.

PROFILE: Totalspan is part of the Spanbild Group, with over 40 yearsâ&#x20AC;&#x2122; experience in the building industry in Australia and New Zealand. Our franchising structure and systems are tried, tested and proven â&#x20AC;&#x201C; just ask any of our 100 franchisees, or 1,000 employees!

No stock to carry, means no dead money. Clients pay you in advance, so no cash flow concerns. Simple to run business. For an easier life/work balance. Massive potential earnings, so now itâ&#x20AC;&#x2122;s up to you to determine your future income.

Totalspan not only offers you a proven franchise system, but weâ&#x20AC;&#x2122;re also the designer, engineer and manufacturer of all our products, so youâ&#x20AC;&#x2122;ll have a unique advantage in the market, by being connected across all aspects of the supply chain.

Our cleaning franchise system is the longest established in the UK and is easily the most successful with 200+ franchise business owners cleaning the houses of over 20,000 clients each and every week, 52 weeks of the year. Thatâ&#x20AC;&#x2122;s 10 million cleans annually! Enquire now!

Whatâ&#x20AC;&#x2122;s more, our quality, affordable steel buildings are designed and built for life â&#x20AC;&#x201C; we stand behind every one with a 25 year structural guarantee.

Successful people are changing their life with Totalspan - you can too!

Be part of our success story!

Phone: 03 9413 1400 / 0429 811 811 Fax: 03 9413 1401 Contact: Adrian Gallace adrian.gallace@unitedpetroleum.com.au www.unitedpetroleum.com.au/ franchising/welcome

Phone: 0438 011 020 Fax: 03 5243 1476 Contact: Joe Rossi franchise@townandcountrypizza.com.au www.townandcountrypizza.com.au Start up costs from: $200,000-$350,000 PROFILE: Town & Country Pizza & Pasta want to share and help franchisees build a successful business with the development of their effective and profitable business model. They help you manage your team, cultivate your clientele and grow your business to ensure your full potential is reached and maintained.

By using the right business systems, ingredients and recipes, Town & Country Pizza & Pastaâ&#x20AC;&#x2122;s proven franchise model can help franchisees take-off sooner without the usual headaches when starting up.

Being a Town & Country Pizza & Pasta franchisee is a rewarding opportunity for people who want to thrive in a challenging environment and make a difference in their workplace and communities.

PROFILE: Australian-owned company that has become one of the largest independent fuel retailers with over 320 convenience stores throughout Australia. United Petroleum continues to invest heavily in its stores and systems which has earned the trust of consumers and respect of major competitors.

United franchisees enjoy ongoing support, generous Fuel Commissions, merchandising support, a national promotional program, five week induction program and on-going training.

United is a proud member of the Franchise Council of Australia (FCA) and was awarded Canstar winner for 3 years in a row â&#x20AC;&#x201C; Most Satisfied Customers (Service Stations).

Phone: 13 26 13 Fax: 08 8220 4588 info@viphomeservices.com www.viphomeservices.com

Phone: 02 8338 0930 Contact: Daniel McDonough franchising@WHSmith.com.au www.wildcardsandgifts.com/franchising

Start up costs from: $25,000

Start up costs: $42,000 + GST plus $200,000 to $300,000 capital investment w/ recommended working capital of $80,000

PROFILE: V.I.P. was the first company to start franchising in home services in 1979.

V.I.P. has over 1100 franchisees across Australia and New Zealand.

V.I.P. has franchise opportunities available in: t ( BSEFO .BJOUFOBODF BOE -BXO .PXJOH t )PNF $MFBOJOH t $PNNFSDJBM $MFBOJOH Over the last 35 years, V.I.P. has helped over 4,000 people just like you become successful business owners by providing: t *OJUJBM BOE POHPJOH USBJOJOH coaching and mentoring t "GGPSEBCMF GSBODIJTF PQUJPOT t /BU JPOBM BOE MPDBM NBSLFUJOH

Start up costs from: $400,000 upwards

t " O FTUBCMJTIFE DMJFOU CBTF t " DDFTT UP B OFUXPSL PG GSBODIJTFFT t " O JOJUJBM TUBSU VQ LJU TP UIBU ZPV BSF ready to go

PROFILE: With 40+ stores across the nation, Wild Cards & Gifts is Australiaâ&#x20AC;&#x2122;s largest group of franchised card and gift retailers.

The philosophy of Wild Cards & Gifts is simple - to make our stores #1 for profitability!

We believe that the formula to having outstanding success comes from providing great support and having great relationship with our franchisees. We deliver high quality, high demand cards & gifts in a contemporary, well designed store whilst offering value for money to our customers in a fun and energetic environment.

The card and gift market is highly competitive, worth in excess of $2b annually, and with the backing of UK giant WHSmith we have access to exclusive product not available in Australia through international suppliers creating our point of difference.

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Wisewould Mahony Lawyers Lawyers in love...... with Franchising

Phone: 03 9612 7297 Fax: 03 9629 4035 Contact: Melissa Strain melissa.strain@wisemah.com.au www.wisewouldmahony.com.au

Phone: 1300 655 559 Contact: Jonathan Payne jonathan@xpresso.com.au www.xpresso.com.au www.facebook.com XpressoMobileCafe Start up costs: $119, 500 + GST including our FAST TRACK Program which guarantees your income!

PROFILE: Specialised Franchise Industry Knowledge Member Franchise Council of Australia (FCA), International Lawyers Association (IFLA), Franchise Association of New Zealand & US Commercial Services.

FIXED COST FEES to Franchisors and Franchisees based on scope of works.

No hourly rate surprises!

Services provided: • Legal and consulting advice to Franchisors & Franchisees.

• Code compliance requirements.

• Dispute resolution – mediation – strategies and solutions

• Sale/Purchase of Franchise Systems • Master Franchising • International Franchising • Business Law Specialists

A-Z Call or email for a complimentary brochure for Franchisors and Franchisees.

L I S T I N GS

FOR A-Z LISTINGS ENQUIRIES CONTACT:

NATIONAL SALES & MARKETING MANAGER DAVID STRONG ON 02 8484 0905 DAVID.STRONG@CIRRUSMEDIA.COM.AU

PROFILE: Xpresso Mobile Cafés operate in areas nationally where there are little to no fixed location café options for the workforce in commercial and light industrial precincts.

We supply premium Di Bella Coffee products – both hot and cold. Frappés, energy drinks, bottles of water and food options such as gourmet cookies that are designed to compliment the enjoyment of an awesome espresso coffee.

An Xpresso Mobile Café is also able to custom grind beans from a dedicated bean display cabinet and then weigh, custom grind, heat seal and retail with Eftpos.

We also stock Di Bella Coffee specialty capsules that fit the ‘Nespresso’ pod machine. Both of these services are unique to Australia!

Phone: 0414 669 101 Contact: Stephen Spitz stephen.spitz@xpressodelight.com.au www.xpressodelight.com.au Start up costs from: $59,990 + GST

PROFILE: Invest in an Xpresso Delight franchise and seize the opportunity to profit from one of the fastest growing markets on the planet. As the number of savvy, educated coffee drinkers has boomed, the market has exploded!

This pent up demand for gourmet coffee in the workplace is very poorly met.

Each day, thousands of workers trek to the nearest café to pay as much as $4.00 for their morning and afternoon coffees.

This is the premise of Xpresso Delight - transplanting the cafe into the heart of the workplace at a fraction of the price that people pay normally.

START YOUR

JOURNEY Thinking about buying a franchise?

Leverage our countless years of knowledge and industry expertise to help find the right franchise for you!

Download our FREE 6 step “Buying a Franchise” education journey at Franchisebusiness.com.au/subscribe

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2014-12-11T13:12:39+11:00

ADVERTISING INDEX

INCORPORATING FCA NEWS

* INDICATES FCA MEMBER

Ace Insurance Affinity Business Insurance Platform Appliance Tagging Services Australia and New Zealand Investments Baskin-Robbins Battery World Baybridge Lawyers Bedshed Begin Bright Benga Designs Brian Tracy Buy Australian Property Cafe2U Cashflow It Cirrus Media Display Design Dodo Dominos Dr Boom Dream Doors Envie Fitness Fastway Couriers Fibre New Franchise Selection Gelatissimo GroutPro Hairhouse Warehouse Healthy Habits Indian Brothers InXpress Leadership Management Marsh & Maher MST Lawyers

4 65 123* 46, 47 11* 49* 100* 81* 73* 67* 79* 85* 38,39* 35* 138, 146, 149 69 9* 31 118 71* 7* 151* 113 60,61* 21* 59* 51* 15* 127* 57* 131 111 72*

Noodle Box

101*

Nutrition Station

55

Pack & Send

2*

Raw Energy

25

Redcat

123*

Refresh Renovations

102, 103

Retail Food Group

74, 75*

Retail Zoo

86,87, 89*

Revel Australia

43

Rock Paper Scissors

133

Snooze

115*

Specialised Events

135

St Louis

17

Subway

45*

The Cheesecake Shop

129*

The Concrete Cutter

109*

The Drug Detection Agency

152

The Leather Doctor

125

The Property Club

91

Town & Country Pizza & Pasta

107*

United Petroleum

119*

VIP Home Services

106*

Waterco

53

Wild Retail

95

Wisewould Mahony Lawyers

97*

Xpresso Delight

41*

Xpresso Mobile Cafe

29*

JAN/FEB 2015 | 150 | WWW.FRANCHISEBUSINESS.COM.AU

FR0115_000_FAST

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1

2014-12-05T09:58:49+11:00

FR0914_000_TADDA

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1

2014-08-29T13:39:15+10:00

There’s a lot of money in drugs.

We’ll help you get it!

Workplace and pre-employment drug testing is exploding as a business in every state in Australia.

Be quick to secure one of our exclusive franchise territories. With the right motivation, a bit of hard work and our comprehensive 100-day training program, the financial rewards will follow.

If you’re ready to jump on board as a Franchisee in our proven business model, we want to talk to you. Sooner rather than later.

Email our Franchise Manager glenn.dobson@tdda.com

Take a video tour on our website