Inside Franchise Business - Sep/Oct 2017

YOUR ESSENTIAL GUIDE TO BUYING A FRANCHISE WWW.FRANCHISEBUSINESS.COM.AU

SEPTEMBER/OCTOBER 2017

ISSUE 30 VOL 5

8

FRANCHISES THAT DELIVER

CASUAL CUISINE: INVESTING IN

HOW TO FIND THAT

HOTSPOT LOCATION

THE FOOD TREND

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BILLY’S BUDDIES

KICKS SOME GOALS

e h t join t e k mar r e d lea 50+ E GYM FRANCHIS IN AUSTRALIA

MANCE

ERFOR P M Y G N O D E S BA

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NEW LOCATIONS FOR SALE

CONTENTS

REGULARS

LEADERSHIP

5 6 10 124 126 127

14 8 FRANCHISES THAT DELIVER

EDITORIAL

Convenience is king as these businesses are proving.

GLOBAL EYE INSIGHTS

18 COVER STORY

GLOSSARY

Billy’s Buddies kicks some goals.

CHECKLIST

34 STEPPING INTO A NEW LIFE

US retail business Good Feet touches down in Australia.

37 FAMILIAR TERRITORY

How one father and son make their franchise work.

40 RAW AMBITION

RESOURCES

Superfoods drive latest healthy eating chain.

24 WEIGHTS AND MEASURES

How one gym franchisee is building business growth.

28 ON THE FRONT LINE

44 BANKING ON BUSINESS

32 DOUBLING DOWN ON SUCCESS

48 FIVE MINUTES WITH…

Former army captain puts his future in a Quest franchise.

INDUSTRIES

Mum, dad and the twins are one happy family at Snap-on Tools.

50 KEEPING IT CASUAL

Why destination eateries and dining precincts are so popular.

82

111 NUMBER CRUNCHING

IT COMES WITH THE TERRITORY

87 A GOOD POSITION

66 A FOOT IN THE DOOR

90 SETTING BOUNDARIES

72 RIDING THE BUBBLE

94 IT’S ALL IN THE NAME

Keep up the momentum, visit Melbourne’s franchising expo.

79

104 THE LEASE OF YOUR WORRIES

Whether a luxury or a necessity, beauty treatments are on trend.

How to choose the right location.

The role of the mortgage broker is ever more crucial.

80 LOCKING IN A LOCATION

What your franchisor has to tell you about your business location.

60 THE EYE OF THE BEHOLDER

76 FULL STEAM AHEAD

Rozzi’s founder and franchise recruiter takes our Q & A.

SETTING THE SCENE What you need to know about finding and researching a site for your franchise.

There’s room for growth in franchised real estate.

Nellie Dicks loves her work so much she bought a franchise.

The rights and obligations allied to your defined territory.

The pros and cons of leasing and subleasing.

100 CLINCHING THE DEAL

Expert tips on how to negotiate your way to success.

11 solutions to your burning questions.

Why cashflow counts when buying the business.

112 PROPERTY SEARCH

How to manage the site process.

116 FINDING THE RIGHT FIT

How to avoid delays in setting up the premises.

122 5 REASONS

Why you need to research your location.

138 FINAL WORD

The Franchise Council of Australia’s view on retail leasing.

SEPTEMBER/OCTOBER 2017 | 3 | WWW.FRANCHISEBUSINESS.COM.AU

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EDITORIAL

Franchising in your sites “Location, location, location” is the real-estate mantra that really resonates in franchising as well.

How is your franchise search going? Perhaps this is your first foray into the wonderful world of franchising, in which case welcome. Maybe you are a regular reader of Inside Franchise Business and so are well-versed in the need to do your research to find a franchise that is right for you, to ensure the numbers all add up.

Our Franchise Basics series in this edition investigates the tricky but crucial aspects surrounding location and leasing. These issues touch on the vast bulk of franchise brands – even mobile-based service businesses where the location equates to a territory that needs to be jam-packed with client potential to bring in the dollars.

Finding a site that will position the business in just the right spot to attract customers is a fundamental step in gearing up a franchise for success.

Fast-food outlets, casual-dining precincts, retail chains, business services with shop fronts, gyms, health and wellbeing salons and clinics, real-estate businesses...all these are dependent on the franchisee signing up to an appropriately priced lease that suits the business income and allows for growth.

Read expert advice and insights into site selection and leasing issues over 26 pages, starting on page 79.

As casual dining makes inroads into shopping centres, we look at some of the brands in this increasingly popular sector (page 50). With wellbeing now part of the modern vocabulary, we take a look at what it means in terms of business (page 10) and hear from some franchise chains blossoming in the beauty industry (page 60).

Franchisees are encouraged to match their passions to their business, and it is the same for franchisors. It makes perfect sense for our cover star Billy Slater, rugby league footballer and family man, to head up a business geared to boosting children’s participation in sport. And now it is open to franchise investment. Learn all about the opportunities to invest in this brand on page 18.

EDITOR

SENIOR ACCOUNT MANAGER

JOURNALIST

CLIENT SUCCESS MANAGER

SUB-EDITOR

MARKETING MANAGER

Sarah Stowe P: 02 8224 8371 sarah.stowe@octomedia.com.au

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Louis Allen louis@octomedia.com.au

GENERAL MANAGER

David Strong P: 02 8224 8370 david.strong@octomedia.com.au

Charlotte Redfern P: 02 8224 8373 charlotte.redfern@octomedia.com.au

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Sar a h Sarah Stowe

Editor

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GRAPHIC DESIGN

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GLOBAL EYE

DELIVERING

OPPORTUNITY

THE BEAUTY OF CONVENIENCE

CHILLING OUT

Delivery is the buzzword in business, thanks to the trend for ultra-convenience. While make-up artists and massage therapists have always been able to take their skills to the client, it hasn’t been a franchise phenomenon.

Now, according to www.inc.com, WarPaint International in the US is expanding its business, opening up franchise opportunities to freelance make-up artists and hair stylists who can benefit from a brand name and business support.

In Australia, Express Mobile Beauty offers a full range of beauty treatments including nail services, waxing, spray tanning and lash/brow treatments.

Have you heard of cryotherapy? It’s a deepfreeze muscle and skin treatment which, says USA Today, is a “really cool trend” in US franchising.

Nitrogen gas is chilled to sub-zero temperatures (minus 150°) for a threeminute shock treatment to boost circulation and stimulate the body’s immune system.

At New York’s International Franchise Expo, cryotherapy lined up with acai bowls and juice bars as one of the new, must-watch business opportunities.

Established franchise Australian Skin Clinics is ahead of the game, having already introduced its CryoDefine fat-freezing treatment. National training manager Darlene O’Gara says clients can expect to see visible results from

BEAN COUNTING

Australians are keen coffee drinkers, particularly in Melbourne, but it may come as a surprise that in a global ranking of coffee consumption the nation is nowhere near the top 10. In fact, caffeine-mad Aussies are drinking enough to only pull a 42nd slot in the list. European or Scandinavian nations lead the way, with Brazil coming in as the 10th

the treatments within 12 weeks, with progressive results ongoing after only two to three treatments.

It’s the next stage from the ice-bath treatment popular with sports stars and is expanding into the mainstream. Fledgling franchise business Cryo Australia uses custom built equipment to help clients fight deficiencies, overcome sickness, improve sports performance and recovery, and as a skin-boosting beauty treatment.

Iit has chosen to work closely with research institutes and is supporting the latest study with the Brisbane Broncos and University of Queensland.

Read our beauty feature on page 60 for more on how the sector is shaping up here, and turn to page 40 to learn how one Australian franchise is marching on with the acai bowl and raw superfood trend.

coffee-drinking country Finland tops the chart, perhaps as it is the only country with a law requiring workers to have an official coffee break. Finns consume an average 9.6kg of coffee; Australians manage only 3kg a person, according to SBS. However, Asia Pacific’s largest coffee expo, the Melbourne International Coffee Expo, this year's attendance attracted 9646

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visitors, an increase of 4.7 per cent on last year.

And our own surveys reveal coffee as the top single interest for potential franchisees. You can check who’s who in this popular sector by visiting the category listing in the official online directory of the Franchise Council of Australia at our website, www.franchisebusiness.com.au.

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GLOBAL EYE

Franchising statistics Total sector = $146bn Brands = 1120 Franchised units = 70700 Corporate units = 8300 Fuel retail = 6050 Car dealerships = 4618 New retail unit start-up costs = $287,500 Franchising Australia 2016 Report, Asia-Pacific Centre for Franchising Excellence

GROWING OPPORTUNITY

We’ve said it before: Australia is an ageing population, and the seniors market has lots of business potential. The Wall Street Journal agrees there’s money to be made in this sector, citing US Census predictions of growth for the 65+ age group at 23 per cent over the next five decades.

On our shores, the government is looking to strengthen the way residential aged-care funding is determined. A report, Alternative Aged Care Assessment, Classification System and Funding Models, has been released by Federal Minister for Aged Care Ken Wyatt, who says the Australian government contributes about $17.5 billion a year to the aged-care sector.

“By 2019-20, that’s expected to be nearly $21 billion,” Wyatt says. “It’s important we review the way we fund aged care to ensure we create a system that is affordable, sustainable, flexible and responsive to consumers.

“In 2015-16, more than 1.3 million older people received some form of aged care, and with more Australians living longer and healthier lives, those numbers will increase.”

And that means value-for-money for aged-care services is a priority.

Regulation reforms came through on 21 February, which means seniors

who are eligible for government-funded services to stay at home can now choose their care.

“We’ve been advocating these changes for 10 years,” says Martin Warner, who heads up the Australian franchise arm of Home Instead. “It’s a win-win. It gives consumers choice and control – if they are not getting value for money they can go elsewhere.”

Better efficiencies are making a difference, he says.

“The taxpayer is ultimately funding this, and they are getting better value for money. Families win too, as they are usually responsible for handling seniors’ needs.”

Warner highlights the greater level of transparency that comes with the new system, with clients now receiving monthly reports on where the money has been spent.

“It hasn’t changed the world overnight, but over time I suspect you’ll see a shift in numbers and the less-traditional companies taking a bigger share.”

While the market has opened up, it isn’t about to provide easy pickings for the opportunistic, he says. Running a home-care services business will take more than a transactional or task-based attitude. It is an opportunity suited to people who really want to make a difference in people’s lives.

“This is about relationships, and it takes time – time to build trust in the community.”

Warner expects some of the businesses that enter the arena to fall by the wayside as they fail to meet the

standards required as far as service is concerned.

“Corporate governance doesn’t mean you are providing the highest care,” he says, warning that it is a complex business.

BRAIN POWER MENTAL HEALTH UNDER PRESSURE Franchise buyers are like any small business owner, susceptible to stress and negativity.

The Australian Small Business and Family Enterprise Ombudsman has published online resources and links to raise awareness of wellbeing issues.

Ombudsman Kate Carnell says it can be tough starting and growing a small business, with long hours and a tight cash situation.

“You have to constantly overcome obstacles,” she says.

“The results of our payment times inquiry found the stress of late payments, cashflow and debt affected the wellbeing of more than three-quarters of smallbusiness owners surveyed. In fact, 93 per cent reported personal and family hardship as a result of late payment.”

Carnell says good mental health is critical to the success of a business.

Suncorp’s new SME vs Me report found that the owners of small and medium-sized businesses were blurring the lines between their personal and business finances, which impacts their wellbeing. n

SEPTEMBER/OCTOBER 2017 | 8 | WWW.FRANCHISEBUSINESS.COM.AU

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INSIGHTS

YOU COULD

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SEPTEMBER/OCTOBER 2017 | 10 | WWW.FRANCHISEBUSINESS.COM.AU

There is opportunity aplenty in the wellness sector for franchisees to invest in businesses that offer a feel-good factor.

Y

ou have probably heard the term “wellness” being bandied around.

It’s a phenomenon that globally is stacking up the dollars: the global wellness economy in 2015 was worth US$3.7 trillion, according to the latest Global Wellness Economy Monitor from the Global Wellness Institute (GWI).

acoustic quality.

The global market for homes and neighbourhoods designed and built to maximise the physical, mental, social and environmental health of residents and the community reached $119 billion in 2015, says the GWI.

But what does it mean? What is wellness, and how can you get a piece of the wellbeing pie?

It is obviously concerned with health; it is considered to be self-directed, holistic, positive and affirming. The monitor describes wellness as “the active pursuit of activities, choices and lifestyles that lead to a state of holistic health”.

A quick check of the institute’s website will reveal a long list of alternative therapies, treatments and activities that contribute to the sector, including acupuncture, aromatherapy, chiropractic, exercise, hydrotherapy, massage, nutritional counselling, Pilates, sauna, stress management, tai chi, workplace wellness and yoga.

Traditionally we would think of a wellness sector being focused on boosting health and fitness, but increasingly the definition is expanding to even include the building of wellbeing communities.

With findings to be presented in October, the GWI is looking more deeply into the idea of wellness communities and lifestyle real estate, suggesting there are ways to adopt a wellness approach across the building and design sectors. For instance, gyms and spas are significant pillars of the wellness living trend, but there has been a major shift in the industry to offer a total wellness package that encompasses and is judged on quality but offers more ethereal elements like air, water and light as well as food, sleep and

Another US organisation, the National Wellness Institute (NWI), shares the aims of promoting optimal health but by developing strategies that encourage healthy, balanced lifestyles. The NWI outlines six dimensions of wellness: • Occupational • Physical • Social • Intellectual • Spiritual • Emotional It is clear that a narrow view of what wIt is clear that a narrow view of what wellness means no longer provides the best perspective.

At its heart, wellness equals simplicity, suggests the GWI. Going back to basics with a focus on human connections to counteract increasing loneliness, it says trust, green space and healthy food will set us on a path to improved wellbeing.

Looking at the global wellness economy, the biggest category is the $999 billion beauty and anti-ageing market which is significantly ahead of the second sector, healthy eating, nutrition and weight loss ($684 billion).

Wellness tourism accounts for $563 billion in revenue, just ahead of fitness and mind/body at $542 billion, and preventive and personalised medicine and public health ($534 billion).

Complementary and alternative medicine has revenues of $199 billion, ahead of wellness

LIFESTYLE STRATEGIES

SEPTEMBER/OCTOBER 2017 | 11 | WWW.FRANCHISEBUSINESS.COM.AU

Tourism $563b

$199b Thermal/ Mineral Springs $51b

INSIGHTS Preventive & Personalized GLOBAL WELLNESS ECONOMY:Spa Medicine and Industry Public Health$3.7 trillion in 2015 $99b $534b Complementary & Alternative Medicine $199b

Preventive & Personalized Medicine and Public Health $534b

Workplace

Wellness Wellness Tourism $43b $563b

Thermal/ Mineral Springs $51b

Spa Healthy Eating, Industry Nutrition, &$99b Weight Loss $648b

Beauty & Fitness & Anti - Aging - Body Mind $999b $542b

Workplace Wellness $43b

Healthy Eating, Nutrition, & Weight Loss $648b

Fitness & Mind - Body $542b

Wellness Lifestyle Real Estate $119b

Note: Numbers may not add due to overlap in segments.

Note: Numbers may not add due to overlap in segments.

lifestyle and real estate ($119 billion). The remaining three sectors are the spa industry ($99 billion), thermal/mineral springs ($51 billion) and workplace wellness ($43 billion).

These figures, from the GWI, show the wellness economy grew by 10.6 per cent between 2013 and 2015, with its revenue representing more than 5 per cent of all global health expenditures.

As the sector is traditionally seen as a high-end offer, the GWI suggests the next step is improved wellness for middle- and lower-income individuals.

All this suggests there are opportunities for franchise businesses, so here is a deeper dig into where the revenue is coming from, in sectors relevant to the Australian market...

SPA In the Asia-Pacific region, 38,819 spas generated $21.4 billion income between 2013 and 2015. More spas opened in this region than anywhere else in the world during this time, and Australia had the fastest-growing average annual growth rate at 36.7 per cent.

TOURISM Wellness tourism grew more in 2013-15 than standard tourism (6.8 per cent annually against 3.4 per cent). This includes well-being-focused accommodation, food and beverages, shopping, activities and excursions, as well as transport and travel services.

Travellers made 691 million wellness trips in 2015, and because of their high-spending tendencies, accounted for 15.5 per cent of all tourism expenditure.

A wellness tourist could be either someone for whom the entire trip is focused on wellness, or who will undertake wellbeing experiences as part of the trip.

WORKPLACE The need for governments and employers to boost employee health and wellness will create opportunities for associated businesses, GWI predicts. In 2015, less than 10 per cent of the global workforce had access to workplace programs and services.

REAL ESTATE Wellness lifestyle and real estate is poised for fast growth, with increasing interest in holistic communities.

THE FUTURE The GWI predicts the big growth sector to 2020 will be wellness tourism, predicted to reach a global revenue of $808 billion – that’s annual growth of 7.5 per cent.

Spas could grow by 6 per cent, drawing in $103.9 billion by 2020.

Where does Australia sit?

Beauty WHAT ARE THE CHALLENGES? Anti - Agi $999b

• Growth will be limited if wellness becomes simply a luxury segment.

• Research that backs up the theory that wellness services and products equate to boosting health will be important.

• Public debate about whether or not better health is a personal or social issue that will be taxed Wellness or incentivised accordingly, will Lifestyle influence demand.

Real Estate $119b

9 TRENDS TO WATCH

Personalised medicine – a more proactive approach to health decisions Digital detox – unplugging from the online world Adult play – bringing out the inner child The quantified self-community – reliance on each others through digital apps Sleep is health – aids for a better night’s shut-eye Food is medicine – fighting disease through nutrition Vegan-ish – dabbling in a vegan diet Financial wellness/health – money matters are a big initiator of stress Wellness where you are – well-being initiatives in hotels/airports (Edelman Insights 2016)

10 SECTORS TO CONSIDER Fitness centres, gyms and personal training Healthy eating and nutrition Home building Hotels and accommodation Massage Medical services, such as physiotherapy Outdoor sports activities Spas and salons Sleep programs and aids Yoga 

18 in top 20 global spa markets with 1,162 spas employing 12,208 people and a revenue of US$0.79bn

14 in top 20 global wellness tourism with 8.5 million trips, US$8.2bn revenue, and 0.10m employees.

10 in global workplace wellness markets, with expenditure of US$0.98bn

6 in thermal/mineral springs in Asia-Pacific, with 23 venues and a revenue of US$54.2bn.

Figs refer to 2015; source Global Wellness Institute, Global Wellness Economy Monitor, January 2017 SEPTEMBER/OCTOBER 2017 | 12 | WWW.FRANCHISEBUSINESS.COM.AU

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THE LIST

8 THAT DELIVER

FRANCHISES

As more and more businesses strive to stay relevant in an ever-changing marketplace, convenience is still king. Customers expect products and services when and where they need them.

M

ore franchises are jumping on to the delivery bandwagon. Some companies have had experience with delivering while other are still finding their feet.

More franchises are jumping on to the delivery bandwagon.

Some companies have had long experience with delivering while other are still finding their feet.

Here are eight franchise businesses that really deliver to their customers...

1

RED ROOSTER

HOW IT WORKS: Red Rooster trialled with Menulog in 2014 and 2015 before launching their own delivery service nationally last year. Customers can order delivery through Red Rooster.com directly or via Menulog. Some customers still phone in orders, but using the online service is most popular, with 65 per cent of online orders being placed by smartphone. Orders can also be made through the Red Rooster App. Red Rooster owns the customer experience from the kitchen to the door, whether it is through Red Rooster.com or Menulog.

The group has a fleet of 400 delivery vehicles across Australia.

COSTS TO EXPECT: Franchisees can expect costs on food, labour and motor vehicles as well as platform costs, including commission to core partners. As delivery becomes a part of the business, it is important to ensure costs are monitored as well as customer satisfaction. Red Rooster uses a rostering platform as well as GPS technology to ensure the teams can manage speed of delivery.

2

3

CRUST GOURMET PIZZA

HOW IT WORKS: Delivery is an integral part of the Crust business, and has been part of the model since 2012.

Franchisees employ delivery drivers, but some are starting to use third-party aggregators such as Deliveroo and UberEats.

Crust has also implemented driver-tracking technology to help streamline the delivery process, and to ensure a fast and reliable end-to-end experience.

COSTS TO EXPECT: Delivery costs can include delivery driver wages, ongoing costs for the driver-tracking technology and mapping systems, which are now optional. A percentage also that goes to third-party aggregators, should a franchisee wish to engage them.

4

ROLL’D

HOW IT WORKS: At Roll’d, customers use their smartphones or similar device to order. Orders are processed in-store for delivery via Deliveroo and/or Foodora, which pick up in a 15- to 20-minute timeframe.

COSTS TO EXPECT: Stores are credited every two weeks with the monetary exchange from Deliveroo and Foodora, which receive a 20 per cent commission of the sale price of orders.

There are no other associated costs, and setup is free.

KWIK KOPY

HOW IT WORKS: Delivery plays a critical role in the Kwik Kopy service. Most customers need their job to be ready within only a couple of hours. Many Kwik Kopy franchises use their own vehicle, with some CBD locations opting to use a bike to get around the traffic. Where a delivery vehicle is not available, franchisees use courier services. Not only are deliveries critical to maintaining a high level of customer satisfaction, but they also help market services as delivery vehicles are fully branded.

COSTS TO EXPECT: Average annual costs for vehicles: • Lease: $4800 • Rego/insurance: $1000 • Fuel/tolls: $5500 • Maintenance: $1150

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THE LIST

5

COURIERSPLEASE

HOW IT WORKS: CouriersPlease (CP) was founded in Brisbane in 1983 as a parcel delivery business. CP’s delivery network uses a “hub and spoke” model. A central depot (the hub) is set up from which radiate individual geographical areas (defined by the spokes). Parcels are collected from the dispatch point and delivered to the hub, where they are sorted and moved to the correct depot. Franchisees then pick up parcels to deliver to their designated area.

CP has just launched flexible delivery choices – a network of POPStations (Pick your Own Parcel/Post your Own Parcel) at retail outlets or parcel lockers. Options include redirecting a parcel anywhere within the POPStation network or to an alternate address such as a neighbour.

COSTS TO EXPECT: Costs vary for a franchise in CP’s delivery network, but expect to buy an existing business from $5000 up to $200,000.

Alternatively, an individual starting a new run will need to buy a van, which may cost $20,000 to $40,000. The signage cost for a CP-branded vehicle depends on the model and size of the van, but is typically between $3000 and $6000.

Franchisees will also need to buy CP uniforms at $250 each.

Running costs include insurance, business registration, bookkeeping and wages, which differ depending on the franchisee. Additional ongoing costs for fuel and servicing also vary depending on the size of the individual run, the distance from the depot, the vehicle type and the service offer.

6

DOMINO’S PIZZA

Veteran franchise Domino’s Pizza has introduced some key technological innovations in delivery, including a 20-minute service guarantee. Domino’s has a range of delivery vehicles including electric bikes (e-bikes), scooters, cars and robots.

New this year is its DRU Assist technology, which can be used both in the Domino’s app and on the website. Similar to Apple's Siri, DRU Assist has a virtual assistant that can help customers place orders. As well as speeding up the process, it can tell customers what’s new and help them get a deal on their pizza.

There are also plans to launch Domino’s Anywhere, a first in Australia, which will enable customers to drop a location pin using GPS locators so stores can deliver to parks, beaches and other locations without a specific street address.

TRIALLING

7

KFC

HOW IT IS BEING TRIALLED: Multinational fried-chicken franchise KFC has just started trialling deliveries in Australia, with Foodora bringing delivery to the Manly KFC restaurant in Sydney. A further eight restaurants in various states are being planned. KFC Australia MD Nikki Lawson tells Inside Franchise Business that once KFC meets quality, operational and financial obligations during trial stage, it will be happy to roll out delivery nationally.

8

LA PORCHETTA

HOW IT IS BEING TRIALLED: Italian restaurant chain La Porchetta is trialling all aspects of home delivery. Customers will be able to order via the brand’s 1300ITALIAN number, on its website or via its app. Franchisees can run their own driver, or work with drivers provided by an external contractor. The brand uses drivertracking technology to ensure prompt delivery times and keep product quality at a premium. Orders go directly to La Porchetta’s point of sale and are scheduled into the tracking system for delivery. Each restaurant has a delivery captain whose job it is to ensure efficiency.

COSTS TO EXPECT: There are initial capital costs to buy equipment and technology. There are also ongoing driver and technology costs, as online portals and apps have transaction fees. However, the company says these are more than offset by the increased business generated. 

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COVER STORY

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SCORING

GOALS Look behind the gloss of a sporting superstar and you’ll find passion, commitment and hard work – the exact same attributes entailed in running a business or franchise.

M

elbourne Storm’s NRL superstar Billy Slater, the Maroon who helped take his home-state team Queensland to yet another State of Origin win, is a devoted family man with a passion for engaging children in sport. This led to him launching his sports programs for youngsters, Billy’s Buddies, in January last year.

It’s a business from which he derives plenty of satisfaction: “seeing children develop their physical and social skills but above all have fun.”

It all came about because he thought there was a gap in the market to attract more children to rugby league, specifically the two to six years bracket.

Slater believes there are parallels between running a business and sport.

“It is like footy in many respects: discipline, hard work and relationships are the cornerstones of achieving long-term success,” he tells Inside Franchise Business.

But it takes more than passion and determination to bring a business project to fruition, he says. It helps to have some management experience backing up the entrepreneurial drive and commitment.

“I’ve been in it since the beginning,” says former PricewaterHouse Coopers management consultant CEO Tom Longworth of his involvement in Billy’s Buddies. “I am one of the owners and have an equity interest.”

Spreading its wings from central Brisbane out, the business now holds more than 150 classes each week across southeast Queensland.

“It’s a reasonably big operation,” says Longworth. “We have two full-time staff members and 25 part-time and casual employees across coaching and admin roles.”

And the business is planning to bring on

another staff member soon, reflecting the fledgling brand’s swift growth and move to a franchise model.

“We have one franchisee under contract for the Sunshine Coast,” Longworth says, with four other areas close to being signed. These are all new territories, or greenfield sites.

So why franchise?

Says Slater, “I know the importance of local networks and connections in building any business. Franchising enables us to get the right people, with the right networks, and the right motivation to grow our programs.”

LINKS WITH CLUBS While the programs have come out of rugby league, there is as yet no direct affiliation with the sport, though Longworth says Billy’s Buddies has strong relationships with local clubs. “Registration is beneficial to a club. We introduce the kids to rugby league at three, four or five years old, and they graduate to play in a club.”

Coaching is structured to suit different age groups in park-based classes. But it is not just “running around”, says Longworth. Two-yearolds have one program, those three and four work together in another skillset, and the fiveand six-year-olds progress to more advanced sporting skills. Typically, three-year-olds are the core of the business.

One way the business works is through childcare centres, where parents can sign up their youngsters to a sporting program.

The childcare sessions incorporate all ages, with coaches modifying the activities to suit individuals. Longworth says a two-year-old’s attention span is the biggest challenge.

Coaches need to have first-aid qualifications and approval to work with children (in Queensland, the Blue Card).

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COVER STORY

“We’ve built up a reputation already,” says Longworth. “Initially we had to prove ourselves. Goodstart is a major stakeholder.”

BRINGING IN BUSINESS A website and strong social-media presence boost the brand, and a combination of head-office and individual initiatives bring in new business. While childcare-centre groups can make overarching decisions to take on the program, it can be up to each particular centre manager to implement it, so networking skills and relationship-building form an essential part of the franchisee’s role.

“We’re not looking for rugby-league tragics,” says Longworth. “Of course we want people with a passion, but we are choosing those who have business skills and will network in the community. Franchisees have to sell themselves to the centre.”

An obvious advantage of the Billy Slater name is the capacity for his management team SFX Group to propel the brand into the spotlight and attract media attention and brand awareness. This has already included two reports on Channel 9 News over the past 12 months and publicity in the Courier Mail.

“I have been lucky enough to have played rugby league at the highest level which has naturally provided me with a national profile. Billy’s Buddies can leverage this profie - and the fact I am writing the program - to drive business growth,” Slater says.

"I don't see it as a risk - not when you have the right people on the team.

I am not alone in this endeavour and have leveraged significant expertise, and business experience to ensure the business is an ongoing success.”

“I still like to have significant input, particularly in the coaching modules which we are constantly tweaking and improving,” he adds.

AUTOMATED ADMIN Success brings its own challenges, says Longworth. “When it’s going well, there are a lot of kids in the system, and there’s a fair bit of admin. Parents need to know what’s going on.” And he believes Billy’s Buddies systems are excellent at capturing registrations and taking payments.

“We automate a lot of admin and reporting for the franchisees to see how they’re tracking.”

He believes parents particularly like the

no-contract set-up of the Billy’s Buddies program. “Three-year-olds can easily change their minds quickly. It’s hard to guarantee a kid for a term, so one of our fundamental pillars is that there is no barrier to entry. We offer free trials, and no upfront fee. There’s a fair bit of flexibility.”

Weekly fees are $11.90 for a 40-minute session.

When it comes to territories, Billy’s Buddies is looking for a minimum population of 80,000. An average area size has a population of 125,000, while the biggest territory would have a 175,000 catchment.

SAME FEES The business approach is to charge the same fees for a territory, irrespective of population, but to adjust the key performance indicators (KPIs) accordingly. So, says Longworth, the Mackay territory is priced the same as Townsville, despite the different population sizes.

Franchise KPIs are based around the number of children taking classes each week. It might start with 40 children in a week and build up to 160 in 12 months for one territory, but with smaller targets for regions with different demographics.

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COVER STORY

WHAT’S IN THE PACKAGE? Franchisees invest in a proven model and turn-key business, which means they can get started right after training.

Franchisees have three days of upfront training, plus ongoing support. Training focuses on program management and administration; coaching (both practical and theoretical); marketing; and using Billy’s Buddies Sports Management software.

Billy’s Buddies has access to cheaper pricing for supplies (apparel, gear, materials) as a result bulk buying, with the savings passed on to franchisees.

term with the possibility of renewal, linked to KPIs. The number of coaches needed to run the sessions will depend on the number of sessions, and the franchisee – investors with a hands-off approach are likely to employ between three and five coaches.

Owner/operators will be able to manage their business with fewer coaches, perhaps just one.

For instance, in Carina in Queensland, the Billy’s Buddies turnout is 45 youngsters on a Saturday morning across two and a half hours.

The model is set up for smaller classes, however. Longworth says the business still makes money with just four youngsters in a childcare-centre session.

EXPANSION PLANS So where next for the brand? As it fans out across southeast Queensland and down to the New South Wales central coast, the plan is to head for Canberra, then other states.

“Melbourne will be the next cab off the rank after that,” says Longworth. “If we had really good interest from Adelaide and Perth, we’d consider it.”

For now, the business is concentrating on growing its presence in New South Wales and may even open a Sydney office this year. In time, a Sydney base could well become the head-office hub, Longworth suggests. “We definitely want to position ourselves as the top sporting program.”

There are many competitors in other sports sections with franchise brands that appeal to the parents of active youngsters. While rugby league has been the foundation for kickstarting Billy’s Buddies, it offers a more diverse range of skills as the primary aim is to encourage children to be active and engaged in sport.

The five-year goal is to have 20,000 children participating in sessions each week," Slater points out.

“The cost structure is very variable.

There’s little in terms of costs, the main ones being coaches and labour,” says Longworth.

“It’s the systems and the processes that give franchisees the ability to make a profit.” 

WHO’S ON THE TEAM? BILLY SLATER

Award-winning professional rugby-league footballer who has represented Australia internationally, won three grand slams, and was the 2008 World Cup's top try-scorer. Queenslandborn Slater has played for Melbourne Storm since 2003.

TOM LONGWORTH

Heading up this sports business on a day-to-day basis, Longworth has a background in franchising his own brand, TRL (Touch Rugby League), and a corporate perspective from his years as a management consultant with PricewaterhouseCoopers.

GEORGE MIMIS

Founder and managing director of the sports management and marketing business SFX Group, which has Billy Slater on its books. Mimis is a University of Sydney alumni with an economics and econometrics degree. SFX’s sporting legends have included David Beckham, Greg Norman, Pat Rafter and Tim Cahill.

SEPTEMBER/OCTOBER 2017 | 22 | WWW.FRANCHISEBUSINESS.COM.AU

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WEIGHTS AND MEASURES SEPTEMBER/OCTOBER 2017 | 24 | WWW.FRANCHISEBUSINESS.COM.AU

F

ive Anytime Fitness outlets might seem a good number of gyms to have in your portfolio, but it is a breeze for franchisee Rhys Cutifani, who peaked at 15 fitness units. And yet again, in a growth phase, he has added new sibling brand Orange Theory Fitness to his network.

Cutifani shares how he manages to keep success on track.

“My uncle owned a gym. I moved to Canberra to finish school and was working as a cleaner in his gym when I was 17,” he says. “Then I had different roles: maintenance, reception, working the gym floor, teaching classes, then membership sales.

“I had the opportunity to buy into Anytime Fitness...we knew Jacinta and Justin who bought the business here through the industry, and I was sold straight away. There was nothing like this at the time.”

When the industry was very labour intensive, the concept of all-hours access with limited staffing to run the 24/7 gym was innovative.

Teaming up with his wife Bridie, parents, family members and friends, Cutifani bought and sold several Anytime Fitness gyms.

“Our first club was the fifth Anytime Fitness in the country, in 2009. By the end of the year we were at full capacity.

In fact, by August we knew were on to a good thing and opened a second store in September.”

SCALED BACK

An Anytime Fitness franchisee has found that tracking measurements helps his business do some heavy lifting - and not just on the gym floor.

Sarah Stowe reports.

The business grew rapidly from there, with Cutifani opening one club on average every two to three months, for two years.

“I had 15 at one point, then we scaled back. I had about 10 for two years until 2014, then when Bridie was pregnant we sold off a big chunk of the clubs to focus on the family.”

What has stood Cutifani in good stead has been a stringent management structure he instigated about three years in, when opening his seventh store.

“I was doing site selection, managing the builds, had one staff member selling memberships before a site opened, and once it was up and running I would start the next one.”

Regional and metro gyms were spread as far apart as Bathurst and Cooma in New South Wales, and the ACT. Business was going well, but he made a conscious

decision to focus on store performance and operations.

Each club has its own manager and a personal trainer manager. In the overarching business there is an operations manager for the group and a personal training director, plus an admin assistant and financial controller.

The gym membership model equates to a fairly reliable and consistent turnover, which allows for reliable predictions and an accurate understanding of the business financials. For instance, Cutifani knows that each month the business will lose about 3 per cent of its membership. Depending on the maturity of the club and the company’s goals, the team works back to find out how many prospects are needed each month, and how many contacts need to be made each day.

‘Powerful’ system “The flow-through will achieve the targets we’re aiming for each month,” says Cutifani. “We have a truly powerful system. It aggregates in real time across all the clubs, on an hourly basis. I look at it two or three times a day.

“If there’s a red flag, I’ll snapshot it then try to dig a little deeper and work with the managers, who will take action.

“We set all our targets each month - for instance, how many calls an individual staff member needs to make. If we’re halfway through the month and only 30 per cent on target, it will affect us somewhere down the line.”

To act swiftly and deal with underperformance in any measured area, managers can draw from a menu of remedies to deal with particular issues.

While the clubs remain geographically apart, every six months there is a face-toface planning meeting to review, identify and set key measures. Each week there is a 30-minute video conference that is compulsory for all club managers and open to any staff members.

“What is key in the meeting is that managers must be able to explain how their commitments will improve a lead measure toward our goal,” says Cutifani.

Three measures are tracked on a weekly basis: the total number of personal-training clients (these become more engaged and therefore good ambassadors for the brand, they stay longer, spend more and spread the word); the number of members; and, most importantly, he says, the “Belong

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LEADERSHIP

score”.

“This is the Anytime Fitness version of the net promoter score, giving us a great idea of customer satisfaction, where we are sitting in the national ATF group ranking and feedback on both what our members like and don’t like, which means we can act accordingly.”

Member focus Cutifani says the first 18 months of any gym is the big growth period.

“We discovered the 24-hour model is no different to any other gym. You need to have a focus on member satisfaction, not just offer convenience. You have to look after members and look after facilities.”

That includes the tangible and the intangible, like music and the environment, which might change during the day according to the clientele profile. “It’s really important to try and keep the right people and look after them. Our staff members are empowered to make changes.”

It is the “magic combination” of a great structure feeding detailed data, and a strong team delivering the service, that makes it work, he says.

So now the business is ramping up again. Cutifani wants to own 10 Anytime Fitness outlets. The explosive growth he experienced was not backed up in the early days with a long-term success strategy, and he would like to have a second go at that.

“We didn’t set it up for long-term success, and now we understand more about membership levels and what members want.”

Both Anytime Fitness and Orange Theory Fitness sit under the Collective Wellness umbrella group. Both run network promoter-score schemes, and Cutifani taps into the overarching business aims to set his own goals.

He would like to establish 10 Orange Theory Fitness gyms, too.

“We have an advantage because we’ve run Anytime, but we need to know more in depth about Orange Theory success. Until we’ve mastered the basics, we’ll keep them separate. My goal is to combine them in my management structure,” he says.

“I’m really lucky, I have a great team and structure. I help from a high level and guide as needed, and I still run the weekly meetings. There’s always something that needs to be done.”

But the structure allows Cutifani and his wife Bridie (who runs her own boutique cycle and yoga studio and athleisure wear businesses) to share time with their two-year-old and five-month-old children, and work through weekends or late nights if need be.

“Being a franchisee with the Collective Wellness Group gives me access to a

You need to have a focus on member satisfaction, not just offer convenience.

network of peers that both challenge and support me to constantly improve my business’ performance. By taking away the guesswork I can focus my energy on what is important, and that means I have the freedom to spend more quality time with the people important to me.” 

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ON THE

FRONT LINE

Whether as foot soldier or franchisee, former army captain Byron McDonald has seen plenty of action, but it’s the hospitality world that has given him the greatest challenge. And he’s loving it, as he writes here...

N

o-one in my family before had been in the services, but I saw joining the army as a good experience, and an opportunity to develop management and leadership skills. It was my best decision to join the army when I did, and my second-best decision to leave when I did.

In the army, the most important thing I learned that is of value to me today is the importance of building relationships. It is the key to success in business, and very, very important when you are working with a chain of command and also with soldiers and other stakeholders (other armies, the media, community elders). It is important on several different levels.

I left the army nearly five years ago after returning from service in Afghanistan. I had originally intended to pursue a special-forces career, but the tour was very active and I felt I had achieved everything I wanted to do. It was time to move on while I was still at a good age.

Dicky David, a friend of my father and the founder of Ausfuel, encouraged me to take on a service-station business, and after checking it out I decided to give it a go. So I quit the army and drove across the Nullarbor Plain in my Mazda with everything I owned, leaving behind the sheltered workshop of the army and taking on three servos.

NOT ENOUGH CONTROL I built up the business to seven service stations and two car washes, and was doing really well. The good thing about working under a franchise model is that you’re buying systems and processes.

Working with oil companies was tough, though, and there was no extended tenure, no long-term security. I started to look at SEPTEMBER/OCTOBER 2017 | 28 | WWW.FRANCHISEBUSINESS.COM.AU

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LEADERSHIP

options. I wanted more control over my business.

Then I found Quest Apartment Hotels, which offered everything I want out of a business. Franchisees control their own room rates, and there is long-term tenure (the lease is 30 years). As I went through the selection process I came to know the people at head office, and all spoke highly of the business and represented the brand well.

The franchisees I met were impressive individuals and happy with the performance of their businesses.

Everything stacked up.

For me, the biggest challenge was the transition from service stations to hotels and hospitality. The day-to-day running of the business was easy, but learning the basics and how to make it profitable and how to manage sales, that was challenging.

The key to the business is sales activity, and how to get the most out of your sales team, as well as how to yield off your room rate, learning about the competition and how it all fits together.

SET UP FOR SUCCESS Quest set me up for success. I have a franchise relationship manager looking at how things are running and whether overheads are efficient, plus an area sales manager who helps me with sales strategy.

There is also support from the franchisor, which feeds business from its national accounts. A lot of the base business comes from big companies which use our national presence really well.

I’m in business by myself in East Perth, and with a business partner in Fremantle.

I opened up both properties when the economy was softening. Many hotels are coming into the market, so it’s my goal to continue to grow the business in a tough and demanding market over the next five years.

Overall, I want to grow my business and ensure its profitability. I’m in for the long haul and have long-term plans for both venues. I understand the challenges of the next three to five years, and I’m prepared.

When you buy into a franchise you buy into a lifestyle – it’s all encompassing.

When you buy into a franchise you buy into a lifestyle – it’s all encompassing.

Hospitality is all about generating sales and cross-checking operations. At night I might have dinner with a potential client or stakeholder, then I’m up in the morning and off again.

It’s very busy, and very, very enjoyable.

My advice to anyone considering buying a franchise is to ensure you get a return on your royalty. You pay to buy systems and processes, but if you get value for money, that’s good value. 

SEPTEMBER/OCTOBER 2017 | 30 | WWW.FRANCHISEBUSINESS.COM.AU

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DOUBLING DOWN

ON SUCCESS It’s truly a happy family “snapshot” - mum and dad, followed by the twins, all working under the same franchise umbrella.

I

f you believe that investing in a franchise that could be a smart choice for your family, then you could well find inspiration and endorsement from the journey of husband and wife Clive and Wendy Waller who moved from England to Australia in 2003 with their young twin sons.

After settling in, the couple started searching for a new career for Clive - then made a “snap” decision. In England, the Wallers had had success working together for Snap-on Tools, and when the chance came to invest in a franchise with the brand in Australia, there was no hesitation.

The Waller twins, Craig and Daniel, were exposed to the Snap-on career lifestyle from an early age with dad on the road and mum handling the stock ordering and accounts on top of her full-time role as a nurse.

“For as long as I remember, Dad has been working with Snap-on,” says Craig.

“As children, Daniel and I would jump into the truck and admire all the cool tools in the back.”

When the boys finished school, working in the automotive industry was on their career radar. After both completing diesel mechanic apprenticeships, they considered their first move into the workforce. Understanding how the Snap-on franchise had provided career

enjoyment and success for their parents, the boys decided to invest in their own, individual Snap-on franchises.

“Snap-on has been a large part of our life.

It offers an organised, proven franchise model, which truly is a whole package,” says Wendy.

“Snap-on understands that if franchises are happy and successful it is a win-win, so they go the extra mile with support. So we were very supportive when Craig and Daniel chose this path.”

SIMPLE ADVICE For Clive, it has been a great experience having his sons learn the life lessons and responsibility that comes from running their own businesses.

“I’ve achieved success and enjoyed a great career with Snap-on, so I felt very comfortable in recommending it to both my boys as they came of age,” he says.

“My advice was simple: you get out what you put in.

“So far they are excelling in building

the business. Best of all, they are enjoying their work, which is great to see.”

Although only a couple of years into his Snap-on franchise life, Craig says he is relishing his chosen path.

“I think there is no better company to work for. You are starting from the best place for your career by selling the best tool brand in the market.

“I love being out and about building relationships with people in the trade. The financial rewards are also there if you work for them. I absolutely recommend it to others looking for a career change.” n

SEPTEMBER/OCTOBER 2017 | 32 | WWW.FRANCHISEBUSINESS.COM.AU

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STEPPING into a new life One franchise is going feet first into the future with a business geared to improving people’s lives.

J

arrod Blamey came across the concept while travelling in America with his wife Rebecca. Plagued for years by back pain that chiropractic and physiotherapy treatments failed to resolve, he stepped into the Good Feet store and tried the orthotics.

These changed his life one step at a time - within six months, his pain had disappeared.

Unable to source the product in Australia, Blamey spotted a business opportunity.

The former franchisee with home-building chain GJ Gardner tells Inside Franchise Business he took on the master franchise rights to build and develop the 30-yearold brand in Australia and New Zealand.

It took four years to gain the relevant approvals and trademarks.

Wanting to start the business away from a capital city, the couple moved from Sydney to Newcastle and opened the doors to their first store in September last year.

“It’s been a good roller-coaster experience as neither of us has had experience in retail,” says Jarrod. Sales grew however, and within four months the Blameys were employing four sales people.

Good Feet orthotics are designed to

provide comfort without needing to be customised. Quoting a podiatrist, Blamey asks “Why make a mould of feet that aren’t performing?”. He likens the orthotic approach to dental braces that shape teeth - “it’s about training feet into an ideal position”.

Costs are on par with custom-made orthotics, and there are 25 styles across 300 sizes.

Blamey says it is an intensive service, with the franchise best suited to individuals prepared to spend time helping customers, and in the fitting process find out what activities they like, their preference in shoe style and their pain points.

It can take an hour to go through the fitting, and post-purchase there are three follow-up phone calls to ensure the customer is using the orthotics correctly.

An ideal franchisee would be 40 years or older, empathetic, perhaps ex-corporate, and may have experienced back pain themselves, says Blamey.

CORE DEMOGRAPHIC Customers of any age can benefit from the service, but the core demographic is 39- to 59-year-olds who spend their working lives on their feet - typically in retail, hospitality,

nursing or the mining industry.

Blamey predicts a maximum of 30 stores around Australia (maybe eight in Sydney), with up to six outlets across New Zealand. A franchise will cost up to $250,000.

One current outlet for the orthotics, which is outside the store network, is the cruise business, with the brand’s entrylevel products being promoted and sold at sea by cruiseline spa staff.

“This serves as an introduction to the product range, and happy customers tend to upgrade their orthotics after a year,” says Blamey.

Because of the product’s personal element, orthotics cannot be successfully sold online, he says.

The benefit of a former franchisee taking on the development of a franchise brand is understanding what is involved in a successful franchise relationship.

Blamey points to the experience of helping franchisees grow their businesses as the main lesson from his time with GJ Gardner.

“It’s about working with franchisees closely to grow with them, keep them motivated, educating them. And marketing the brand. It’s more about the brand than us - the brand is more powerful.” 

SEPTEMBER/OCTOBER 2017 | 34 | WWW.FRANCHISEBUSINESS.COM.AU

LEADERSHIP

FAMILIAR

TERRITORY

Father-and-son duo Peter and Simon Kelly own and run the Balcatta (Western Australia) Minuteman Press franchise.

I

nside Franchise Business chats with Simon Kelly, who opens up about the franchise business he runs with his father, and what he has learned along the way.

WHAT IS YOUR BUSINESS? Our aim is to offer a one-stop shop for print, design and promotional requirements. This could include business stationery, signs, promotional flyers and websites. We also offer canvas, fine-art and photographic prints.

WHAT YEAR DID YOU JOIN THE MINUTEMAN PRESS FRANCHISE, AND WHAT WAS YOUR BACKGROUND? We started with Minuteman Press in December, 2015. My father Peter had sold a successful garden products business and retired to a farm in the southwest, but eventually moved back to the city and was running a stationery manufacturing business where I was working part time. I was also running a small printing business out of one of the company’s offices, and working as a musician.

Peter was looking to expand the

stationery business. Newly married, I was looking for a more settled lifestyle. We had been in contact with Glenn Coyle, the Minuteman Press International regional vice-president for Western Australia. He was very helpful and knowledgeable, and it just took a little while to find the right fit and the right timing on our end.

WHY DID YOU CHOOSE TO BUY A MINUTEMAN PRESS FRANCHISE? The stationery manufacturing business we owned made us somewhat familiar with the printing industry. We were running

SEPTEMBER/OCTOBER 2017 | 37 | WWW.FRANCHISEBUSINESS.COM.AU

LEADERSHIP the business with a digital press, offset press and large-format printing. One of the most attractive aspects to me was that Minuteman Press International has proprietary pricing and management software called Flex that really helps run the business. The support and training offered by Minuteman Press is also great.

WHAT IS THE MOST REWARDING THING ABOUT RUNNING YOUR BUSINESS? The feeling of being in charge of your own destiny is probably one of the major benefits of running your own business.

Running a family business also has many advantages. My wife and I have an eightmonth-old child, so having flexibility with my working hours has been important.

Peter and his wife Trudy are also at an age where they are looking to retire, and they like to sneak off for a round of golf. We have great staff that can keep things running smoothly when we aren’t around, but between us we can generally co-ordinate our schedules to make sure someone is in the shop.

The feeling of being in charge of your own destiny is probably one of the major benefits of running your own business.

WHAT HAVE YOU LEARNED WHILE WORKING WITH YOUR DAD?

HOW HAS THE SUPPORT FROM MINUTEMAN PRESS HELPED YOU?

I have been involved in the family business since a young age, so most of the things I have learned about running a business have come from my parents. Also, my generation is much more tech-savvy, so they sometimes need my guidance in that aspect of the business. It's nice to be able to help them with all the years they have spent raising and mentoring me.

Local support has been very important, especially in the early days when we were still finding our feet in the print industry.

Knowing we can call on someone from Minuteman for a second opinion or advice is still very helpful, and gives you great peace of mind if you ever run into any trouble.

*Finance options available subject to lenders terms and conditions.

Reference the Franchisor Disclosure Document for more detail.

DO YOU WORK WITH LOCAL ORGANISATIONS? We think it is important to share our good fortune and give back to the community. We have provided print for many charity events and fundraisers. We also work with non-profit community radio stations and offer special rates for independent artists and musicians.

WHAT IS A TYPICAL DAY LIKE? Every day is different, which is another reason why the print industry is appealing.

We begin the day with a production meeting with our staff members where we go through all jobs in progress, quotes and any general issues that need attention.

WHAT IS YOUR IDEAL DAY OFF OR WAY TO RELAX? Peter and Trudy are keen golfers so their ideal vacation is Bali, where they stay at a

golf resort. I have spent most of my life travelling as a musician, so these days I like to stay close to home when I have time off, especially now we have a young child.

WHAT ARE YOUR NEXT BUSINESS GOALS? Our main goals for the rest of this year are simply to continue to grow the business by expanding our customer base, and to

search for new ways to run the business more efficiently.

WHAT IS YOUR ADVICE FOR POTENTIAL FRANCHISEES? My advice to potential franchise owners would be to go for it, but to keep in mind that you will get out of it only what you put in. Pay attention to details and always give the customer more than they expect. 

Time to

be your own boss?

There’s never been a better time to join the Michel’s Patisserie & Café family.

Now selling over 1.6 million coffees per year, Michel’s is Australia’s largest patisserie chain with over 200 locations. Backed by Australia’s leading Franchise operator, Michel’s Partisserie & Café gives you the tools and support you need to successfully run your own business.

-

New & existing sites available 30 year brand history Initial & ongoing training provided Finance options available* Ongoing national & local area marketing support

For more information contact Joanne on 0401 388 863 or email joanne.taylor@rfg.com.au www.franchising.michels.com.au

LEADERSHIP

SEPTEMBER/OCTOBER 2017 | 40 | WWW.FRANCHISEBUSINESS.COM.AU

Raw

ambition Superfoods in a bowl...just what the retail doctor ordered, and also a shot in the arm for franchisees of healthy-eating chain CocoBliss.

R

aw, vegan and sugar-free are increasingly mainstream food preferences, and as the trend for clean and healthy eating keeps growing, more retail concepts are tapping into it. That’s how franchise chain CocoBliss had its start - two young mums saw a gap in the market for tasty immune-boosting superfoods.

After failing to find healthy nutrient-packed meals, Candice Roat discussed the issue with good friend Mellita Rayner.

The pair came up with the idea of delivering what the market seemed to lack: healthy, unrefined food.

Since launching in 2013, they have dished up many an acai bowl.

MD Gus Khcheiche joined the business two years ago after years of experience as a Crust Gourmet Pizza multiunit franchisee.

CocoBliss caters predominantly for female customers.

In fact, three-quarters of its customers are healthconscious, social-media-savvy women aged 15 to 35 years with an interest in fitness. Inevitably, this core group is attracted to be franchisees as well.

FIRST BUSINESS “When I speak to potential franchisees, 90 per cent are pretty young. It’s their first business and they want to work SEPTEMBER/OCTOBER 2017 | 41 | WWW.FRANCHISEBUSINESS.COM.AU

LEADERSHIP

They love the brand, and in many cases are funding their investments through savings.

really hard,” says Khcheiche. “They love the brand, and in many cases are funding their investments through savings.

“It costs about $200,000 to set up a CocoBliss outlet. It’s important to ask them why they want to invest in the business. Are they going to love their job?

“It’s about letting them know what they are getting into so they can own the experience of running a franchise.”

Khcheiche says there is an increasing interest from more mature franchise prospects keen to invest and appoint managers.

The model accommodates this type of franchisee, “but the owner/operators are the backbone,” says Khcheiche.

He believes his strength is in an area he is passionate about - supplies and logistics.

While the healthy-foods industry is positive, it is limited in experience, he says. “I’m doing good deals. It’s about partnerships. These businesses count on

us. We can help them with their business models.”

As a result and despite the swift growth of the brand’s network, he is confident in the costs of goods and the supply chain in a segment where ingredients are generally expensive.

VERSATILE MODEL CocoBliss stores can have footprints of 20 to 100 sqm, and be in kiosks, malls, strip sites, hospitals, airports and cruise ships, says Khcheiche. “The demand is there but we want to grow responsibly, be diligent about sites.”

To this end there is a matchmaking process that goes on with franchisees and locations.

“Personality can make certain sites work,” says Khcheiche. And there are other sites where the franchisee’s personal touch is wasted - a busy

grab-and-go kiosk is all about speed, not relationship building.

As it cements its presence in its home state of Queensland, CocoBliss is expanding further afield and has just opened its eighth store. “We wanted to create a hub in southeast Queensland, the Sunshine Coast, the Gold Coast,” says Khcheiche.

As the network spreads, the first location in each state will be corporately owned.

Sydney already has one outlet, at Coogee Beach. Melbourne will have its first CocoBliss early next year.

There is more to come from the CocoBliss team, though. As the business is somewhat climate-dependent (Queensland’s sunshine is perfect) there is a second concept in the pipeline to cater for cooler climes - and offer franchisees who put the two outlets side-by-side a second bite at the cherry. 

SEPTEMBER/OCTOBER 2017 | 42 | WWW.FRANCHISEBUSINESS.COM.AU

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LEADERSHIP

BANKING

ON Business When you love what you do, why would you change it?

For Nellie Dicks, the chance to stay in her beloved field of banking while becoming a business owner was too good an opportunity to miss.

SEPTEMBER/OCTOBER 2017 | 44 | WWW.FRANCHISEBUSINESS.COM.AU

W

hat does Nellie Dicks love most about the world of banking? It is the customer interaction, which made it hard for her to think about leaving her role at NAB. But the opportunity to run her own business while doing what she loved was just too great a pull.

She describes the role she loves: “I put myself in my customer’s shoes and figure out transactions – what the customer needs and what the bank needs. Then I guide the customer through the process.”

Dicks clocked up 20 years working in the frontline of banking, eschewing headoffice roles to maintain that customer contact. But she reached a point where it was time to move on. “Being my own boss was the driver,” she says.

While she considered moving into other markets, her heart was still in the banking sector. Finding she could invest as a franchisee in the Bank of Queensland (BoQ) made all the difference, she says, and clients followed her from her NAB branch to her new business.

Dicks signed up for a five-year term, and is now in her 13th year as a BoQ franchisee having renewed her agreement twice already.

“Initially transitioning from a corporate role to being my own boss was a challenge,” she admits. “It probably took bit longer and was more difficult than I thought.

“I took it for granted the mindset about banking but also having a business, I have staff so need to hire and fire. Finding staff members and looking after them is a challenge.”

RESONATES This problem resonates with smallbusiness owners everywhere, she says.

Using a small-business ownership model

itself, the bank tends to attract small and medium enterprises (SMEs) as clients.

“As an owner/manager, I am the same as an SME. You can understand cashflow and the frustrations. We have to do everything a business has to do. Of course we have other clients, but these are easier shoes to fill.”

Dicks worked long hours at NAB, and while little has changed in that respect, she now chooses to work longer.

However, she does admit that work/life balance is important.

“It’s about making money.

If you’re not thinking about the bottom line, you’re not going to run a profitable business.”

Banking regulations require compliance, so working within a framework was familiar for Dicks. However, she still has freedom to make decisions outside of the regulatory remit.

One of the benefits of being with BoQ is a coaching program, which she says has proved significant in lifting the business up to the next level. “A few of us were bogged down in our businesses. We were speaking to customers but forgetting about the business.”

Tailored coaching is the basis of BoQ’s Fit for Biz plan.

A STEP BACK Key to Dicks’ business boost was admitting that she didn’t know everything, taking a step back from the day-to-day business procedures, and holding herself accountable. A mentor keeps her on track with her work/life balance as well.

If you’re not thinking about the bottom line, you’re not going to run a profitable business.

The investment in her mentoring has paid off. Dicks has made it to the finals of the Franchise Council of Australia’s national awards in October, nominated for her performance as a franchisee with two or more staff in Victoria.

“The awards are nice, but it won’t change what I do or how I do it,” she says.

“What is important is building a better business. When we started the coaching program it became a catalyst for change.

It’s about right-sizing, re-setting the business, and the challenge is to make those changes.”

That includes recognising when it is appropriate to let go a staff member, a tough decision Dicks had to make about one of the two team members who joined her from her NAB days.

She has now adopted flexible working for staff members to make her business attractive to high-quality workers.

“I want to be someone people want to work with. I stand behind what I say and do,” she says, pointing out that it is about finding people who can fill her skill gaps so she can work smarter, not harder.

The experience of the past three years has far outweighed the achievements of the initial 10 years as a franchisee, she says.

“It has exceeded my expectations. I couldn’t do anything else!

It’s about relationships, not about buying and selling the business. It’s the perfect fit for me.” 

SEPTEMBER/OCTOBER 2017 | 45 | WWW.FRANCHISEBUSINESS.COM.AU

FRANCHISE

WITH THE CHICKEN EXPERTS...

Australians love chicken, in fact Australians are amongst the highest consumers of chicken per capita, at 43 kilograms a year... so if you are thinking of buying into a food franchise, the chicken business is booming and there is no better group to join than craveable brands.

As the largest Australian owned quick service restaurant operator, craveable brands. own and operate three unique Australian chicken brands; Red Rooster, Oporto and Chicken Treat. Combined, the restaurants hire over 18,000 people and serve over 150,000 customers every day.

Having over 560 restaurants across three iconic brands craveable brands. has extensive experience in restaurant operations, supply chain, franchising, IT, marketing, store design and construction, food innovation and customer satisfaction.

The three brands are widely recognised and established in each of the markets in which they operate.

ESTABLISHED: 1972 in Kelmscott, WA

ESTABLISHED: 1986 in Bondi, NSW

ESTABLISHED: 1976 in Perth, WA

SPECIALTY: Roast Chicken

SPECIALTY: Portuguese Flame Grilled Chicken

SPECIALTY: Crunchified Chicken & Rotisserie Chicken

RESTAURANTS: 150 locations across Australia

RESTAURANTS: 60 locations across WA

RESTAURANTS: 360 locations across suburban,regional and rural Australia

SEPTEMBER/OCTOBER 2017 | 46 | WWW.FRANCHISEBUSINESS.COM.AU

ROAST CHICKEN Red Rooster has been part of Australian family life for 45 years, has an established network of 360 restaurants across the country and is in a phase of growth.

Last year Red Rooster launched their own online delivery service which enabled existing restaurant owners to reach more customers, more often. The next stepchange for Red Rooster is to expand their network of restaurants with new small delivery enabled shopfronts in high density, urban main streets. Offering lower capital investment for franchisees and strong return on capital, these stores will create a stronger market position for Red Rooster.

These growth strategies are an integral part of the transformation of Red Rooster and pivotal in the goal to make their delicious roast chicken accessible to more Australians. With great expansion plans across the country, Red Rooster is looking for customer-centric, business minded franchisees to join the team.

Interested in becoming a Red Rooster franchisee?

Apply today redrooster.com.au/franchising

PORTUGUESE GRILLED CHICKEN With traditional Portuguese cooking methods and a unique delicious and irresistible sauce… Oporto was established in 1986 in Bondi NSW by Antonio Cerqueira. Now there are 150 stores across the country and with a comprehensive renovation and expansion plan, Oporto has never looked better.

The brand has undergone an amazing transformation. The new design is warm, casual, contemporary and inviting, highlighting the brand’s use of fresh produce and grilling cooking methods.

Last year Oporto introduced delivery which has resulted in incremental sales for franchise partners. This year will see some restaurants open with a liquor license and alfresco dining as well as delivery, all designed to enhance the customer service.

Oporto franchises are available now, apply today at Oporto.com.au/franchising

FRIED & ROTISSERIE CHICKEN Chicken Treat is an iconic and much-loved West Australian brand that has held a place in the hearts, minds and bellies of West Australian since 1976.

Menu diversity has been an integral part of their success. With a laser focus on taste and product innovation, the hand-breaded and freshly cooked fried chicken as well as slow cooked rotisserie chicken is a result of forty years of expertise. Offering customers the element of ‘fun food’ has also resulted in unique and mouthwatering menu items such as the ChiCow Burger, Loaded Chips, Chicken Crackling, Crunchified Chicken and most recently Mac & Cheese Balls and the Tempta Burger.

This year Chicken Treat introduced delivery resulting in incremental sales for franchise partners and food induced happiness for their customers.

Want to become a WA Chicken Treat Franchisee?

Apply today chickentreat.com.au/franchise

LEADERSHIP

FIVE MINUTES

WITH ROZZI’S

DEAN SALOMONE

Dean Salomone heads up and recruits franchisees at Rozzi’s Italian Canteen.

1. What is your personal strength in business?

4. What do franchisees want from their franchisor support team?

8. What do you look for when interviewing a prospective franchisee?

I have been involved in franchising (as a consultant, a franchisee and now franchisor) for 17 years and have built solid relationships on trust and longevity. My experience means I can empathise with prospective and existing franchisees as to the sometimes emotional roller-coaster story of what it's like to be franchisee.

Everyone’s definition of support can differ, but most franchisees want regular, open and honest two-way communication about how they can improve the running of their business. As a support team, we need to add value constantly.

Our first interviews with franchisees are relatively informal and really an opportunity for an open and frank discussion about both parties, as well as their key motivations for thinking about joining the Rozzi’s famiglia.

Sometimes we are not aligned, and that’s okay, but we are looking for servicefocussed individuals who love the idea of producing new products every day.

I look to see how many questions they will ask during the interview. You can never ask too many questions of a franchisor - they will be responsible for your investment just as much as you as a franchisee.

2. What have you learned about franchising?

People and money equal emotion. I like to refer to it as the great Australian second dream - running your own business. As a distribution model, franchising can be very successful for all stakeholders when done correctly and, wearing my recruitment hat, this means being honest and transparent with prospective franchisees about what the business actually needs from its stakeholders to succeed: planning and application.

I have also learned that you can take people on a fantastic journey with you. A willingness to embrace change and all the challenges that come with it seems to be a common theme for success.

3. What does it take to have an efficient franchise model?

• Consumer relevance • Realistic growth plans and resources • Solid policies for consistency of product and/or service.

Your franchisor will drive efficiencies within the franchise model by way of innovation in product and technology. Franchisors are really the disruptors of their industry - they take a business model and scale it up for growth while retaining the fundamentals that make their business attractive to prospective franchise owners.

5. How does a franchisor foster trust in the relationship with a franchisee?

Deliver what they say they are going to do - from the moment they receive an inquiry.

It’s pretty simplistic, I know. However, franchisors need to show commitment to franchisee growth (while treating everyone equally and fairly) if they want franchisees to believe in them. Franchisors should always look for ways to help the ongoing profitability of franchisees.

6. What can franchisees do to ensure a good relationship with the franchisor team?

If you have been honest in your dealings with your franchisor and are seen as a brand advocate who knows the system and is prepared to support the system, you are giving yourself every chance of maintaining a fantastic relationship with your franchisor team as you build your business.

7. In your experience, what is the most common mistake franchisees make?

Buying into a business and not truly appreciating what is needed to be successful. Contractually, it is called due diligence, but in its truest sense it’s about talking to other franchisees about the work involved, particularly in the early stages of the business.

9. What do you think is the most important quality a franchisee needs?

The ability to embrace change and lead their team to high performance.

10. What does it take for a franchisee to be a star performer?

• Live and breathe the brand - be infectious with that passion so it reflects on the teams they lead and manage • Have a respectful and collaborative relationship with franchisor support team • Maximise profitability while working within the business protocols • Be seen as a leader among fellow franchise partners. 

SEPTEMBER/OCTOBER 2017 | 48 | WWW.FRANCHISEBUSINESS.COM.AU

Finding a business that offers financial security with a family-friendly lifestyle might be easier than you think. I built the most successful SafetyQuip business. Call me and I’ll tell you how.

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Check us out at www.safetyquip.com.au.

INDUSTRY SPOTLIGHT

Destination eateries are popular with consumers while casual-dining precincts are favourable for franchisors, writes Noha Shaheed.

F

ull-service restaurant chains dominate the casual dining scene, with franchises from the US featuring prominently in Australia.

demographic are families, corporates, parties and events, date nights and just general catch-ups.”

A new Euromonitor International report, Full-Service Restaurants in Australia, says North American full-service restaurant chains account for 42 per cent of value sales and 29 per cent of outlets in Australia.

“These restaurants tend to serve mostly families and larger groups, as their offering usually includes good deals for children’s menus, and food portions tend to be larger,” says report author Julia Illera, senior research analyst at Euromonitor International.

A casual-dining destination could be defined as a food outlet where customers dine in groups and spend at least half an hour eating.

One example is the Singapore franchise The Rotisserie, which offers a comfort-food menu covering breakfast, lunch and dinner – from coffee during the day to alcohol at night. Meals come in large portions at affordable prices, with each food product prepared fresh daily.

“Our target customers are working professionals in their early 20s to late 50s, families and events organisers who are frequent party planners,” says MD Jason Pope. “Our food has a broad customer appeal – a dine-in meal with colleagues, a packed sandwich on the go or an intimate family celebration.”

CEO Ross Worth of home-grown casual-dining chain Hog’s Australia says its audience is extremely diverse. “We cater for everyone between 18 and 54 years specifically, and included within this

TARGET CUSTOMERS “Our primary target customers are 20 to 50 year olds, with a slight male skew, and secondary are young families,” says Twelve Boar franchisor Rick Palesh. The brand offers American-style barbecue tailored to the Australian market.

“Our customers are unpretentious, relaxed and casual ‘foodies’,” he says.

Millennials are a key target group for local fast-casual franchise Rozzi’s Italian Canteen. Director Dean Salomone says the group had a specialist consultancy group conduct extensive market research to clearly identify the ideal customer.

The findings were 58 per cent female, 42 per cent male and 49 per cent between 18 and 34 years old, “which is a strong reflection on our ability to engage with millennials”.

Costa Anastasiadis, who heads up local Hellenic dining chain Zeus Street Greek, says this brand also targets millennials and growing families. As does Australia/New Zealand franchise La Porchetta, CEO Sara Pantaleo saying its primary customers are families, with secondary markets of young people and baby boomers.

DELIVERY AND TECH Delivery technology has been a big disruptor in the restaurant space,

SEPTEMBER/OCTOBER 2017 | 50 | WWW.FRANCHISEBUSINESS.COM.AU

Zeus Street Greek SEPTEMBER/OCTOBER 2017 | 51 | WWW.FRANCHISEBUSINESS.COM.AU

INDUSTRY SPOTLIGHT

La Porchetta

particularly with mobile apps being used for booking tables or ordering homedelivery food.

In the Euromonitor restaurant report, Illera says competitors in other channels, including 100 per cent home-delivery/ takeaway, cafes/bars and fast food, will continue to pose a potential threat to growth in the full-service restaurant space.

“In fact, these channels are expected to outpace full-service as busier lifestyles encourage Australians to opt for more convenient food options that can be ordered and picked up or delivered faster than waiting for a meal at a full-service restaurant.”

So how are franchised casual-dining chains meeting these challenges?

THE ROTISSERIE Pope says The Rotisserie has two store models, express and restaurant.

“An express unit is suited to food courts or shopping centres while a restaurant is larger and suited to dining precincts and shopping centres.

“Our concept is based on casual dining and takeaway formats. With the fast-casual trend sweeping Australia, more consumers are looking for speedy meals with good food quality. That is what The Rotisserie is built around, ‘Fresh Food Fast’. We put out good-quality food with the flexibility of having it on the go,” says Pope.

Blackboard specials are added to the menu regularly, with higher-performing meals eventually being included on the permanent menu.

In terms of food trends and the rise of varied dietary needs, Pope says the group is working on specific dietary options.

For deliveries, the company is working with third-party companies to manage the

logistics. As the company rolls out new technology, franchisees will incur fixed costs, with support and training from head office.

“As a new, young company, we are receptive to trends in technology and will be allocating funds and time for training, which in turn generates value for the business,” says Pope.

“Potential buyers should be legally and financially informed before signing on the dotted line. The lease and franchise agreement should be studied in detail, and prospective franchisees should ask plenty of questions to clarify any doubts.

“Speak to different people and do background checks on the franchise you are entering into.”

LA PORCHETTA

It’s very important to listen to your customers. That’s one the most important elements of a successful business.

Master franchisees invest in a 10-year term starting from $130,000 (licence fee only, does not include store fitout cost).

For a five-year term, franchisees buy in for $350,000-plus (includes store fitout/ set-up and licence fee).

Support includes: • Full turnkey establishment • Initial training and startup help • Vendor selection • Site selection and construction help • Marketing support However, Pope says it can be a challenge for franchisees to maintain quality standards and the brand’s reputation.

Pantaleo says La Porchetta is a homemade Italian kitchen concept which runs a standard kitchen with a full restaurant menu, and a pizza kitchen.

“We’ve been around for more than 30 years and have grown because we understand our customer,” she says.

“The ideal site for us is in a suburban area, because people now want to eat locally. There’s also a growing market for takeaway and home delivery.”

For franchisees, La Porchetta has a flat-fee system and standardised menu.

However, franchisees can create a specials board to cater for local tastes.

“We’ve made sure our menu has lighter options, as well as options for vegetarians and people with special dietary needs,” says Pantaleo. “We’ve been customising our meals for our diners since we started.”

As well as the menu being reviewed annually, franchisees need to ensure they “stay across changing food trends and can meet customer demand at a national level, as well as provide menu items that reflect local demographics”.

“As well as the point-of-sale system we use, we’ve introduced online ordering and driver tracking,” says Pantaleo.

“We’ve also introduced new marketing platforms. Technology is a very big part of everything we do, including engaging

SEPTEMBER/OCTOBER 2017 | 52 | WWW.FRANCHISEBUSINESS.COM.AU

Love your work!

Make it a reality with The Cheesecake Shop.

Many people just dream about doing a job they love. Why not make those dreams come true by owning a franchise in The Cheesecake Shop. You can be your own boss!

Bake tasty masterpieces all for the world to enjoy! And most of all you can enjoy your days working with those you love.

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INDUSTRY SPOTLIGHT

Before you do invest homework, homework and then some more homework.

Twelve Boar

with our customers online, because that’s where they now are.”

Online portals and apps have transaction fees, and home delivery is being trialled.

“In a highly competitive market, you need to make sure you deliver at every touch point,” says Pantaleo. “It’s very important to listen to your customers.

That’s one the most important elements of a successful business.”

Meals are made from scratch with fresh ingredients at La Porchetta, which can be a challenge. Franchisees must follow franchisor processes and procedures to ensure consistency across the brand.

The initial investment in a franchise starts from $450,000, depending on the size and location of the restaurant.

The franchise terms are 10 years, and franchisees benefit from full training, on-site visits, regular contacts from franchise support coaches, and marketing.

Pantaleo says an ideal franchisee is someone who loves food, has entrepreneurial drive and is passionate about greeting customers. “They need to enjoy rolling up their sleeves and being owner/operators. We have amazing husband-and-wife teams and franchisees who are in a business partnership in which they complement each other’s skills, and that works very well.”

Her advice for potential buyers considering the casual-dining space: “Don’t think it’s a passive investment. It is a business in which you will need to work.

If you love the food industry, you will love it.

“Make sure you are aligned to the culture of the brand and that you love it, because it’s like a marriage. If you don’t fall in love with it, you can’t succeed.”

TWELVE BOAR Palesh says the Twelve Boar model allows franchisees to produce quality smoked barbecue cuts without needing to be a “pitmaster”, and without compromising on taste.

He says the model entails “low skill and low labour costs” but can still deliver “consistent and excellent quality”.

Palesh says informal dining is the primary business, and a “healthy menu” is not necessarily important. As most products are made in house, the food has minimal fillers and preservatives. “There is always room to introduce salads and the like,” he says.

Each new menu item is given the Twelve Boar touch to make it distinct to the brand.

“This food category does not leave much room for the likes of vegans and vegetarians,” he admits. “On the flip side, most of our food is gluten free.”

Home delivery is not offered because of territory issues, and also because the offering does not necessarily travel well.

“People do not eat out just to eat. In our ever-evolving social culture, people are continually looking for an experience.

It’s also a form of social interaction,” says Palesh. “Although there is a place for home deliveries and other conveniences, it’s simply not for everyone – or for all the time.”

Palesh says a challenge for the business is that it is all about a new concept in Australia, so customers are still developing an understanding of what American barbecue is.

The initial investment for a franchisee ranges from $150,000 to $350,000, depending on such factors as location, fitout contribution and store size. Franchise terms are for five years with an option to renew for another five. Franchisees benefit from training and marketing support.

An ideal franchisee is an owner/operator who enjoys providing customer service.

“We feel that less hospitality experience is better for our franchise model, as the franchisee can come in with a fresh perspective and be happy to learn the systems created for them.”

ROZZI’S ITALIAN CANTEEN Rozzi’s Italian Canteen offers Italian-inspired dishes within the breakfast and lunch space, Rozzi's Italian Canteen

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Hog's Breath

and dinner where applicable.

Salomone says that with two models, Fresh Kitchen and Italian Canteen, there are three shopping-centre sites suitable for the business: fresh food, fashion or destination sites within centres with a minimum of three feeders for foot traffic.

“We are in the research and development stage of an express version of Rozzi’s with a view to trialling a site,” Salomone says.

“Should the trial be successful, we will look at our express version as a potential foodcourt property play, to complement our

Fresh Kitchen and Italian Canteen models.”

He says one of the benefits of the Rozzi’s model is a competitive cost of goods with efficient labour percentages. “Once our stores have opened and settled, we allow our franchise partners to review their sales trends and adjust their category mix to suit their local clientele.”

For Rozzi’s, informal dining is critical as it is not a full a-la-carte service and more of a value offer. “We have some great healthy options in our salad and breakfast ranges.

We have built our entire menu range with a view there will always healthy options.

“It’s super important for consumers to feel they have options. We currently have gluten-free and vegetarian options in our salad, pizzas and pasta ranges,” says Salomone.

Menus are reviewed annually, but he says this is likely to move to a six-monthly review.

He also says a challenge of the business is site selection in a crowded real-estate market.

The initial investment for franchisees can range from $300,000 (for smaller kioskstyle sites) through to $750,000 for sites of up to 200 sqm. Initial training, marketing support, product innovation and ongoing support is included.

“Before you do invest - homework, homework and then some more homework,” advises Salomone. “Ideally, you also really like the product/cuisine you’re selling and producing every day.”

HOG’S BREATH Australian franchise system Hog’s Breath has more than 80 locations throughout Australia and New Zealand.

“Healthy eating is a huge element of our menu,” says Worth. “We constantly

refer to the company Tree of Life Nutrition for external expert advice, and always try to ensure our menus are both current and innovative while remaining excellent value for money. We look to make menu updates every 12 months.

“We want every diner to experience our ‘hog’spitality’ and cater to all dietary requirements including gluten-free, lactoseintolerant, vegan and vegetarian.”

Worth says delivery is also a priority.

“We’ve just partnered with Deliveroo to explore this exciting area, and have five restaurants trialling it,” he says.

“We’re also continuously working on streamlining other avenues such as drivethrough and customer pick-up.”

Technology is also a priority. “We partner with an online booking process (Dimmi) and have successfully trialled the ability to order at the table via iPads. We’re also looking at launching an official app that will offer a full suite of initiatives.

“We will certainly continue to grow and evolve with technology and, depending on what initiatives are taken up by our business owners, there could be a small capital investment required.”

Taking into account the footprint size and the concept - an express model or a fullservice restaurant - the initial franchise investment can range from $150,000 to $1 million. Franchise terms are 10 years with an option to renew for another 10.

Franchisees benefit from the franchisor’s leverage in buying stock and equipment.

“We offer full training, coaching and mentoring along with strategic marketing advice by internal and external parties,” says Worth.

While he agrees that there is huge competition in the casual-dining sector, he says the brand is aware that growth and variety are important.

This is why the brand has developed a

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INDUSTRY SPOTLIGHT

Steve Costi's Famous Fish

“As a new, young company, we are receptive to trends in technology and will be allocating funds and time for training, which in turn generates value for the business.”

new express model.

“This comes in the form of a food truck that can visit events, or a smaller static footprint for such locations as airports, food courts, cinemas or petrol stations.

“Obviously this is also a great opportunity for potential franchisees that do not have the capital for a full restaurant model.”

ZEUS STREET GREEK Zeus Street Greek (ZSG) co-founder/GM Anastasiadis says the franchise “is not a cookie-cutter business”, but a tried-andtested model.

While healthy food is not a priority, serving up “honest” food is crucial.

“For us, it’s about transparency in our

food offering.”

Anastasiadis says customers, particularly millennials, are interested in where the product has come from, such as sustainable and ethical farming. However, by default the Mediterranean diet is gluten-free and has a large vegetable offering. ZSG has an annual menu change which comes with a 10 per cent shift.

Meanwhile, Anastasiadis disagrees with the Euromonitor prediction that hospitality brands with full delivery will pose a threat to casual dining.

“I think there is a general oversupply in the sector,” he says. “Over time, quality offerings will be more available and consumers will be more astute in their choices.

“Not everything travels well or can be delivered.”

He says third-party delivery accounts for 20 per cent of trade, with the exception of food-court sites. A cloudbased POS system used by the network is included in the establishment costs.

Initial investment costs for franchisees are: • Restaurant - $580,000 to $650,000, licensed, higher foot traffic • Express - $300,000 to $350,000, food-court lunch trade, Thursday nights and weekends.

Terms are five years with an option to renew for a further five. Training, innovation and a buddy system among franchisees are included.

Anastasiadis says the first three to six months can often be challenging because for many franchisees it is often a major career shift. Franchisees can expect to be working 60- to 70-hour weeks at the start. After a while franchisees can start taking days off and be less hands on.

“Tell your family to hang on for the ride,” says Anastasiadis. “There are long hours at the start, but it’s worth it at the end.”

STEVE COSTI’S FAMOUS FISH Famous Fish originates from the Costi’s Seafood brand which has been around since 1958.

In 2014, Steve Costi and former Michel’s Patisserie co-owner Jon Sully with a group of partners evolved the brand, the menu and the business model.

“We’ve not only drawn much of our inspiration from the seaside, which is reflected in the aesthetics of the stores, we’ve also created an overall experience that is both in keeping with what everyday Australians have come to know

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INDUSTRY SPOTLIGHT

and love about fish and chips,” says GM Sal El-Houli.

He says the model is dynamic enough to apply across several different store formats, from CBD food courts that start at 50 sqm through to strip and/or casual dining/restaurant precincts ranging from 120 to 150 sqm.

“Ideally, the site needs to have a demographic mix of nearby residential and commercial/retail,” he says.

“At the moment there is not a fully integrated seafood franchise operator in Australia. With seafood/fish and chips being the number-one takeaway food throughout Australia by independent food businesses, we believe there is a significant gap in the market for a quality seafood and fish-and-chip offer across the country,” says El-Houli.

He says a healthy menu is very important to the brand. “This has been something we have worked hard on. We have marketed much of our offerings that are grill- and salad-based to highlight the fact we do have an extensive healthy offer in addition to our traditional fishand-chip offer.

“Informal dining is also an important transition for fish and chips in general,

• • •

There are no silver bullets in this caper, and it takes time to get the business to where it needs to be.

and something we are also conscious of and working toward communicating clearly to our customers.”

But while the business is known for its seafood, the menu is broader. “We have a spread of product categories, with burgers, pastas, soft-shell tacos, lamb, beef and chicken products, salads, and much more.”

El-Houli says a challenge is being consistent enough and bold enough with brand communication to customers.

While delivery is on the radar for the

short to medium term, technology at store level comes in the form of self-ordering tablets for customers.

“There is an upfront hardware cost for franchisees and ongoing annual software costs, but the key metrics as a result of having these really do stack up,” says El-Houli. “At the moment, a solid chunk of our customers use this channel to order, and on average spend nearly 25 per cent more when using them.

“Online ordering is being worked on, with the ordering app a little further down

the track.” he says.

As for investment levels, some Famous Fish stores have required less than $200,000 (after applying the fitout contribution) for a turnkey operation, but this can stretch to $450,000. The two big variables are the size of the tenancy, and whether or not the franchisor can secure a fitout contribution from the landlord.

Franchise terms are five years with an option to renew for another five.

“We issue 100 per cent of fitout incentives from the landlords to our franchisees, as ultimately this would potentially mean franchisees can look to scale up quicker and become multisite franchisees, so it’s a win-win for everyone,” says El-Houli.

He believes investing in a hospitality franchise requires the right attitude. “If your mindset and motives for coming into a business like this aren’t established on a sound platform, it is very likely the industry will churn you out fairly quickly.

“There are no silver bullets in this caper, and it takes time to get the business to where it needs to be. It requires hard work and dedication.” 

THE TASTE TEST

KEY SUCCESS FACTORS IbisWorld report: Restaurants in Australia January 2017

ACCESS TO NICHE MARKETS A recognised quality restaurant that offers a niche offering will typically experience less competitive pressure.

EFFECTIVE COST CONTROLS To maximise profit, industry players should minimise costs and waste, especially with regard to food and rent.

ACCESS TO MULTISKILLED, FLEXIBLE WORKFORCE Restaurants with a large number of skilled, casual and permanent wait staff, cooks, chefs and kitchen hands are

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better able to maintain the high level of service crucial for upmarket clientele.

WORD-OF-MOUTH RECOMMENDATIONS High-quality food and excellent customer service are key to gaining favourable recommendations from customers. This encourages new and repeat business.

ABILITY TO CHANGE GOODS AND SERVICES TO SUIT MARKET CONDITIONS To maintain customer flow, dining franchises need to be able to change menus to respond to consumers’ changing tastes.

INDUSTRY SPOTLIGHT

SEPTEMBER/OCTOBER 2017 | 60 | WWW.FRANCHISEBUSINESS.COM.AU

THE EYE OF THE

Beholder Is looking good a necessity or a luxury? Either way there is business potential. Sarah Stowe looks beneath the surface to find out what is keeping the beauty industry on an upward trajectory.

W

ithout doubt the beauty sector has expanded over the past five years, driven by a combination of higher discretionary income, new markets and a growing population, according to Brian Lo, analyst and author of the January IbisWorld report Hairdressing and Beauty Services in Australia.

Beauty businesses can charge top dollar for more advanced, results-driven treatments such as skinrefining microdermabrasion and laser hair removal.

While IbisWorld predicted an annualised 2 per cent boost for industry revenue up to this year, reaching $4.8 billion, growth has slowed with expectations of an 0.4 per cent decline this year because of consumer caution.

But it is a diverse industry, from haircutting, styling and colouring (which has maintained stable growth and accounts for most revenue) to strongperforming hair-removal and nail-care services.

Not every sub-sector has proved to have long-term financial sustainability, however; IbisWorld highlights the decline of indoor tanning as a result of regulatory changes and “media coverage on the dangers of solarium tanning”.

Traditionally, the beauty sector is made up of a multitude of small concerns, and is extremely competitive with high entry and exit rates. The battle for customers, says the report, has put downward pressure on prices, forcing inefficient contenders to quit.

There is also increased external competition from day spas, hotels and airports offering hair and beauty services.

IbisWorld expects higher discretionary income and population growth in key markets to drive demand for services, yet warns that revenue may be constrained. Add this to higher wage costs, and beauty service businesses are likely to face

trimmed profit margins.

Lo sees further revenue growth, however.

“Higher grooming standards for men and an increase in baby boomers trying to slow the ageing process are expected to provide some slight reprieve,” he says. “IbisWorld forecasts that industry revenue will grow at an annualised 1.4 per cent over the five years through 2021-22, to $5.1 billion.”

So what is driving franchised beauty businesses right now? The sector has several levels, with franchised chains working to match consumer demand for affordable treatments in both the medical-aesthetics arena and the popular back-tonature space.

NIRVANA BEAUTY LASER CLINICS Demanding beauty clients are seeking the fountain of youth, and they don’t want to wait for it or have any downtime, says Nirvana Beauty Laser Clinics, which delivers results-focused services.

A current treatment trend is hyaluronic acid, which works on plumping the skin. Whether it is for treating signs of ageing or the results of stress, medication or pollution, the acid flushes out toxins and improves the skin’s cellular communication, says Nirvana’s Suzan Akil. It can be used as dermal filler and a home treatment suitable for all skin types and age groups.

Nirvana has developed its own serum, which it has been using for four years. “It’s the secret to youth,” says Akil. “No-one wants to age anymore.”

The clinics positioned themselves as offering non-surgical and non-invasive treatments for anti-ageing. That’s where the profit is, says Akil.

“There’s no profit any more in laser hair removal.”

Clients want to spend a minimum amount of time achieving immediate results, she says.

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INDUSTRY SPOTLIGHT In November, Nirvana introduced a lifting treatment in November that uses CO2 to infuse the skin, available in single treatments or a series of six. Its latest treatment, developed in Spain, is a one-off high-intensity focused ultrasound treatment (HIFU) that encourages muscles to tighten at a deep level. As a non-invasive procedure, it is seen as an ideal replacement for a facelift.

TREATMENT FINANCE Akil says annual treatments are sufficient, but it is costly ($4500 for a face/neck application). Nirvana has taken steps to ease the monetary burden for clients. “We’ve joined forces with a finance company that can offer interest-free finance,” Akil says.

Research and trials are important steps to introducing new, safe services to the treatment menu.

“There are lots of treatments out there, but are they delivering results? With HIFU we’ve had the machines in clinics for six months but have only just released the service to clients,” says Akil. “We’ve been using it on each other and models to see the benefits and get feedback.”

As a trainer, Akil is involved in ensuring all staff members are fully aware of the protocols involved in treatments - all staff must be diploma qualified.

Demographics are crucial when it comes to clinic locations. Parking is needed, plus a convenient site near groceries and shops.

“We always like to be near the fashion area,” says Akil.

Currently the brand has stores in Westfield Burwood, Miranda and Hornsby.

There is a strip site with a more urban feel appealing to lunchtime workers in Sydney’s city and Darlinghurst district.

Akil is seeking franchisees who will be owner/operators - beauty therapy is seen as an advantage but not an essential.

A fundamental requirement is business management experience.

HAIRHOUSE WAREHOUSE Hairhouse Warehouse made its name offering professional salon products off the shelf to consumers, then added hairdressing and other services. Now it has a twofold focus: a measured introduction of makeup product into its stores, and a greater focus on

providing first-class service.

“Customers coming in for haircare are also interested in beauty products,” says Jason Panda, head of salon operations and development. “We have a couple of beauty ranges and nail polishes.”

Makeup is proving the fastest growing category at the stores, with the trend for contoured hair mirrored in cosmetics that define and shape the face.

“There’s quite detailed advice now on social media,” says Panda. This reiterates the influence of social media bloggers who take catwalk trends and transform them to consumer-friendly looks.

Staying on top of the trends means a multi-layered approach to merchandising, starting with buyers who travel to global fairs to spot what is coming up, and look not just for a great deal but also merchandise that is on trend. Suppliers are also quicker at getting product to market.

A customer preference for natural and organic ingredients is crossing all elements of the beauty sphere, from hair and cosmetic products to skincare. Also driving buying patterns is a concern for animal welfare.

Panda says cruelty-free products are a top consideration for skincare buyers, such as derivative-free lip colour as an alternative to a collagen lipstick.

This broadening of choice hints at greater product personalisation. The idea of customisation has been fundamental to the hair and beauty sector, according to national franchise development manager Peter Fiasco.

“Customisation is entrenched in the industry. Now it’s a buzzword, but we have always customised.

No-one walks out of a hairdressers with exactly the same haircut.”

PERSONAL ATTENTION However, the idea of a tailored package, whether it embraces hair, skincare or cosmetics, is putting

the focus back on personal attention, which is good for bricks-and-mortar stores, says Panda. “It’s driving people to our stores for face-to-face consultations.”

As the network continues to grow, Fiasco says the need for consumers to find services and products means shopping centres make ideal sites for the company.

“We see the dynamics of shopping centres changing, but not the buying habits of consumers,” he says. “Shopping centres are evolving into entertainment hubs, and there’s a lot of talk about Amazon...yes, it will affect certain retailers, but it’s not going to kill retailing.”

Growth for the Hairhouse Warehouse group comes from new sites, from franchisees converting from competing chains, and from the success of boosted business driving internal growth.

Panda says services are a good way to secure a customer and getting them to return. No amount of online business can replace that, suggests Fiasco.

Hairhouse Warehouse is evolving its model; an aggressive refurbishment program is bringing a new format to the fore, and this really picks up on the idea of retail as experience.

The new layout improves the customer’s ability to navigate the store and find items more easily. There is also a style bar where customers can experience products.

With only a handful of new-look stores unveiled, customer feedback shows it is a positive move, backed up by improvements in turnover.

AUSTRALIAN SKIN CLINICS Hairhouse Warehouse’s Ella Rouge business last year merged with Australian Skin Clinics with the aim of converting the beauty outlets into laser-focused brand.

Now there are about 55 outlets across both brands, with four Ella Rouge salons already rebranded on renewal of their agreements.

SEPTEMBER/OCTOBER 2017 | 62 | WWW.FRANCHISEBUSINESS.COM.AU

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INDUSTRY SPOTLIGHT

Chief marketing officer Christie Harris says the rebrand will see Australian Skin Clinics grow from three to 27 in New South Wales, with the remaining Ella Rouge outlets expected to be converted by the end of the year.

“We see the move as a great strategic

step forward in providing high-quality service for an affordable price to the New South Wales public,” Harris says.

Australian Skin Clinics offers resultsdriven cosmetic treatments to suit a wide spectrum of customers both in age, skin type and gender.

Its latest treatment is a fat-freezing and reduction technology, CryoDefine.

“The non-invasive treatment is a safer alternative to liposuction surgery,” says Harris, “selectively cooling and destroying fat cells, resulting in a targeted re-shaping of problem areas such as love handles, inner and outer thighs, and stomach.”

National training manager Darlene O’Gara believes the treatment will transform clinic offerings. “Clients can expect to see visible results from CryoDefine treatments within 12 weeks, with progressive results ongoing after only two to three treatments per area.”

O’Gara says the treatment is ideal for busy clients who want to spot-reduce stubborn fat quickly and effectively.

The priority, says Harris, is to make customers look and feel fantastic about themselves by offering affordable, accessible and results -driven cosmetic treatments in a beautiful, high-quality clinic environment.

“We are passionate about ensuring

our staff members are some of the best trained and educated in the medi-aesthetics industry.”

Clinics that implement new treatments and technologies are supported with training and education for all staff members at its training arm, the Advanced Skills Academy.

This offers therapists concentrated training in an environment that replicates a typical clinic.

ENDOTA SPA Amanda Connors of Endota Spa agrees there is a major trend for holistic treatments and wellness. In fact, the Global Wellness Institute points to a wellness industry that with sales of $3.7 billion is three times bigger than the pharmaceutical industry.

Within this, the spa sector accounts for about $99 billion.

“It’s such a different landscape to when we opened 17 years ago. Then it was a luxury and a treat, but now people see the benefits and the need for relaxation and mindfulness,” says Connors, who believes the wellbeing concept is growing into home and workplace, and into food and entertainment.

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all three key customer segments: the trailblazer 20-plus customer with a millennial mindset; the time-poor mothers juggling life with children or young teens; and the age optimisers, the baby boomers or empty nesters.

“We have done a lot of research and found it’s a myth that people see a spa treatment as a bit of a luxury.”

A sub-trend within the wellness movement is anti-ageing, but customers want more than to see results, says Connors.

“They want to reconnect themselves and nature. It’s also about trying to overcome nature.”

And that means avoiding quick fixes and focussing more on ageing consciously, she says.

DATABASE RESEARCH When checking trends, Endota turns to its own database of half a million customers to find out what motivates them, which outlets they use, what they buy and which treatments are popular.

Testing products is even more rigorous, with some products achieving organic certification standards. Tests are done through third-party labs as well as within the company.

To continue the spa experience, Endota has an organics range of 32 products for

face, body and muscles - a professional range that can be used at home.

A new age range is being introduced in September after clinical tests and trials.

For franchisees, business is about repeat bookings - a spa visit inspires loyalty, says Connors.

Mother’s Day, for instance, is a substantial source of new clients who can receive gift vouchers bought not only from the spas but through outlets such as Australia Post and Coles. While this is more convenient, the process also widens the brand’s reach. “It’s a customer-acquisition program,” says Connors.

She says that providing consistency, quality and service are important for franchisees. “The customer is at the centre of everything we do.”

All categories are in a growth phase, says Connors, which means the focus is very much on marketing to and developing new customers as stores open up in new locations. Expanding the footprint of stores in Queensland and Western Australia is a particular focus.

Analysis of geographic and catchment areas is a huge part of site selection as the business is highly localised - customers want to relax then get home quickly.

Building a customer base in a greenfield site involves a multi-media campaign

embracing social-media influencers, public relations and paid online searches.

With 100 spas in the Endota network, marketing is increasingly sophisticated and driven centrally through a media and digital agency. “It’s about exploring a deep connection with wellbeing,” says Connors.

Questions the business needs to ask include how to take wellness into people’s homes and how the company can become part of their daily routines.

Despite its focus on relaxation and nurturing, Endota works to ensure it is using the best technology to meet customer needs. “It seems at odds when people come to us to disconnect,” says Connors, but it is important the company offers treatments that deliver results.

Redesigned treatments have taken two years to create, and there is now also a redesigned spa including a “dabble bar” where customers can try out minit-facials.

“We have always been an experiential brand,” says Connors. “Now this is more of a sensory journey.”

The appeal of the brand has always attracted and retained franchisees, she says. “We always do a franchisee satisfaction survey, and people actually love the brand. More than 120 franchisees have become successful.” n

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INDUSTRY SPOTLIGHT

A FOOT IN

THE DOOR As the Australian housing market continues to boom and the role of the mortgage broker becomes even more crucial, there are opportunities for franchisees, writes Noha Shaheed.

D

emand for residential property in the past five years from both owner/occupiers and investors has been enhanced by rising house prices and declining residential housing loan rates, according to IbisWorld’s Mortgage Brokers in Australia January 2017 report.

This has boosted mortgage broker industry growth, with revenue projected to rise at an annualised 3.5 per cent over the five years through to 2022, to reach $2.7 billion.

Loans issued via mortgage brokers many of which are in a franchise - have increased in value, both in absolute terms and as a proportion of total mortgages issued. In the latest Review of Mortgage Broker Remuneration report by the Australian Securities and Investments Commission (ASIC), the value of mortgage brokers to the consumer was seen in a positive light.

Consumers with recent experience or future intention of using a broker (58 per

cent) were much more likely than general consumers (25 per cent) to consider that brokers offer a better deal, says the review. Only 3 per cent of consumers with recent experience/future intentions thought that brokers offered a worse deal, compared to 7 per cent of general consumers).

CHALLENGES Industry revenue is expected to grow at a slower rate of 2.8 per cent this year because of a projected slowdown in housing price growth and tighter restrictions on lending to foreign buyers of domestic property.

Competition among brokers has intensified over the past five years, largely because of increased consumer awareness of the role they play in the mortgage lending market.

More big players are expected to emerge, and the big banks are already starting to make their presence felt by integrating broking into their services.

However, borrowers have a more positive perception of the value of an independent broker as they are not tied to one particular financial institution, so therefore can offer a broader range of options. As many broking services are part of a franchise, this opens the doors to potential franchisees.

SMARTLINE A franchise established in 1999, Smartline Personal Mortgage Brokers, has a culture of support within its network.

“In the past three to four years there has been a real turnaround and emphasis on first-year support for franchisees,” says New South Wales/Australian Capital Territory state manager Matt Fitzpatrick. “Smartline is non-territory based, so franchisees are collaborators."

Some even share offices, which he says helps them get up and running quicker.

Fitzpatrick says one of the major benefits of the Smartline system is work/life balance.

This is a key attraction for the 60 per cent or so franchisees who come from banking and

SEPTEMBER/OCTOBER 2017 | 66 | WWW.FRANCHISEBUSINESS.COM.AU

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INDUSTRY SPOTLIGHT corporate backgrounds.

Once a franchisee becomes established, they can start outsourcing many of the administrative tasks.

But while franchisees are at a stage where they need to be hands-on all the time, it can be easy for them to take a holiday as another franchisee can fill in.

The initial investment for a Smartline franchise is $13,000 plus GST for a five-year rolling contract, which can be renewed without a fee after that period.

Franchisees receive structured support for marketing including digital, Facebook and Adwords. However, while digital is important, the nature of the business is very much about people and helping franchisees start the conversation with customers, says Fitzpatrick.

A dedicated team is on hand for lending knowledge, plus a franchise development manager helps with key performance indicators, prospecting and networking. Leads are not provided, but a business coach is available for the franchisee’s first six months to help with sales, staffing and any specific issues.

BUYING ISSUES Fitzpatrick says the business has the buying power to source better rates

for indemnity insurance, but the main benefits to franchisees are leveraging the brand name and running a business with low overheads.

A challenge of the business is building up a reputation as a mortgage expert in the community. It can also be at least four to six months before a broker receives payment.

“Financial pressure is a big hurdle, but any business is the same,” says Fitzpatrick, who believes the future of mortgage broking is bright considering the positive ASIC review.

“About 70 to 75 per cent of mortgages overseas are obtained via brokers, but it’s at 50 per cent in Australia at the moment.”

He believes Australia will follow the overseas trend.

MORTGAGE CHOICE Established in 1992, ASX-listed Mortgage Choice has expanded from being a brokerage into a fully fledged financial services provider.

CEO John Flavell says the brand is “a one-stop financial shop” providing access to home loans, financial planning, risk and general insurance, car loans and business

lending. On the mortgage front, its special offer is a “paid the same” commission model for brokers.

“Under the terms of this unique payment model, our brokers are paid the same rate of commission regardless of which lender or product a customer chooses,” he says.

“This commission model is also carried over into our financial-planning arm, with advisers being paid the same rate of commission regardless of which insurance product their customer chooses.”

Flavell says that while a franchise is a full-time commitment, the hours are flexible to fit a franchisee’s lifestyle. Some franchisees work from home and find time to take children to school and pick them up, catching up with administration work in the evening.

STREAM OF LEADS Mortgage Choice provides its brokers with a steady stream of home-loan leads from the day they start. These come from the brand’s market-facing activities including advertising, local brand awareness and public relations.

“We also help our brokers grow their business through an in-house call centre and a dedicated web-chat system that directly connects potential customers

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SEPTEMBER/OCTOBER 2017 | 68 | WWW.FRANCHISEBUSINESS.COM.AU

with franchisees,” says Flavell.

There is also a mini-site for franchisees that draws from the Mortgage Choice corporate website. This plays a significant role in helping franchisees build their local profile.

The initial cost of a franchise is $14,815 plus GST for a five-year term, with the option to extend. Included is two weeks of training at Mortgage Choice head office, followed by a 24-month in-franchise business training and education program, Accelerate.

Every inductee is assigned a mentor/sales and credit coach for the first 36 months.

Ongoing support is provided with franchisees having access to IT support, compliance support, marketing support and diversified products and services.

However, while Flavell says the biggest challenge is turning a profit, he believes the future of the industry is positive.

“Things are looking good for the mortgage-broking industry,” he says. “Many changes are happening in the market, with lenders altering their pricing and policy requirements across their suite of services.

“Complexity breeds confusion, and confusion breeds opportunity for mortgage brokers to help their customers with their financial goals.” n

GETTING THE BEST RETURN:

KEY SUCCESS FACTORS IbisWorld: Mortgage Brokers in Australia January 2017

LINKS WITH SUPPLIERS It is important for brokers to have a strong relationship with multiple lending institutions to offer their clients an extensive choice of loans.

ABILITY TO FRANCHISE Many larger brokers work through a national network of franchisees. Sole operators are more likely to join a mortgage broker’s network if they have a reputable brand and provide support through training and mentoring.

ECONOMIES OF SCALE Many larger companies have a scalable

business model, allowing them to grow their originations and loan book without growing their cost base at the same rate.

CUSTOMER RELATIONS Mortgage brokers need to provide a high level of support and service to their customers.

As the brokers rely on client referrals, good customer service helps them grow their loan book through word-of-mouth.

EXPERIENCED WORKFORCE Experienced and knowledgeable staff members are vital for superior customer service and to effectively communicate different loan products to clients.

SEPTEMBER/OCTOBER 2017 | 69 | WWW.FRANCHISEBUSINESS.COM.AU

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INDUSTRY SPOTLIGHT

RIDING

THE BUBBLE Sydney’s housing bubble is a prime example of how franchised real-estate companies can benefit from investment in residential and also commercial properties, writes Noha Shaheed.

W

hile most franchised real-estate agents tend to focus on residential property, commercial property is also important. This involves the sale, lease and management of offices, retail stores and industrial sites.

Rising property prices have encouraged investors into the market, as increased equity in existing properties allows many owners to buy multiple properties, says IbisWorld’s Real Estate Agency Franchises in Australia October 2016. Increased commercial property activity has also boosted industry revenue growth.

Real-estate industry revenue growth is forecast to slow to an annualised 1.1 per cent over the next five years, to reach $7.6 billion in 2021-22.

Four major real-estate agencies offer options for franchisees seeking to enter this market...

Harcourts Harcourts is a privately owned real-estate brand that started in New Zealand in 1888 and now works in 10 countries. With 400 locations, Harcourts Group Australia is the master franchisor across Australia.

“We first stepped out of New Zealand 20 years ago,” says CEO Marcus Williams.

“We are the third-largest real-estate group in Australia.”

Behind-the-scenes licensing arrangements are in place, but terms are tailored for each individual new franchise. Five-year terms are the standard.

“We insist on franchisees being owner/ operators,” says Williams.

While the licensee in charge must have the proper expertise to run the business, there are instances where there is a partner investor, but the licensees need to have a real-estate licence. Statutory regulations specify the qualifications and responsibilities for licensees.

“We want to be sure the person in charge is actively involved in the business, a former real-estate agent or someone who has worked in the industry,” says Williams.

A standard Harcourts territory equates to 10,000 houses, and depends on how close the franchise office is to others, and how many people work for the franchise. They are generally non-exclusive, but there are rules to govern prospecting.

To become a franchisee, buyers need to pay a joining fee of $5000 to $10,000 for a standard five-year term with an option to renew for another five years. To secure a lease and fitout requirements, costs range from $50,000 to $250,000. In terms of overheads, the average business owner has three to five staff members.

Support includes access to state leadership teams, problem solving, business planning, disputes support, marketing, training, a full technology suite of Harcourts One products and apps, annual conferences, leadership focus, and access to Harcourts Academy, a registered training organisation.

Franchisees need to be good listeners, financially astute and driven, says Williams.

“They need to understand the why - why they are going into business.”

He has a positive outlook on the the $3 trillion housing market. “Australians love real estate,” he says.

His advice for potential franchise buyers is to really know what they are getting into. “You have to take your time to ensure the values of the leadership and franchise business are aligned with yours. Look under the bonnet to ensure the group has the value proposition to make you successful.”

Laing & Simmons Laing & Simmons MD Leanne Pilkington says the boutique agency offers a variety of options.

“These include a traditional franchise,

franchise partner (for a group planning to open multiple offices), virtual franchise for those who are not quite ready for the expense of an office, and a full partnership where we own half of the business with the principal.”

As owner/operators, franchisees are given territories. They cannot canvas for business in another franchisee’s territory. “Most of our franchisees are happy with this system as it prevents internal work disputes and confused brand messaging,” says Pilkington.

While she does not quote figures for initial investment costs, she says there are no upfront franchise fees, but a new business owner really needs to have 12 months’ worth of expenses set aside to be safe.

“Franchise terms are for five years, but most of our franchisees stay on for multiple terms.”

Overheads can vary widely depending on location and the size of business, and also on whether you are planning to buy a rent roll (a register of a landlord’s properties with the rental amounts).

Support includes marketing, training, technology, induction, on-boarding and a suite of shared backend services including bookkeeping, accounts, HR, technology and property management.

“Passion and enthusiasm for the industry” is the overriding factor when recruiting franchisees, says Pilkington. “But we do look for experience in real estate, if not necessarily previous business ownership. People who already have a network in the area they are looking at are also ideal.”

Regarding the current housing climate, she says it is not about the price of the property but more about the turnover. “When not much property is transacting, it becomes extremely competitive around listings.”

She advises prospective franchisees to do their research on the area they want to target.

“Know your numbers, know the competition and also be very clear on what your expectations are from your franchisor.

SEPTEMBER/OCTOBER 2017 | 72 | WWW.FRANCHISEBUSINESS.COM.AU

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INDUSTRY SPOTLIGHT

MAXIMISING VALUE:

KEY SUCCESS FACTORS From IbisWorld’s Real Estate Agency Franchises in Australia October 2016.

MARKETING AND PROMOTION Marketing and advertising initiatives are critical to the success of the real-estate industry, given the high competition and significance of referrals such as word-of-mouth.

EFFECTIVE PORTFOLIO MANAGEMENT The effective management of assets and tenants enables agency franchises to maintain a continuous leasing revenue stream.

KEY CONTACT MARKETS Maintaining contacts within the market, particularly for non-residential agency franchises, is critical to industry success. These contacts include institutional and private investors, banks and international real-estate agencies.

LOCATION Operator establishments should be near the customers they intend to serve.

“We believe that different franchise groups appeal to different people, so understand the values of your potential franchisor and make sure they align with yours.”

Ray White Established in the Queensland town Crows Nest in 1902, Ray White has evolved to almost 1000 individual offices across Australia, New Zealand, Indonesia, India, Malaysia, Papua New Guinea, China, the Middle East and Atlanta in the US. According to its website, the group sold more than $25 billion worth of property last year.

Ray White is still a family-owned business spanning residential, commercial and rural property as well as hotels, marine, property management and property funds investment.

Andrew McCulloch, CEO for network development, says Ray White has “a traditional franchise model in the sense we provide systems, tools, training and marketing”.

Owner/operators are preferred, and businesses need to be run by experienced, ambitious property professionals.

“It’s very unlikely for us to recruit anyone without experience.”

Franchise terms are five years with no charge upfront. Ray White helps choose sites, and no agreement is provided until a site is secured. Overheads include licensing cost, franchise fee, staff costs, technology (subscriptions) and, in some state, a marketing fee.

Fitout costs depend on staff numbers.

The average site size is 15 sqm. McCulloch says a franchisee usually has one staff member (often a receptionist). Franchisees are provided an onboarding support person.

The business is also territory-free. “We don’t provide territories as it can prevent growth,” says McCulloch. “Our model is very much designed around the consumer.”

He says that when the market is good, more people open independent realestate offices. “When the market is bad, they look for value and support from a franchise system.”

One Agency One Agency is a real-estate business with a licensing model.

“We license an applicant to a group of suburbs that can comprise a population of 30,000 people,” says Australasian head of membership John Stewart. Licensees can engage in commercial, residential, industrial or any area of real estate they wish, but no prospecting is permitted in another licensee’s territory.

The model allows for buyers to run their own business and ask for support when needed. Stewart said most members are fully licensed, have had 10 to 15 years’ experience in the real-estate sector, have business acumen and are “quiet achievers while being professionally focused”.

The initial investment is $13,000 plus GST, and licensees pay a $12,000 flat rate licensing fee. Owner/operators, licensees can access support within the network.

Stewart says the business can be run from home by a sole operator for less than $5000 a year, which includes overheads, car insurance, phone and licensing fee.

He says it is important for potential buyers to work out what they are looking for from a system, whether it is a franchise or a licence, and understand what they are willing to pay. “There’s a right home for everybody, and you’ll know when you find it.

“Go into the marketplace and talk to everyone. Do absolute due diligence - don’t get side-tracked by just one system.” n

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FRANCHISE INDUSTRY SPOTLIGHT BASICS

BE SPOIL T

F OR CHO ICE T her want e is nothi searc to serioung like an a n d a h fo r a f r s l y r a m p e x p o i f in M chance anchise up your you e lb o u o t rne. o do this ppor tunit is com y, in g u p

F

ranchising contributes a massive $146 billion to the Australian economy, and as a sector it employs 472,000 individuals, with new businesses seeking franchisees every month to grow their networks, according to the Franchising Australia 2016 report.

more about the franchising sector, and there’s no need to book – just show up and grab a seat.

Expert advice will also be available from organisations such as Australian Government Assistance, DC Strategy, the Franchise Council of Australia, LegalVision and the Small Business Commissioner.

Buying a franchise is likely to be one of the biggest decisions you make, and perhaps one of the largest investments, so it makes sense to put time and effort into choosing the franchise that is right for you.

Attending a franchising expo can give you insights that are hard to gain from online searches. Under one roof you will be able to speak to representatives of known brands as well as investigate new concepts.

Franchisors will be keen to showcase their business model, and find out whether you and the brand are a likely fit.

This is a chance not only to compare franchise offers, but also to see how brands present themselves, and to gauge the attitude and approach of franchise team members.

In Melbourne, the annual Franchising and Business Opportunities Expo in August is much more than a showcase of brands.

Each of the two days of the show features a day-long program of free educational seminars, with topics such as “Is franchising right for you?”, franchisee success panels, and keynote speakers sharing their years of experience. It is a great chance to learn

FINDING A FRANCHISE Finding the business for you depends on your budget and the type of industry that appeals to you.

Here is a sample of the businesses that will be participating in the expo in Melbourne...

Looking for business services? Check out Action Coach, Minuteman Press, Tax Assist and Tax Store.

Want to run a mobile business? Explore Appliance Tagging Services, Bugroff Pest Buster, Express Business Group, James Homes Services, TapSnap, The Coffee Guy, The Graffiti Eaters, WheelChangeU and Xpresso Mobile Cafe.

If fitness is your thing, look for Anytime Fitness, Belgravia Health Clubs, Orange Theory Fitness and Step into Life.

Want to work with children? Try Begin Bright, Jump Swim Schools and Sherpa Kids.

If you have a taste for a food franchise, the range includes Banjos Bakery Cafe, Brumbys Bakery, Crave Ice Creamery, Crust Gourmet Pizza, Dessert House,

Franchising & Business

Opportunities Expo 10am to 5pm, 26 and 27 August Melbourne Exhibition and Convention Centre Southbank For a free ticket at www.franchisingexpo. com.au, use the code FMG.

Donut King, Doughnut Time, Ferguson Plarre Bakehouses, Fogo Brazilia, Gloria Jean’s Coffees, Hombre Mexican, Hudsons Coffees, Liveat, Lord of the Fries, Michel’s Patisserie, New York Slice Pizza, Ogalo, Papa Johns, Pizza Capers, Sabatinis, Sharetea, Shingle Inn Cafes, Spudbar...

If retail is your thing, visit Clark Rubber, Godfreys, Luxaflex, Poolwerx, Sportsco, Vast Furniture and Homewares.

For the feel-good, look-good factor, see Cryo Australia, Laser Clinics Australia and Massage Envy, and if you are community spirited, check the business opportunities offered by Drug Safe Communities and Home Instead Senior Care.

Prepare a list of key questions for each franchise so you can save time and make the most of the event. List key franchise brands that interest you.

You can check the full exhibitor list when you register online for your ticket. 

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You know what you’re looking for in a great coffee place — perfect for a quick espresso on the run, or a relaxed bite to eat with your friends. At Coffee Guru, you always know what you’re going to get and you’re free to be yourself.

Our franchise model is based around you as the owner — we work with you to add a personal touch to every element of your store and menu offering, even down to personalising your fitout.

Afterall, it’s your place.

There’s never been a better time to be part of the vibrant cafe culture, and with the right partners, the sky’s the limit.

Are you ready to start your own place? coffeeguru.com.au Email us at franchising@coffeeguru.com.au  CoffeeGuruAustralia  coffeeguru_au

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Do you have what it takes to represent Australia on the world stage?

FCA Octomedia Nextgen Competition 2017 Australia is now open and the Franchise Council of Australia (FCA) invites young entrepreneurs to explore opportunities and to connect with the franchising sector globally This is part of a global competition that the FCA launched in Australia in partnership with the International Franchise Association (IFA) to celebrate the achievements of our young entrepreneurs who have brought forward innovative business ideas with the potential to franchise.

Australian finalists will compete against each other in a FranShark experience to be selected as the Australian winner. As a winner, you will be rewarded with access to the most successful executives, experts and financiers in the sector.

Who can enter Entrepreneurs between 21-35 years old, in business for 1-5 years.

How to enter Register now at nextgenfranchising.org

Deadline Applications close September 1, 2017. The Australian winner and global finalist will be notified on October 10, 2017 during the FCA Excellence in Franchising Awards night.

ENTER NOW! For your chance to take on the franchise world, register at nextgenfranchising.org

Winners will receive 3 Australian finalists will win return air fares and accommodation to the Gold Coast plus complimentary registration to attend FCA’s National Franchise Convention and Awards night.

The Australian winner will be representing Australia amongst the top 20 young entrepreneurs in the world at the NextGen global competition taking place in Phoenix, Arizona at the International Franchise Association (IFA) Convention next year – February 8-13 2018.

The Australian winner will have their return airfare & accommodation for Phoenix sponsored by the FCA. The IFA will sponsor the Australian finalists IFA Convention registration to attend & compete.

FRANCHISE BASICS

SETTING

THE SCENE Where you decide to set up in business, and at what cost, will form the framework for your franchise success.

C

hoosing the top spot for your franchise business is essential, and that includes ensuring you have the right rental agreement for any premises you need.

To successfully deliver a service to customers, a franchisee needs access to the target market, whether the venture is territory-based or run from a retail unit. In this, the fifth edition of our Franchise Basics series, we investigate the key issues crucial to finding the right location.

IN THE NEXT ISSUE How to set up in business • Essential documents • Getting the best from your training • Marketing must-haves • Working the plan

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FRANCHISE BASICS

NEIGHBOURHOOD

WATCH Search carefully for the right site to establish your franchise outlet and you will be well set to build your business.

H

ow can you maximise the profit of your franchise? First of all, it needs a saleable product or service that can bought at the right cost; it takes initiative and hard work to develop and maintain a good reputation; it takes financial nous to manage costs and cashflow; and, of course, it takes the right location.

An advantage of investing in a franchised business is the experience that comes into play in choosing a site: a good franchisor understands what makes a franchise success, and will turn down overpriced premises.

Many a franchisor has experienced how hard it is to find locations to develop their franchise networks. It is a delicate balance of availability, accessibility, business competition, services and cost.

It can be tempting to act instantly when a commercial opportunity arises, but rushing into premises that prove ultimately unsuitable is not wise.

One challenge might be finding a location at just the time you are ready to buy a franchise. That might well guide your choice of whether or not to buy an available business that is already established, or seek a brand new site.

When it comes to new or greenfield sites, find out if the franchise chain you are interested in has a site selection policy. Some franchisors will take on this task, others will give guidance

and insist on final approval, and some franchise companies leave the decision to franchisees.

You will know what suits you best and what skills you have to spot and negotiate the right venue. If this is not your strength, you could bring in expert help from an independent advisor.

SAME PRINCIPLES If you are considering buying an existing business, apply the same rigorous principles of site evaluation, particularly if it is a retail outlet. An established business will be able to supply trading figures you can use to work out the viability of the business in its present location.

Underperformance might indicate poor management and leadership from the outgoing franchisee, or it may be in the wrong location to maximise its potential.

As a franchise you will need to run your business efficiently, so some of the considerations will include: • NEIGHBOURHOOD Is it a desirable area your customers will want to visit?

Does it suit the profile of the business?

Is it a suburb that is booming or fending off a decline? Does it have the right zoning for your business activity?

• PERSONAL How far do you want to travel each day to get to and from

work? This is particularly pertinent when you are starting out and putting in long hours to establish the business.

• COMMUNITY Are you already part of the local community with contacts you can leverage as you build the business?

It the site is elsewhere, will it be easy for you to establish connections with businesses and charities in the area?

It is worth taking a helicopter view as well, looking at how the new site would work within the network.

Consider: • The franchisor’s expansion strategy • How the location will fit into their plans • What level of support will be available to you if you are, for example, the first interstate franchisee.

Your choice of location will have a significant impact on the success of your business, and buying a franchise will give you a head start in picking the right site. 

Rushing into premises that prove ultimately unsuitable is not wise.

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FRANCHISE BASICS

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IT COMES WITH THE

TERRITORY Before you sign up for that franchise business, do you know all the details about the area you have been allocated and the lease for your premises? There are certain things you franchisor is legally bound to tell you.

JENNY NEEDHAM Senior associate, Piper Alderman

B

ecoming a franchisee can be an exciting and daunting business decision. For some people, it offers the chance to move away from working for someone else toward self-employment with the security of being part of a network. While there are risks as in any business, there are two matters

that should be resolved before you sign on the dotted line for a franchise.

Many franchise businesses allow a franchisee to work from a particular premises and in a particular area.

Generally, this is referred to as a franchise territory.

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FRANCHISE BASICS Whether you are setting up a new franchise or acquiring an existing one, the disclosure document will set out the franchise site details.

WHAT THE FRANCHISOR MUST GIVE YOU As a prospective franchisee, a franchisor is required to provide you with: 1. A copy of the most current disclosure document, which offers detailed information on the franchise business 2. A copy of the franchise agreement in the form it is to be executed 3. A copy of the Franchising Code of Conduct 4. A copy of the franchisee information statement.

This must happen at least 14 days before you enter or agree to enter into a franchise agreement; or before you make a non-refundable payment.

WHAT THE FRANCHISOR MUST TELL YOU ABOUT YOUR TERRITORY In general, the franchisor must tell you: • Whether the franchise territory is exclusive, non-exclusive or limited to a particular site and geographic range and under what conditions this territory can be changed

• What allowances there are for you, other franchisees or the franchisor to run similar businesses • Whether or not the franchisor can sell the same products online • Details of any previous franchisee’s business operated in the same spot within the last 10 years.

WHAT THE FRANCHISOR DOES NOT NEED TO TELL YOU Generally, the franchisor does not need to tell you: 1. Any future business future plans, such as network expansion or reduction 2. Any negotiations being held with potential or prospective franchisees 3. Any plans to sell the franchise network that would not affect you 4. Whether other franchisees can solicit and market their own business within your territory, although such terms will generally be covered in a franchise agreement.

SITE OCCUPATION Among the most significant aspects of running a business are the costs, risk and

liabilities associated with leasing and occupying premises.

There are two main ways of occupying a business premises: 1. You enter into a lease directly with the landlord 2. The franchisor holds the lease and grants you a right, through either a sublease or a licence, to occupy the premises.

Whether you will be granted a lease, sublease or a licence to occupy will usually be dictated by the franchisor.

WHAT MUST THE FRANCHISOR MUST GIVE YOU If granting you a lease, sublease or a licence to occupy, generally the franchisor must: 1. Provide you with either a copy of the lease or a copy of the agreement to lease 2. Provide you with details of any incentive or financial benefit the franchisor or its related entity is entitled to receive as a result of the lease 3. Give you the above documents within one month of the signing of the lease or agreement to lease 4. If there is no lease or sublease, give you a licence to occupy the premises specifying the conditions of occupation 5. It you are given a licence to occupy, the

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conditions of occupation and a copy of the franchisor’s lease of the premises must be supplied within one month of you occupying the premises.

While there are risks as in any business, there are two matters that should be resolved before you sign on the dotted line for a franchise.

WHAT THE FRANCHISOR DOES NOT NEED TO TELL YOU A franchisor has no obligation to provide you with any advice relative to the terms of a lease agreement. You should seek legal advice on the terms of the lease agreement because agreements are usually in the landlord’s favour.

In particular, you should: 1. Be aware of the start and end date of the lease agreement 2. Find out whether the lease can be renewed after the initial term ends 3. Find out if you or the franchisor will be responsible for requesting a renewal of the lease term 4. If you are buying an existing franchise, find out how long is left on the existing lease, if there are options to renew it, and if the landlord has granted a new term on the lease 5. Find out whether the premises are subject to any town-planning conditions or compulsory acquisitions.

BE WARY While most franchisors do the right thing, be wary of franchisors who: 1. Fail or are reluctant to provide the information needed in the disclosure document 2. Are not transparent in their dealings with you 3. Seem overly pushy and intensify their sales pitch to encourage you into: a. signing the franchise agreement and its associated documents in a rush b. entering into a lease agreement before negotiationing the term of the lease c. opening and trading before any of the legally necessary franchise documents are provided, finalised

or signed 4. Create a sense of “urgency” in your dealings with them 5. Do not have a lease but grant you a licence to occupy premises 6. Do not have all the agreements and suppliers necessary for you to run your business (for example, a menu if you are working within the food industry, an operations manual or supplier agreement) 7. Have yet to organise a trademark and take steps to protect their brand.

Finally, before signing that franchise agreement, be sure you have a lease covering a term that at least covers the term of the agreement. Choosing the right location and understanding your lease obligations are vital to give your business its best possible chance of success. 

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FRANCHISE BASICS

IN A GOOD

POSITION

Choosing the right location is one of the most important decisions you will make when becoming a franchisee.

PETER BUCKINGHAM MD, Spectrum Analysis Australia

W

hen joining the world of franchising, one of the biggest decisions you will make is where to locate your business. This is particularly pertinent for highercost, retail-based franchises with the financial obligations entailed.

Think of a lease fee not as a monthly expense but as a long-term commitment - if all else fails, the landlord will still be expecting to receive payment until the end of your lease.

Add that up over five to 10 years, and it will probably be the biggest expenditure you ever make outside your personal home.

So where should you start to make an informed decision?

The first thing you need to address is location - the ideal site for your store. You

can be reactive and listen to every real estate agent in the market, or do your own preliminary research and set out your own site-selection criteria.

Firstly consider your customer - where do they sit in the socio-economic world?

Some items that everyone uses or buys may be described as demographically agnostic, but most franchise systems have a target audience. Use demographics to match the area to the product you sell.

WEALTH OF INFORMATION With census results released, look for Quikstats on the Australian Bureau of Statistics website. Enter a suburb or postcode, and up will come a wealth of

information. Once you filter down to the People segment, you will see the figures for that area. It is easy to see whether a particular area is suitable for your enterprise.

There is no need to be concerned about the size of the population of a single suburb or postcode in a metropolitan area because neighbouring districts add to the numbers.

However, a rural location (town or city) is a different matter as the market is more finite.

Suburbs and postcodes are rather random in size and can vary from 803 people (in Kooyong) to 47,637 people (Reservoir), both suburbs in Melbourne.

You need to have a 360o overview of the area, which a map offers. Areas such as Williamstown (Melbourne), Newport (Sydney) and Cottesloe (Perth) may look great on face value, but you are in water

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FRANCHISE BASICS

It is vitally important to do your own research or due diligence.

within 1km in at least two directions. That restricts such markets to the number of potential customers within a 3km radius.

Census data should also help you answer a range of questions, and depending on the type of franchise you considering, these can be critical...

• Are the people in the area younger or older than average?

• Is the locality full of young families?

• Does the area have more of a student feel?

• Is there high ethnicity in the area?

• What is the average household income?

• Are the locals car drivers?

• Are householders renters or homeowners?

Most franchisors will do their best to help you, and in some cases may provide a datapak, or can help you with researching and understanding census data. However, it is vitally important to do your own research or due diligence.

NOT ALWAYS REALISTIC If you are researching a shopping centre, I am sure the leasing agent will be able to provide the best demographic information possible.

There is a tendency for agents to provide a map and classify areas as primary, secondary or tertiary catchments. In our experience, these may not be realistic assessments so you need to have some basic knowledge of the area to be able to

draw your own conclusions.

Here are some terms you might come across: GLAR: Gross Leasable Area Retail is the total floor space used for calculating tenancies. The space can be measured either from the internal finished surface of external walls or from the central line of walls between tenancies.

MAT: Moving Annual Turnover is the total consumer spend at a shopping centre in a 12-month rolling period.

Once you understand the data, you can suggest to the franchisor the areas that interest you for a store, confident the sites are not just local agent recommendations.

When you have pinpointed an area, you need to match your expectations with what is available and within your budget.

Depending on the merchandise or service you will be offering, and whether you are going into a shopping centre or a strip, these are the points to look at: SHOPPING CENTRE 1. Size of the centre and the gross lettable retail area, moving annual turnover and pedestrian count 2. Whether the shops being offered are the correct size for your business 3. The suitability of the precinct, matching you with similar businesses in the same market 4. Whether your near neighbours benefit or hinder your brand

5. Whether the rent is affordable for your expected turnover SHOPPING STRIP 1. The location of the strip’s busiest section 2. Whether you are prepared to pay the rent for this busiest section or look further out from the centre of the strip 3. The size of the store 4. Available parking 5. Visibility – will signs be easily seen?

FREESTANDING SITE 1. The strongest traffic flow 2. Site suitability for product or service 3. Level of access from both directions 4. Visibility (from both directions) 5. Traffic speed going past and the capacity for drivers to pull in.

While it is quite easy to talk about the perfect site, before you even start that discussion it is crucial to have an understanding of the areas available. It is most important to choose an area suitable for your product or service, rather than setting up in a great site within a totally mismatched area.

Peter Buckingham is both a Certified Franchise Executive (CFE) and a Certified Management Consultant (CMC). Spectrum Analysis Australia is a geodemographic and statistical consultancy. 

SEPTEMBER/OCTOBER 2017 | 88 | WWW.FRANCHISEBUSINESS.COM.AU

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FRANCHISE BASICS

SETTING

BOUNDARIES Before entering into a franchise agreement, a franchisee must have a clear understanding of the nature of their rights and obligations relating to their territory, assuming they have one.

RAYNIA THEODORE Principal, MST Lawyers

Q

uite commonly, franchise agreements include a stipulation that the franchisor will not to establish nor allow another franchisee to establish a competing business within a defined territory. This means the franchisee has the sole right to the brand within their selected area.

But, of course, this does not necessarily mean the franchisee will not have competition. While a franchisor may agree not to have competing franchisees within a territory, this does not prevent a competitive brand opening a business nearby, even next door.

SEPTEMBER/OCTOBER 2017 | 91 | WWW.FRANCHISEBUSINESS.COM.AU

FRANCHISE BASICS This is a normal risk that every business owner must assume.

National franchisors who have some clout with shopping-centre landlords may be able to negotiate a restraint that prevents a landlord from granting leases of nearby premises to competitive brands, but this is rare.

And while franchise agreements guaranteeing exclusive territories are common, it is equally common to see these territories narrowly defined. For example, a retail territory might be limited to a strip shopping precinct or a particular section or level of a shopping centre. Some franchise agreements even limit the territory to the site of the franchised business.

A franchisor who grants larger territories may protect themself with provisions allowing them to split or reduce the territory if the franchisee is not meeting predetermined performance criteria.

Exclusive territory provisions also often restrict the ability of a franchisee to market outside the defined area. This becomes a problem if a franchisee wants to advertise in a publication that circulates across many franchised territories. The franchisor is unlikely to sanction this unless the other franchisees within the

magazine’s distribution area agree to be part of the campaign.

Marketing restrictions usually also prohibit franchisees from maintaining their own website and social-media sites.

NON-EXCLUSIVE TERRITORY A non-exclusive territory is one where other franchisees or the franchisor may conduct business.

Some service-based franchise systems grant a territory to a franchisee, and when allocating work (usually from a call centre) will give the franchisee first right to the work. However, if the franchisee is too busy or unable to do the job, the franchisor can re-assign the work to another franchisee.

Service-based franchise systems also often contain provisions that honour the customer's wishes. For example, a customer may use a certain franchisee for garden maintenance, and build up a good relationship with them. When the customer moves house outside the territory, they may want to keep using the same franchisee for their new garden. Rather than losing the customer, the franchise agreement may allow the franchisee to continue to provide the service even though the job has moved to another

franchisee’s territory.

Where a non-exclusive territory is granted, the franchisee will usually be permitted to work outside the territory subject to compliance with the rules and guidelines in the franchise agreement and/or operations manual. Such franchisees will usually be able to work in non-franchised areas.

TERRITORIAL ENCROACHMENT Encroachment arises where the territorial rights of the franchisee are infringed by a neighbouring franchisee working or doing business within their territory, inevitably causing anger and discontent within the network.

Some franchise agreements define territories by reference to municipal boundaries or postcodes. However, should these boundaries or postcodes change, the territory will also change, which could restrict a franchisee from continuing to service some customers.

The internet also does not sit well with territorial provisions because a franchisor or any franchisee could theoretically sell to a global market. Many franchise agreements reserve the right of the franchisor to sell via the internet. In some

SEPTEMBER/OCTOBER 2017 | 92 | WWW.FRANCHISEBUSINESS.COM.AU

cases, profits are shared with affected franchisees; in other cases, the franchisor retains all profits.

Franchise agreements may contain exceptions to the exclusivity of a franchisee’s territory. For example, a franchisor may be allowed to sell the franchise’s products in non-branded retail outlets in a franchisee’s exclusive territory, such as a supermarket. A franchisor may also be permitted to operate or allow other franchisees to operate mobile or temporary franchises inside a franchisee's exclusive territory, an example being sporting events.

The Franchising Code of Conduct requires franchisors to give a prospective franchisee a disclosure document in a prescribed form, and the franchise agreement in the form in which it will be executed by a franchisee at least 14 days before the franchisee enters into the agreement or pays any non-refundable money.

While the legal position regarding a territory is ultimately governed by the terms of the franchise agreement, franchisors must include in their disclosure document certain information about territories in order to help franchisees better understand their rights.

Exclusive territory provisions also often restrict the ability of a franchisee to market outside the defined area.

The disclosure document must include this information: 1. Whether the franchise is for an exclusive or non-exclusive territory, or whether the franchise is limited to a particular site.

2. Whether, within the territory of the proposed franchise agreement: a. Other franchisees, the franchisor or an associate of the franchisor, may own or run a business that is substantially the same as the franchised business; b. The franchisor or an associate may establish other franchises that are substantially the same as the franchised business; c. The franchisee may run a business that is substantially the same as the franchised business outside the territory of the franchise;

d. The franchisor may change the territory or site of the franchise.

3. The franchisor’s policy of territory selection.

4. Details of whether, in the previous 10 years, a franchised business under the same brand has been run in the territory.

If so, details of the business should be given, including the circumstances of its closure.

5. Details of whether the franchisee, the franchisor or an associate of the franchisor or other franchisees may make goods or services available online.

Territorial rights can be complex and easily misunderstood. To ensure clarity about rights and obligations, franchisees must read both the disclosure document and franchising agreement carefully, and should also discuss issues relating to territory with their legal advisor. 

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Call Patrick on 0431 649 450 or franchisedevelopment@shingleinn.com shingleinn.com SEPTEMBER/OCTOBER 2017 | 93 | WWW.FRANCHISEBUSINESS.COM.AU

FRANCHISE BASICS

IT’S ALL IN THE

name

It pays to know the pros and cons of leasing and subleasing before you sign a rental agreement for your franchise outlet.

CORINNE ATTARD Partner, Holman Webb Lawyers

I

f you are looking to buy a franchised business that can be run from any premises other than your home, you will probably need a lease. For retail, businesses location is critical, and it is likely your franchisor will control the negotiation process and require that the lease be either in its name with a sublease or licence

granted to you, or allow the lease to be in your name but with conditions attached.

There are pros and cons for either of these retail lease structures for you as the franchisee and actual occupant of the premises.

SEPTEMBER/OCTOBER 2017 | 94 | WWW.FRANCHISEBUSINESS.COM.AU

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FRANCHISE BASICS

OPTION 1 – HEAD LEASE IN FRANCHISOR’S NAME The lease may be in the franchisor’s name either because the franchisor wants ultimate control over the site, or because the landlord has insisted on it.

Franchisors can usually negotiate better lease terms with landlords than can individual franchisees, so this is often a key advantage.

You can also expect the franchisor to negotiate the lease directly with the landlord as they have the experience to understand a commercial deal that will be sustainable for the business. If the lease has not been finalised, however, you should ask to see any offer and determine if there are any terms you wish to negotiate or want the franchisor to negotiate with the landlord.

If the franchisor holds the head lease it will need to grant you a sublease or a licence to occupy. You should check that the lease allows the franchisor to do this, otherwise the landlord may insist on a formal application for approval of you as subtenant/licensee (which means further costs).

In most cases there is no real advantage to a sublease over a licence to occupy. A

sublease is a more formal document that in most states and territories requires registration on the title, which means extra costs. If the franchisee changes, then the sublease must be surrendered or transferred, and incurring more costs, which the franchisor will usually pass on to you. This is why a licence to occupy is generally favoured.

In either case, it is usual for the franchisor to simply pass on its tenant obligations to you as the licensee.

If a landlord’s disclosure statement is issued, you should also receive this.

You may also need to provide a tenant’s disclosure statement or certificates detailing any representations about the premises you relied on, or whether you took legal advice on the terms.

This is because under the retail leasing laws in most states, a licence is treated the same as a lease: you have the same legal rights against your franchisor as you do against your landlord. Importantly, this does not apply in all states so you need to obtain advice on this.

Even though you are not the tenant named in the lease you may still be named as personal guarantor, and you are also usually required to provide the bank guarantee or security deposit to

the landlord as well as the insurance certificates. Whether or not you have guaranteed the lease to the landlord, you are still liable to the franchisor if you default in rental payments.

A disadvantage with the licence or sublease arrangement is that you have no formal right to deal directly with the landlord about the lease or matters concerning your tenancy, even if you have provided a personal guarantee and a bank guarantee. It is up to the landlord to negotiate with the landlord.

If, for example, the franchisor does not properly exercise an option or right to renew the lease term within the time required, or does not negotiate the lease renewal, you may be left without a lease and therefore without a shop.

Another problem will be that should the lease end for any reason (which may be beyond your control), your right to use the premises also comes to an end. This is a concern if the franchisor goes into administration or liquidation. The lease may be terminated by the liquidator and you will have no further occupancy rights.

In that situation you will need to negotiate directly with the landlord for a new lease in your own name if you wish to stay on.

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FRANCHISE BASICS

OPTION 2 - LEASE IN FRANCHISEE’S NAME The franchisor may not wish to take on the lease in their own name. This may be its general policy or it may vary from site to site depending on the merits of the location or landlord requirements.

If the franchisee is the tenant, then the franchisee has the ultimate responsibility to pay the rent to the landlord and meet all obligations.

If there is a default, the landlord will sue you as the tenant and not the franchisor.

With the lease in your name, you can deal with the landlord directly. You may consider this a plus if you are confident in doing so, but you may be able to ask your franchisor for help in any case.

If you are negotiating a lease you should obtain your own legal advice, and you may also wish to engage a lease consultant if your franchisor is not able to provide the right commercial assistance.

If you sell your business, you will need to obtain the landlord’s consent to the transfer of the lease to the buyer, as well as the consent of the franchisor.

In the event of the franchise ending early, as the holder of the lease you may think you can use the premises for another business, perhaps even changing to a competing system. In most cases, however, there will be restraints in

A disadvantage with the licence or sublease arrangement is that you have no formal right to deal directly with the landlord about the lease or matters concerning your tenancy.

your franchise agreement that prevent this, and your franchisor may also hold “step-in” rights.

These rights may be outlined in the lease or in a separate deed with the landlord. They allow a franchisor to take over a lease if the franchise ends, for example if your franchise is terminated for default. Alternatively, if the franchisor believes the lease or the site is not favourable, the franchisor may decide in event of default to simply terminate the franchise but not to take on the lease. In that case, as the tenant you will still have to pay the rent until the end of the lease or find a replacement tenant or subtenant.

Whatever the leasing structure, it is important to ensure the franchise term and the lease term match, particularly if you hold the lease directly. If the

franchise ends before the lease you may end up being responsible for the lease but with no right to run a business on the premises.

If the lease ends before the franchise, which can happen in any situation for a reason beyond the control of the franchisee or franchisor - such as shopping-centre redevelopment or fire - there should be provision in the franchise agreement for the business to be relocated to new premises within a reasonable period.

In both options you can see that it is important to obtain independent legal advice on what is most suitable for you, and to determine your legal rights and responsibilities. As a retailer, the importance of the lease cannot be overlooked. 

SEPTEMBER/OCTOBER 2017 | 98 | WWW.FRANCHISEBUSINESS.COM.AU

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FRANCHISE BASICS

CLINCHING

THE DEAL What does it take to realise a brilliant rental deal that will set you up for success?

F

ranchisees have a particular advantage over independent businesses when it comes to agreeing a lease - the skills and experience of the franchisor in lease negotiations. Here one leasing expert and a franchisor share their views on getting the best deal.

Will your franchise business be sited in a strip location or a shopping mall? Will your lease be negotiated with a local landlord or a major property business?

As a franchisee one advantage you have over independent business owners may be the access to negotiating expertise, and good connections.

SEPTEMBER/OCTOBER 2017 | 100 | WWW.FRANCHISEBUSINESS.COM.AU

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FRANCHISE BASICS

If there isn’t a negotiator within the franchisor team to act on your behalf you can still employ the services of a leasing expert.

So what insights can the professionals reveal?

THE LEASING ADVISOR Angelo Kondos and LeaseWise have been representing retail tenants within the franchise industry for 18 years so the knowledge and data collected during this period is pivotal to any lease negotiation advantage.

ANGELO KONDOS: "The foundation of any retail franchise business is the location and the lease that governs it. This will largely determine whether the business is successful, mediocre or a non-performer. Location and the lease comprising rent, incentives, annual increases, term of the lease and many intricate components are all mutually exclusive and any one component can affect the whole enterprise.

The good news is most retail franchise systems are proficient at considering all of the components mentioned and presenting their franchisee with a location/lease package that minimises risk and provides the best possible chance of success.

Franchise systems, whether using inhouse or external property consultants such as LeaseWise, have minimum requirements that all landlords must meet before concluding a deal. This includes size of tenancy, services to a tenancy, location or precinct, minimum seating area, storage to be included etc. Negotiation is about using a mixture of data, brand equity or leverage matched with individual skill and experience to complete a transaction on beneficial terms. The landlord's representative usually negotiate leases every day so has an advantage; however that is negated by the franchisor when they bring to the table all of the elements referred to.

The art of negotiation is to have a discipline that does not allow you to deviate from base line positions that may compromise or risk the future of the business. You only really get one chance to negotiate the best possible deal and that is at the start of the process. The property experts who represent a franchise system bring an expertise to negotiation devoid of emotion that will always get the new franchisee the best possible deal.

Understanding the environment and your opponent in a negotiation is an important element, the human factor that adds an unquantifiable dimension to the data-driven process. The networking and

Angelo Kondos

relationships required to achieve the best possible deal cannot be underestimated.

Landlords want brands that have a presence, add value and security to their property.

A progressive franchise system will always have the advantage and the wherewithal to deliver the best possible deal in any environment. The retail market has been tough the last several years and the ability for a franchise system to procure and negotiate the best commercial deal has never been more evident in my experience.

My tip for securing the best possible lease is to have complete faith in the property experts a franchise system provides. In the event it is an emerging system that does not provide this full service, do the research or engage an expert that has the background and data and let them deliver. The exercise and cost is a decimal equation in the scheme of the business’ life and total investment.”

a corporate level.

The company negotiates and accepts the lease deal on behalf of the franchisee, presenting them with the final option. It is important however, that the franchisee is involved in all steps of the decision making process. This comes down to negotiating terms like: rent free periods, fitouts, rent escalations, premise usage, operating costs and common area exclusivity - to ensure the franchisee benefits from any contributions made by the lessor.

While having that relationship with the franchisee certainly helps the negotiation, understanding and factoring in commercial terms is very important: refurbishment work, competitors and all aspects of business, annual reviews - Jamaica Blue won’t proceed with any deal if the terms don’t make sense commercially.

Another thing to remember, is that a franchisee has no obligation to proceed with the terms of the lease if they disagree with them - and this should always be an option whether that disagreement is between the franchisee and landlord, or the franchisee and franchisor.

If the terms don’t make sense for Jamaica Blue or the franchisee, then neither will proceed, which is why lease negotiations are so important and should be carefully conducted.

Jamaica Blue has found that landlords are always open to negotiation, however a franchisee always has to remember that a lessor’s primary concern is ensuring their own revenue targets are met, even if this involves keeping the face value high should it come time to sell. But by maintaining a strong relationship with a lessor, and taking all these considerations into account, a company is able to achieve satisfactory outcomes for both parties and especially their franchisees.

Ange Ritchie

THE FRANCHISOR Ange Ritchie, business development manager for FoodCo, one of Australia’s leading food and coffee franchisors, talks lease negotiations across Jamaica Blue.

ANGE RITCHIE: The first thing a franchise buyer should know is that they’re not alone in the negotiation process. With a growing network of approximately 130 cafés in Australia and 40 cafés internationally, Jamaica Blue’s parent company FoodCo holds the head leases with the majority of its sites, and so keep lease negotiations at

SEPTEMBER/OCTOBER 2017 | 103 | WWW.FRANCHISEBUSINESS.COM.AU

FRANCHISE BASICS

THE LEASE OF

YOUR WORRIES...

Concerned about signing up to a lease? Resolve those burning issues with these 11 questions about what happens next...

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BIANCA SEVASTOS Partner, Baybridge Lawyers

E

ntering into a long-term agreement such as a lease can be daunting. Franchisees, whether they hold the lease in their own capacity as tenant or are granted a right to occupy the premises via a licence from the franchisor (or its leasing entity), should understand the pitfalls and dangers in leasing so they are better prepared for all situations.

If you occupy premises through a licence, you essentially assume all of the obligations of the tenant under the lease.

SEPTEMBER/OCTOBER 2017 | 105 | WWW.FRANCHISEBUSINESS.COM.AU

FRANCHISE BASICS

Landlords will generally have greater powers than tenants because of their stronger bargaining power and business experience.

Here are 11 common questions regarding potential hazards that can be associated with retail leases...

1. WHAT IF MY LANDLORD WANTS TO REFURBISH OR RENOVATE THE SHOPPING CENTRE? For most retail business owners, fitting out the store will be one of the largest upfront costs of establishing the enterprise, if not the largest. But in most cases there is little guarantee a tenant will be able to stay in their premises for the full term of the lease.

Most retail leases contain a clause that allows for the refurbishment or renovation of the shopping centre where the premises are located, which may mean your tenancy will be relocated or even terminated. However, retail leasing legislation in each state provides some comfort to tenants: a landlord cannot demand a business relocate without providing some security or relief in return.

While tenants should check the relevant laws in their state, the legislation has some general provisions…

1. A landlord must provide the tenant with details of a proposed refurbishment/renovation reasonably early, and the work cannot be carried out without vacant possession of the premises.

2. A tenant cannot be required to relocate unless the landlord has given written notice (in most states this is three months in advance) which contains details of the alternative premises being offered.

3. A tenant is normally entitled to a new lease for the alternative premises on the same terms as the existing lease and up until the same expiry date. The rent of the alternative premises must be the same except for any reasonable change because of the different commercial value of the premises.

4. If given a relocation notice, you may be entitled to terminate the lease within one month of that notice.

5. The landlord may be required to pay reasonable costs of relocating, including the dismantling of the current fitout and reinstalment in the new premises to the same standard, plus legal costs.

If the landlord intends to refurbish or renovate the centre, this should be disclosed to you in the Landlord’s Disclosure Statement provided to you before you sign the lease. It is important to consider the impact of any such works on your business and your investment.

2. WHAT IF MY LANDLORD WANTS TO DEMOLISH THE CENTRE AND TERMINATE MY TENANCY? As in renovation or refurbishment provisions, a lease may also contain a provision that permits the landlord to demolish the shopping centre and consequently end your tenancy.

Again, retail-leasing legislation provides some protection for tenants in such circumstances. Generally, the landlord needs to take two steps in order to be able to rely on the demolition clauses within the lease: 1. The landlord must give the tenant

details of the proposed demolition; and 2. The landlord must give the tenant at least six months’ notice of the demolition.

If you are served with a demolition notice, you can give the landlord seven days’ notice that you wish to terminate the lease. You do not have to wait until the six months’ notice period has expired.

The landlord must compensate you for the value of the fitout, but compensation does not extend to the value of the business as a whole.

Just as with the renovation and relocation provisions, the Landlord’s Disclosure Statement should also state the landlord’s intention to demolish the centre.

3. WHAT HAPPENS IF I DEFAULT ON MY LEASE? A tenant should always observe and adhere to all obligations under a lease.

In the case of a breach, the tenant should be aware of the consequences and the normal procedure. Breaches of leases may include falling behind in your rental payments or failing to repair any damage to the premises as required under the lease.

Typically, a landlord is required to give a tenant notice that they have breached a term of the lease, and provide a reasonable time frame for the breach to be remedied.

If a tenant is served with a breach notice from a landlord, they should take the matter seriously and contact their solicitor for advice as soon as possible.

SEPTEMBER/OCTOBER 2017 | 106 | WWW.FRANCHISEBUSINESS.COM.AU

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FRANCHISE BASICS If the breach is not remedied, a landlord may opt to terminate the lease. This may, in turn, result in the termination of the franchise agreement.

4. WHAT IS THE EFFECT OF PROVIDING A PERSONAL GUARANTEE TO A LEASE? If a franchisee takes a lease as tenant under a company name, most landlords will require them to personally guarantee the obligations of that company under the lease.

It is important to understand the implications of the personal guarantee, and what it means in the event of a default or termination of the lease. If the company is unable to meet its obligations or debts under the lease, the landlord can pursue you as a person to fulfil the obligations of the company.

It is recommended that any tenant who has to provide a personal guarantee for a lease should seek clarification from their solicitor to completely understand these obligations. A personal guarantee can have serious ramifications in the event of a default or termination of a lease, as your personal assets may not be protected.

5. WHAT IS A BANK GUARANTEE, AND WHAT HAPPENS WHEN I PROVIDE ONE TO A LANDLORD? It is customary for a bank guarantee to be provided to a landlord as security under a lease. The amount may vary depending on the policy of the landlord, but it is typically equal to three to six months’ rent and outgoings for the premises. The landlord holds the bank guarantee as a form of security over the performance of a tenant’s obligations under the lease.

When a tenant has defaulted under a lease, the landlord may elect to draw on the bank guarantee. This can be when a tenant has failed to pay rent or has other unpaid debts under the lease.

If a landlord uses part or the whole of a bank guarantee, the tenant has to provide a replacement bank guarantee so the landlord always has the security amount stipulated in the lease.

6. CAN MY LANDLORD TERMINATE MY LEASE? If a tenant has not complied with the terms of a breach notice, a landlord may choose to terminate their lease.

A landlord will terminate a lease either by notice to the tenant or by re-entering and taking back control of the premises. In these circumstances, a tenant will typically forfeit any bank guarantee supplied to the landlord and may also lose any equipment in the premises when the landlord re-enters.

7. IF MY LEASE IS TERMINATED, AM I LIABLE TO PAY DAMAGES? If a lease is terminated by a landlord for the breach of an essential term, the landlord may pursue the tenant, and/or the guarantor, for loss and damages. These damages are typically the money the landlord could have expected to receive from the tenant had they stayed for the duration of the lease.

While in these circumstances a landlord is obliged to mitigate their losses by actively trying to find a replacement tenant for the premises, it does not stop them from seeking damages

8. WHAT HAPPENS IF THE LEASE EXPIRES BEFORE MY FRANCHISE AGREEMENT? Often the term of a franchise agreement is

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subject to the term of the lease for the premises. This means both arrangements expire at the same time. While it is not always possible, franchisees should try to obtain a lease that matches the term of their franchise agreement.

A franchise agreement typically will provide for circumstances in which a lease expires or terminates before the franchise agreement. Franchisors may allow a franchisee a period of time to negotiate a renewal of their lease, or time to find alternative premises.

If a franchisee is unable to find alternative premises within the allotted time there may be a clause in the franchise agreement that allows for it to be terminated.

9. CAN I GET OUT OF MY LEASE EARLY? Unless the landlord consents to let the tenant out of a lease early, an exit before the due date is possible only by assignment, which means transferring the lease to a third party.

Most retail leases will provide for assignment, but impose conditions in order to protect the landlord and their interest in the lease. Typically a landlord

will require that the proposed new tenant prove they can meet the lease obligations, and have at least the same business skills and financial capacity as the current tenant.

When signing a lease, a tenant should always plan to occupy the premises for the full lease term or consider in advance the landlord’s requirements for assignment of the lease.

10. WHAT ARE MY OBLIGATIONS AT THE END OF A LEASE? When a lease expires or is terminated, a tenant must vacate the premises and remove their property.

A landlord may also require a tenant to “make good”, which entails returning the premises to the base building condition, or the condition it was in when possession was taken. This will include repairing any damage caused by the removal of a tenant’s property.

Tenants should also be aware that if they do not remove their property, the landlord may do so and charge the tenant for the cost.

The price of de-fitting a store and making good a premises can often be

significant, and should be factored into your business model.

11. WHAT ARE MY RIGHTS UNDER RETAIL LEASING LEGISLATION? Landlords will generally have greater powers than tenants because of their stronger bargaining power and business experience.

It is important for tenants to be aware of their rights under the relevant legislation, which may provide some relief and help for the tenant in certain circumstances.

Talk to your solicitor to better understand these laws and how they may protect and benefit you. 

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SEPTEMBER/OCTOBER 2017 | 109 | WWW.FRANCHISEBUSINESS.COM.AU

NUMBER

FRANCHISE BASICS

CRUNCHING Your business success depends on negotiating lease terms that give you a chance to write off your investment within its time frame.

S

igning a lease is a significant step in the process of setting up in business. The numbers are important because these financials are the foundation of your ongoing costs.

Specialist retail valuer and arbitrator Don Gilbert, who provides independent advice to landlords, prospective investors and tenants, says his best advice echoes the words of former Westfield GM Allan Briggs: “What are you buying? You certainly are not buying a lovely little shop in a lovely centre - you are buying the cashflow, the business.”

When it comes to business, starting a business or buying a business, it is all about numbers, says Gilbert.

“When people enter into leases, at worse they do not do their numbers properly; often marry their leases and other family assets to their homes by way of personal guarantees; and have not negotiated the lease terms based on hard numbers.

“To put this in perspective, the 1997 Fair Trading Inquiry addressed some important points about what one signs before starting or buying a business, with goodwill and cashflow being thoroughly teased out by landlord representatives to the committee.

“The concept of goodwill was discussed in the context of security of tenure,” Gilbert explains. The committee chairman asked Allan Briggs whether a business in a major shopping centre had “goodwill”, particularly at the end of its lease. His response, as reported by Hansard: “The value of the goodwill decreases, depending on the term available to the merchant... There is no goodwill attached to a lease, except if a merchant has a five-year lease, let us say, then it has some value… one year into the lease it has four years, two years in it is three years, and so on as it gradually diminishes. But at the end of the lease there is no goodwill.”

You certainly are not buying a lovely little shop in a lovely centre - you are buying the cashflow, the business.

PROFIT DRIVEN Briggs further said the value of any business is driven by the income earned and by the bottomline profit. “Our industry is no different from any other … If there is a suspicion the rentals will not be maintained, then the valuer is duty bound to base his valuation on that instinct or knowledge or premise.”

It was also made clear that lease renewal is no certainty, and a business is technically worthless by lease end, points out Gilbert.

“In franchised businesses you do not have to build a brand. Many business systems are in place, such as stock ordering.

But this comes at a cost.

“In every business, $1 equals 100 cents.

You cannot add extra to a customer’s bill “because my landlord and my franchisor want more money” Extra expenses come out of your pocket - your family home, if you have put that on the line.”

The time to get these things in order, or to quit, is before signing up to a lease.

The term “goodwill” as used here is “superprofit” after you have paid yourself a reasonable wage, says Gilbert. “That is the money needed to fully amortise (write off) investment over the term granted under a lease, in taking on that business risk in the first place. As many leases are over-priced it is not possible to amortise costs.” n

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FRANCHISE BASICS

PROPERTY

SEARCH How does a major franchise network manage its site selection process?

B

raeden Lord, general manager, retail operations at convenience chain 7-Eleven explains how the property division stays ahead of the game.

Q: WHAT'S THE PROPERTY STRATEGY FOR 7-ELEVEN? A: The customer is at the heart of all we do at 7-Eleven, and therefore the changing needs of the convenience customer drives our business strategy including managing our property portfolio.

We have a well-defined network plan, updated annually, led by our development managers based in each of the four main states we operate in (VIC, NSW, QLD, WA).

This plan saw us open around 30 stores in the last financial year, with similar rates of growth projected in the year ahead.

This growth is predominantly in new suburban fuel sites, as well as fuel sites in some key regional areas.

In addition to opening new stores, we are continuing to refresh our current trading portfolio, including a planned transformation of our non-fuel sites based on learnings from a couple of trial store transformations in Melbourne.

Q: WHAT'S THE RATIO OF GREENFIELD AND RESALES IN THE EXPANSION PLAN? A: Over the next 12 months, we project that the number of existing stores to resell will be similar to new store openings, providing strong opportunity for growth and renewal across our network.

Q: WHAT GIVES THE COMPANY A COMPETITIVE EDGE IN SITE SELECTION? A: The common feedback we receive from developers is that we are agile and

decisive. 7-Eleven’s model allows us to play equally well on smaller suburban sites through to highway fuel stops. We have strong customer insights and business analytics to understand what works for us and our business model.

Q: WHAT ARE THE RESPONSIBILITIES OF THE PROPERTY DIVISION? A: We logically break our property division into two areas: development and existing portfolio. We have a talented team who specifically manage these responsibilities, with an overarching objective of ensuring 7-Eleven remains the market leader in petrol and convenience.

Our property team is also there to provide support to franchise partners if they have random queries on their site.

Q: HOW DOES THE PROPERTY DIVISION SEARCH FOR SITES?

us on greenfield locations.

However, if we need to acquire a site so that we can close a gap in our network plan, then we would definitely consider it.

Q: IF LEASED, ARE FRANCHISE TERMS MATCHED TO LEASE TERMS? A: We back our ability to trade successfully and generally take out lease terms that are equivalent to, and often exceed, the standard 10 year franchise term. Where the terms are lesser, there is ordinarily an option right to renew.

Q: AT WHAT STAGE DOES A POTENTIAL FRANCHISEE GET INVOLVED AND WHAT'S THE PROCESS FOR THEM TO BE MATCHED TO A SITE? A: In all cases where a franchisee is looking to buy a site, they need to be

A: Property, as much as any successful strategy, is about a focused team with clearly defined requirements and outstanding contacts. We value each of the hundreds of relationships we have with developers, landlords and property trusts. We work with consultants to regularly define our strategy, taking into account population growth and land releases.

We also have an engaged network of franchisees who bubble up local market insights, that feed into our decision making process.

Q: DOES 7-ELEVEN OWN OR LEASE SITES? A: 7-Eleven has a large portfolio of owned sites, largely due to historical reasons.

More recently, we have tended to lease sites, particularly as we have a long list of developers who are keen to partner with

SEPTEMBER/OCTOBER 2017 | 112 | WWW.FRANCHISEBUSINESS.COM.AU

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FRANCHISE BASICS

fully approved by the support office.

Most enquiries come through to our local offices in the states and our franchise development managers walk prospective franchisees through an extensive selection and training process that assists in matching them to a suitable available site.

Q: AT WHAT POINT DOES THE POTENTIAL FRANCHISEE OPT FOR EITHER A GREENFIELD OR A RESALE? A: Generally we are opening greenfield sites as corporate stores. The purpose, primarily, is to enable us and any future franchisee to ascertain the true value and potential of the location. Once established, we may then look to sell that site.

So our franchise partners generally are buying into existing premises – either a resale or a corporate store - rather than a greenfield opportunity.

Q: CAN A FRANCHISEE REJECT A GREENFIELD SITE? A: Our franchisees are entirely free to make their own decisions regarding their potential investment – they are not compelled to buy into any location.

Q: WHAT INFORMATION ARE FRANCHISEES RELYING ON WHEN THEY PICK A LOCATION? A: We ensure all relevant details are provided through the matching process of a partner with a site. This includes all financial, lease and trading history.

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SEPTEMBER/OCTOBER 2017 | 114 | WWW.FRANCHISEBUSINESS.COM.AU

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FRANCHISE BASICS

FINDING THE

RIGHT FIT When it comes to fitting out premises, costs and delays can have a big impact on a new franchisee.

B

uying a franchise with a shopfront, be it retail or food, is not only a big investment, but needs careful planning to prevent delays when it comes to a fitout. In fact, says CRS Property principal Myles Snow, fitouts are generally referred to as a categoryone cost in the scope of works.

“They can vary greatly from project to project,” he says, but franchisees can negotiate fitout incentives with landlords for the premises they are considering. Some franchisors will want to undertake that aspect of the negotiation and pass on to their franchisee an agreed percentage of the total contribution.

Snow says planning is integral to avoiding delays. “Proper planning is a fundamental part of scheduling shop design and fitouts.

“This planning is driven by the franchisor

and the landlord agreeing on each party’s standard administrative protocols for reaching agreement on critical dates, and scheduling well in advance as to when the fitout period will start.”

Key timeframes include dates for design approval from the landlord’s architect, which could generally take six to eight weeks.

Snow says most experienced developers should have key timeframes in place, but a checklist of timeframes and approval protocols presented as part of a leasing package by the franchisor is a real benefit to the franchisee.

SHOP FITOUT AS BRAND DNA While franchises tend to share the same brand vision and culture, casual-dining

concept Zeus Street Greek ensures each franchise has its own identity.

“It’s very important that each of our stores has its own design identity, but the bespoke elements of the store identity are carefully balanced against the strong Zeus identity that runs through each of our stores,” says co-founder/GM Costa Anastasiadis.

“We believe it’s important our stores fit within their environment but it’s equally as important that customers feel as though they have walked through into a Zeus store and our brand DNA is evident.”

Each community around a Zeus location has its own identity which the store personality needs to reflect, says Anastasiadis.

The design process is driven by Zeus’ design team and partners, with input from marketing for branding and store

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FRANCHISE BASICS

experience. The final store designs are discussed with each franchisee.

But how much influence does a franchisor generally have over design?

“Landlords are always looking for quality innovative design, and their decision to choose one franchisor over another could ultimately come down to the overall design and originality of the fitout and the franchisor’s vision,” says Snow.

“However, there are always tenancy fitout design guidelines established by the landlord and their architect that must be followed. These, for example, address such details as signs, shopfront, heights, treatments to bulkheads, and lighting.

“In most cases, a good landlord will have their design team work with the franchisor to encourage originality of retail presentation to complement their own design objectives.”

CUSTOMISATION COSTLY Snow says custom design can come with costs and delays if not planned properly.

“For example, some developments do not have shopfronts, ceilings or even utilities. For food franchises, slab services will be needed to meet their specific layout requirements.”

In these instances, the franchisor will generally require the franchisee to pay for the changes to the standard layout. “These costs can be quite significant and fall outside the franchisee’s original budget.

“The combined sum of costs to undertake shopfronts, ceilings and partial category-one costs will require a significant amount of capital from the franchisee, and should be fully understood from the outset.”

Proper planning is a fundamental part of scheduling shop design and fitouts

SEPTEMBER/OCTOBER 2017 | 118 | WWW.FRANCHISEBUSINESS.COM.AU

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FRANCHISE BASICS

Snow says that in his experience, most fitouts are designed and fabricated offsite then taken to the premises for installation during the franchisee’s fitout period, which is usually a pre-determined, documented four-week period.

It is the franchisee’s responsibility to ensure all tradespeople doing out their fitout works are correctly registered and comply with the requirements of the

BRAND/CATEGORY

builder’s contract held by the landlord.

If this key procedure is not followed, in nearly all cases it will cause delays that sometimes can turn into weeks, says Snow.

It is in this critical phase that the landlord’s appointment of a tenancy fitout co-ordinator becomes a critical aspect.

That role should include checking that the franchisee’s tradespeople are properly

FIT-OUT COSTS

registered to perform the site works.

“I have seen many delays caused by inadequate notice to utilities such as power, water, communications and gas,” says Snow.

“Delays caused by inadequate planning can be costly both in respect of penalties from the landlord, along with missing out on the planned opening date.

“Plan your work, and work your plan.” 

PERCENTAGE OF FIT-OUT COSTS FOR EQUIPMENT

EQUIPMENT LEASE OR BUY?

About 30-40 per cent.

No leasing, but equipment can be funded by cash or borrowings. Oporto has bank lending accreditation and various equipment-leasing options with a range of finance institutions.

$350,000 to $700,000 depending if shopfront, food court or drivethrough restaurant.

FAST FOOD

HAIR AND BEAUTY

FITNESS

Set-up costs include franchise fee, training fee, administration fee and fit-out costs.

Total costs: about $300,000 • Legal and financial advice • Initial franchise fee • Legal agreement drafting and execution • Entity incorporation • Design fees • Council and building permits • Plumbing, electrical, etc.

• Furniture and equipment • Rental bond (bank guarantee)

About $550,000 to $700,000.

Investment level depends on site and landlord’s conditions or fit-out contributions. For instance, if landlord provides air-conditioning, the investment is likely to be at bottom end of the range.

Franck Provost-branded furniture and equipment need to be purchased from the franchisor. Other general equipment can be bought from a local store.

About 30 per cent.

No leasing option is available directly from the franchisor, but the franchisor can help a franchisee obtain funding from third-party equipment finance companies.

About 40 per cent.

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Financing options are available, including lease or chattel mortgage options, which will reduce the initial set-up investment cost significantly.

5

FRANCHISE BASICS

WAYS TO GET

THE SITE

RIGHT

The old real-estate mantra “‘location, location, location” certainly applies when you are choosing a site to set up your franchise business, so do your homework.

SEPTEMBER/OCTOBER 2017 | 122 | WWW.FRANCHISEBUSINESS.COM.AU

L

ocation is paramount for a business, particularly in retail. What might appear tempting at first glance can sometimes prove to be a dud, so it pays to put plenty of effort into first-class site selection.

Here are five elements that will help you find the right site...

1. UNDERSTAND YOUR MARKET Whether the franchise you are investing in has a niche product or a service with widespread appeal, it is crucial to match this to the demographics of the area where you want to set up.

How much will your customer be prepared to spend, and how often? How will you attract clients? What do your customers need (parking, public transport, street access) so they can spend money with you?

Of course, you will want to know that the local demographics match your needs.

An independent geodemographic analysis firm can provide relevant data.

If the site is in a shopping centre, ask the landlord for statistics that show foot traffic.

If the site is an existing business, you can check the foot traffic in person. It takes just a few hours of your time.

It is crucial to match your franchise to the demographics of the area where you want to set up.

THE 3. CHECK PREMISES’ POTENTIAL Will the premises give you all that you need to run your business - easy access, storage, water and so on? If it is in a shopping centre, how far is it from escalators or lifts? For a strip site, are there delivery-time restrictions on the street that will affect your business?

If there is to be a significant change from its current business use, consider the costs the conversion will entail.

Strong negotiations that will deliver a viable deal are worth paying for as rental costs are likely to be a substantial outgoing.

Ensure you can afford the rent.

2.RESEARCH THE LOCATION

HELP WITH 4. SEEK LEASE NEGOTIATION

5. SEEK LEGAL ADVICE

Some franchisors will find a site for you, others will help in the search, and some may leave it all up to you. Even if you don’t have to find the spot yourself, it is wise to undertake your own research or due diligence to ensure you are confident all the elements add up.

One major benefit of joining a franchise is help with lease negotiations, particularly useful in high-traffic locations such as top-tier shopping centres.

Even if your franchisor will not negotiate for you, expert firms can wrangle with the landlord on your behalf.

Have an experienced franchise/leasing lawyer act on your behalf to check out the clauses in the lease agreement and, where possible, line up your lease and franchise agreement terms. They will spot any danger signs and alert you to less-than-favourable terms. n

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GLOSSARY

LEARNING THE

BUZZWORDS

Like any area of endeavour, the franchise sector has its own particular terminology that new franchisees need to understand.

ACCREDITATION: a banking

loan scheme that provides franchisees with some of the finance they may need when buying the franchise. It is based on a bank’s understanding of the brand and its business methods. While this funding option is popular, it is not common across the sector.

ASSIGNMENT: when a franchisee sells their business to a new franchisee, it is referred to as assignment. It is common for the franchisor to retain the right to interview and accept or reject any proposed buyer.

The franchisor may also have the right to buy back the franchise.

The vendor franchisee can set the value of the franchise.

BUSINESS-FORMAT 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.

COMPANY-OWNED UNITS:

locations run by the franchisor rather than a franchisee.

CONVERSION: an existing

independent business that joins a franchise network.

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: the process of conducting in-depth research on a business before purchase.

FIELD MANAGER: an individual tasked with managing a group of franchisees, with a focus on relationships, brand alignment, and sales and profit. This role might also be called business development manager or area manager.

FIXED SERVICE FEE:

franchisees may pay their franchisor a weekly or monthly fixed-amount payment, or a service fee calculated as a percentage of turnover

(above a minimum payment).

FRANCHISE AGREEMENT:

this is the legally binding business between the franchisor and the franchisee.

FRANCHISEE: an individual

who runs a franchised business using the intellectual property of the franchisor.

FRANCHISEE ADVISORY COUNCIL: a structure for

franchisors to seek and receive feedback from their franchisees. Participating franchisees may be elected or chosen by the franchisor.

FRANCHISE FEE: an up-front cost paid to the franchisor. It covers the use of the brand name and business system.

FRANCHISING CODE OF CONDUCT: a mandatory

code that governs franchising in Australia. It 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).

FRANCHISE TERM: this

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GLOSSARY

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. Franchisors often refer to a term with two options to renew as 5 + 5 + 5, for instance.

FRANCHISOR: the franchisor

grants permission to the franchisee to conduct business using its intellectual property, brand name, working methods and marketing.

GREENFIELD SITE: a

brand new site.

GOODWILL: this is a

calculation of the value of trade in an existing business that is likely to continue and benefit the incoming business owner.

INFORMATION STATEMENT:

this is a two-page standard document that outlines what franchise buyers need to know about franchising.

INTELLECTUAL PROPERTY:

this term refers to the trademarks, copyright, know-how, trade secrets, designs, patents, branding, operational manuals, methodologies and/ or recipes franchisors license to franchisees.

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:

often abbreviated to LAM, this is marketing the franchisee is responsible in their territory or designated marketing area.

MARKETING & ADVERTISING LEVY: a regular flat or

percentage-based-fee paid into a centralised advertising or marketing fund.

for a further term. This process is bound by the Franchising Code of Conduct. 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.

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.

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.

MULTI-UNIT FRANCHISEE:

TERRITORY: is the area assigned

MASTER FRANCHISEE: a

a franchisee who has been granted the rights to run 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

to franchisees for their business. Territories can be exclusive or nonexclusive.

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

CHECKLIST

30

THINGS TO CHECK BEFORE YOU INVEST GET SET PRIOR TO YOUR PURCHASE WITH OUR EASY CHECKLIST. JUST TICK OFF THE MUST-DO ITEMS.

Are you confident in the franchisor?

Have you worked out your operating costs?

What are the franchisee and franchisor obligations?

Have you seen a disclosure document?

Do you know the term of the agreement?

What training is available and who pays for it?

Is the franchisor compliant with the Franchising Code of Conduct?

Do you need a permit or license to operate the business?

Who owns the intellectual property and what is licensed to the franchisee?

Have you run a credit check on the franchisor?

Is the business operating from fixed or mobile premises?

What marketing will the franchisor implement?

Does the franchisor have a history of litigation? Are there any cases coming up?

Have you checked the lease? Is there a right to renew?

What marketing is your responsibility?

If you are buying an existing business, have you seen current financial statements (balance sheets, profit and loss, tax returns)?

Does the length of the lease match the franchise term?

What is the dispute resolution process?

What are the store fit-out costs?

Do you know what it is like to be a franchisee?

Have you evaluated the financial returns?

If you are buying a greenfield (brand new) site, do you have sales and profit examples and know the method behind the calculations?

Do you know all the expenses franchisees are required to pay?

What royalties are there and how are they calculated?

Are you working within a territory? If so is the area exclusive?

Do you have an exit plan?

Are you restricted in your product purchase?

Have you spoken to former and current franchisees about the business?

Are you required to reach a minimum performance level?

What restrictions are there on the franchisee and guarantor operating a similar business?

SEPTEMBER/OCTOBER 2017 | 126 | WWW.FRANCHISEBUSINESS.COM.AU

RESOURCES

DIRECTORY

ASIA-PACIFIC CENTRE FOR FRANCHISING EXCELLENCE

organisation or anyone involved in the franchise industry including franchisees.

A pre-entry franchise education program is available for free and online through this centre. Funded by the ACCC this course attempts to help franchisees understand the process of due diligence and have realistic expectations of what it means to be a franchisee.

Visit: WWW.FRANCHISE.ORG.AU

The Centre was launched by Griffith University in 2008 and undertakes research on franchising best practice. This research helps inform policy and team members regularly engage with government bodies and franchise associations across the Asia-Pacific.

FRANdata is the home of the Australian Franchise Registry which identifies franchise brands that have up-to-date franchise agreements and disclosure documents, and which have confirmed with the Registry their compliance with the Franchising Code of Conduct.

FRANdata also provides reports on the franchising sector.

Visit: WWW.FRANCHISE.EDU.AU

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION (ACCC) The ACCC is an independent Commonwealth statutory authority which regulates the mandatory Franchising Code of Conduct (Code) and can investigate alleged breaches of the Code.

The ACCC is responsible for enforcing the Competition and Consumer Act 2010 as well as legislation, promoting competition, fair trading and regulating national infrastructure.

Its role is to protect, strengthen and improve the way competition works in Australian markets and industries.

Visit: WWW.ACCC.GOV.AU

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 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 The FCA is the main body for representing franchisees, franchisors and service providers in the $146bn franchising sector in Australia.

Becoming a member of the FCA is a voluntary and is available for any

FRANDATA

Well established in the US since 1989, the business was established in Australia in 2013 to help the franchise sector address key strategic challenges and take advantage of opportunities available to qualifying brands.

Visit: WWW.FRANDATA.COM.AU

THE FAIR WORK COMMISSION Fair Work Commission (the Commission, previously called Fair Work Australia) and the Fair Work Ombudsman (FWO) are independent government organisations that regulate Australia’s workplace relations system but have different roles.

The Commission is the independent national workplace relations tribunal. It is responsible for maintaining a safety net of minimum wages and employment conditions, as well as a range of other workplace functions and regulation.

The FWO enforces compliance with the Fair Work Act, related legislation, awards and registered agreements. It also helps employers and employees by providing advice and education on pay rates and workplace conditions.

Visit: WWW.FAIRWORK.COM.AU

FRANCHISEBUSINESS.COM.AU This is the online arm of the Inside Franchise Business publication. Both platforms are focused on providing essential advice and information for anyone looking to invest in a franchise. The website provides short and snappy business tips and news, video interviews, industry commentary and market reports.

FranchiseBusiness.com.au 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 opportunities that currently exist in the market and enquire about the franchisor or brand.

Users also have access to franchise consultants and advisors who can assist prospective or existing franchisees and franchisors with legal, financial educational and training, IT and other services.

Visit: WWW.FRANCHISEBUSINESS.COM.AU

SEPTEMBER/OCTOBER 2017 | 127 | WWW.FRANCHISEBUSINESS.COM.AU

Everything you need to find a franchise

• Browse more than 4,700 franchise opportunities to discover on Franchisebusiness.com.au – the Official online directory for the Franchise Council of Australia – the peak body for the $146-billion franchise sector in Australia • Free online educational program “How to buy franchise” designed to kick-start your journey into franchising • Access essential financial, legal and business advice and up-to-date news and information • Be inspired by real-life stories of everyday people making their franchising dream a reality

Inside Franchise Business is your essential guide to buying franchise – join us online now at www.franchisebusiness.com.au

INSIDE

ACCESS FREE ONLINE EDUCATION PROGRAM

FRANCHISE BUS I N E S S official online directory

Phone: 07 3999 8950 Contact: Sean Corbin info@frb.com.au www.frb.com.au

A-Z LISTINGS

Phone: Shayne Boogaard (NSW): 0418 136 156 Brett Reading (Qld): 0407 877 674 Peter O’Hara (Vic/WA): 0408 175 534 Contact: Shayne Boogaard (NSW): szh@7eleven.com.au Brett Reading (Qld): bzr@7eleven.com.au Peter O’Hara (VIC/WA): pwo@7eleven.com.au www.franchise.7eleven.com.au

Start up costs: From $185,000

PROFILE: Our mission is to source and roast speciality coffee and provide our customers with unique, seasonal blends that they love. We draw on the original qualities and characteristics of coffee dating back to its origins, as we aim to raise the bar of all things coffee related.

At 1582 we’re passionate about good quality coffee and we want business-savvy franchisees with that passion that motivates us each and every day.

If you share our love of coffee and always convey energy, quality and pride in your work, we want to hear from you!

Start up costs: $400,000 to $1,000,000 PROFILE: 7-Eleven is the largest convenience and independent petrol retailer in Australia with more than 650 stores across VIC, ACT, NSW, QLD and WA. We opened our first store in 1977 and have almost 40 years’ experience in franchising.

When you buy a 7-Eleven franchise, you buy two things. Firstly a globally recognised brand name, and secondly a business system that works, one that provides more support than most other franchises. As our stores are open 24/7, support is just a call away 24 hours a day, 7 days a week.

We are looking for Franchisees who have the potential to lead their team to deliver an outstanding experience to customers. Learn more about what it takes to be part of a partnership in success with 7-Eleven, at www.franchise.7eleven.com.au

Phone: 02 9415 5300 Contact: Raheem Abdul Raheem.abdul@anytimefitness.com.au www.anytimefitness.com.au/own-a-gym/

Phone: 1300 287 669 Fax: 1300 795 287 Contact: Steve Wren steve@ats.com.au www.appliancetaggingservices.com.au

Start up costs: Enquire

Start up costs from: $52,000 + GST

PROFILE: Australia’s biggest gym community, Anytime Fitness Australia has over 500,000 members and 450+ clubs nationwide. We’re the brand that brought the 24/7 concept to life, and cut-through app Anytime Workouts. We’re getting Australians moving for a fitter and healthier future.

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 50 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.

Phone: 07 3860 6716 Contact: Michael Payne franchise@palmoasisventures.com www.baskinrobbins.com.au

Phone: 07 5591 3242 Fax: 07 5591 9021 Contact: Adam Peppiatt adam.peppiatt@rfg.com.au www.franchising.brumbys.com.au

Start up costs: from $190,000.00 + Start up costs: $360,000 - $480,000 PROFILE: Baskin-Robbins® has been creating irresistible treats to make you smile and feel good inside and out for over 70 years. We’ve perfected the combination of delicious treats and a fun atmosphere.

Now, we’re offering rewarding franchise opportunities that help aspiring business owners thrive and to continue to be the world’s leading chain of ice cream specialty restaurants If you love to have fun and put a smile on people’s faces; if you are hard-working, dedicated and community oriented; and in touch with your ‘ice cream side’; Baskin-Robbins® may be a perfect fit for you.

A-Z Contact: franchise@palmoasisventures.com to scoop up your own Baskin-Robbins®.

L I S T I N GS

FOR A-Z LISTINGS ENQUIRIES CONTACT:

NATIONAL SALES & MARKETING MANAGER DAVID STRONG ON 02 8224 8370 DAVID.STRONG@OCTOMEDIA.COM.AU

PROFILE: Brumby’s is one of Australia’s most iconic bakeries. With a history of baking fresh bread every day since 1975, it has fostered a loyal legion of customers who buy more than 10.5 million loaves each year. Featuring more than 250 stores across Australia, New Zealand and Papua New Guinea, Brumby’s has also grown to incorporate the specialty sub-brands Brumby’s GO! and Big Dad’s Pies.

Brumby’s specialise in freshly baked bread and bakery goods including, artisan loaves, sweet cakes, tarts and slices, savouries, pastries, gourmet pies and sandwiches.

In 2013 Brumby’s underwent a transformation in order to remain current in the market and meet ever changing consumer demands. The brand extending their range to include functional health breads, large cakes, and quality crafted coffee.

Phone: 1300 99 55 12 Mobile: 0488 11 55 33 Contact: David Pascoe franchise@buyaustralianproperties.com.au www.buyaustralianproperties.com.au Start up costs from: $50K to $100K + GST PROFILE: Buy Australian Properties is the first professional property investment Franchised Business operating in Australia that is a fully accredited member of the FCA (Franchise Council of Australia) and adheres to their code of conduct.

We assist clients from all over Australia find and purchase suitable property investment products that suit their needs and wants through our “Unique 4 Step Client Engagement Process” that is based on “Investing with Integrity”. We are a company that is solely focussed on what our clients’ want.

We are a full-service company that sources and provides property investors with quality brand new house and land packages, townhouses, units, row houses, duplexes, dual occupancies and apartments (Boutique and High Rise) for traditional and SMSF buyers.

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Phone: 1800 243 637 Fax: (02) 4587 8733 Contact: Alan Biddle alanbiddle@chemdry.com.au www.chemdry.com.au Start up costs from $39,950 + GST

Phone: 1300 659 676 Fax: 1300 659 675 Contact: Dan Toms customerservice@cashflowit.com.au www.cashflowit.com.au PROFILE: PROFILE: Cashflow It are the franchise finance experts. With competitive rates and flexible terms from 12 months to 5 years, Cashflow It can provide the funding that franchisors and franchisees need today. We offer flexible rental solutions, traditional leasing and business loans tailored to your requirements.

What can we Fund - New equipment / Used equipment / Fit-outs / Store refurbishments / Re-financing from other lenders / Buying an existing franchise / National equipment roll-outs Franchise Accreditation - If you belong to a Cashflow It Accredited Franchise system, you can enjoy pre-approval and other exclusive benefits.

Chem-Dry is Australia’s largest and most successful carpet and upholstery cleaning franchise. Established in 1986 as a healthy and green carpet cleaning alternative, today Chem-Dry cleans more carpet and surfaces than any other company.

Using the company’s patented cleaning solutions and over 35 years of experience, our franchise partners are able to build successful businesses by making their customers’ homes and workplaces cleaner and healthier.

Our franchise partners are passionate about providing their customers with the cleanest and healthiest homes.

A Chem-Dry franchise is not just about residential and commercial carpet cleaning.

Our franchise partners also clean upholstery, leather, tiles and grout, and are specialists in water damage restoration.

Phone: 03 9508 4409 Fax: 03 9508 4499 Contact: Stacey Mercaldi Stacey.mercaldi@retailzoo.com.au www.cibo.com.au

Website: www.chickentreat.com.au Start up costs: From $350K - $500K for shop fronts

PROFILE: Chicken Treat is the ultimate corner chicken store, famous for their generously sized meals of slow cooked rotisserie chicken, lightly spiced fried chicken products, chicken rolls, burgers and wraps.

Having first opened in WA back in 1976, Chicken Treat has become an iconic Australian chicken brand with a network of over 60 stores across West Australia, and is continuing to grow.

Being a part of the craveable brands network of restaurants, Chicken Treat is a strong player in the market exercising robust buying power with suppliers, marketing and advertising reach.

Start up costs: $220k - $300k + GST (Hole in the Wall model) $400k - $500k + GST (Kiosk model) $450k - $600k + GST (Street site location) PROFILE: If you live or have travelled to South Australia recently, you would know the Italian coffee institution that is CIBO Espresso. With its bespoke store fit outs, bright red logo and coffee cups, CIBO roasted its way into South Australia’s coffee and food industry in 2000.

It was identified that authentic Italian espresso bar culture was almost non-existent in Australia and since then, CIBO has been a cornerstone of the South Australian coffee market. With 34 stores in operation, the CIBO network is thriving and the brand has exciting franchise, product development and marketing plans brewing!

Phone: 089 321 5844 Fax: 08 9321 5855 Contact: Steven Andrews steve@consolidatedfood.com.au www.croissantexpress.com.au

Phone: 07 5591 3242 Fax: 07 5591 9021 Contact: George Metzakis George@aplusbrokers.com.au www.franchising.crust.com.au

Start up costs: Entry from $300K inclusive of fees

Start up costs: $375,000 - $450,000

PROFILE: Croissant Express, a leading grab and go bakery chain in Perth for 30 years, is expanding to the East coast and regional centres across Australia. There are few experiences more satisfying than growing your own business, especially with the experience of this strong brand. We have clear and defined objectives and each franchisee has the in store support to assist in continued growth. Multi sites and master franchises are available in Far North Queensland, South Australia and the Northern Territory. Become your own boss and be part of this exciting growth period across Australia.

Phone: 07 5591 3242 Fax: 07 5591 9021 Contact: Ben Hatten Ben.hatten@rfg.com.au www.franchising.donutking.com.au Start up costs: $280,000 - $360,000 PROFILE: Donut King is an iconic Australian brand with strong recognition amongst consumers. Since opening over 30 years ago, Donut King has grown to over 300 stores nationwide and is Australia’s largest specialty donut and coffee chain - and we’re still growing!

Not only selling donuts, Donut King stocks a wide range of snack options including hot dogs, churros, smoothies, milkshakes, Fruit Freezes, barista-crafted coffee and more.

In 2013, Donut King underwent a major brand evolution, which includes a modern, updated store design.

PROFILE: From a small-time family business to a multi-million-dollar pizza empire, Crust Gourmet Pizza Bar has grown to more than 200 stores across Australia, New Zealand, Singapore and the USA since 2001.

Crust is known as the brand that makes pizza more interesting. It’s not just the finest ingredients we use, but the way we fuse them to create unique combinations which are adventurous in flavour. Making pizza the authentic way, we rely on instinct and measuring by hand rather than following a strict formula.

Our ‘boutique’ style extends beyond our menu to a customer’s experience in a Crust store. While there are commonalities in store design, we endeavour to keep the boutique, local pizzeria feel.

A-Z L I S T I N GS

FOR A-Z LISTINGS ENQUIRIES CONTACT:

CONTACT SENIOR ACCOUNT MANAGER CHARLOTTE REDFERN ON 02 8224 8373 CHARLOTTE.REDFERN@OCTOMEDIA.COM.AU

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A-Z LISTINGS

Phone: 07 3999 8950 Contact: Sean Corbin info@frb.com.au www.frb.com.au

Phone: 03 9336 3200 Fax: 03 9336 3266 Contact: Peter Collins franchising@fergusonplarre.com.au www.fergusonplarre.com.au

A-Z LISTINGS

Start up costs: From $100,000

Start up costs: $250,000 - $300,000 PROFILE: PROFILE: Ferguson Plarre Bakehouses has always been and still is a family owned and operated business celebrating its 115 year anniversary in 2016. The fourth generation of the Plarre family still actively own and manage the day to day running of the business from baking through to retail shop design, operations and bakery franchising. The family continue to embrace their forefather’s commitment to quality products, service and innovation.

With no Royalty or Marketing Fees, fresh product delivered daily to the store and no baking required, the business is perfect for people who can drive sales and install this trait into their own team.

With a variety of food and beverage brands including New York Slice, Hombre Mexican Cantina, Sabatini’s, The Dessert House, Crave Ice Creamery, Lord of the Fries, 1582 Coffee, Doughnut Time and more, FRB is fast establishing itself at the forefront of Australian food franchising.

With a listing on the ASX coming in late 2017, FRB will have over 120 sites on listing and a pipeline of brands and concepts in the wings will be adding several more in the months ahead.

If you want to join Australia’s newest franchisor of choice, talk to us today about becoming a franchisee in one of our exciting brands.

Contact: franchising@freshiiau.com www.freshii.com/franchising Start up costs: Investment Levels: $200,000 - $300,000 based on 35sqm to 100sqm Capital Investment: $100,000 PROFILE: A FRESH INCENTIVE FOR NEW FRANCHISEES! The world’s fastest growing franchise Freshii is look for motivated, dedicated and passionate franchisees to help us continue our growth in Australia! We deliver fresh, healthy fast food to people across 5 continents with a business model focusing on making positive change to our clientele’s lifestyles.

Freshii Australia will provide a kiosk in high-traffic areas to new franchisees, training, assistance and marketing in an all-inclusive package for just $250k, with financial assistance options also available (subject to approval process).

Phone: 1300 780 562 Contact: Con Klestinis con@games2u.com.au www.games2u.com.au Start up costs: $200,000 + GST PROFILE: Everyone loves to have a great party or event. And by making it easy and pleasant, we’ve not only tapped into a truly vibrant industry, we’ve secured the lead position.

Our on-going marketing and operational support will ensure that you are able to enjoy the flexibility and lifestyle benefits that owning your own successful business can provide. You’ll also receive all the training you require, with no prior gaming experience necessary.

The mobile business is easy to operate with low overheads.

Already operate an existing franchise? Freshii will waive the $50k Licence fee for those willing to Partner in a FRESHII Store!

A Games2u franchisee is young at heart with business experience, entrepreneurial flair and most of all – an absolute passion for customer service.

Our team has negotiated attractive lease terms in various locations throughout Australia in anticipation of this offer, and we look forward to helping our franchisees move in an exciting new direction. Terms & Conditions apply; for further information & expression of interest, please contact franchising@freshiiau.com

Exciting opportunities now exist to join the Games2u Franchise network throughout Australia. Claim your territory now.

If you’re looking for a franchise with high energy and heaps of fun, this one takes the cake.

Phone: 1300 432 565 Contact: Kim O’Donnell info@geckosports.com.au www.geckosports.com.au

Phone: 02 8845 0100 Contact: Franchise Development Manager franchise@gelatissimo.com.au www.gelatissimo.com.au

Start up costs: from $35,000

PROFILE: GeckoSports are Australia’s multi-sports and fun fitness experts for primary school (aged kids 5-13).

We are a national family friendly franchise network with excellent support and likeminded people.

Work flexible hours to suit your lifestyle in a rewarding industry where no day is the same and you love what you do!

We will train you to be your best coach, provide all of the systems and tools you need to get straight into it.

A-Z

Start up costs from: $280,000

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.

There is a wide variety of channels to work within all the while making a real difference to kids health and wellbeing every day!

L I S T I N GS

FOR A-Z LISTINGS ENQUIRIES CONTACT:

NATIONAL SALES & MARKETING MANAGER DAVID STRONG ON 02 8224 8370 DAVID.STRONG@OCTOMEDIA.COM.AU

Phone: 02 4957 4230 Contact: Franchise Development Manager jarrod@goodfeet.com.au www.goodfeet.com.au Start up costs from: $150,000 to $250,000 PROFILE: The Good Feet Store Australia and New Zealand franchise is looking for outstanding franchisees.

The ideal candidate should have solid business or retail experience, with strong management skills and business ethics. Candidates should have a customer service mentality, with the desire to enhance the quality of our customers’ lives.

Benefits of a Good Feet Store Franchise * Serves the needs of a large and broad market: people searching for relief of foot, knee, hip, and back pain * A category leader with few direct competitors * Attractive unit level economics: a proven model, The Good Feet Store is designed to generate some of the highest sales per square foot in the industry * Comprehensive branding and marketing: campaign materials and support – broadcast, in-store, online and collateral *The Good Feet Store provides full training and on-going support

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Phone: 03 9234 2200 Fax: 03 9234 2266 Contact: Peter Fiasco franchising@hairhousewarehouse.com.au Hairhousefranchising.com.au

Phone: 04 8833 8668 Contact: Franchise Recruitment hh@helloharry.com.au www.helloharry.com.au

Start up costs from: $350k +

PROFILE: With over 20 years of experience in the hair and beauty industry, Hairhouse Warehouse is one of Australia’s leading retail franchise brands.

Hairhouse Warehouse’s vision is clear and simple. Offer quality products at a reasonable price, whilst providing exceptional customer service. This mission is clearly on display in each and every one of our locations by simply looking at our franchisees and the teams they work with.

As a franchisee, no hair or beauty certification is required - just a passion for success.

PROFILE: Hello Harry The Burger Joint is a funky eatery serving up generous size burgers!

Burgers, Craft beers and fun is what we are about.

Great value with a fun, funky, cool brand that is reflected in store.

This QSR brand offers a great lifestyle to Franchisees. High quality product, easy in store operations and a very solid business model. With low set -up costs, open the best burger joint in town. Hello Harry is seeking Franchisees Australia wide.

Sick of working for the man? Be the man and open your Hello Harry

As Hairhouse Warehouse continues to dominate the hair and beauty industry in Australia, the brand and franchisees are seeing amazing results. To continue our brand domination Hairhouse Warehouse is planning to expand to over 180 stores over the next three years.

Phone: 0412 692 052 Contact: David Wilkinson sales.au@inxpress.com inxpress.com inxpress.com.au/franchising

Phone: 131 546 Contact: John O’Callaghan admin@jimsantennas.com.au www.jimsantennas.com.au Start up costs: $59,000

Start up costs: $74,950 + GST 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 13 countries with over 350 franchisees globally, InXpress is now accepting applications to grow the Australian business. Benefits to franchisees include: • Low entry costs • Guaranteed income* • No inventory/warehousing

• Work from home • High income potential • Ongoing training and support

PROFILE: Jim’s Antennas is Australia’s largest and most trusted Audio Visual installation company and is part of the Jim’s Group of Home Services.

Established in 1999 Jim’s Antennas currently has 150 franchisees throughout Australia and we are looking for enthusiastic candidates who enjoying working for themselves to join our team. No experience is required as we provide full training – with ongoing support for the life of your franchise.

Call us today on 131 546 for more information

For more information about becoming an InXpress franchisee contact us now. *conditions apply

Phone: 1800 334 498 Contact: Luke Manning bdm@justcuts.com www.justcuts.com

Phone: 0459 654 146 Contact: Andrew Lyme andrew.lyme@justbettercare.com www.justbettercare.com

Start up costs: $85,000-$250,000 PROFILE: Just Better Care is Australia’s largest franchised provider of in-home care services to the elderly and disabled.

We provide a wide range of in-home services and are extremely passionate to support people to live the quality of life they want in the place that offers them the most security and comfort – their home.

Just Better Care has been in operation since 2005, built on over 20 years in community care experience. The exceptional results of the business led to the development of the Just Better Care Franchise in 2007.

Today Just Better Care is part of the global Caring Brands International group and has over 35 offices nationally.

PROFILE: At Just Cuts™, it’s all about you. We believe in making things easy, comfortable and convenient for our Franchise Owners. Join the largest hairdressing network in the Southern Hemisphere offering a fixed franchising fee, flexible finance options plus, you’ll get all the ongoing support you need from the Academy team, who will provide you with any business, operational and marketing guidance that you need.

Did you know you don’t have to be a hairdresser to own a Just Cuts™? Over half of Just Cuts™ franchisees are multi-site owners who own two or more salons each, so it’s easy to see that our business model works, and is continuing to work.

Just Cuts™ also introduced the Kiosk salon concept, designed to the same high standard of the Just Cuts™ salons. This is a fantastic opportunity for those looking to take the first step as a business owner. With only 49 sites available, Australia-wide you can style your work/life your way from just $85,000!

A-Z Find out more about becoming your own boss with Just Cuts™ – give us a call for a confidential chat today!

Phone: (02) 8962 8556 Contact: Benoit Davi franchise@kwikkopy.com.au www.kwikkopy.com.au/franchise

PROFILE: Start your franchising journey with Kwik Kopy, the leading provider of print graphic design, printing and marketing services throughout Australia.

As a Kwik Kopy Franchise Owner you could be delivering a wide range of print and online solutions including business cards, brochures, catalogues, training materials, graphic design services, marketing plans, websites, email newsletter and direct marketing campaigns.

Kwik Kopy is a flexible franchise model, where each Centre is fully equipped to create high quality graphic design, online services and digital printing on-site.

We have both existing and new locations for sale throughout Australia.

L I S T I N GS

FOR A-Z LISTINGS ENQUIRIES CONTACT:

CONTACT SENIOR ACCOUNT MANAGER CHARLOTTE REDFERN ON 02 8224 8373 CHARLOTTE.REDFERN@OCTOMEDIA.COM.AU

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A-Z LISTINGS

Phone: 0402 171399 Contact: Liz Seeto franchising@laserclinics.com.au laserclinics.com.au

A-Z LISTINGS

Phone: 1800 068 111 Fax: (07) 3100 7888 Contact: Aroha Leigh Email: opportunities@lenards.com.au Website: http://franchise.lenards.com.au/

Start up costs: $250,000 - $500,000 PROFILE: At Laser Clinics Australia, our vision is to provide affordable, effective and safe non-invasive cosmetic treatments to all Australians. Since 2008, Laser Clinics Australia has grown to be the largest provider of laser hair removal, cosmetic injections and skin treatments in the country.

Laser Clinics Australia is an award-winning business with over 85 clinics and still growing.

Laser Clinics Australia offers every franchisee partner a unique franchise business opportunity. Each location we open is a 50/50 partnership between the franchisee partner and Laser Clinics Australia. Our unique business partnership model reduces start up and ongoing operational costs.

We seek out the most motivated individuals who will be empowered to take on the day-to-day responsibilities of running a successful clinic. Franchise partners receive a $100,000 salary from day one.

We are looking for franchisees for new clinic locations in Melbourne, regional Victoria and Queensland.

Start up costs: $350k-$400k turnkey PROFILE: Lenard’s Chicken is Australia’s favourite chicken shop and a leading brand among Australia’s fresh food retailers. Our unique concept of value-adding amazing ingredients and flavours to fresh chicken has established our offer as the leader in the marketplace.

Since the first store opened in Queensland, Lenard’s has sold more than 500 million chickens, served more than 200 million customers and injected more than $2 billion into the Australian poultry market. Today, Lenard’s employs more than 2,000 staff in nearly 300 franchises, supermarkets and butchers across Australia and remains one of the great success stories of Australian retailing.

Phone: 02 8115 9550 Contact: Phillip Blanco franchising@madmex.com.au www.madmex.com.au

Phone: 02 9648 2500 Contact: Bob Ozdemir info@lewrap.com www.lewrap.com

Start up costs: $375,000 to $550,000 PROFILE: When you join the LeWrap team you are becoming part of the fresh food revolution. Our stores supply the discerning public with quality, fresh-made wraps, plates and salads.

You don’t need prior experience to become a LeWrap franchise partner – we are looking for individuals with ambition, initiative and integrity. Great interpersonal skills are essential as you will be working hands-on in your own store – your passion for LeWrap will be on show!

You will receive full support from our management team, including training, operations and brand marketing, to assist you to become a successful business operator. After all, your success is our success.

PROFILE: We are continuing our growth, and are actively seeking new franchise partners.

Our menu is heavily influenced by fresh, Baja style Mexican food made with authentic ingredients. Our focus is on serving fresh quality food in a quick environment whilst still allowing customers to tailor meals to their to personal tastes and dietary requirements.

Do you have the drive to lead the way with fresh authentic Mexican flavour? The passion to utilise your past business knowledge & skills to deliver an outstanding customer experience? A background with QSR, sales or marketing ideal, but not essential. Ability to lead, inspire and motivate staff!

Become your own Head Honcho!

Phone: 0424 144 035 Contact: Greg Prussia greg.prussia@mbe.com.au www.mbebusinessfranchise.com.au

Phone: 03 9604 9400 Fax: 03 9600 3313 rxt@marshmaher.com.au www.marshmaher.com.au

Start up costs: From $130,000 PROFILE: Looking for more than just a print and design company?

Mail Boxes Etc. is a part of the world’s largest Business Services franchise system; with over 1,600 MBE Centres world-wide and growing. We offer a multiincome stream of printing, shipping and mailing services, just to name a few.

Our Owners enjoy a great work/life balance with your Centre opening hours of 8am to 5:30pm Monday through Friday – closed for Public Holidays. As Business Services Franchise, there is no spoilage and we also partner with our training program – no experience is necessary.

A-Z Our National Marketing Program will help you identify and find your clients, and our National Supplier Agreements, will ensure you’re always purchasing as cost effectively as possible.

PROFILE: Well recognised and published franchise specialist with over 30 years industry knowledge and experience.

Providing advice to: 4. Franchisee Advice and fixed fee reports.

1. International Franchisors and 5. Sale/ Purchase of franchise systems.

Franchising.

6. IP/ Trademark advice.

2. Master Franchising.

3. Dispute Resolution – Solutions and 7. Company structures and tax advice.

8. ACCC and Consumer Law advice.

Strategies We provide clients fixed fees based on the scope of work.

Contact Robert on (03) 9604 9400 or by email at rxt@marshmaher.com.au

With MBE, it’s an investment in your future.

Phone: 02 9415 5300 Contact: info@collectivewellnessgroup.com.au www.massageenvyfranchise.com.au/ Start up costs: Enquire

PROFILE: Taking care of yourself shouldn’t be a luxury. Massage Envy Australia offers great value membership to rejuvenating massage and skincare treatments that help you to feel your best. If you want less stress, more energy and improved wellness, it all starts with treating your body right.

L I S T I N GS

FOR A-Z LISTINGS ENQUIRIES CONTACT:

NATIONAL SALES & MARKETING MANAGER DAVID STRONG ON 02 8224 8370 DAVID.STRONG@OCTOMEDIA.COM.AU

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Phone: 1300 650 330 Contact: Tzuri Avila Phone: 1 300 650 330 franchising@mortgagechoice.com.au Contact: Tzuri Avila www.mortgagechoice.com.au/join-mortgagechoice.aspx franchising@mortgagechoice.com.au

Phone: 0407 175 857 Contact: David Lilley mbtmanagement@mbtrans.com.au

www.mortgagechoice.com.au/join-mortgage-choice/ franchise-opportunities.aspx

Start up costs from: $14,815 + GST

PROFILE: Start up costs: $18,796 - $38,796 + Mortgage Choice is an ASX listed company that seeks help Australians with all to terms andtoconditions of their financial needs.

Start up costs: $50,000 plus GST plus van

GST – Subject PROFILE: Courier Runs for Sale in Yarra Valley

PROFILE:

Established in 1992, Mortgage Choice was originally established to help Australians Mortgage Choicesituation is an ASX listeda choice company that seeks to help Australians improve their financial by offering of home loan providers, of theirwith financial needs. coupled the expert advice of a mortgage professional.

with all

Since that time, the company has grown Choice and developed into a fully fledged Established in 1992, Mortgage was originally established to help financial servicesimprove provider. their financial situation by offering a choice of home loan Australians

providers, coupled withcustomers the expert advice of a mortgage professional.

Today, Mortgage Choice helps source car loans, personal loans, credit cards, loans, finance,has deposit bonds, anddeveloped risk and general Sincecommercial that time, theasset company grown and into a fully fledged insurance. financial services provider.

Today, Mortgage Choice helps customers source car loans, personal loans, credit cards, commercial loans, asset finance, deposit bonds, and risk and general insurance.

MBTF consolidates and delivers parcel and bulk freight for 11 major freight companies in the Yarra Valley and Dandenong Ranges in Victoria. We currently have 15 Courier runs using vans and 4 bulk runs using tautliner trucks Own and run your own business with nothing to do except turn up every day, load your van and head off into the beautiful Yarra Valley and Dandenong Ranges.

5 days a week You are your own boss each day No marketing, all freight supplied You work in beautiful surroundings Guaranteed income for 5 years You can resell your Franchise

Phone: 02 9472 8555 Contact: Lee Rubino info@mrsfields.com.au www.mrsfields.com.au

Phone: +613 8526 4488 Fax: +613 9645 1859 Contact: Daphne Chin franchise@nenechicken.com.au www. nenechicken.com.au

Start up costs: $200,000-$300,000

Start up costs from: $500,000 +

PROFILE: Mrs. Fields Franchisees are attracted to our brand, for a wide variety of reasons. Whether you are currently an experienced business owner or you are commencing a new and exciting journey, Mrs. Fields is a great way to be in business for yourself, but not by yourself, as you always have the full support of your very own Franchise Business Consultant.

PROFILE: Nene chicken is one of the top Korean fried chicken chains with over 1,000 outlets in South Korea.

Mrs. Fields is all about making people feel good, through simple, special moments. The mouth-watering taste of Mrs. Fields freshly baked cookies, toasties and savoury selection, along with a hand-crafted Barista coffee (specially blended and exclusive to Mrs Fields Bakery Cafes and roasted at Mrs. Fields Head office roasting facility), what more could you want?

We pride ourselves on delivering the NeNe experience with uniquely marinated and batter coated fried chicken and range of authentic NeNe sauces.

NeNe Chicken flew into Australia in 2015 and in 18 months has rapidly expanded to all over Australia.

With Nene Chicken, you can get extensive franchisee owner support and training.

As well as, various marketing activities throughout local and national.

Nene chicken invites you to start your own successful story by becoming a franchisee. Visit our website for further information.

Phone: 0413 546 565 Fax: 8 5095 456 Contact: Marc franchise@nirvanabeauty.com.au www.nirvanabeauty.com.au

Website: www.oporto.com.au/franchising Start up costs: From $350K - $500K shop front From $700K - $800K drive thru

Start up costs: $250,000 - $550,000 PROFILE: Having conquered some of the latest beauty treatments and technologies, Nirvana Beauty Laser Clinics presents a huge investment opportunity for people wishing to enter an industry with enormous potential.

As a franchise owner with Nirvana Beauty Laser Clinics, you will experience the satisfaction of working in an exciting and on-trend industry. Every day you will reap the fruits of your own input by delivering results-driven treatments to many satisfied clients. Enjoy working with state-of-the art equipment, a great work-life balance, a personalised support network, and ongoing training through our Head Office What are you waiting for? Contact us today and join in our success.

Phone: 02 9415 5300 Contact: info@collectivewellnessgroup.com.au Start up costs: Enquire

PROFILE: A one-of-a-kind personal training workout, Orangetheory Fitness is all about keeping you fit, healthy and ready for anything. Backed by science, heart rate monitors are worn throughout the one-hour session, making sure you stay at the optimum metabolic rates.

PROFILE: Oporto are proud to have played a role in promoting and supporting the Aussie entrepreneurial spirit by paving the way for hundreds of people to become successful franchisees and business owners.

It all started 30 years ago with one man’s passion for the food of his homeland Portugal, flame grilled chicken basted in an amazing chilli, garlic, lemon and ginger sauce. Fast forward to today and there are over 150 Oporto stores across the country serving Antonio’s flame grilled Portuguese chicken as well as an incredible range of burgers, wraps and salads.

With new dynamic, small format stores opening across the country, now is the time to buy into a brand that is in a phase of growth.

A-Z L I S T I N GS

FOR A-Z LISTINGS ENQUIRIES CONTACT:

CONTACT SENIOR ACCOUNT MANAGER CHARLOTTE REDFERN ON 02 8224 8373 CHARLOTTE.REDFERN@OCTOMEDIA.COM.AU

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A-Z LISTINGS

Phone: 02 4626 7777 Contact: Brian Laul franchise@ozfunland.com www.ozfunland.com

A-Z LISTINGS

Phone: 03 9645 4667 Fax: 03 9645 4747 Contact: Jian franchise@papparich.net.au www.papparich.net.au

Start up costs: from $300,000 + leased equipment PROFILE: Since it opened in July 2008, The Wizard of Oz Funland has become a landmark in Sydney’s Macarthur Region, a popular community hub and winner of several prestigious awards.

•

A unique, first-of-its-kind venue in Australia, an exciting children’s entertainment, party and education centre.

•

Recognises that children today demand more than just passive play, and that the children’s entertainment sector will soon have to reach beyond current boundaries to remain relevant for the future.

•

An interactive ‘live’ space that is changing the way children are entertained by engaging its young visitors with creative activity and giving them an unforgettable time of adventure, fun & discovery.

We seek expressions of interest from people who wish to join the growth of Oz Funland in Greater Sydney, Central Coast, Newcastle, Wollongong, Melbourne, Brisbane, Perth, Adelaide and Regional Australia.

Start up costs from: $600K to $1.5M, depending on model/size

PROFILE: Founded in Kuala Lumpur in 2005, PappaRich is a chain of cafés and restaurants in Singapore, China, South Korea, USA, Australia and New Zealand that serves a plethora of authentic Malaysian delights. Each eatery is fitted out with a modern, earthy-coloured interior and an extensive kitchen with hardworking chefs ready to create your meal. Groupies can enjoy a range of roti canai, satay, rice, noodle, fish, dim sum or vegetarian dishes, as well as traditional Malaysian drinks including kopi, teh tarik, and lemon tea.

Read more at http://www.franchisebusiness.com.au/brands/ozfunland#H8sedhki4FaGDRPz.99

Phone: 1800 809 913 Fax: 03 8699 1555 Contact: Anna Goncalves franchising@ questapartments.com.au www.questfranchise.com.au

Phone: 1800 245 447 Email: joinourteam@poolwerx.com.au Web: www.poolwerx.com.au Start up costs: From $97,000 + GST + Van

Start up costs: $750,000 upwards PROFILE: Australia’s Franchise System of the Year 2016.

Build your successful business future with us. We have a career path in business that we can tailor to suit you. As a Poolwerx Franchise Partner, you can start small or jump right in. Join us as a man in a van, progress to multi-vans, a retail store and vans and then in multi store. Or purchase an existing fast start mobile territory or retail mobile business. Whatever your journey, we will help you realise your vision.

Our one focus is to create a profitable partnership. We do that by matching over 25 years experience and outstanding support, marketing and business development systems to your energy and enthusiasm.

For more information, visit poolwerx.com.au/franchising.

Phone: 1300 4 REDCAT (1300 473 322) hello@redcat.com.au www.redcat.com.au

PROFILE: Redcat is an Australian POS provider, supplying end-to-end point of sale, accounting and business management solutions that give users total control of their business. Our customers include some of Australia’s best known franchises, restaurants and cafes.

Redcat Polygon is an integrated software and hardware solution that manages sales, staff, stock, payroll, accounts, inventory, and customer loyalty. Polygon includes web based multi-site reporting, to provide a complete business management system.

Franchised groups benefit from our flexible centralised management capability, that permits multiple levels of control and reporting.

Redcat also provides integrated online ordering systems. Customers order and pay through a customer-branded app, with the order passed into Redcat Polygon. Fully audited, fully automatic.

Phone: 07 5455 3822 Fax: 07 5455 3616 Contact: Gary Shearer franchise@safetyquip.com.au www.safetyquip.com.au

PROFILE: Quest Apartment Hotels is the largest and fastest growing apartment hotel operator in Australasia, with a network of 150 franchised properties across Australia, New Zealand and Fiji.

For over 25 years, Quest has provided convenient locations, reliable standards and flexible living conditions for extended stay corporate travellers among Australia’s top 500 companies.

Quest is now one of the top 15 apartment hotel providers in the world, and widely recognised as the market leader of apartment hotel accommodation in Australia.

To become a Quest Franchisee you must be prepared to make a significant investment and commitment to the business, both personally and financially.

Website: www.redrooster.com.au/franchising Start up costs: From $350K - $500K shop front with delivery From $700K - $800K drive thru format with delivery

PROFILE: Red Rooster has been providing Australians with roast chicken since 1972 when the first restaurant opened in Kelmscott, WA. Now with at least a third of Australian households sitting down to roast chicken and veg every week, Red Rooster have made it even easier for families to share a meal together with the launch of their delivery service.

Chris Green, CEO of Red Rooster “We’ve put an incredible investment into making sure our delivery systems and procedures are technologically advanced and streamlined. It is our commitment to ensure that our future equates to more profits for franchisees. We are really happy with the results so far, but this is just the beginning... there is so much more to come!”

Australian owned and operated, now is a great time to buy into an iconic Aussie brand that is on the rise.

Phone: 07 3399 3000 Fax: 07 3399 3077 Contact: Patrick Mulcahy franchisedevelopment@shingleinn.com www.shingleinn.com

Start up costs: $250,000 - $500,000 plus working capital PROFILE: SafetyQuip is Australia’s only franchised player in full scope Workplace Safety Supplies and services – a booming, billion dollar market. Serving a target market of small to medium-sized businesses, a developed SafetyQuip franchise has a counter-sales base and distribution warehouse anchoring one or more mobile units, providing customers with competitive pricing yet the personal service of a local business. It’s a potent combination, with franchisees turning over up to $3.4 million pa.

The SafetyQuip system, highly developed over 20+ years, has thirteen territories currently operating across Australia. No prior experience in safety is necessary.

PROFILE: Shingle Inn is a leader in the boutique café market. Established in 1936, against the backdrop of the Great Depression, Shingle Inn has been the perfect destination to share special times with family and friends for generations.

Luxurious high-backed chairs, warm rich colours and intimate booths create an atmosphere that attracts customers and Shingle Inn’s focus on superior quality food and coffee keeps them returning. With decadent cakes and delicious treats, made from traditional recipes in Shingle Inn’s central bakery, Shingle Inn prides itself on an exclusive product range that will not be found in any competing café.

Together with Shingle Inn’s constant focus on coffee excellence and freshlyprepared meals on our extensive menu, Shingle Inn is unsurpassed in today’s café culture. Contact us to find out why Shingle Inn could be the right coffee and food business for you. Patrick Mulcahy 0431 649 450.

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Phone: 03 9571 0600 Contact: Kate Hopley kate@spudbar.com.au Spudbar.com.au

Phone: 02 9037 2849 Contact: Doug Downer doug@thealternativeboard.com.au www.thealternativeboard.com.au

Start up costs: $250,000-$280,000

Start up costs: from $40,000 up to $95,000

PROFILE: Spudbar was founded in 2000 around the simple promise to create delicious food that’s healthy, great value, quick and casual. We discovered the spud was the perfect platform to build a meal around - delicious, filling and much healthier than the typical meal staples of pasta, bread and rice.

We have built an exciting business around this nutrient rich gem of natural goodness and would like to share it with likeminded people.

Our franchisees enjoy • Work with a product that you can feel good about serving • Low start up costs Ongoing support and guidance

• Easy to learn store systems • Simple to operate business E: franchising@spudbar.com.au

AZ-The Cheesecake 1 11/8/2016 10:54:58 AM For more information contact Shop.pdf us on W: www.spudbar.com.au

PROFILE: The Alternative Board is a membership organisation of Business Owners and CEOs who meet monthly in confidential board meetings to assist each other in transforming their businesses.

The Alternative Board (TAB) exists to help business owners align their business vision with their personal vision. It exists to provide owners/CEO’s with the power to ensure that their businesses will deliver what they want out of life.

In addition to the monthly board meetings, the facilitator/coach meets with the business owner/CEO each month and works with them in a one on one coaching session focussed exclusively on their business.

P: 03 9571 0600

Phone: 029723 97231011 1011 Phone: 02 02 9723 Phone: Fax: 029727 97276771 6771 Fax:02 02 9727 Fax: Contact: Nick Nick Avgerinos Contact: NickAvgerinos Avgerinos Contact: Email: franchise@cheesecake.com.au franchise@cheesecake.com.au franchise@cheesecake.com.au Website: www.cheesecake.com.au www.cheesecake.com.au www.cheesecake.com.au

Phone: 0407 105 613 Contact: Robert Graham robert@ceoconsulting.com.au www.therotisserie.com.au

Start up costs costs from: $200,000 --$800,000 Start $1million Startup up costsfrom: from:$200,000 $200,000 - $800,000

Start up costs: $130,000 - $250,000

PROFILE:

PROFILE: Master franchise and store level franchise opportunities now available in Australia.

Our award winning system makes for one of the simplest businesses to operate.

After years of success in Singapore, The Rotisserie brings its all day comfort food menu and restaurants to Australia. Broad food & beverage menu including coffee & alcohol, 7 days trading, 3 meals a day.

PROFILE: PROFILE: The Cheesecake Shop opened in 1991 and has developed into an Australian TheCheesecake Cheesecake Shop Shop opened 1991 into anan Australian The openedofininalmost 1991and andhas hasdeveloped developed into Australian favourite with a massive network 200 stores across Australasia. favourite with with aa massive massive network 200200 stores across Australasia. favourite networkof ofover almost stores across Australasia.

Our award winning system makes for one of the simplest businesses to operate.

Our award winning system makes for oneyou of need the simplest businesses operate.

Our systems guide you on how many cakes to produce each weektoand Our much systems guide you on how many cakes you need to produce each week and how of each ingredient to order.

Our systems guide you on how many cakes you need to produce each week and how much of each ingredient to order. how muchare of baked each ingredient order. recipes. You don’t need to be a chef or Our cakes from easy to to follow Our cakes are baked from easy to follow recipes. You don’t need to be a chef or a baker, its so Our cakes areeasy! baked from easy to follow recipes. You don’t need to be a chef or a baker, its so easy! loveitstoso bake cakes for the kids then here is your chance to turn your aIf you baker, easy!

If you love to bake cakes for the kids then here is your chance to turn your If you love to bake cakes for the kids then here is your chance to turn your

Backed and operated by an international food and hospitality team with Australian support and local experts. Join early to secure the best sites and terms.

Phone: 07 3215 6050 Contact: Gen Alexander Franchising@tommyguns.com.au www.tommyguns.com.au

Phone: 0439 966 391 Contact: Wayne Stapleton info@under-wraps.com.au www.under-wraps.com.au

Start up costs: $250,000 - $500,000

Start up costs: $100,000

PROFILE: Tommy Gun’s Original Barbershops have been designed with the customer experience at centre, creating a complete destination for male grooming.

For years men’s grooming needs have been largely ignored. Getting a haircut in a salon surrounded by flowers and piles of ladies magazines…or joining the queue of guys on an uninspiring bench at the local cheap cuts. Getting their hands on the right grooming products was also a challenge, running around to multiple stores for razors, oils or waxes.

Tommy Gun’s is the new alternative that has been received with high fives and fist pumps.

Seamlessly combining the latest technology with old-world finishes, grooming services and products, all under the one accessible roof. What’s not to love?

With custom red barber chairs, an exclusive waiting lounge, arcade games and Foxtel in every mirror, the experience is relaxed, luxurious and affordable.

Phone: 0414 669 101 Contact: Stephen Spitz stephen.spitz@xpressodelight.com.au www.xpressodelight.com.au Start up costs from: $49,500 + GST

PROFILE: The Under Wraps Franchise opportunity is a health and superfood inspired fast food business in the sandwich, salad & juice bar arena offering the confident entrepreneur the business ownership option of a single or multi-unit Kiosk, Food Court and/or Cafe store operation.

Staying true to philosophy – “Real Food, Real Fresh” – Under Wraps offers a nutritious approach for breakfast, lunch, snacks, take home meals, Juices and more, prepared fresh, everyday, with love, using premium seasonal ingredients and selected superfoods.

FRANCHISES ARE NOW AVAILABLE AUSTRALIA WIDE... Under Wraps is a “Real Food, Real Fresh” fast food franchise opportunity set for national expansion.

Phone: 0459 654 146 Contact: Andrew Lyme andrew.l@zsg.com.au zeusstreetgreek.com.au Start up costs: $350 – $600k+

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!

PROFILE: Zeus is a fast growing franchise on a journey to lead and innovate fresh casual dining and bring its distinctive brand of healthy Greek street food to your street.

This pent up demand for gourmet coffee in the workplace is very poorly met.

The Zeus team has proven franchising expertize and are committed to working closely and collaboratively with its franchise partners. Zeus provides store set-up and ongoing support for franchisee’s including site selection, store development, hiring, training, marketing and all that is required to deliver the Zeus experience.

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.

Zeus is on the lookout for franchise partners with a passion for customer service and combining business savvy with great tasting food.

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A-Z LISTINGS

FINAL WORD

A FAIR GO FOR FRANCHISEES The need to ensure retail leasing is both balanced and fair is paramount for franchising and the sector’s peak body is taking steps to bring this about.

DAMIAN PAULL CEO, Franchise Council of Australia

T

here are an estimated 79,000 franchise business units operating in Australia, representing a diverse range of industries, but whether a quick service restaurant (QSR), travel agency, pharmacy, sports store or a myriad other businesses, many of these franchised businesses have bricks and mortar retail outlets.

This makes the issues of site selection and retail leasing important for the franchisors and franchisees alike.

Good site selection will contribute to the profitability of a franchisee's business, delivering strong foot traffic in addition to customers who may be attracted to the business through marketing and advertising campaigns. Conversely, poor site selection can reduce the viability of a franchisee's business, with issues such as poor visibility or poor access limiting sales potential.

Tied to this is the retail lease. A prominent retail site in a good location will likely command a commensurate rental outlay, and this is an expense a franchisee must factor into the cost of doing business.

So, in addition to the franchise agreement, a franchisee will likely also sign a separate retail lease agreement with a landlord.

While the Franchising Code of Conduct regulates the relationship between franchisor and franchisee, and in doing so provides protections to franchisees to address any power imbalance between these parties, there have not historically been equivalent protections enacted in regard to landlords and tenants that are parties to retail leases.

Indeed, where franchising is regulated by a mandatory Code that applies nationally, retail leasing legislation differs from state to state, and so too do the requirements imposed on landlords in their dealings with retail tenants.

As the peak body for the franchising sector, the Franchise Council of Australia (FCA), has been actively engaging to ensure franchised businesses who are required to enter into retail leasing agreements are doing so in a fair and equal marketplace.

In recent times, the FCA has worked in conjunction with our industry partners, the Australian Retailers Association (ARA) and the Pharmacy Guild, to engage with State Ministers responsible for Small Business,

and the State Small Business Commissions around the issue of retail leasing in regard to the review of Retail Leasing legislation in both South Australia and New South Wales. The FCA is also represented in a review of Retail Leasing legislation that is currently underway in Victoria.

In addition, a Retail Code of Industry Practice – The Reporting of Sales and Occupancy Costs (the Code) has been developed and signed by the ARA, Pharmacy Guild and the FCA in response to the Retail Leasing Act amendments in NSW. At the time of this publication, the Code not been signed by the Shopping Centre Council of Australia on behalf of its members.

This Code aims to provide retailers with greater transparency when negotiating lease deals, and to put them on a level playing field with landlords, by addressing some of the information asymmetry and ensuring tenants can make more informed decisions This is of particular importance in the context of franchising, where there is a marked inequality of bargaining power between landlords in major shopping centres and franchising tenants, the vast majority of whom are individual small businesses.

These tensions have recently boiled over as QSR franchise SumoSalad has sought to force a shopping centre landlord to the negotiating table and protect the financial interests of some of its franchisees by putting two of its companies, which hold leases of a number SumoSalad franchise units in shopping centres, into administration.

While this case study highlights the potential for a franchisor to step in on behalf of franchisees in a defined set of circumstances, it also underlines the importance of redressing the intrinsic power imbalance between shopping centre landlords and franchisee tenants.

The FCA will continue working with the ARA and the Pharmacy Guild to ensure the implementation of the Reporting of Sales and Occupancy Costs code, the review of the Casual Mall Licensing Code and to reform state-based retail leasing legislation to reduce red tape and make retail leasing easier and fairer for the franchising sector. 

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