Inside Franchise Business - Sep/Oct 2018 by Octomedia Pty Ltd

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SEPT/OCT 2018

ISSUE 31 VOL5

LEASE ALERT! Hidden property costs revealed

FEED YOUR PASTA PASSION

Why the casual dining scene could be for you

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CHAMPIONS

THE

STAR PERFORMERS SHARE THEIR SECRETS TO SUCCESS

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CONTENTS

REGULARS

LEADERSHIP

5 6 10 118 119 120 121

EDITORIAL

TIME TO CELEBRATE

Six franchise brans hit big anniversaries.

GLOBAL EYE INSIGHTS

30 THE BAKER BOSS

Long term baker turns franchisee

32 YOU GUYS ARE ROCKING IT!

A special needs gym lands in Australia.

BUYING PROCESS

18 LOCAL HEROES

INFLUENCERS CHECKLIST

Spotlight shines on winning franchisees.

RESOURCES

22 SWEET TASTE OF PROFITABILITY

34 SPILLING THE BEANS

Franchisees fuelling Zarraffa’s Coffee growth

38 MILESTONE MAGIC

Poolwerx’ $100m turnover just one of three targets met.

Rising franchisee profits at The Cheesecake Shop

THE FITNESS FACTORY

High intensity workout brand new to franchising.

26 SOLDIERING ON

42 COVER STORY

28 THE GREEN RACE

52 THE POLE POSITION

Ex-military father and son join forces in business. How coffee brands are flexing their green credentials.

INDUSTRIES

FRANCHISE BASICS

54 THE ITALIAN JOB

84 THE REAL STORY

Eateries are serving up fresh flavours and a winning formula.

Franchising in the spotlight with FCA CEO Mary Aldred.

86 ARE YOU PAYING TOO MUCH?

Signs you are investing too much in your franchise.

88 HOW DO I KNOW MY TERRITORY WILL SUPPORT ME?

Size matters when choosing a territory for your service franchise.

64 SPOTLIGHT ON COURIERS

Convenience, speed and flexibility are driving this market.

69 HOUSE RULES

What’s ahead for home loans and mortgage brokers?

75 CLEAR LINE OF SIGHT

Options for owning an optometrist franchise.

78 GET OUT!

Business opportunities for outdoor fiends.

High performing franchisees tell their stories

Hollywood dancer turns franchisor and shares her passion.

106 HIDDEN FIGURES

There’s more than rent to pay when you sign a lease.

109 INSIDER KNOWLEDGE

What does a retail leasing expert actually do?

110 TYING THE RETAIL KNOT

Your lease is like a marriage, with a divorce factored in.

112 WHAT FRANCHISORS CAN 92 SEEK AND DISCOVER AND CAN’T DO Stay alert to the pitfalls and potentials of a property site.

95 SITE SPECIFICS

Don’t struggle with the wrong location.

96 CENTRE OF ATTENTION

The changing nature of shopping centres.

100 THE DEVIL IS IN THE DETAIL

How to ensure your lease delivers what you need.

SEPT/OCT 2018 | 3 | WWW.FRANCHISEBUSINESS.COM.AU

How the Franchising Code governs franchisor behaviour.

116 5 WAYS TO SECURE THE BEST SITE

Pick the top spot for a franchise business.

130 FINAL WORD

Franchisees share secrets to location success.

BE PART OF SOMETHING BIGGER QUEST FRANCHISING - A PROVEN & SUCCESSFUL BUSINESS FORMULA As Australasia’s largest apartment hotel operator, Quest is a brand business travellers have come to rely on for more than 30 years. We’ve created a business format franchise model that takes away some of the challenges to achieving success in small business, with the support of one of Australia’s most recognisable brands.

Visit questfranchise.com.au or call 1800 809 913

EDITORIAL

High performers Super achievers reveal what it takes to hit business goals. What appeals to you about the franchising model? The power of branding – the opportunity to develop your own business under an established marque – could be the number one benefit. Or it could be the ability to learn from a team of experienced business owners and the franchisor, who have found out the best ways to maximise investment and implement best practice. A fear of marketing is a common sensation for many would-be and existing franchisees, who view the presence of a marketing department with strategies and templates on hand as nothing short of a blessing. There’s also the advantage of buying power and access to suppliers that can make a franchisee’s job easier. For many first time franchisees, running a business is both a dream and a totally new experience, a step into the unknown. And so it helps to have company on the way. The franchisor – and that includes the support team at head office and in the field – is on hand to provide guidance and advice. However there’s an onus on franchisees to operate and drive their businesses and not rely on the franchisor to deliver results for them. Business is risky – a franchise business is no different. Solutions to problems are as likely to come from fellow franchisees as from the franchisor, and the access to a network of business owners who share the same concerns and challenges is often cited as one of the best reasons to buy a franchise. While it would be unrealistic to suggest that each franchise purchase is a success, and every relationship between franchisee and franchisor is positive and empowering, there’s no doubt that for many franchisees the benefit of taking on a franchise has outweighed any negatives. It helps to get off to a good start with the right site for an outlet, or the appropriate territory for a service business. Read more about what’s involved in our ‘Franchise Basics’ section on page 84. In this issue, Inside Franchise Business showcases high performing franchisees (page 42), tales of innovation, fresh ideas to invest in, and brands celebrating their longevity. In October the Franchise Council of Australia will announce national winners in its Excellence in Franchising Awards – in this edition, Inside Franchise Business puts the spotlight on the franchisee finalists who have each won a regional award. Look out in the next issue for the national champions.

EDITOR

SENIOR ACCOUNT MANAGER

SUB-EDITOR

Marketing & sales co-ordinator

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Karen Gee

JOURNALIST

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GRAPHIC DESIGN

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SEPT/OCT 2018 | 5 | WWW.FRANCHISEBUSINESS.COM.AU

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GLOBAL EYE

MOVING ON UP Investment, restructuring and expansion are crucial elements for franchise growth.

GUZMAN Y GOMEZ GETS $44M Fast-growing casual dining restaurant, Guzman Y Gomez (GYG) has secured a new investor. The burrito chain has penned a deal with Sydney-based private investment firm TDM Growth Partners worth a reported $44 million, in exchange for a minority stake. The new deal marks a significant milestone for GYG, with the equity boost bolstering the brand’s recently announced plans for further expansion both in Australia and overseas. “We are immensely proud to join GYG on the next stage of their journey,” TDM said in a statement posted to its Twitter page. “We are incredibly impressed by the quality of both the management team and board. We love the passion they have for their business, and importantly, their focus on culture – a value that is at our core.” In late 2017 it was reported that the Mexican food franchise was in discussions with several private equity backers and firms, seeking an investment that would strengthen the brand's drive-through network. The landmark deal with TDM will see Tom Cowan, one of TDM’s founding partners, join the GYG board, in addition to former head of Accent Group, Hilton Brett; however, co-founder Steven Marks will continue as GYG global CEO. The investment will allow GYG to further its plans for global expansion, which Marks said are already in discussion. Marks told Inside Franchise Business sibling publication Inside Retail that the company is currently looking at around five possible locations, and plans to bring over a large contingent from its Australian head office to assist with the opening. The new funding will also be used to strengthen GYG’s technical foundations,

including its operating platform, which Marks claims to be the fastest in the industry. “I’m a people and numbers junkie. When I was thinking of opening GYG in Australia, I realised there weren’t a lot of people and everyone eats within a certain timeframe. I realised we had to be fast [to succeed],” Marks said. “We developed one of the fastest operating platforms in the world. It allowed us to become the number one [restaurant] on Deliveroo and one of the top guys on Uber Eats and to do drive-throughs. “Our model works. It’s about taking it to the next level, and that takes constant investment.” For TDM, the deal with GYG continues a successful run of investments in Australian privately owned companies looking to drive growth. The private equity firm was previously a major shareholder in baby goods retailer Baby Bunting, and saw revenue jump from $40 million to $278 million under its guidance. GYG shareholders and franchise partners will be hoping the latest deal produces similar results, driving further expansion for the network, which boasts 80 per cent franchised stores. GYG has a network of 120 franchise and company-owned restaurants and drive-throughs across Australia, Japan and Singapore, with reported sales in excess of $200 million annually, growing at around 30 per cent.

LENARD BACK AT LENARD’S Embattled food retailer Lenard’s Chicken is back under the direction of founder Len Poulter, following a buyout deal with minority stakeholder, Blue Sky Alternative Investments (ASX:BLA). Poulter, who founded the franchise

Mark Hawthorne and Steve Marks more than 30 years ago, faces an uphill battle to re-establish Lenard’s after it was revealed in March that the business had only just broken even in the first half of FY18, down from a normalised profit of $400,000 a year earlier. The news comes after the private equity firm confirmed its EC 2010 fund had exited investment in the brand, after previously putting the business up for sale. It is believed that under the terms of the sale, Blue Sky will also provide Poulter with a working capital facility to complete the deal. The private equity firm had been involved with the franchise since 2008, when it took up a 42 per cent stake in the company; however, recent struggles had put a strain on the working relationship. The franchise network currently holds 80 stores nationwide, a dramatic decrease from the 200 it saw in 2015.

SEPT/OCT 2018 | 6 | WWW.FRANCHISEBUSINESS.COM.AU

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GLOBAL EYE

RESTRUCTURE ON CARDS AS SUMOSALAD APPOINTS ADMINISTRATORS In July, SumoSalad appointed Ferrier Hodgson as administrators. Chief executive and co-founder Luke Baylis said in a statement that while the operations of the business would be in the hands of the administrators, he expected the 85-strong network of Sumo fresh food stores to continue trading as normal while the business is restructured. Baylis said that Sumo has a healthy core business with like-for-like retail sales now growing in “the high single digits”’. “However, the business has some legacy issues that have made ongoing trading challenging, despite the strength of the brand and the business model,” he said. “We will look to propose a Deed of Company Arrangement (DOCA) to ensure we can provide our creditors with the best possible outcome and plan to continue positive relations with suppliers and partners into the future.” Baylis said the long-term strategy is to progressively extend the brand into grocery, convenience and transport hubs. The restructuring process does not affect stores owned by SumoSalad Holdings in Western Australia.

LOCAL GROWTH Brisbane-based fitness franchise, Fitstop Australia plans to open 20 locations across the Brisbane metropolitan area in the coming months, in addition to interstate expansion in Canberra, Sydney and Melbourne. The interstate expansion will bolster the brand’s current franchise network, which has grown from two locations in 2017 to 14 at present. Korean fried chicken franchise NeNe Chicken will open a new storefront in Casuarina, Darwin in early September. The latest location will be the northern-most site in NeNe’s Australian network, taking the list of outlets to 14, with additional stores currently in negotiation talks. Healthy fast food chain Suki has put breakfast on the menu in its brand new express concept targeting city workers. Franchisor Kim Toovey, CEO of Suki Sushi Burrito, says, “We’ve been playing out of the 100–120sqm space in a retail landscape that is accompanied by higher rents. We’re introducing this model as an alternative option to fit into CBD. We won’t be putting the traditional Suki outlet into a city

NeNe Chicken location. Suki Express is for key locations, with a reduced footprint.” Australia and New Zealand’s fastest growing fitout franchise group, Total Fitouts is on the hunt for a Queensland master franchisee. Based on the Sunshine Coast, the franchise presents a rare opportunity to leverage the company’s proven business model and established customer base to further develop the Total Fitouts brand. Quest Apartment Hotels will unveil five new hotels over the next seven months within the Melbourne metro area, reflecting unprecedented growth for the franchise chain. The developments will bring Quest’s total number of Melbourne properties to 47, offering 3169 rooms across the city, and add about 125 employment opportunities.

COMING HERE Singaporean boxing training and fitness franchise Spartans Boxing Club is making the move down under, after announcing a master franchise opportunity for the region. The franchise currently has two locations in Singapore, and reported it would be focusing on South-East Asia and Australia as its next growth markets. Russell Harrison, Spartans Boxing Club general manager, said, “Ideally we’d love to sign some five-gym deals for each location. If we can hit 15 gyms in Australia in the next two years, we’ll be happy.” US hair and beauty salon franchise giant, Sola Salon Studios has announced expansion into Australia, and is currently in collaborative efforts with DC Strategy to find a master franchise owner. Originally launching in Denver, Colorado almost 15 years ago, Sola Salon Studios has carved out an impressive name for itself, with a network of over 400 franchise and

company-owned stores across the US, Brazil and Canada. Now serving as the largest salon studio concept in the US, with over 10,000 stylists and salon owners, generating close to US$1 billion in professional services revenue, the brand is steadying its plans for further international growth.

IN HOT WATER Audits into 15 Degani Cafe outlets by the Fair Work Ombudsman found a number of serious breaches of the Fair Work Act 2009, with only one of the audited stores meeting compliance regulations. However, results indicated non-compliance was more prevalent within stores operating under a licensee agreement, as opposed to franchises. The ACCC is taking Europcar to the Federal Court, alleging the company charged excessive credit and debit card payment surcharges in breach of the Competition and Consumer Act 2010. The ACCC’s proceedings only relate to outlets that are owned and operated by Europcar and not those run by franchisees. In Australia, 96 out of 126 Europcar outlets are owned and operated by Europcar.

FAST FOOD SUSTAINABILITY Subway’s environmental efforts to remove items before they enter the waste stream eliminated 76 tonnes of plastic and almost 300,000 kilograms of paper and cardboard from operations. McDonald’s is to phase out plastic straws with an initial two-store trial of paper straws before rolling out the change to all 970 restaurants nationwide by 2020. Read more about sustainable issues with a coffee focus on page 28. n

SEPT/OCT 2018 | 8 | WWW.FRANCHISEBUSINESS.COM.AU

INSIGHTS

AUSTRALIA

UNDER THE MICROSCOPE

SEPT/OCT2018 | 10 | WWW.FRANCHISEBUSINESS.COM.AU

Take a look at the national numbers that shape our lives and our businesses.

ustralia’s population has reached 25 million. Australian Bureau of Statistics director of demography, Anthony Grubb, says “From our average age, to how long people live and where we live, Australia’s population has experienced major changes. “Australia’s population has increased more than sixfold since 1901 when it was 3.8 million. “By 1918 it had grown to 5 million, it had doubled to 10 million by 1959 and reached 20 million in October 2004. It has been just over 2.5 years since we reached 24 million in January 2016.” The population growth equates to an additional person every one minute and 23 seconds. Looking more deeply into this figure there is: • one birth every 1 minute and 42 seconds; • one death every 3 minutes and 16 seconds; • one person arriving to live in Australia every 1 minute and 1 second; and • one Australian resident leaving to live overseas every 1 minute and 51 seconds. WHERE DO WE LIVE? At the beginning of last century just over one third (36 per cent) of Australians called capital cities home and 64 per cent lived in other urban and rural areas. In 2017, this figure has flipped: 67 per cent of us inhabit capital cities and just 33 per cent are resident outside these major conurbations. WHAT DOES 25 MILLION LOOK LIKE? The structure of Australia’s population has changed significantly since the turn of the 20th century. According to the ABS, the median age in 2017 was 37. Back in 1901 that figure was 15 years younger: 22.5 years. Australians are also living longer, with almost 4000 centenarians in 2017. There’s a shift in the gender make up of the population too: males dropped to 98.5 for every 100 females; that’s a change from 110 males to every 100 females in 1901. In 2016 the census showed the median age of Australians was 38. The over 65s accounted for 15 per cent, while the Millennials (20s to mid 30s) were about 20 per cent of the population.

SEPT/OCT 2018 | 11 | WWW.FRANCHISEBUSINESS.COM.AU

INSIGHTS

FASTEST GROWING CAPITAL CITIES IN 2016–17 MELBOURNE + 125,400 = SYDNEY + 100,000 =

BRISBANE + 48,000 =

HOBART + 2,400 =

4.9 MILLION 5.1 MILLION 2.4 MILLION 222,356

HOW BIG IS AUSTRALIA AS A GLOBAL MARKET? Right now the world’s population is approximately 7.6 billion. New Zealand, often the first overseas location for a franchise looking to expand globally, has a population of just 4.8 million. Other popular export destinations are the US (328 million) and the UK (66 million). What differentiates our market and offers both challenges and opportunities for both incoming and domestic businesses is the coastal concentration of population and lack of infrastructure in a vast interior. WHEN WILL AUSTRALIA REACH 26 MILLION? Over the past three years, Australia’s population has grown by around 400,000 people per year. If this trend continues, the country’s population would be expected to reach 26 million in about three years’ time.

EMPLOYMENT AND HOURS In July 2018 trend employment increased by about 27,000 people with 18,000 individuals taking on full-time employment. The trend participation rate remained steady at 65.5 per cent.

Over a year, trend employment grew by 2.4 per cent (approximately 300,000 people), which was above the average year-on-year growth over the past 20 years (2 per cent). Statistics show that the the trend monthly hours worked increased by 0.2 per cent in July 2018 and by 1.9 per cent over the past year. STATES AND TERRITORIES With the exception of Queensland, Tasmania and Western Australia, yearon-year growth in trend employment for states and territories was above their 20 year average. Over the past year, the states and territories with the strongest annual growth in trend employment were Northern Territory (3.5 per cent), New South Wales (3.2 per cent) and Victoria (2.5 per cent). SEASONALLY ADJUSTED DATA The seasonally adjusted number of people employed dropped in July 2018 by about 4000. At the same time, the seasonally adjusted unemployment rate fell to 5.3 per cent and the labour force participation rate in Australia lowered to 65.5 per cent.

WHAT DO WE EARN? With the help of the Australian Taxation Office, the ABS is able to paint a picture of the income trends. The Australian median personal income in 2015–16 was $47,692; that’s an increase of 1.8 per cent from the previous 12 months. The figures released in June reveal the Australian Capital Territory tops the stats for the state/territory with the highest median income: $63,084 in 2015–16. Over the past six years, the Northern Territory has seen the highest growth in income at 21.1 per cent; even higher in Darwin with a 23.3 per cent increase. High median incomes were recorded in some local government areas in Western Australia. Bjorn Jarvis, the ABS’s head of labour statistics, says, “Western Australia had four of the top five local government areas with the highest median income. "However, despite four of the five highest median income regions being in Western Australia, it was also the only state to experience a decrease in the overall median income. These figures are important to understanding changes in income in WA, following the mining boom," he says. n

Statistics source: Australian Bureau of Statistics SEPT/OCT 2018 | 12 | WWW.FRANCHISEBUSINESS.COM.AU

Be the

LEADER OF YOUR OWN SUCCESS Welcome to a world of opportunity, brought to you by 7-Eleven, the brand that’s world famous. A 7-Eleven franchise is a partnership in success. When you buy a 7-Eleven franchise, you buy two things. Firstly, a brand name that’s recognised around the world, and secondly a business system that works, one that provides more support than most other franchise networks.

BENEFITS OF BEING A 7-ELEVEN FRANCHISEE Our stores are open 24/7, so we’re with you 24 hours a day, supporting you in every part of your operation. From setup, to training, to marketing, and even to book-keeping, we’ll help you turn your new business into a solid investment. We set up shop for you and give you

full training

We take payroll admin off your hands

and help with the book-keeping

We deal with suppliers to get you the

best products

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Financials

Contact Details

An initial investment of between $400,000 and $1,000,000 + is what is required to become a 7-Eleven Franchisee, so it’s certainly a big decision to make.

Franchise Development Managers

The 7-Eleven franchised business model is one with a difference, because we tie our financial success to the success of our Franchisees. 7-Eleven shares in the profits, so it’s in our interest to ensure that we continually work with you to meet the needs of your customers to grow sales, and to grow profits. Our gross profit split is determined progressively, and there are other shared income stream profits, such as commissions.

We have brands you won’t find anywhere

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E-Mail: bzr@7eleven.com.au Mobile: 0407 877 674 Peter O’Hara Victoria / Western Australia

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FRANCHISING

THE LIST

TIME TO CELEBRATE It’s time to say happy anniversary to these franchise brands who have notched up the years serving Australian customers.

lot has happened in the last few decades, as some of these longstanding franchise businesses can attest. Inside Franchise Business has gathered together a line-up of brands that have withstood the dips and downsides of commerce and are looking ahead to the next decade or two … or more.

Swimart

Fastway couriers

Mail Boxes Etc.

It all started in 1983 with a single retail store in Killara, NSW. Since then the company started by Malaysian migrant Soon Sinn Goh has steadily grown into a specialist pool and spa care franchise with 75 stores across Australia and New Zealand and a fleet of more than 220 mobile service vans. The first franchise opened its doors in Miranda, NSW, in 1987, with some franchisees now notching up 30 years with the brand. Swimart’s first franchise manager, Bob Tully, managed the Miranda store then bought the Campbelltown outlet. "Swimart provides its franchisees with fantastic marketing and advertising support, and it's really good with keeping up with products trends and technology. It's good to be part of a company that moves with the times. It's also good to have loyal customers, some of whom have been with us for more than 20 years." The franchise development manager Alex Johnson says, "We are an agile company that is customer focused and service orientated, and we work closely with our franchise partners to educate pool and spa owners about how to get the most out of their investment.” Today the business is owned by ASX-listed Waterco Ltd, a manufacturer, marketer and distributor of water treatment products.

Fastway Couriers is celebrating the milestone at its annual conference, this year held in the Northern Territory at Australia’s iconic Uluru. The business was established in New Zealand in 1983 and within 12 months became the first transport company to enter the franchising arena. After launching into Australia in 1993 the company saw exponential growth. Two years ago international courier and logistics company Aramex (which operates in more than 60 countries) bought Fastway Couriers, which today comprises more than 800 franchisees in Australia and showed in excess of 10 per cent growth over the last year. Fastway Couriers is turning the traditional delivery model on its head with a range of new technology and processes including embracing the sharing economy to help support franchisees and customers. “The transport and delivery industry has changed dramatically over the past 25 years,” says Fastway Couriers Australia CEO Peter Lipinski. “The first Fastway van in Australia distributed in a world of pre-smartphone technology and internet, in a market made up predominantly of business-to-business customers. The rise of online shopping in the past five years has completely transformed our industry. The rapidly growing appetite of Australian consumers for online shopping and the expectation of roundthe-clock convenience has underpinned the development of a number of innovative new technologies,” he says.

The Sydney suburb of Neutral Bay hosted the launch site of the MBE Australia network back in 1993. There are now more than 35 business centres across the country. It’s one of the world’s largest networks of business service centres offering shipping, couriers, printing, graphic design and postal service solutions to business and private customers. “I started out as an owner of one of the MBE business centres in Perth,” says Clayton Treloar, CEO MBE Australia. “I quickly realised what an incredible franchise business model MBE offers and came on board as CEO in 2014. The head office team and franchise owners are all passionate about the brand and committed to delivering exceptional customer service. “We have an incredible team culture, which is cemented with our popular and well attended annual conferences. It’s the MBE #PeoplePossible culture which enables us to embrace challenges and ensure continued and successful growth of MBE in Australia.” Since opening the doors to the first outlet, the MBE Australian network has serviced thousands of customers, delivering the MBE worldwide mission: making business easier worldwide through its service and distribution network, delivering personalised and convenient business solutions with world-class customer service.

35 years

25 years

SEPT/OCT 2018 | 14 | WWW.FRANCHISEBUSINESS.COM.AU

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THE LIST

Signarama 20 years Over the past two years, six centres have been unveiled, and Signarama reports yearon-year growth. Today there are 105 locations across Australia with 22 outlets achieving Million Dollar Circle status in 2017; on the global front Signarama’s presence is close to 900 outlets. “There have been many positive changes in the sign industry in the last 20 years that have helped our franchise locations succeed,” says Evan Foster, Signarama Australia’s national director. “The future promises to be even more exciting as we embrace new technologies and product lines to strengthen our network even more across the country.” Signarama is part of the US based United

Franchise Group and the brand launched in the US more than 30 years ago. Franchisees who started 20 years ago say their success has less to do with simply making and selling signs and more to do with building strong relationships with their valuable customers to help meet their needs. “I opened my store in 1998 and we’ve gone from focusing on installers and simple signs to today’s world of multi-million dollar locations with experts in all fields of signage within our ranks,” reveals Ross Wade, Signarama Dandenong franchisee. The Signarama brand continues to grow worldwide with locations now in more than 60 countries and hundreds of new locations slated for opening in 2018 globally.

One Agency 10 years Real estate industry disruptor Paul Davies is the founder and CEO of One Agency. “Our network grew quietly through the post GFC period, hitting its straps over the past four to five years and now boasts members in all states and territories along with a strong contingent in New Zealand,” says Davies. Late 2017 saw the informal roll-out of three sister brands, focusing on specialists in rural, commercial and projects marketplaces. “It’s been an incredible journey over the past decade,” he says, “I’ve worked in real estate for more than 45 years, have owned both franchises and independent agencies and so when we launched One Agency I knew exactly what real estate business owners would want and need; I had been my own prospective customer.”

Paul’s wife Annie suggested to Paul that he should replicate his business model for other agents who were complaining about the cost of operating their businesses. She said, “Why not add a brand to it and keep it all economical?” So they backed their dream, sold their home and put energy, belief and hard work into the business. “We are now an overnight success after 10 years,” he says. Davies keeps a close eye on the bottom line. ”It’s not what you make that counts, it’s how much is left after expenses that is the only measure.” One Agency has plans to be a strong International brand.

Franck Provost 10 years Franck Provost opened his first hair salon in 1975 in a chic suburb of Paris. In the more than 40 years since those humble beginnings the brand has grown exponentially to become the number one hair salon in France and is renowned worldwide, with almost 700 salons in 30 countries, servicing more than 10 million guests each year. Franck Provost Paris began its Australian affair in 2008 with a salon in the heart of the Sydney CBD. Today there are 17 Franck Provost Paris hair salons around Australia. The Australian operation also has its own training academy in Macquarie Street, Sydney, which is an extension of the Franck Provost Paris international academy based in Paris. Australian women have embraced the

brand’s unique trademark of accessible luxury since it launched 10 years ago; as a result the company has ambitious plans to mirror the same reputation that it enjoys in France on local shores to become Australia’s largest premium hair salon brand and adding to the global company’s already vast international portfolio. “The Franck Provost Paris business model has proven highly successful across the globe, and it is our goal to continue to build the Australian operation in the coming years, ultimately making it the country’s leading hair salon group,” says Jean-François Carré, Franck Provost Paris Australia’s master franchisor, who is in charge of the expansion of the salon brand in Australia through franchising and opening corporate stores. SEPT/OCT 2018 | 16 | WWW.FRANCHISEBUSINESS.COM.AU

BOB BEAUMONT, Beaumont Tiles

50 years

Bob Beaumont’s father set up national retailer Beaumont Tiles back in 1960 and this year the current executive chairman is marking his 50th year in the business. Eight years after RJ founded the business, then 19-year-old Bob joined his father and says he immediately loved tiles and the tile retail industry. “We started with one store in Adelaide which we had for around 20 years,” he says. “Each new store we gradually opened was a big achievement, but we soon set some goals, and by 1990 we had reached our main goal – to be the biggest tile retailer in Australia.” Today there are over 113 outlets across most states and the company is chasing a boost in sales to the tune of $500 million by the year 2022. “It’s very important for a sustainable franchise model that the franchisee makes money first. If they don't, then you don’t have a franchise system. Well, not one that’s going to last anyway. “We have added 50 franchise stores over the last five years and aspire to double this figure again over the same period. “The bonus for us with franchising over having company stores is it provides us with the working capital we need to sustain our five-year growth plan, to hit $500m in sales and reach 180 stores,” says Beaumont.

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YEARS

Why join Ella Baché?

65+

Established in Australia for over 65 years

The first Australian skincare brand to launch into franchising

Booming skincare industry

Ongoing support and training to enhance performance and profitability

Market leading iconic brand committed to education and innovation

Australia’s largest beauty franchise network with over 170 locations nationwide and growing!

Limited opportunities available, express your interest now ELLA BACHÉ FRANCHISING T. ( 02 ) 9432 5054 | E. franchise@ellabache.com.au ellabachefranchise.com.au

LEADERSHIP

Poolwerx franchisee Michelle Graham, centre

LOCAL HEROES

Celebrating outstanding franchisees: these top performers have been recognised across the country in a series of regional awards culminating in a national awards ceremony.

The Franchise Council of Australia (FCA) holds an awards program that commends brilliant franchisees and puts regional winners in a line-up for the top slots at a gala awards night in October.

Mary Aldred, CEO of the FCA, is full of praise for the award-winning franchisees. “With a lot of small businesses, the owners are so flat out running their business that they often don’t take the time to take a step back and actually look at the fantastic things they have achieved,” she says. “Hopefully it gives them a sense of confidence and endorsement. “They are delivering fantastic outcomes for other people, employing people, giving them a shot at a job; the living embodiment and gold benchmark of franchising is on display.”

New South Wales/ Australian Capital Territory

“I like to excel at what I do.” Those are the words of Dan McKenzie, an award-winning franchisee with Kwik Kopy who took the opportunity to buy a struggling franchise business and turn it around.

And it’s paid off, with Dan scooping up the Single Unit Franchisee of the Year, two or more staff in the Fastway Couriers FCA 2018 NSW/ACT Excellence in Franchising Awards. “We got to take a franchise that was ranked number 100 out of 100 centres and within three years take it to the Kwik Kopy Franchise of the Year, and now to win this within four years with a fantastic team and wonderful support blows my mind actually,” Dan says. Husband and wife team Jim Kelly and Crystal Petzer had more than a decade of experience as convenience store franchisees when they made the decision to change direction. This decision ultimately led them to where they have been franchisees for nine years, winning multiple awards within the franchise network along the way. Now they’ve scooped the regional multi-unit award. The secrets to their success are simple: following the Hire A Hubby franchise system, understanding and making the most of their respective strengths and a passion for the brand. “Together we’re a really good combo,” says Crystal. “Jim’s skills are that he’s amazing with the customers, they all love him, and he’s great at managing the staff side of things. I’m

awesome at the marketing and business side. We find time to promote the brand and we’re passionate about the brand. “The franchisor has a really good system and we follow that system to a tee. Maybe that’s our secret – we take that system and we work it,” she says. Single Unit Franchisee (less than 2 staff) award winners Mel Flavell and Grant Maloney both bring strong business backgrounds to their Frontline franchise, but according to Grant the support of the franchise system is still invaluable. “I think when you have that entrepreneurial view of things, having that franchise structure and having that accessibility is just amazing,” he says. “We are very supported within our franchise system. Our franchisors are always there if we require them, and we have 39 agencies nationwide that we can reach out to as well.”

Western Australia

Manish Gupta came to Australia from India in 2010. With an extensive hotel and hospitality background, he was initially deemed overqualified for his first job at Hog’s, but after overcoming this early setback and getting his first job within the

SEPT/OCT 2018 | 18 | WWW.FRANCHISEBUSINESS.COM.AU

Mark and Cindy Edwards, Kirri Clark

Aaron Gunthorpe

Manish Gupta

network, he eventually bought his first Hog’s store in Mandurah in 2014. Now he is the franchisee of Hog's Breath Cafe, Mandurah/ Eaton, Hog's Express, Mandurah, and Funky Mexican Cantina, Mandurah, and named the WA Multi-Unit Franchisee of the Year. “My dream was to be a restaurant owner. Once I got into Hog’s I saw it’s a good company. They care about you as a franchisee. They want you to grow,” says Manish. He cites hard work and determination, a supportive franchisor and his team of staff members as fundamental to his success. “You are nothing without your staff. Look after your staff members and they will look after you,” he says. “At the same time, you have your values and goals set by the company. Without the support of Hog’s Australia, I wouldn’t be where I am right now.” WA Franchisee of the Year, two or more staff, Kenneth Ting grew up in Malaysia helping out in a small family-owned bakery, before moving to Australia in 2005, where his passion for retail and hospitality continued to develop. “I like going out and eating at restaurants and that sets my standards. How I feel I want to be treated is how I treat my customers,” says Kenneth. “For us as a cafe it’s very important to have great teamwork and everyone buying into that goal. I put 100 per cent in and ask my team to join me and create that great vibe in the cafe,” he says. Aaron Gunthorpe brought 20 years’ experience as a franchisee at Harvey Norman with him when he purchased the Pack & Send Midland franchise in 2016. “The franchise model always makes the path and the progress very easy,” Aaron says. “You don’t need to change anything, you just follow how it needs to be and that’s where you get your result.” Aaron scooped the WA Single Unit Franchisee of the Year, less than two staff award for 2018. WA’s 2018 Franchise Woman of the Year, Emily Slevin of Aussie Pooch Mobile, started out as a franchisee but when the chance to become Western Australia’s regional master franchisee for the brand presented itself, it was an opportunity she couldn’t pass up. “I didn’t go into franchising with the ambition of becoming a master franchisee,” says Emily. “It was a progression of me finding something that I loved and being supported through it all. The personal growth that I’ve had through franchising has been huge.”

Kenneth Ting

Evan Davis

SOUTH AUSTRALIA

Grant Maloney and Mel Flavell

Russell Hampton

EFM Health Clubs Unley franchisee Kirri Clark picked up the award for South Australian Single Unit Franchisee of the Year, less than two staff with Battery World Morphett Vale franchisees Mark and Cindy Edwards receiving the South Australian Single Unit Franchisee of the Year, more than two staff award. Kirri Clark says the supportive attitude at EFM Health Clubs helped her get started and make a success of her business. "I loved fitness and had been involved as a fitness professional for some time, but I knew nothing about business,” she admits. "Starting up was daunting but thanks to the guys at EFM I had ready access to the support I needed, especially in many areas of business that I didn't know and that you don't really think about." "The biggest thing for me with franchising is that it gives you the access you need to a supporting network with the franchisor's backing, and helps you get the runs on the board." Battery World Morphett Vale franchisees Mark and Cindy Edwards bought a struggling store and within months turned it around and doubled the turnover. Mark says that the key to their success has been teamwork and sharing the workload. Cindy says that after 20 years together they realised they did not want to work for anyone else and decided to put their heads together to run their own business. "The Battery World business has allowed us to work together in a strong franchise business that we are proud is being successful." SEPT/OCT 2018 | 19 | WWW.FRANCHISEBUSINESS.COM.AU

Dan McKenzie

Emily Slavin

LEADERSHIP

Dan Blacklow, centre

Glenn Cammiade

VICTORIA/TASMANIA

Evan Davis of RAMS Home Loans says being named FCA Single Unit Franchisee of the Year, two or more staff was a "very humbling recognition of years of hard slog". "The RAMS franchise has been a terrific opportunity as the network supports people from all walks of life and, in supporting me, has allowed me to support others around me in my business,” he says. "Through the RAMS brand I've been able to open doors and help my staff create businesses within my business and I've been able to enjoy their success as well as my own. “Client needs come first. If we look after our clients, everything else becomes comparatively easy." After 12 years in banking and finance Dan Blacklow was ready to move out of the corporate world. “Being asked to do 20 per cent more with 20 per cent less, every year, you just get enough of it,” he says. So he bought his own Hire a Hubby business and this year he was named the Vic/ Tas FCA Multi-Unit Franchisee of the Year. “I’ve renovated properties and been very hands on and the property market was very appealing. It’s something I’m passionate about. “Once you’ve got the field selected, and research what’s available, you obviously can go out on your own but it’s a tough start, it’s a long period getting to where you need to go, and for me Hire A Hubby stood out from the crowd.” Dan had found a senior corporate role on the road with a young son allowed almost no family time. So the investment was a lifestyle, as well as a career, choice. “It’s much more satisfying, I have time to pick up my son from school, take him to swimming. I couldn’t be happier.” Glen Cammiade’s passion for confidence-building in his clients has paid off. The Single Unit Franchisee of the Year, less than two staff, ran his own business before becoming a franchisee with EFM Health Clubs. He believes it was the best thing he did.

Jim and Crystal Petzer “My biggest success is just growing a business. That’s why you get into franchising in the first place. “It’s all about relationships, with your support staff, your franchisor, clients. Relationships carry you further.”

QUEENSLAND/NORTHERN TERRITORY

Multi-Unit Franchisee award winner Dione Mauric joined Finn Franchise Brokers as the network's second franchisee and a decade later remains passionate and positive about the sector and its ability to help families achieve their small business goals. "We are very proud to receive this award for the second year," says Dione. "We believe that franchising provides a fantastic model for families to fulfill their dreams of having their own business. We're very honoured to receive the award but we're very, very proud to be able to help so many families change their lives on both the Sunshine Coast and in Northern Queensland. "I think the key ingredients to be a successful franchisee are really being passionate about your brand, being passionate about what you're doing and really being involved in your business and leading it from the front," Dione says. These qualities, along with a positive relationship with his franchisor, have also been key components of QLD/NT Franchisee of the Year, two or more staff, Russell Hampton's success. Russell joined Hire A Hubby after a 24-year career in management at Woolworths. The decision to walk

Dione Mauric away from a well-paid corporate job was a tough one, but eased with the franchisor's guaranteed income. And the risk has paid off, with Russell rapidly growing his Bayview business into the best performing Hire A Hubby franchise in the country. "When I joined the franchise, Brendan Green, who is the CEO, actually flew up from Sydney to Brisbane, so I had the opportunity to meet him from day one. We worked on a plan from there," says Russell. For Michelle Graham, who has been a Poolwerx franchisee for 15 years, it's the network's systems and structure as well as a culture of inclusiveness that have helped to achieve her business goals. "Franchising gives you a structure that I don't think you would find in any normal business," says Michelle. "And you're not on your own. We've been with Poolwerx for a long time, and along the way we've had them for guidance and systems support, which has been massive for running our own business and achieving our goals." For Michelle, who is involved in two Poolwerx advisory councils as well as being a mentor for women within the Poolwerx network, the feedback and assistance process between franchisees and the franchisor is a two-way street. "Poolwerx is an inclusive environment. We're in this as a team to get the best profitability for every franchise partner," says Michelle, named QLD/NT Franchise Woman of the Year. n

SEPT/OCT 2018 | 20 | WWW.FRANCHISEBUSINESS.COM.AU

LEADERSHIP

Sweet taste of

profitability Profits are up for franchisees in The Cheesecake Shop chain.

hen you run your own business, profitability is a key ingredient to success, not the icing on the cake. The Cheesecake Shop is ensuring franchisee profit is in the mix as it serves up its franchisor support program. The dessert chain has seen average profits gained by franchisees across the 212-strong retail network in Australia and New Zealand rise by 7.5 per cent in 2018. Managing director Ken Rosebery says “We’re proud to have achieved improved performance for our franchisees when franchising in general is copping a lot of negative media lately.” Technology has been at the heart of the financial improvements: the franchisor implemented cloud based accounting, payroll and reporting systems back in 2014, and these significantly improved the monitoring of franchisee financial health and payroll compliance. Today franchisees receive monthly data on their financial performance and comparisons with other franchisees. “This has really helped us to better manage franchisee profitability and ensure they get value from their investment,” says Rosebery.

For the roughly 10 per cent of the franchisees who are operating under-performing stores and the profits are unsatisfactory, the franchisor has a program of additional support. “We have a cohort of stores in remedial stage, we use financial data to see they are underperforming.” When it’s time to take action, the franchisor considers additional marketing resources, a lease review, even relocation. It’s all part of being a franchisor that is focused on improving its franchisees finances, he says. “We’d like to get profitability as a proportion of sales over 20 per cent,” Rosebery says, while admitting there is some limit on how much profit can be made from a cake shop.

IMPACT ON PROFITS How can the franchisor have a direct impact on franchisee profitability? The franchisor can provide the franchisee with the data to manage and benchmark, can encourage a sense of competition, and

identify where to provide assistance. Rosebery also lists product design, lease negotiations and marketing to grow sales; alongside these, the selection and pricing of supplies, and evaluating the type of products made in store and how they impact on labour costs. Understanding the numbers and their impact on profitability is essential to improved business. “One of the things franchises look for is a franchisor right on top of the figures. If you measure it you can manage it. We know the numbers in this business and transparency is incredibly important with franchisees,’ he says. Existing sales growth is modest but more importantly Rosebery points to the consistent consumer sentiment that provides reliability of future income for franchisees. It’s a mature business in Australia but The Cheesecake Shop continues to expand, with 10 new stores in the pipeline across the country and New Zealand, and four further outlets lined up for the UK. n

MAKING THE NUMBERS WORK The Cheesecake Shop financial benchmarking data has shown that the measure of cash profit for all TCS stores on average, called EBITDA (Earnings Before Interest Tax Depreciation Amortisation) and Owners Wages has increased from 18.9 per cent for the year to 30 June 2017 to 19.6 per cent in the 12 months to 30 June 2018. This is an increase of 0.7 percentage points for this ratio over the past 12 months. On average (same store) sales have also grown by 3.6 per cent which means with higher sales and a higher ratio of cash profit to sales – that in dollar terms on average, store profits are up by 7.5 per cent. Rosebery is pleased with the figures. “That is a great result in a mature, steady business like ours,” he says. “These are averages and of course, depending on the franchisee’s circumstances they may do better or worse than the average.”

From left to right: Michael Kulic, finance director; Tony Cameron, general manager – ingredients supply; Ken Rosebery, managing director; Nick Avgerinos, general manager – franchise development; and Peter Dable, general manager – marketing & operations SEPT/OCT 2018 | 22 | WWW.FRANCHISEBUSINESS.COM.AU

NightOwl wl Franchises AVA I L A B L E N AT I O N W I D E

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LEADERSHIP

FITNESS

FACTORY

een fitness experts looking to invest in a franchise can discover opportunities galore in the gym space. New to franchising is the HIIT Factory, a business that’s been operating since 2013. It is taking a fast and furious approach to gym classes, with its core offer based around 30 minute high intensity interval training (HIIT) with many of the workout sessions reliant on bodyweight. Founder Colette McShane explains “We put the fast and the fun into fitness with 30 minute workouts that deliver great results. We are more than a gym, we are a community of awesome people doing incredible things.” And the business is expanding, she says. “We are looking for absolute go getters who are prepared to put in the work to reap the reward.” Right now the HIIT Factory has six studios

Fun, fast and family-oriented, this franchise newbie is a low cost fitness option.

with 15 planned for the next 18 months. There is a focus on the metro surrounds of the capital cities in each state, as well as regional areas across the country. Classes are held early morning, mid morning and evening and unusually for a gym set-up kids are welcome to come and watch as their parents workout, making it easy for busy parents to access the facilities. Any city based venue would offer lunchtime classes. Franchisees take on a lease for the studio, and McShane reports the business appeals to existing gym owners with their own premises who can rebrand their current businesses.

SUPPORT BEHIND THE SCENES The franchisor is on hand to help new franchisees set up and establish their businesses.

“We will help you with the launch, create a huge buzz around your studio, and do everything we can to help make your business a huge success.” Training covers both operational and technical aspects of running a HIIT Factory franchise: operations, marketing and social media, and technical knowledge are matched by physical training courses for the workout formats and approved formats. When it comes to spreading the word through social media, franchisees can gain extra mileage from online programs of free workouts for home fitness through the HIIT Mum community which has a 200,000+ engaged following, says McShane. In addition, there’s a workout app called PT In My Pocket, and meal plans available for members. Gym users can take on a membership or buy a pack of sessions; there’s an equal split between the two options, she says. While standard industry qualifications are needed for class delivery, experience of running a fitness business is not necessary for a HIIT Factory franchisee. What you will need is a passion for health and fitness, market knowledge, community involvement, ambition and a solid work ethic. Studios are easy to manage, with low overheads and no requirement for equipment leasing, which cuts out the significant costs found in equipmentbased fitness centres. So what will it all cost? A franchise fee of $35,000 with up to $25,000 for equipment (dumbells, kettle bells and aerobic steps), gym flooring and any incidental costs. n

SEPT/OCT 2018 | 24 | WWW.FRANCHISEBUSINESS.COM.AU

LEADERSHIP

SOLDIERING ON Military veterans, Phillip and Adam Anderson, have joined forces to build a future in franchising.

he father and son duo have joined the chorus of franchisees at Minuteman Press International, and after four years have found their rhythm as marketing services providers.

Their combined talents have brought them local business success, with three awards already under their belt. But it’s a long way from their previous careers. Phillip has an outstanding record of military service, recognised in the 2004 Queen's Birthday Honours with the Medal of the Order of Australia. He enjoyed the privilege of leading one of Australia's premier military ensembles as the director of music of the Royal Australian Navy Band from 2002 until 2012 and proudly wears the Australian Active Service and Iraq Campaign Medals His son and partner in business, Adam, a former member of the Australian Army and French Foreign Legion, and the recipient of a bravery award in 2010, believes the lessons learned by the pair in their former lives have stood them in good stead in business: dedication, and resilience in the face of adversity. It has helped to have a supportive franchisor too. Phillip says, "It has been a big 'sea change' for us and there have been many challenges to overcome; not least of all, the day to day operations of a digital print, design and marketing centre. Fortunately, we have benefitted from great support from the Minuteman Press field representatives and our area manager, Jeff Lewis. They truly are experts in their field and it would have been impossible to gather new customers and operate the business without their support and encouragement." The pair own and operate the Liverpool Minuteman Press business and have taken on particular roles that are naturally aligned with their talents. Adam is the face of the business, an active member of the business community sitting on local boards and committees and a former vice president of the Liverpool Chamber of Commerce and Industry.

Phillip brings his wisdom to an elder statesman role. But there’s no holding back this pair, who can’t resist the opportunity for a bit of fun and music in their lives. Phillip still finds time to employ his musical talents, conducting a school orchestra and taking on guest conductor opportunities at home and overseas. And Adam is participating in a gala fundraising dance-off, the Stars of Sydney South West, which is raising money for the Cancer Council of New South Wales. His dad comments: "He has zero dance experience; but has two sisters who have danced professionally so maybe dance is in his blood! Adam is most excited about supporting an amazing charity and having fun doing it." The community plays a significant role in their business. "We support the Police Citizens Youth Club and Ingham Institute by providing free print products each year and we also provide work opportunities for people from disadvantaged backgrounds who are trying to get back into the workforce." As franchisees, Phillip and Adam are enjoying their new lives. Phillip has found

that his new role, providing marketing services, is similar in exciting ways to his last position as the leader of the Royal Australian Navy Band and this provides an added sense of satisfaction. "Both jobs have a high creative element. We create products and deliver services to our customers. In my previous life, my team composed, arranged music and delivered ceremonial services for performances to audiences ashore and afloat. “In the print shop, we create engaging designs and deliver the finished product to our customers. Those designs make their way into the hands of thousands of people whether it be in the form of the traditional flyer or brochure or on a promotion product or as an eye-catching sign on a vehicle or shopfront. "The most gratifying jobs (which are not necessarily the ones with the highest profit margins) are the ones we do for other small business owners, people like us who are trying to make their way in a very competitive field. "Yes, we are printers; but we do much more than just business cards and flyers! We help our customers connect with their communities." n

SEPT/OCT 2018 | 26 | WWW.FRANCHISEBUSINESS.COM.AU

LEADERSHIP

THE GREEN RACE Australia is a nation of coffee lovers, but as the recycling revolution gathers pace, businesses have found themselves in a race to flex their green credentials. By Nick Hall

he influence of recycling initiatives on the retail industry has hit dizzying heights of late, with the plastic bag ban in full effect, but as the year presses on it’s the nation’s coffee providers that are eager to serve up a sustainable cup.

Recent demand has seen a monumental shift in attitudes regarding recycling and single-use plastic, with takeaway coffee cups the latest product on the provisional chopping block. Each year, Australians use around one billion disposable coffee cups, with the majority of those ending up in landfill. Following the nation’s tough stance on plastic bags, coffee providers are now racing to curb their contribution.

“Rather than competing on price or time, green credentials offer a way for retailers to differentiate themselves,” says Gary Mortimer, associate professor of marketing and international business at the Queensland University of Technology. With today’s digital age placing emphasis on social responsibility more than ever before, businesses that leverage their sustainable practices reap the rewards of ethical operations. The psychological effect has the potential to drive sales and create brand loyalty, something all businesses in the crowded cafe scene are desperate for. So which franchises are making an early push to get consumers on-side?

SEPT/OCT 2018 | 28 | WWW.FRANCHISEBUSINESS.COM.AU

Angus McKay, 7-Eleven chief executive o3fficer and Rob Pascoe, Simply Cups' founder and managing director

7-ELEVEN

The convenience giants announced in late July two Australian-first recycling initiatives. Following an initial partnership with recycling program, Simply Cups beginning in March, the brand has now released the rCUP, the world’s first reusable mug made entirely out of takeaway coffee cups. Made from six recycled cups collected from the Simply Cups UK program, the rCUP is 100 per cent leak-proof and fully insulated, ensuring hot drinks stay warm for longer. The rCUP’s release also coincided with the announcement that plastic straws, coffee cups and Slurpee-type cups are now recyclable at 200 7-Eleven stores across the nation. Since the recycling partnership with Simply Cups was launched in March, 1.48 million cups have been collected and given new life as hospital trays and other products. “We have a new partnership with a company that has developed cutting-edge technology to recycle plastic waste into a dough-like plastic material that can be moulded into new products including rCUPs, furniture and car park bumpers,” says Rob Pascoe, Simply Cups founder. “This locally developed technology is the first of its kind in the world and to continue to develop it we need the community’s help to recycle their takeaway cups and plastic straws.”

Natalie Brennan, Muffin Break general manager with Rob Pascoe, Simply Cups' founder and managing director

MUFFIN BREAK

No stranger to coffee innovation, Muffin Break has been working on refining its recycling initiative for over a year. The casual dining restaurant was the first brand to offer specialty milks at no extra cost following consumer demand, and this year opened its ears once again, making the move to sustainable practices. “Over almost 30 years in business, our success has always been to listen to our customers and ensure what is important to them is also our priority,” Natalie Brennan, Muffin Break general manager said. “Although Australians have always been good at recycling, the realisation that a lot of what we think is being recycled ends up in landfill is not acceptable to us or our customers. The fact that there is no profit in recycling (like coffee cups) means there is a bigger picture for corporates to take on this responsibility of coming up with solutions. We are taking this responsibility very seriously to ensure that Muffin Break’s legacy is not tonnage of landfill.” When the call for the end of single-use plastic started to brew, Brennan found that the noise was coming not just from the community, but from the franchisees themselves. “Our franchisees are all families working in their communities, so it’s important to them to minimise our waste as business owners and community members. They are the drivers of this initiative for the

SEPT/OCT 2018 | 29 | WWW.FRANCHISEBUSINESS.COM.AU

brand to come up with more recycling/ repurposing/reusing initiatives,” Brennan explains. Muffin Break also partnered with Simply Cups in an effort to repurpose single-use coffee cups, but have also found success partnering with sustainability initiative, Responsible Cafes, offering discounts to customers who present a ‘keep-cup’.

THE COFFEE CLUB

The Coffee Club has been servicing Australia since 1989, with a franchise network of over 400 cafes here and abroad. In July, the brand announced a nationwide franchisee commitment to offer a 50-cent discount on hot beverage purchases to customers who bring a reusable cup. Similar to Muffin Break, the decision was a reflection of both community demand and franchisee passion, says Matthew Emmerson, The Coffee Club’s head of marketing. “Our franchisees live and work in the communities they operate in, and so it’s our responsibility that we listen to our customers’ passions, such as the health of our environment, and support when and where we can.” n

LEADERSHIP

THE BAKER BOSS Heritage brand Banjo’s Bakery has just opened its 40th store with long term baker Shannon Davis at the helm.

baker with a passion for his craft has taken on a brand new franchise opportunity thanks to an internal training program at Banjo’s Bakery. Store number 40 in the chain has just been opened at Sippy Downs in Queensland, with baker Shannon Davis and businessman Rod Saxby heading up the business in partnership. Davis has been with Banjo’s for 16 years and has backed up his love of baking with a talent for good operations, winning Banjo’s Bakery of the Year award for the previous store he managed in Tasmania. “I just love this industry, it’s been good to me,” says Davis. Right now he’s taken the leap from not just operating a store but driving the business and he’s already got an eye on extending his skills into multi-site franchising. “It was exciting opening a new store and I look forward to more in the future. I’d like to expand and have two or three bakeries,” he says. Davis stepped up to business ownership after completing the company’s Self Raising Program which trains existing employees to become franchisees. Potential participants are identified by the franchisor or may nominate themselves to take part. The program consists of training modules covering all aspects of ‘front of house’ retailing and management and ‘back of house’ production and operations. Throughout the program Banjo’s is able to determine the skills and aptitude for business and the baking industry. Once the program is completed successfully, graduates of the program are provided with the opportunity to become an owner or a partner in their own bakery. “I’m excited to be partnered with Rod,” says Davis. “He’s been with Banjo’s

for over 20 years and has interests in a number of Banjo’s bakeries. He brings with him extensive knowledge and expertise which he is happy to pass on.” Thirty five years ago the Banjo’s Bakery brand was born in Tasmania with a mission to bring customers a relaxed environment to sit down and enjoy freshly baked breads and cakes or handmade treats for breakfast, lunch or a snack with a perfectly made coffee. Today more than 11 million customers visit a Banjo’s store each year. The bakery chain has experienced solid growth over the past 12 months – out performing the previous year in key areas of sales, profitability, transaction numbers and average customer spend. Store growth has been slow and measured over the last 12 months with

three new outlets opening: Claremont Tasmania, Traralgon Victoria and Sippy Downs Queensland. But the pace is already picking up: there are 10 sites currently in negotiation and the franchisor has plans to open another store before the end of the year. While there is a focus on Queensland and Victoria other sites in other states are also being considered. Managing director Jessica Saxby reports that business is strong. “Our strategy is to stick to our plan, which is to have 85 stores by 2025. Our focus is on IT and utilising technology to create efficiencies across the business and communications. This will help us to remain relevant to our everchanging customer base. We are also very excited to soon be launching our first drive through.” n

SEPT/OCT 2018 | 30 | WWW.FRANCHISEBUSINESS.COM.AU

you deserve to join a growing industry Established in 1996, Australian Skin Clinics has now expanded to nearly 50 clinics nationally, due to client demand. We are leaders in highly effective laser and skin treatments, cosmetic injectables, acne programs and skin care products. Australian Skin Clinics has developed The Advanced Skills Academy (TASA) to provide full training and development for all franchisees. If you are new to the industry, you can be assured that by the time you open your clinic, you will be equipped in all areas of management including recruitment, marketing, medical requirements, legal, systems, procedures, protocols; all supported by a Medical Director and in-field teams.

franchise benefits Nationally recognised brand Turnkey operation Ongoing training and development In-field support from business development managers and training teams

Custom IT systems and online sales and support Advanced medical support 7 days a week with a Medical Director Multi-channelled centralised marketing support Latest treatment technology

1300 303 014

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Join the fastest growing sector in retail!

LEADERSHIP

YOU GUYS ARE

ROCKING IT!

It’s an Australian-first – a gym with a real difference has opened its doors in Preston, Victoria. By Nick Hall

e Rock the Spectrum is a purpose-built gym developed in the US and designed for children with special needs, with specialised equipment including slides, swings and ziplines. All of the equipment is designed by occupational therapists with the aim of aiding the sensory development of children with processing disorders, while providing additional motor skill development. Sally Johnson is the local mum and master franchisor behind the Preston opening and was inspired to bring the concept to Australia after seeing the benefits first-hand. “Within my own special needs community, I see the desire families have to connect with one another,” Johnson explains. “I also see how great families feel when they know their children are benefiting

from activities that help them regulate their sensory needs, while having fun.” Johnson’s son Digby was diagnosed with autism and ADHD at age two, and the pair struggled to find play centres where he felt included. After learning about the We Rock the Spectrum model, Johnson traveled to the US to see the gyms for herself, meeting with founder Dina Kimmel, who shares a familiar story. Kimmel developed the specialised concept in 2010 after her two-yearold son, Gabriel, was diagnosed with autism. The gyms allow families with special needs children to engage in SEPT/OCT 2018 | 32 | WWW.FRANCHISEBUSINESS.COM.AU

sensory-beneficial activities. Now in its fourth year of franchising, We Rock the Spectrum has over 70 locations across the globe, with the Preston opening marking the third international franchise and first for Australia. Specialist gym franchises have garnered much attention in Australia of late, however this latest model caters to a traditionally under-represented market. According to a recent study from AMAZE, Victoria’s peak body for autism spectrum disorder, only 4 per cent of autistic Australians feel their community knows how to properly support them. n

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Sonya and Robbie Farr

SPILLING

THE BEANS As the Australian convenience-culture takes hold, one franchise has quickly emerged as the leader in drive-through delights. Inside Franchise Business takes a look at the franchisees fuelling Zarraffa’s Coffee’s impressive growth. By Nick Hall THE RACE CAR DRIVER AND THE COP After 25 years as a professional race-car driver, Robbie Farr is set to step out from behind the wheel, so you don’t have to. The ex-sprintcar driver, alongside wife Sonya, a former state and federal police officer, opened the doors to their franchise in July. Farr says the pair decided to take the leap after falling in love, both with the coffee and the brand’s benchmark in supporting new franchises. “The brand feels more like a big family,” Farr says. “Having researched numerous businesses, we were set on the franchise model of Zarraffa’s and fell in love with the brand due to its professional framework,

customer service and fantastic coffee.” The new franchise store is located in Underwood, servicing the suburbs of Springwood, Eight Mile Plains, Rochedale South and surrounds. For the new franchisees, the store location not only places them firmly in the minds of the local community, but also opens a gateway to the Gold Coast region. “We are thrilled with the site and look forward to establishing relationships with local coffee-lovers, businesses, sporting associations and emergency services in the area,” Farr says. “It’s been a wonderful journey watching our store come to life and we can’t wait to welcome the community in and build relationships with our soon to be regulars.”

THE BRAND ADVOCATES Just weeks earlier seasoned franchisees Ben Old and Dion Schulz unveiled their new drive through Zarraffa’s store at Browns Plains. This is the fourth drivethrough for the seasoned franchisees whose network also includes stores at Nerang, Worongary and Slacks Creek. “The new store is located in a very populated and busy area outside of Logan, offering the perfect pit-stop for coffee lovers on-the-go or those looking for a relaxed setting to unwind,” says Old. The new store further expands Schulz and Old’s footprint across Brisbane’s South with the pair confident locals will react well to the opening. “We are keen to expose those working

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LEADERSHIP

and living in the area to our outstanding product, great service and the convenience of a drive-through store,” Old says. “There are so many people based in the area that are on different schedules with early starts, shift work or those who have to commute past our new location. We are sure the combination of a custom drive-through store, relaxed seating area and being open from 5am until late, will be a hit.” The latest site is 140sqm, with indoor and outdoor seating for up to 56. For Old, Zarraffa’s is more than just a franchise opportunity, with the franchisee believing that to be successful in business, you have to first and foremost be an advocate for the product. “I started drinking coffee at what became my first Zarraffa’s Coffee store, when I lived around the corner, and I still drink Zarraffa’s everyday.” Community also plays a big part in Schulz and Old’s franchise network, with the pair opting to employ a local team of 25 as they feel offering opportunities to those who live in the area is important. “Any system is only as good as its people

and we have a solid team, across all of our stores, some of whom have been with us for over 10 years.” The network’s 50th drive through location was opened in July. The milestone comes after almost a decade of drivethrough service for the franchise, which launched its inaugural car-friendly coffee model in 2009.

THE LOCALS Seasoned franchisees, Joanne and Paul Brierley are the husband and wife duo behind Zarraffa’s Edmonton and were enticed to become multi-site franchisees following the success of their initial store at Cairns Showgrounds. “It’s been quite the journey since opening our first store, and as we transition into multi-store ownership, we’re excited to be expanding our footprint into the southern corridor of Cairns,” Joanne says. Community plays a big part for both Zarraffa’s and the Brierleys, with Joanne suggesting the couple’s local knowledge

was critical to the Showground site’s success. “We have been Cairns locals for nearly 20 years and after recognising a gap in the market for quality drive through coffee back in 2014, we knew it was a step in the right direction.” Now, with a second store in their portfolio, the duo are hoping to extend that local knowledge and passion for coffee excellence to a new Cairns market. The familiar pattern of existing franchisees diversifying their drive through operations was repeated with the unveiling of the chain’s 85th outlet.

THE DREAM INVESTOR Justin Fu is the seasoned franchisee who bought into the business after honing his skills at the Toowong outlet for the last 13 years. Fu says the success of his first store, driving passion for coffee excellence, and a shot of fortuitous timing inspired him to make the leap to multi-unit franchisee. “I love coffee and everything that the

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Joanne and Paul Brierley brand has to offer, so it was a no-brainer and dream come true for me to buy my first store, and when Cannon Hill came up for sale at just the right time I knew I had to take the leap and invest in another business,” Fu says. “Zarraffa’s Toowong has been successful from the start, thanks to our amazing team who have been able to engage with the local community and build strong relationships through coffee.”

Kenton Campbell, Zarraffa’s Coffee managing director believes it is important that the new franchisees bring with them brand knowledge and a passion for ensuring all customers receive the ultimate Zarraffa’s experience. “The most important attribute of any new franchisee is enthusiasm, a focus on customer service and willingness to deliver the best cup of coffee,” Campbell says. Greater access to high quality coffee,

underpinned by the brand’s extensive barista training program has driven this convenient model’s steady expansion, he says. “The inception of our drive through stores in 2009, has enabled us to choose higher traffic sites within densely populated markets, that ultimately help boost business and ensure our franchisees can be successful,” he says. “It’s a win-win for our customers and franchisees. “Since launching our first drive through, there has been a lot of research into the operation and functionality of the model to ensure that we deliver the Zarraffa’s Coffee promise and standard time and time again,” Campbell says. “Drive throughs have taken our retail operation to the next level, capturing a large chunk of the time-poor drive market that is seeking the ultimate convenience and easier access to quality coffee.” n

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SEPT/OCT 2018 | 37 | WWW.FRANCHISEBUSINESS.COM.AU

LEADERSHIP

MILESTONE

MAGIC

Poolwerx has just passed a significant milestone, the magic 100 figure across three metrics: 100 franchisees, 100 stores, $100m group turnover.

By Sarah Stowe

oday Australian store numbers total 118. Adding in the US business takes the figures to 150 franchisees, 150 stores and $150m revenue.

Reflecting on the achievement John O’Brien, Poolwerx founder and CEO, says “We set the $100m target three years ago for group revenue. We achieved it in Australia with three days to go in June. “Sometimes we don’t look back enough and celebrate our wins. It’s like all these things, they look big when you set the goal, then when you reach them, you think ‘What’s next?’ ” What’s next for Poolwerx is further significant growth with the burgeoning US business close to matching the home-grown targets. “Our five-year plan for Australia and the US is almost aligned: 300 stores and 1000 vans across Australia, and the US is almost identical.” However growth hasn’t been a smooth upward trajectory. In fact, the number of franchisees has gone down from a high point of 140 franchisees 10 years ago. O’Brien explains what happened. “We realised we didn’t want to be a man and a van business but to be in business with franchisees who are business people.” The goal of cutting back franchisees was a difficult message for O’Brien to deliver at the national conference all those years ago. But by working with franchisees to partner with other franchisees, the business achieved both a reduction to 70 franchisees and an increase in sales and revenue. “We improved the revenue of individual franchisees,” said O’Brien. “Now we

have 100 with revenue close to $1m each. We have five key KPIs and the number one, not talked about much in franchising, is to increase the average EBITDA plus owner’s earnings. A key driver is to increase profitability.” That KPI has been in place for a decade and that’s encouraged focus from the whole Poolwerx team, for whom 10 per cent of their salary is a bonus allied to key metrics. “The biggest weighted bonus for our staff is that KPI. That focuses everybody,” says O’Brien. The average EBITDAO today is 25 per cent. O’Brien says the quality of incoming franchisees has helped boost business too, and the average Poolwerx franchisee tenure is eight years. “Having a greater focus on better qualified and business partners as we’ve grown, been awarded and profitable, means the ability to attract good franchisees is greater.” He says one of the franchisor’s key responsibilities to the franchise network is “to keep looking under rocks to find the next opportunity so franchisees can stay and grow within the brand”. Over the last two years the business has heavily invested in a new PoS, a system based on Netsuite. This allows franchise partners across the network to run their businesses more efficiently and use real-time metrics for measurement. “That’s what you want when you invest in a franchise, to measure yourself against your peers. “We’re fairly entrepreneurial. We encourage you to have as many as you can have, if you do the training and qualify. If you go a step too far, we’ll help you take a step back.” n

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LEADERSHIP

OPPORTUNI-TEA

KNOCKS

It’s easy when you love a brand to want to invest in the business – and that’s just what Hung Nguyen did. By Sarah Stowe

ust a year ago Nguyen opened up a brand new Chatime outlet in Welland, South Australia.

While it was a big step to take, he was quite familiar with the world he was heading into. “I started out in retail. And I loved Chatime tea. We’ve grown up with the brand, we drink there quite often, we go to Chinatown to get something to eat and pop over to Chatime.” Nguyen wanted to be confident about the business, however, before he signed up to a lease and to the franchise chain. “There are other franchisees in Adelaide who are my friends so I sat down and talked to them. They gave me the lowdown on how it works. I went out to see what sort of crowd was going to the store, the traffic. We did our due diligence.” With his business partner, and accountant, Nguyen studiously went over the figures before he purchased. Now he’s lucky that Chatime does his books but he still calls on his partner (who works independently) to double check all the paperwork. In setting out their goals, the partners tempered their ambition with some downto-earth realism. “We were prepared for a worst case scenario. It would probably have meant just two of us working long hours. But we’re pretty close to where we want to be. We’ve had good sales growth.” Nguyen works with his partner’s wife instore, and has 11 staff members. He admits, however, that the first year hasn’t been all rosy despite the growth of the store’s revenue. “Labour is very expensive, we understated the costs, the miscellaneous expenses don’t seem much but they do add up.” The target was 10 per cent annual

growth. It’s getting close to that, says Nguyen. There are some franchisees in the Chatime chain who are performing very well, he points out. “My friend’s store last year to this year is double digit growth. My store is not very traditional. Chatime always like to couple with retail or high traffic areas like cinemas. We’re a suburban shopping centre, what was once a fruit and veg store.” In fact initially the franchisor was sceptical of the location, which didn’t match the parameters of the Chatime site selection model. “It’s a destination store, it’s not a high traffic store which Chatime is usually. We assessed it, then the team looked at it, and decided to give it a go.” There’s after-hours life in the cafe community, so evening trade, weekends and school holidays are good. In a brand new or greenfield site, the biggest challenge can be getting customers. Nguyen says brand awareness, social media, and word of mouth have been the biggest drivers for his business. “We’ve established ourselves in the community,” he says. It’s been crucial to the business to deliver a high level of customer service – something Nguyen is totally aligned with from his retail background. If consumers get a positive experience, they will tell their friends. Of course, the franchisor is right behind the franchisee and Nguyen recognises the difference it has made to have expert support behind the scenes. “The franchisor built the shop and ran marketing promotions. They do quality assurance reports every three months – my business development manager will look at the store, the equipment, test the teas. It’s quite a rigorous check.

We’ve grown up with the brand, we drink there quite often, we go to Chinatown to get something to eat and pop over to Chatime.

And we have random mystery shoppers instore every month. “We get reports from PoS, back end so we can look at what we’ve sold, the hours worked. All these tools really help.” Just a year in business and Nguyen is already looking ahead. “There’s still growth potential in this store but we’d like to get a second store,” he says. n

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LEADERSHIP

THE CHAMPIONS! High performing franchisees from four very different industries discuss the paths they took towards business ownership and the lessons theyâ&#x20AC;&#x2122;ve learned along the way. By Sarah Stowe SEPT/OCT 2018 | 42 | WWW.FRANCHISEBUSINESS.COM.AU

DANIEL MCDOUALL, RED ROOSTER

ales and recruitment just didn’t cut it for Daniel McDouall. He started his fast food career with McDonalds while at high school before trying his hand at more corporate roles. But this Millennial knew when faced with a crossroads in his life that business ownership, and franchising, was his future.

“Fast food was something I was familiar with, I like to be hands-on. That complemented my skillset. I wanted to stick with a biggish brand. McDonald’s was pretty much closed, as were KFC, Hungry Jacks. It was a process of elimination, I spoke to a lot of franchisees, and I was really comfortable with the brand.” He had been self-employed since the age of 22 so it didn’t even cross his mind that there was an alternative. Signing up to the franchise was just one major life change at the time. “As we purchased our store, we had our first child three weeks after,” Daniel reveals. However, it took a further six months to get into the store. The landlord was selling the building so there were leasing issues to settle, and legals and contract problems dragged on. It was about 10 months before the doors opened and he could leave his previous role. “It was daunting because there the buck stops with you. If you had HR or maintenance concerns you can go to head office. But ultimately it’s your decision and you’re paying for it. “I wasn’t a handyman, but when a light bulb breaks you have to fix it. Some things, I’ll just roll up my sleeves and do it. “If the business isn’t making money, you have to cover that. You have to get up to speed very quickly to find key drivers. But you can’t go in thinking you know it all.” Daniel admits he made a lot of mistakes to start with because he didn’t understand the business levers. “You can chuck a lot of labour to improve service but there’s a tipping point where you’re not making money. You learn not to throw product out for the sake of throwing out,” he points out. But once you’ve learned the rules of the game it’s easy to replicate, he says. “My strategy from the word go was to go big. I’m confident and back my ability.” So when, 12 months into his business,

he had the opportunity to get a second store he forged ahead. “One of the biggest challenges to grow is to have the right people. And appreciate you need to let go in certain parts of your business, to give control to someone often a lot younger and less experienced, and have faith they have the right temperament and attitude. “We didn’t get it right first time. You always want to hire someone similar to yourself, but they are never going to be you.” Daniel says he quickly learned the lessons to be mindful of who you bring on board, and to value the team. He pays above award wages for a frontline manager, on award for general staff; and promotes a career path within his stores. As the portfolio of stores has risen to seven, then dropped to five as two stores were sold to enable the purchase of bigger outlets, Daniel’s role has become a jack of all trades. Today, with three children under the age of six he regularly works from home yet he can be found instore on a night shift four times a week. “It’s important for the boss to be in there and hands on, and it gives me a sense of the pulse of the business and what’s going on. I’m still a strong crew person. I’ve seen it when the boss doesn’t understand how a burger is made.” He hands responsibility for stores to restaurant managers, believing that financial transparency empowers them. “We dive into financials with managers, not just about our margins but what the store makes, EBITDA, all the controllables, things they don’t have an effect on – royalties, rent. If I can walk away and they can run my job’s done. “A lot of business owners try to drip feed information and expect managers to have a big impact on P&Ls. “We’ve had to sit down if they are not doing well, and treat them as an equal. The difference is if they have more buy-in, they have more say. Full transparency makes them more responsible for the outcome.” While he understands that some franchisees are cautious about sharing financial figures, he thinks an open approach pays off. “People think you’re making millions and driving Ferraris, and it’s not true. It’s important they understand the reality.

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Lessons learned: • Be a hands-on boss and a good crew person • Share your key financials with the team • Value and upskill your staff

“We give crew examples of upselling – what impacts us and impacts our profit over a year. Then they understand why they’re doing it. “We’re trying to make it as simple as we can. There are five key metrics: sales revenue, gross profit margin, wages percentage, average hourly rate and average ticket size. “All restaurant managers and juniors understand those five metrics.” If those are managed, everything else takes care of itself, he says. Looking ahead, there could be more stores on the horizon although more stores won’t necessarily mean more money, Daniel points out. “If we grow it will be strategically with a high-volume store. For us our first store turned over $1.5m, five stores turn over $8.2m. I’ll be happy to get to the $15m mark,” he says. n

LEADERSHIP

WARWICK WRIGHT, SMITH & SONS

uilder Warwick Wright knew nothing about franchising before a business referral put him in touch with Smith & Sons’ New South Wales master franchisee Mark McNulty. “I was working in project management for some years for a commercial building company but my background was in domestic construction. I wasn’t looking for anything, it just came along.” Although he had always liked the idea of working for himself, it took a few months for Warwick to commit to the idea – and to persuade his risk-averse wife it was a good move. It was marketing that proved the crunch for him. The prospect of marketing a business had held him back from taking the step to business ownership earlier, but as a franchisee with Smith & Sons he would have marketing tools and advice from the franchisor to help him build his business. Within four months Warwick had signed up to take on the Castle Hill business, although he didn’t leave his project management role immediately. “From the time I signed up with Smith & Sons it was five months before I started my first job. I had to transition. You have to source leads and convert these into jobs, and get started – some of the projects are subject to approvals which can take months. It was never going to be ‘finish Friday, start Monday’.” The biggest initial challenge was the simple change from being an employee to running his own business. “I think I’m well suited to running my own business but it’s not just about me, it’s about the rest of family as well. There is a risk involved.” Warwick’s initial goal was to ensure his new income matched his previous income of $130,000. He was confident he could cover that within 18 months, and then double it within two to three years. “I surprised myself,” he says, exceeding his goals despite a measured approach to business growth. “I wanted to build slowly, not bite off too much.” He believes he had one advantage over franchisees who joined Smith & Sons after working on the tools: his financial expertise gained as a project manager.

“I was able to practise with other people’s money. I had experience with cost control, and I was working, managing and pricing jobs over $3m. It was good preparation.” The business got off to a good start with marketing initiatives: exhibiting in a home show which generated a lot of leads, shared marketing, and a website put together by the franchisor, who also put him in touch with an architect. Success in business has been partly just following the systems the franchise provides, and networking and learning from fellow franchisees and the master franchisee. Warwick has found a difference in working with domestic rather than commercial customers. “When you’re dealing with renovations you’re dealing with a more emotional side, it’s people’s hard earned money. The lessons learned are not just understanding financials or pricing, it’s about understanding people. Every person is different, has different expectations and a different way to deal with situations.” On the business side, now the marketing has been conquered, the remaining obstacle is to improve his sales techniques. Perhaps surprisingly, though, his goal is not continual expansion. “I don’t want to grow the business much bigger. There’s a certain point that’s ideal and I don’t want to be a slave to the business. I want to refine it so I can maximise, and return a profit from what I do, rather than work ridiculous hours. “In my third year I turned over more than any other [Smith & Sons] franchisee in Australia. It was a bit much for me. “You don’t want to end up hating it. I was juggling six jobs, it was too much. You don’t know until you’ve pushed the limit what’s ideal.” In the first calendar year (in which he

only started in March) he turned over $700,000 and then doubled turnover in the second year, adding a 50 per cent growth in the third year. Somewhere between $1.5m and $2m is ideal turnover for him, says Warwick. With a seven year old and a five year old to watch grow up, he’s fiercely protective of his weekends. The future is all about honing his processes and techniques so that he can achieve the ideal turnover while working fewer hours. He’s coming to the end of his five-year term and is ready to renew the agreement, and is looking at a 10-year business plan. By the time he decides to hang up the hammer, Warwick intends to have built the business into a viable saleable asset. n

Lessons learned:

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• Understanding people is key to business success • Avoid becoming a slave to the business • Maintain family time

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LEADERSHIP

From the left: franchisees Uday Shankar Sethur Raman; Shankar Arunachalam; and Raman Swaminathan

UDAY, SHANKAR AND RAMAN PACK & SEND

hree friends got together and thought about a new future for themselves and their families. Now it’s a reality. Raman Swaminathan, Shankar Arunachalam and Uday Shankar Sethu Raman have turned their backs on corporate Australia.

Friends and colleagues in the Nielsen Group and IBM, the three of them have turned idle talk into a multi-unit franchise success. Uday takes up the story. “Getting into business started with a casual chat. We were just friends. After a few talks it came a bit serious [and we said] ‘Let’s look at some options in 2010’.” Once the idea had been tossed around for a while, the trio of corporate professionals visited the Franchising & Business Opportunities Expo. Raman says, “We started to look around at the franchise expo in Sydney. We went round exploring options, we looked at petrol pumps and food businesses. We

looked at our skillsets, where we could make a difference.” Because the trio had no experience of business ownership they felt comfortable with the franchising model. “We realised many businesses require a lot of work during weekends. We were looking for something similar to our job, with work–life balance and time for family,” says Uday. The solution was Pack & Send, which the trio found through searching online. “The model is crystal clear, there are not too many things to get involved in but there are no limits to what you can do to get the business,” says Raman. Uday admits he had conflicting emotions about the huge leap into business ownership before taking the plunge. “For me the biggest challenge was the fear of failure. In a job there’s a lot of security – you get your salary,” he says. That it was a brand new experience also made Uday nervous. He questioned whether or not he was making a big mistake.

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“I also had a really good job offer that I was considering. But I thought if I don’t do it now, when will I? What’s the worst than can happen? I lose money and go back into the workforce.” However the franchisees each had wives still working, so they were not entirely dependent on the new business for survival. Raman could see the risk but was ready to take action and get stuck in to the new project. “Whatever we had to do would be rocking the boat. We had to decide who would step in and run the business. I had done a lot in my career – sports journalism, TV, diplomacy and corporate. I decided, I’ll take the plunge. I’ve succeeded in everything I’ve done.” However it didn’t go quite according to plan, he admits. “It wasn’t a great start.” The first job resulted in a customer claim, not through any fault of their actions, but it set the business back. And there were other errors that strained the business.

LEADERSHIP

“

Whatever we had to do would be rocking the boat. We had to decide who would step in and run the business.

“We made some mistakes, like overextending on the rent. The due diligence process doesn’t tell you everything, the amount of work it takes to achieve the returns is not visible,” he explains. It is crucial for the business to generate profit, and to be able to pay and sustain employees, so keeping costs under control in the initial stages, and growing your business, is important. Raman points out that it’s not always possible to concentrate on all aspects all the time. What got them through the early tough times was a commitment to and passion for customer service. “Success, as I see it, is to have a customer focus. View the problems from customers’ shoes, see what you would expect. Don’t underestimate any customer. A $20 or $30 job, these customers will come back to us, and they don’t mind spending extra. What mattered to them was the kind of response they got instore. Service will get you repeat business in logistics. “In certain areas we promised the world to customers but sometimes things fall apart. But then it’s understanding how to fix it, so you have to know what they really need. Diplomacy and tact is what works. We walk that extra mile; don’t charge extra for service.” What they did discover is how varied two neighbouring stores can be. The first store in North Sydney had an established pattern of servicing local business requirements when the second outlet at nearby Crows Nest was opened and turned out to have a totally different set of demands. Most of the business was eventbased and delivering pallets. Each of the three franchisees today is managing a single store, and each store is a profit centre operated independently. The three outlets are combined for the group to view strategy and financials. “Everybody has access to MYOB reports. Each one of us, we are across the business on a daily basis. We’ve dropped our margin levels and seen how it impacts bottom line. It took us a few errors to get the right mix,” says Raman. It took the three franchisees four years to start seeing returns on their investment. Last year they took out the coveted Pack & Send Franchisee of the Year award for two stores. The North Sydney business grew at 24 per cent while Crows Nest, which had a higher starting point, grew at about 13 per cent. Not only are the three friends and colleagues, Shankar and Raman are brothers-in-law. Despite this, Shankar says, “We do things a bit differently – we’re not a family business, it’s corporate run. We have to account for everything. We formed a board

that meets every three months for normal business. I’m the chairman. “I look over the whole business from a financial perspective, for growth. The board is the three franchisees and the financial advisor. We discuss the plan and the weekly sales report.” The franchisees apply any one of 20 different ratios to analyse growth and predict trouble spots. “Being in corporate business helped us,” admits Shankar. “We’re accountable for everything.” They spent five years consolidating because they built the business to be long term. Shankar reveals there are five Cs that nurture and shape the business: character, caring of business, commitment, confidence to scale and drive the business, and communication. “We had a financial goal that within 10 years each of us would have a business with no debts. We are about 80 per cent there.” Recently acquiring an outlet in Castle Hill has given them another loan to repay but makes the portfolio stronger and will help them reach their financial goal, says Shankar. “We had a $500,000 target, it took three years to do that. You have to build a new customer base. We knew what we had to do, how to scale. We’ve taken a careful, methodical approach.” The ex-corporates have discovered more benefits to running their own operations: for one, there is an absence of office politics. “We’ve never had any ego issues, we’ve had our pressures and heated discussions. We knew each other socially but got to know each other as individuals, and we knew what we had at stake. That’s been a driving force,” says Uday. He believes the complementary skills the three bring to the business help their success. “Raman and Shankar have commerce backgrounds, they are qualified accountants. I wasn’t very good with numbers. I am a qualified engineer, and worked in business and marketing. “I used to work in a market research company. They’ve been operational. We complement each other. “The franchisor thinks we are doing well. We have to thank a lot of people, customers, family, friends, employees for sticking by us.” n

Lessons learned:

SEPT/OCT 2018 | 48 | WWW.FRANCHISEBUSINESS.COM.AU

• Don’t overextend on rent • Customer demographics drive the business • Staffing levels are critical • Customer service brings repeat business

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To join a second generation family business phone 0431 649 450 or visit shingleinn.com/franchising/franchising-eoi/

LEADERSHIP

JUSTIN MISTRY, BACK IN MOTION

ustin Mistry has been on a rollercoaster ride with his franchise business dipping frighteningly close to bankruptcy, then rising to achieve franchisee of the year status and bank $1.2m in revenue. When he bought into a physio business just as it was transitioning into a Back into Motion franchise, he had no idea of the lows and highs ahead. As a student Justin had begged for part time work at the practice, took on a full time position after graduation, and worked hard enough to buy a unit within nine months. Within 18 months had bought a 25 per cent stake in the business. Then he was ready to take the next step. “I realised I’d never be the boss. I was making good money, had responsibilities there but it was not like being a sole owner. In 2012 I left and started my own practice.” He had ambitious goals, setting up in a 212 sq m site with six consultation rooms, and spending $400,000 on the fitout to ensure it met the franchise standards. “Looking back, I wouldn’t have gone into such a big practice, I had to grow into it. The standard is to start small, grow out of it, move into a bigger site. That was quite stressful to generate the money to pay off the fitout loan, the staff and franchise fees,” he reveals. Things were about to take a turn for the worse, however. While he retained a 25 per cent stake in the Mermaid Waters franchise, he had invested in his new franchise at Bundall on a 50/50 basis with the same partner; neither had any responsibility or involvement in each other’s practice. When his partner had a falling out with the franchise the result was four years of legal proceedings to extricate themselves from the joint businesses – and in his partner’s case, the franchise. “He wanted to get out and I wanted to stay. The healthcare system is corporatising, and I thought the best chance of success was to stay with the brand, rather than go alone,” says Justin. “Through that phase, we were a start-up

business, so had all those challenges too. We had a revolving door with staffing and I was consulting 60 hours a week, with no capacity to invest in the team.” In one particularly challenging period Justin’s best hire left the profession, another one joined the army, and the graduate physio moved to Brisbane – all within three weeks. “I built it up again, and again. The following year one of my physio’s broke an ankle, a week later another had mental health challenges and moved back to Tasmania.” There was another sharp learning curve when the business ran into strife with the Australian Tax Office. “BAS comes out every three months and I didn’t know. The ATO put me on a six-month payment plan and I thought that was it. Then there was another BAS. It just kept coming and I had an $80,000 hole.” Living off his wife’s wages hadn’t been part of the plan and the business was at rock bottom. It was a timely inheritance from his grandfather that saved the business, he says. What he learned through this time was resilience and persistence. “Looking back, what I got from the franchisor was moral support. I drew a lot from other franchisees, and that’s probably the biggest drawcard, the experience of people who have been there or are going through the same thing.” It was a conversation with a long term franchisee that proved the catalyst for the business. “He said when you get to $70,000 in revenue something magical happens, you have money in the bank, you can reduce your clinical hours and it starts to get easier. “We were stuck at $45,000 to $60,000 for three years and I was losing staff. “I really invested in myself. I committed to three or four books at any one time. I did a two-year business development program through the Entourage. We’re physios, we don’t know stuff like this. It was good grounding and it plugged a lot of holes.” He was able to have better, more informed conversations with the franchisor, and he had a mindshift. “Through all the staff changes, I couldn’t do more hours. I started to think about what

the practice would look like in 12 months. “I reduced my clinical hours. I dropped a day, then two days. I recruited in advance because it takes time to find a physio. I mapped where we wanted to be, new client numbers, and recruited accordingly.” Justin became a master of the art of goal setting and reverse engineering. As a $1.2m practice the goal was $1.5m, which means monthly billing of $125,000, an active database of 2500, retention rate of 10, and an average consult fee of $60. The next step was to breakdown these numbers to the individual practitioners and gauge which team members could bring in what revenue according to skills and experience. “What are the behaviours that need to change or improve that influence those numbers? Look at the numbers but mentor and manage on those numbers,” he advises. “We also looked at personal life goals, learn what they want to achieve. Because if they use work as a vehicle to achieve personal goals, the chances are we’ll hit our practice goals.” The first audacious goal was to bill $100,000 in one month, and Justin found that just setting a goal produced a $30,000 increase in revenue. The reward was to fly everyone to Melbourne for a national symposium and a night out on the town. The process is working. Revenue has more than doubled in 18 months from $65,000 to $127,000. And the business is reaping other rewards. This year it won the Gold Coast Business Excellence award in the health and wellbeing category and Justin was voted by his peers the Most Inspirational Practice Director, an award based on practice performance, contribution to franchising and to the profession, and peer leadership within the directorship. n

Lessons learned:

SEPT/OCT 2018 | 50 | WWW.FRANCHISEBUSINESS.COM.AU

• Focus on what you can control • Franchisee and franchisor support is invaluable

LEADERSHIP

IN POLE

POSITION

Former Hollywood hip hop and music video dancer Kristy Sellars knew she’d found a new love when 12 years ago she discovered the delights of pole dancing. Now she’s sharing her passion with her franchise business. By Sarah Stowe

“I

t changes your body completely. And there’s a mental change. Not many other activities allow you to feel sexy and empowered and good as yourself.”

That’s the view of passionate pole dancer Kristy Sellars who returned from the US and found herself embracing a whole new community. It was a simple step to move from student to instructor. “I was living in Melbourne doing classes but I’d already been teaching dance for years. It was a nice fit.” The first home for PhysiPole Studios was a karate school in her hometown of Warnambool, a three-hour drive from

Melbourne. So on a Friday night Sellars, her siblings and parents would spend three hours setting up portable stages that cost her all her savings, and unpack them on a Sunday night. As the business took off and started to get busier, Sellars leased her own venue. Then she added a studio in Ballarat, and then some students suggested franchising. “I was in franchising before I knew I was in it,” she says. “The growth has been organic. Students have become teachers and managers, and franchisees. We’ve never closed one down. “Six months ago, we started growing a lot faster. We’re getting to the stage that I can’t do so much myself.” SEPT/OCT2018 | 52 | WWW.FRANCHISEBUSINESS.COM.AU

PhysiPole studio Sellars has added a full time employee for operations, an in-house part time graphic designer and is about to appoint a company to handle the marketing strategy. While PhysiPole is not a unique operation, pole dancing is a relatively unknown business proposition and there are few competitors. “What makes us different is that we are more developed in regional areas. Our target client is a woman who has got kids, in her mid 40s or 50s. Or men. We do kids classes too. We have a very diverse customer base. “Our main bread and butter is classes, courses, hens parties. If the franchisee is directly involved, teaching, they are making their own wage plus profits. Some of them who are following the systems, advertising, are making great money.” There’s also a range of clothing produced each summer and winter from which franchisees are able to achieve a good margin. Operating a pole dancing business is definitely a lifestyle choice, she says. Typically franchisees will be running classes each evening from 5pm to about 11pm, with private lessons throughout the day. Sellars suggests spending four hours each day on admin will keep franchisees on top of their businesses. The buy-in cost for a PhysiPole studio is relatively low: $70,000. One franchisee who had to borrow from family to invest in the business reportedly paid back the loan within two years and saved $50,000 to open a second studio. “All our franchisees are passionate about what they do every single day, they get to inspire people, get their own

workout, build a great social community.” Sellars has set herself targets for growth but admits she would rather maintain the current business size and have a great team than grow too rapidly. Three further outlets will open in the next five months, joining the existing 16 venues. The goal for the end of 2019 is to have 25 studios.

OFF TO A FLYING START

Franchisee Robyn Peddlestone runs two Queensland studios. She opened the Rockhampton studio 18 months ago, buying out an existing small pole business and rebranding and relocating the business. “I’d been in the pole industry as a student and teacher for 10 years, I absolutely love it. I was moving up to Queensland from Victoria. For me I’d only ever been involved in PhysiPole. I was a full time instructor teaching 60 hours a week across three studios for a long time. “ She says buying a PhysiPole franchise was “almost a natural progression. It’s as big as you want to make it. “ The Rockhampton studio is large: the back like a warehouse, the front of the studio like a shop. Peddlestone started out with four students, now there are 200. “It’s taken off like a bushfire. I taught every class till I had no more time, then I took on a teacher.” The business now operates with three full time and four casual staff, all fully qualified teachers. PhysiPole’s highly structured approach to learning sets the business apart, Peddlestone says. “You have to learn trick A before we’ll teach you trick B.”

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Kristy Sellars It’s all about strength and injury avoidance. In a business which can see students 4 metres off the ground in aerial pole activity, there are some non-negotiables: compliance with rigging and industry standards, the appropriately rated mat, insurance... “I went to circus school in Melbourne to learn how to teach aerials, and did a course about rigging.” So when it came to setting up the studio and installing a structural beam, Peddlestone ensured a professional team did the work. “I wanted it done properly. What price do you put on someone’s safety?” Just a short while ago she opened up her second studio, taking over another franchisee’s business in Gladstone (the outgoing franchisee will open a studio in Victoria). Five staff operate this outlet, with Peddlestone instructing two days a week. “I want to bring them together. Once we’ve all got a good grasp on it, then I’ll appoint a studio manager. I’m the new captain of the ship and I need them to see me as that.” Although she has more work than hours in the day running two studios, Peddlestone already has her sights set on opening a third PhysiPole franchise. “The success of the business is the brand, this is pole fitness for everybody no matter who you are. We’re like a big family. These clients are not a number to me, they email me about their personal lives. I have time for every one of them.” n

INDUSTRY SPOTLIGHT

The

Italian Job

Casual chain restaurants are becoming increasingly popular in Australia, with Italian eateries such as La Porchetta and Rozziâ&#x20AC;&#x2122;s serving up fresh flavours and a winning formula. By Domini Stuart SEPT/OCT 2018 | 54 | WWW.FRANCHISEBUSINESS.COM.AU

able service in a casual, familyfriendly atmosphere positions chain restaurants somewhere between traditional restaurants and fast-food services. The concept has proved successful in Australia and, according to the IBISWorld Industry Report Chain Restaurants in Australia released in July this year, that success is likely to continue. Revenue is expected to grow at an annualised 1.3 per cent over the next five years to reach $389 million.

“Rising discretionary income has been supporting growth,” says Lauren Magner, client relationship manager at IBISWorld Australia and author of the report. “Consumers are also more likely to dine at restaurants when they visit entertainment and sporting events and they’ve been spending more on these activities.”

ITALIAN FOOD LEADS THE WAY The menus at Italian chain restaurants are usually built around pasta and pizza

SEPT/OCT 2018 | 55 | WWW.FRANCHISEBUSINESS.COM.AU

with other offerings such as salads, Monkey desserts and coffee. Many, such as La King Thai Porchetta and Rozzi’s, are licensed. And Italian food is leading the field, with 40.1 per cent of the sector compared with steaks, burgers and general food at 34.5 per cent, Mexican food at 12.2 per cent, Asian food at 9.3 per cent and breakfast food at 3.9 per cent. La Porchetta was a pioneer in the sector when it opened its first restaurant over 30 years ago. Today it’s the market leader in modern Italian casual dining franchises and La Porchetta CEO Sara

INDUSTRY SPOTLIGHT

Rozzis

Pantaleo, who joined the organisation in 1996, has played a major role in driving the brand’s growth. She believes that consumers are increasingly looking for convenient and quality meals to help them manage their work and family commitments, and that casual dining can provide an ideal solution. “People are turning to trusted and family-friendly brands where they can easily find nutritious, healthy meals in a welcoming atmosphere,” she says. “There’s also growing public awareness of the health risks associated with poor diet and this has led to a greater demand for healthier eating options. Brands that are meeting those demands will stay relevant.” The Rozzi’s brand was born in 2011, franchising began a year later and there are currently 14 restaurants in the chain. Director Dean Salomone believes the concept of “fresh, fresh and fresh” is the key to success in the sector. “One of the great things about good Italian food is that it revolves around fresh produce,” he says. “These days you can’t get away with offering bland cheese on stodgy layers of pasta and tomato paste and saying you’ve provided an Italian experience. As with most other food sectors, customers’ expectations have changed, and not just in terms of how food tastes. They want to know the ingredients

and where there food is being made so, at Rozzi’s, we have worked hard to design a model where each restaurant produces as much product on site daily as possible, right down to baking our own focaccia bread.”

INCREASING COMPETITION Despite its current popularity, Magner expects to see a slowing down in industry demand with industry revenue falling to an annualised 0.7 per cent over the five years through to 2022–23. Strengthening competition is one of the biggest challenges. “Chain restaurants compete with each other on price, menu offering, quality, customer service, marketing, size of operations and reputation as well as style, ambience and quality of service,” she says. “They’re also subject to external competition from fast-food services, independent restaurants and cafes. And then there’s competition from consumers who decide to cook more meals at home, which is particularly common during difficult economic times.” Increasingly sophisticated consumer preferences may also take a toll. “A growing food culture in metropolitan areas has resulted in consumers eating

more often at specialised independent restaurants that offer high quality, premium meals,” Magner continues. “Foodsavvy diners are also more likely to look at menus and peer-review sites rather than rely on the reputation of certain chains. Industry players will need to differentiate themselves through their menus and to build strong reputations.” Demographic trends could also exert an influence. “Chain restaurants that operate in a good location are better positioned to drive customer traffic,” Magner says. “At the moment, many chain restaurants aim to service suburban populations but changing demographics in Australia could potentially have an impact on that strategy. Young time-poor people are expected to increasingly opt for inner-city living so, while chain restaurants are likely to establish new operations in inner-city suburbs to counter this, they would face strong competition from fast-food services and traditional restaurants.”

MANAGING THE COSTS Pantaleo cites the increasing costs of shop fitouts, rents and utilities as another serious challenge for full-service restaurants in Australia.

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INDUSTRY SPOTLIGHT

“That means we need to become even cleverer in the way we operate across the business to find efficiencies elsewhere, such as with improved operational procedures and staff training,” she says. “We’re also currently working with our franchisees to upgrade waste management processes and monitoring, and we work with them constantly to review operational expenses.” Rozzis’ leadership team is also committed to searching out efficiencies in operations, products and how they design and build their stores. “Store designs are becoming increasingly intricate and complex to meet the demands of both consumers and landlords,” says Salomone. “We believe in creating interesting and unique places for our guests to enjoy our Italian-inspired food and, early on, we saw an opportunity to keep build costs down for ourselves and franchise partners by directly importing our stone, timber flooring, furniture and tiles.” More recently, Rozzi’s identified an opportunity to streamline its onboarding and rostering procedures. “We did our research and decided to implement the Ento system, which allows staff to view their weekly rosters online and log on and off their shifts,” Salomone says. “It ensures we’re compliant with all of the documentation required for staff induction and we have also seen a reduction in both employee queries and time spent on payroll processing.”

GAINING CUSTOMER LOYALTY Pantaleo believes that, if branded networks are to continue winning brand trust and loyalty, they need to understand and deliver what customers want. “We work hard to ensure we stay ahead of the game,” she says. “As a brand, we’ve focused on innovation and development to ensure we retain our existing customers and attract new ones. We regularly update our menu to maintain their interest and also to accommodate changing tastes – for example, by introducing vegan options. Customers also turn to us when they’re celebrating special events and we need to be able to cater to their requirements.” La Porchetta’s recent innovations include an app that makes it easy for

Rozzis

Food-savvy diners are also more likely to look at menus and peerreview sites rather than rely on the reputation of certain chains. Industry players will need to differentiate themselves through their menus and to build strong reputations.

SEPT/OCT 2018 | 58 | WWW.FRANCHISEBUSINESS.COM.AU

INDUSTRY SPOTLIGHT

La Porchetta

Store designs are becoming increasingly intricate and complex to meet the demands of both consumers and landlords

customers to find their nearest restaurant and the introduction of home delivery. “We know we need to provide a full-service menu range with quality meals made fresh to order and then offer those meals in the customer’s preferred way, whether that’s dine in, takeaway or delivery,” Pantaleo says. “Brand marketing is another essential because we can’t afford to take brand recognition for granted. We need to deliver our brand message to our target customers at the right time to ensure they will continue to give us their support.” Salomone is confident that quality will always create a competitive edge. “Provide a great product and customers will keep coming back whether you’re part of a network or an independent concern,” he says. “And, of course, cost is another important issue. A lot of our pizza and pasta meals are priced at under $20 which makes us more affordable than many trattorias.”

SEPT/OCT 2018 | 60 | WWW.FRANCHISEBUSINESS.COM.AU

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INDUSTRY SPOTLIGHT

He also believes that branded networks tend to have the edge when it comes to design. “I think we pay more attention to staying current in terms of and the dining experience we provide,” he says. “At Rozzi’s we’re also very conscious of our branding. For instance, following a revamp across our network, all new stores are opening as Rozzi’s Fresh Kitchen rather than Rozzi’s Italian Canteen.”

THE RIGHT FRANCHISEE

Misschu Rozzis

For Pantaleo, a passion for the food and hospitality industry is an essential starting point for any would-be franchisee. “Then we look for entrepreneurial drive, good people management skills, a demonstrated work ethic and a desire to succeed,” she says. “Financial stability and capability are also important.” In return, the La Porchetta marketing team maintains responsibility for all big brand marketing activities across multiple platforms including online, television and radio. “We also provide our franchisees with an integrated, online local area marketing platform to order and deliver approved marketing collateral, which supports business development,” says Pantaleo. Franchisees also receive comprehensive training. “A six-week session covers every aspect of owning a La Porchetta franchise,” says Pantaleo. “This covers practical on-site training, including purchasing, recruitment, products, suppliers, customer service, financial reporting and marketing tips to give you all the information and skills required to run a La Porchetta restaurant successfully.” Rozzi’s also provides six weeks of initial training with ongoing marketing, operational support and strong supplier arrangements. “Rozzi’s is a collaboration of seasoned food and business operators who have combined their industry experience to create this fast casual dining offer,” says Salomone. “Our business model is simple, reliable and proven if you are prepared for some hard work and commitment along the way.” n

La Porchetta SEPT/OCT 2018 | 62 | WWW.FRANCHISEBUSINESS.COM.AU

INDUSTRY SPOTLIGHT

SPOTLIGHT

ON COURIERS What’s driving the courier market? Online shopping and food delivery services are changing the face of the industry.

oday the marketplace is not only diverse, it’s been upended by a revolution in customer expectation - driven by a demand for convenience, speed and flexibility.

Global behemoth Amazon has launched its online marketplace here in Australia as retail increasingly finds value in digital

trade. And while Foodora is leaving Australia, Deliveroo Uber Eats and Menulog continue to disrupt the food delivery scene. On the courier front, two major businesses - Toll Holdings, and DHL - hold almost a quarter of the market. But that leaves 75 per cent of pick-ups and deliveries to be handled by smaller firms. With a low barrier to entry the courier segment is

highly competitive. That’s where franchised networks can make a difference: providing the investment into essential technology that keeps the brand ahead of the pack. Check out these statistics from the IBISWorld report Courier Pick-up and Delivery Services in Australia, from March 2018.

2018

ANNUAL GROWTH 18-23 =4.5% WAGES ANNUAL GROWTH $700.9M 13-18 =1.6% BUSINESSES 16,503 PROFIT $453.1M

REVENUE $4.5BN

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PRODUCTS AND SERVICES SEGMENTATION (2017-18)

MAJOR MARKET SEGMENTATION (2017-18)

10.9%

17.8%

Set-run services

Wholesalers and manufactureres

41.2%

Depot-to-point delivery

22.1%

Point-to-point delivery

38.2%

19.9%

Retailers

Mining-related markets

25.8%

24.1%

Intro-depot services

Professional, scientific and technical services industries

TOTAL $4.5BN

SOURCE: WWW.IBISWORLD.COM.AU

THE MARKET Online shopping has been the big influence on the courier pick-up and delivery industry as the focus on smaller parcel delivery from wholesaler/ retailer to customer shifts the business away from mining and manufacture transportation. As online transactions increased between businesses and between consumers and business, the markets for industry services have expanded. Report author Hayley Munro-Smith, writes “The growing diversity of major markets is likely to insulate the industry from future shifts in demand, helping to limit revenue volatility to a degree. Over the next five years, revenue volatility is expected to decrease, as online shopping becomes more commonplace and as the industry continues to expand into new markets.” IBISWorld points out that significant investment in automated systems that provide clients with up to date information about their consignments is essential. “To grow to a large interstate or international business, good freight forwarding skills or access to international transport networks are required. Larger industry participants are also required to

have a large customer base, substantial investments (diversification) and volumes to reduce risk,” the report reads. Looking at 10 year growth from 2012-13 to 2022-23, IBISWorld predicts an annualised contribution to the economy of 2.8 per cent, that compares favourably with an annualised GDP growth of 2.5 per cent. The industry is growing faster than the overall economy and more operators are expected to join the sector over this decade.

IN THE LOGISTICS AND DELIVERY MARKET Australia Post owns StarTrack Express and has recently invested in a parcel processing machine at its Strathfield, Sydney facility as part of a $300 million national investment over the next 18 months. The new equipment will process 10,500 parcels an hour, significantly increasing parcel processing numbers for New South Wales residents. Australia Post group chief operating officer, Bob Black, said the investment is part of the company’s ongoing efforts to meet continuing parcel growth, with Australians spending $21.3 billion on goods online last year, up 18.7 per cent on 2016.

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Fastway Couriers is now part of the global Amarex logistics business which has provided the Australia and New Zealand operations with scale and innovation investment. Andrew McKenna, GM franchise and business development, says “Our customers and our franchisees are expecting us to innovate. Our franchisees are excited about new ideas.” At CouriersPlease’ Jessica Ip, head of commercial and transformation at franchise business, says customer concerns have all been about same-day, after-hours and weekend delivery. “A few businesses are starting to offer these services in some capital cities and Amazon is working on bringing its Prime services here, but the key point is that it is for a price. Whether these services are scalable, so that retailers and consumers are okay with the price points, is the question.” In shipping software business Temando’s most recent report, an equal 68 per cent of Australian online shoppers revealed they want express (one to three days) delivery and standard (five to seven days) delivery, compared with 41 per cent of shoppers that want same-day delivery and 37 per cent that want hyper-local delivery. n

BE THE LOCAL FACE OF AN ICONIC

d n a r B n a Australi Opportunities don’t happen, you create them WHY CHOOSE BAKERS DELIGHT? No baking experience, no problem We’ll teach you everything you need to know to operate your bakery and run your business We’ve been delighting customers across Australia for almost 40 years Australia’s largest bakery franchise with over 550 existing bakeries

Ongoing operational and marketing support

SPEAK TO US ABOUT FRANCHISE

Opportunities

Web: bakersdelight.com.au/franchise Phone: 1300 309 759

INDUSTRY SPOTLIGHT

HOUSE RULES Change is afoot in the mortgage industry. We take a look at what’s ahead for home loans and the mortgage franchise sector.

ith the dream of owning their own home becoming less of a reality and more of just that – a dream – Australians are finding it tougher to meet the stringent credit criteria put forward by traditional lending companies. And with the regulatory spotlight shining brightly on the banking and financial services sector, what does this mean for incoming franchisees? Will the market get tougher? James Hickey, Deloitte financial services partner and chair of the Deloitte Australian Mortgage Report roundtable, says there is uncertainty around possible new rules and legislative change as a result of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.

“Conduct, compliance and distribution challenges will continue to take centre stage for lenders as the Royal Commission moves through 2018, and the coming of the ‘open data’ regime gives promise to what will become a more ‘customer in control’ future.” Putting the customer in control is reliant on three things: technology, the opening up of data, and broker evolution, according to the 2018 Deloitte Mortgage Report roundtable of lenders. The lenders also agreed that refinancers will dominate the market and first home buyers will have access to greater opportunities than in recent years, with investor and interest-only loans continuing to pull back in response to the tightening of credit for these products. Owner-occupier principal-and-interest (P&I) borrowers will continue to be

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highly sought after by lenders and such consumers can exert competitive pressure to seek the best deal for themselves in the market as well as take advantage of the low interest rate environment to build up equity against their mortgages. Deloitte Access Economics’ director Michael Thomas says “Regulators aiming to restrain increasing property debt amid concerns of an overheating market have targeted investor lending. Tighter lending standards and restrictions on the volume of ‘interest-only’ loans to total new residential mortgages have pushed up rates for investors. Market activity has begun cooling, with house price growth slowing in the latter half of 2017 and continuing into 2018.” However, the residential market generally continues to be buoyant, he believes, due to population and jobs growth

INDUSTRY SPOTLIGHT

MORTGAGE CHOICE REVISIONS

– though this is unevenly spread across the country. “The outlook for construction activity in the near-term varies across the state. For both New South Wales and Victoria, growth in housing construction has slowed from its peaks but remains at high levels and is underpinned by solid underlying demand. “Taken together with the outlook for interest rates, slowing house price growth, moderating the prospect of further capital gains, restrictions on lending such as on interest-only loans and loans to investors as well as to lending to foreign investors, we expect a period of moderation rather than an abrupt adjustment.” Deloitte financial services partner Heather Baister says the Combined Industry Forum (CIF) comprising banks, broker groups and consumer representatives is already looking into ways of addressing the issues of transparency and distribution oversight, as well as accountability around mortgage lending. “This is on the back of ASIC’s review into mortgage broker remuneration and the continued focus by APRA on serviceability assessments by lenders.” So what’s happening among mortgage franchise chains?

One of the biggest names in the home loans market, Mortgage Choice, is overhauling its payment structure after disgruntled franchisees voiced their dissatisfaction with the current model. The publicly listed mortgage broker announced it would be raising the average rate of broker commissions on home loans from 65 per cent to 74 per cent under the new agreement. The new model put forward by Mortgage Choice, which will be offered to all franchisees on an opt-in basis from August 2018, will feature; • an increase in the average commission pay-out rate on residential lending from 65 per cent to 74 per cent; • a unique hybrid commission structure which pays the best monthly outcome on either a flow or book basis; • a reduced income volatility, providing better protection for franchisees in the event of a market downturn. Franchisees spoke out against the company’s model following a joint investigation from The Age, The Sydney Morning Herald and ABC’s 7.30 program, revealing that as many as 173 Mortgage Choice franchisees were considering

Comprehensive training program

Work life balance

legal action against the broker. The broker commission changes signify the message is getting through, with Mortgage Choice CEO Susan Mitchell telling analysts and investors the brand has seen its market share decline due to a broker remuneration model that is “not as competitive as it once was”. Mitchell believes the overwhelming financial reward will see all of the broker franchisees likely to opt-in to the new model. “When we commenced discussions with franchisees, it was with a view to introducing a model that allowed them to earn more so they had the confidence to invest in their business, while still supporting them under a national brand with the services they value including IT, compliance, training, marketing and business planning,” Mitchell says. “The hybrid trail commission structure we are introducing is unique. It rewards franchisees as they grow and provides better earnings certainty through periods of investment. We believe all franchisees will adopt the new model as it caters for businesses across the life cycle spectrum, from greenfield to more established brokers.” For Mortgage Choice, the decision

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to re-evaluate the current remuneration model demonstrates a commitment from the brand to franchisee retainment. To further repair relationships with franchisees, Mortgage Choice has also elected to continue investment in support operations, initiating a program that aims to improve operating efficiencies. “These changes are the product of extensive consultation with broker franchisees and the recognition we needed to rebalance our service provision with more competitive remuneration,” says Mitchell. “Franchisees will have access to the same core services, just delivered in a more efficient way. At the same time, we are investing in a new broker platform that will improve broker productivity and enhance their service levels to customers.” “The demand for the services of a mortgage broker is strong and we believe these initiatives will provide the platform for a sustainable business model for Mortgage Choice and a framework for franchisees to succeed by helping more Australians make better financial choices.”

SMARTLINE’S NEW CHIEF Mortgage broking finance group, Smartline has announced the appointment of Sam Boer as its new CEO. Boer joins the Smartline group from Commonwealth Bank of Australia, where he served as general manager, Third Party Mortgage Brokers. The news comes one year after the group’s acquisition at the hands of REA group, who received an 80.3 per cent stake in Smartline in June 2017, further strengthening its home loan offering, which also includes realestate.com.au Home Loans and realestate.com.au Home Loans broking. The 2017 deal, worth over $67 million, saw Smartline’s over 300 advisors around the country and $25 billion loan book integrated into the REA portfolio, which is majority owned by NewsCorp. Andrew Russell, REA Group executive general manager – financial services, says Boer’s history in the retail lending sector would provide Smartline with the best opportunity for growth moving forward. “Sam brings a wealth of experience to this role and has a long history of leading high performing teams to deliver value for customers,” Russell says.

For Boer, who boasts more than 29 years of experience in personal and professional financial services, the appointment presents a new opportunity to work alongside franchisees. Currently, Smartline franchisees receive a 24-month mentoring program and access to extensive business training and coaching, with the brand looking to expand further. Chris Acret, Smartline executive director and co-founder, says Boer’s appointment will allow the business to further its financial services franchising operations. “We’re delighted that Sam will be joining Smartline to lead the business into our next chapter of growth with REA,” Acret says. “We’ve known Sam a long time, he has strong industry experience and we are very comfortable that he will be a good fit for the business and our people.”

FLEXIBLE SOLUTIONS Red Rock Mortgages has emerged as a leader in flexible, customer-focused finance solutions, tailoring their services for borrowers whose circumstances are a-typical and outside the box.

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INDUSTRY SPOTLIGHT Andrew Cowan, Red Rock Mortgage Group’s managing director, believes the consumer-centric approach is core to the company’s success. “The business was established in 2004 as a specialist mortgage manager primarily catering to the self-employed market,” Cowan says. “Since inception it has grown to become a leading specialist mortgage finance company providing mortgage finance solutions for a range of borrowers whose financial circumstances are often 'outside the square' of the traditional lenders’ requirements.” “We are a very different mortgage finance company; at our core, our focus and expertise has for many years been on providing tailored mortgage solutions for borrowers unable or unwilling to satisfy mainstream lending criteria.” For many Australians, the looming reality of bad debt and credit scores can be a dream killer, however the emergence of flexible finance facilities has opened new opportunities for prospective homeowners. “The market demand for alternative finance solutions has never been greater. The current regulatory environment and the increased public pressure on the mainstream banks is seeing more and more people being turned down for finance for a range of reasons,” Cowan says. Now, following a successful tenure as a specialist finance mortgage provider, Red Rock has announced plans to diversify, launching a Victoria-wide

franchise model into the market. Cowan believes the current economic climate, mainstream banking uncertainty and increasing demand for flexible finance solutions make it the perfect time to branch out. “We believe this to be an ideal time to expand our national footprint via a franchise distribution network that creates value for our stakeholders and a fantastic and rewarding business opportunity for franchise operators wanting to make a real difference to people’s lives through flexible finance solutions that work.” For franchisees, the opportunity presents a chance to develop and further their career with an industry partner committed to ongoing support and caseby-case evaluation. “Our unique mortgage franchise opportunity offers the best of both worlds: the freedom of running your own finance business in a flexible format, with low overheads and a very affordable initial investment coupled with the unique ability to build a regular passive income stream,” Cowan says. “Our model has been carefully considered to provide a high level of differentiation in a competitive marketplace and also give our franchisees flexibility to earn more margin per deal than others by taking a unique approach. “We provide a range of support and tools for our franchisees, starting with comprehensive induction training covering all aspects of mortgage origination, credit advice and sales training,

as well as dedicated relationship and onboarding managers to help grow and assist franchisees in the operation of their business.” The mortgage finance specialist’s announcement demonstrates the company’s desire to grow and solidify its place at the top of the flexible finance solution industry. Currently, the expansion is slated for Victoria, however according to Cowan, considerable growth in the state could lead to greater expansion elsewhere. “Our vision is to build our national network of specialist mortgage franchisees by becoming Australia’s first choice for specialist finance. Our expansion plans for the next 12 months are the rollout of our Victorian territories and then launch interstate the following year,” says Cowan. Deloitte’s Baister cautions the market to be ready for increased requirements, and a slower growth for business. “While there are current laws already in place to manage conduct, I expect to see a greater obligation for lenders beyond the current ‘must not be unsuitable’ legislative hurdle. “In the future, lenders will have to consider how they can demonstrate that the customer has a true understanding of their product. This will mean a more thorough assessment process, tailored to individual customers and their understanding of the loan. This will inevitably slow market growth.” n

Tighter lending standards and restrictions on the volume of ‘interest-only’ loans to total new residential mortgages have pushed up rates for investors.

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INDUSTRY SPOTLIGHT

CLEAR LINE

OF SIGHT

Franchising offers support, experience and established branding for optometrists, but know your options and compare agreements first. By Domini Stuart

ptometrists are highly skilled and highly qualified – but that doesn’t necessarily mean they’re good at running a business.

“Operating a practice requires skills that extend beyond the capabilities of your professional training, into the areas of marketing, accounting, shop fitouts and renovations, purchasing equipment and day-to-day knowledge of business operations,” says Peter Gandolfo, managing partner at Melbourne law firm Partners Legal. “If you purchase a franchise, much of this can be taken care of by the franchisor.” The power of the brand may also be overlooked. “In many cases, the franchisor will have spent a great deal of money establishing and building the reputation of the brand,” he says. “People are attracted to this reputation and this, in turn, can drive business for you.” Specsavers is a notable example. Clever consumer advertising and the memorable “Should have gone to Specsavers” tagline have helped establish the company as a leading international brand. Since launching in the UK in 1984 the organisation has become one of the world’s largest optical retailers with more than 1800 stores in 10 countries. Specsavers also has an optical manufacturing facility in Port Melbourne, which is the largest in the southern hemisphere. “We entered the Australian market 10 years ago, in February 2008,” says Charles Hornor, director of communications. “This was followed by one of the fastest rollout programs ever seen in this country – we opened 100 Specsavers stores in our first 100 days and a total of 155 in our first

12 months. We now have 325 Australian stores with annual sales of $950 million last year and average store sales of almost $3 million. We also have 52 stores in New Zealand.” Specsavers developed the Australian business model from the ground up using the UK partnership strategy as a foundation. “Australians were quick to embrace our mix of clinical excellence, high-quality products and unrivalled price points,” says Hornor.

THE CONFIDENCE TO RUN A BUSINESS The Australian-owned, optometrist-led EyeQ Franchise Associate Network is a more recent entrant in the sector with a launch date of September 2014. EyeQ currently has 25 practices in the group – 15 corporate and 10

Specsavers

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owned by franchisees, who are known as franchise associates. “We worked on developing this network concept over a number of years,” says Ray Fortescue, EyeQ’s executive chairman and a founding director. As an optometrist with over 35 years’ experience in a Sydney practice, he is committed to the long-term sustainability and ideals of independent optometry. “We had observed that many Generation X, Y and Next optometrists weren’t confident enough with the existing business support options to start a new practice on their own, or even to take over an existing independent practice,” he says. “We wanted to create systems and strategies that would provide a way for independent, full-scope optometry practices to succeed in Australia’s highly competitive optical retail environment. We also wanted them to succeed on a personal

INDUSTRY SPOTLIGHT

level, with professional satisfaction and a good work–life balance.”

A CHANGING AUSTRALIAN MARKET Both EyeQ and Specsavers are operating in an area that has grown considerably over the past 10 years. “We expect that growth to continue,” says Hornor. “In 2007 the Australian prescription optics market was approaching $800 million and this year predictions are as high as $3 billion.” The decade has also seen significant change in the marketplace. “A number of new entrants have increased competition and we’ve had to face the same challenges as every other retail business, such as online selling,” says Fortescue. “However, one of the key ingredients in the success of an optometric practice is the relationship that develops between the optometrist, patients, employees, suppliers and other stakeholders. At EyeQ we are constantly assessing the tools, support and resources we provide to ensure our franchise associates have everything they need to deliver the best relationship optometry possible.”

SPECSAVERS’ JOINT VENTURE PARTNERSHIPS Each Specsavers business operates as a joint venture partnership, which means that every store is jointly owned by an optometrist and an optical dispensing retailer. Cost of entry is a $10,000 working capital loan, which is repayable as soon as the store partners have built up a cash buffer in the business. The company also funds the set-up costs through a business loan. “All of our new stores are funded by Specsavers with Specsavers acting as bank to the partnership team,” says Hornor. Store partners are then supported by centralised teams of specialists in areas such as marketing, accounting, IT and supply chain. “The optometrist partner manages the clinical side of the business and is responsible for developing the optometry team,” says Hornor. “The dispensing partner manages the retail and dispensing side of the store and is also responsible for managing and developing the floor team. This allows the two partners to focus on the whole customer journey and drive their business forward – and it’s our standard recipe for franchise success.” All Specsavers optometrists are primary

care health professionals with qualifications in professional optometry that take up to seven years to acquire. “Optometry is strongly regulated by the Australian Health Practitioners Regulation Agency (AHPRA) but optical dispensing is unregulated in Australia,” Hornor says. “Despite this, the vast majority of Specsavers optical dispensers are qualified to Certificate IV level. We have put more than 1000 individuals through that course since 2013.” Specsavers also supports ambitious optometrists and optical dispensers with an internal development program called Pathway. This prepares them to qualify for and then run their own Specsavers business. “It’s a tailor-made six-month training and development package that helps them to develop the commercial and people skills they need to make their business a success,” Hornor says.

A RELATIONSHIP-DRIVEN BUSINESS MODEL FOR EYEQ All of the founders of EyeQ are successful, independent optometrists and practice owners. “That means we can provide franchisees

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with both business and sector expertise,” says optometrist and chief business development officer Lily Wegrzynowski. “We are dedicated to delivering the business support, systems, buying power, marketing initiatives and collegiality that will enable both optometrists and optical dispensers to own and operate their own practice. Our relationship-driven business model is unique in the optometric franchise space because our franchise associates continue to own their business outright. We also offer a relatively low-cost entry compared with other franchise options in the optical industry.” For new practices, EyeQ helps with site selection, lease negotiations and practice fitout. “Naturally, we want our practices to be appealing to patients but it’s important that our franchise associates find them a pleasure to work in too,” Wegrzynowski adds. “They must also stand the test of time.” Franchise associates have the option of using EyeQ personnel management, administration support, financial management, IT services and succession planning. “Our aim is to ensure our franchise associates have the time they need to focus on providing high quality, relationship-focused clinical eye care and eyewear

solutions,” says Wegrzynowski. “We can take care of payroll, accounts payable, marketing, stock acquisition, business management, performance benchmarking, IT and employee training. But the system is flexible enough for them to manage some of these functions themselves if they have the resources and it’s something they enjoy.” The EyeQ leadership team has found that succession planning and the opportunity for optometrists to retain their clinical independence have proved particularly appealing. “Many optometrists decided on their profession because they have a passion for helping and taking care of people,” says Fortescue. “At EyeQ we understand how important it is for them to feel confident this legacy of trust will be passed on to future generations. That’s why we see succession planning as a key component of our franchise associate offer.”

FRANCHISEES’ RESPONSIBILITIES As with any franchise, the benefits come with responsibilities. “Franchisees have obligations to the franchisor, and these are set out in the franchise agreement, information and disclosure statements and the Franchising

Code of Conduct,” says Gandolfo. “The franchise agreement in particular will often dictate the manner in which you run your business, and this can be both beneficial and a burden. “On the one hand, if you’re not an experienced business operator or don’t want to be as involved in the running of the business, much of the operation of the business is done for you. Your franchise agreement will tell you what fitouts are needed for your store, where to purchase your goods, what equipment to buy and, in some cases, even the staff to hire. It may also provide you with pro-forma employment agreements and marketing materials. On the other hand, you may identify a weakness in the prescribed systems, or you may find the franchisor’s directions do not suit the specific needs of your client base. If you do find you want the make changes they can be difficult and costly to negotiate.” He adds that the most important thing to do when you’re considering taking on a franchise is to examine your options carefully. “Take the time to compare and contrast different franchise agreements,” he says. “And you should always have a lawyer look over the documents on your behalf before you enter into an agreement of any kind.” n

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INDUSTRY SPOTLIGHT

GET OUT!

Enjoy fresh air and new business opportunities with an outdoors-based franchise.

ove the outdoors? Keen to get your hands dirty? There’s no shortage of opportunities for enthusiastic and hard-working franchisees. Two founders and leaders of their respective businesses showcase their brands: Jim Penman, of Jim’s Group; and Warren Ballantyne, of Gutter-Vac.

Warren Ballantyne Gutter-Vac

Q: How competitive is the market? WB: Most people would assume that the home and garden services sector is highly competitive, but we have a distinct advantage in two ways on the majority of our competitors. The first being that we vacuum clean the gutters. Not only are we removing the leafy matter but under this there is a layer of mud and sludge that is near impossible to clean by hand. It is actually this sludge that causes most of the problems in a gutter. The second advantage Gutter-Vac has is that we work safely on a roof. All of our franchisees and their staff have completed their ‘work at heights’ training so that they can work safely at any height. They also use specialised safety equipment that they can install and remove on each job to keep them safe and the property owner risk-free from any potential injuries of the workers on their property. More than half the work we do at Gutter-Vac is for commercial properties or commercial customers; we find that our competition is significantly lower. Q: How do you make your brand stand out from the crowd? WB: For the very reasons that we don’t have a lot of competition – safety and the way we do the work. But I actually believe that Gutter-Vac is a customer-service business that then provides a vacuum gutter-cleaning service. We really pride ourselves on our customer service – it’s something that we at head office focus on, and so do our franchisees. We regularly survey our customers and the feedback we always receive is that the franchisees and their staff were polite, helpful, on time – that’s a big one – and that they left no mess behind. Our franchisees really go out of their way to help their customers – both domestic and commercial. It is all the little extras that make the difference and we know that our customers are essential in our business and we treat them with respect. Q: What is your strongest element of franchisee support? WB: Our franchisees are good, honest people who are making a living and life for them and their family, and I really don’t take that lightly. Without franchisees, I don’t have a business so I believe that support is our number one service. Our head office team knows that support is our number one job and we work together to make that happen. I also believe that it is ensuring we move with the times and continually look to do and be better. SEPT/OCT 2018 | 78 | WWW.FRANCHISEBUSINESS.COM.AU

As we grew larger, I invested in an external business coach for all of our franchisees. The coach is on hand a couple of days a week and helps our franchisees navigate their business and, in many cases, their life. This has made a huge impact on the franchisees’ businesses because in that time, the franchisees have more than doubled their revenues. Last year I employed an in-house social and digital manager to look after all things online and assist the franchisees with their online marketing and social media presence. We don’t have a national marketing fund so I invested in this to support the franchisees. Technical and mechanical support is a big thing for the franchisees and we make sure this is on hand 24/7 because if they have a machine issue, then they are not working and not producing income for their family and letting customers down. I’ve worked tirelessly on the machinery and I’m glad to say that any mechanical difficulties are few and far between. I find now the technical support is more around helping with tenders and quoting on large commercial work. Peer-to-peer support is something we have really embraced and produced as a cornerstone of our culture. We have an annual conference that really adds massive

value to the franchisees and is a chance for them to all catch up, and there is a closed Facebook group. Q: What can a franchisee expect a typical day to look like? WB: A typical job will require getting everything organised onsite – from putting out A-frame signage, to ensuring all the equipment is set and ready to go, and then of course all of the safety aspects taken care of. A site inspection for safety is always a priority when arriving on site at any job. The franchisees also know that being organised before getting on the roof is not only more efficient but ensures safety for themselves and their staff. Once they are safely on the roof, they will fire up the specialised wet/dry vacuum machinery and get started at cleaning the gutters, valleys and roof as required. On every job they will take before and after photos – which customers rave about – and they will also do a roof and gutter report to alert the property owner or manager of any potential issues. Depending on the day, the franchisees might have jobs all day. They often work some marketing strategies between jobs and then they may also be going onsite to do quotes for other potential jobs – in

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particular commercial work that requires onsite inspections to complete a quote. Of course the phone rings in the day with customer queries and seeking of quotes, so the franchisees manage their own calls and make sure they are making that connection with their customers. Our customers love that they get to speak to the franchisees directly, not to a call centre, and the franchisees love to speak to their customers. Because franchisees are in charge of their own schedule they can choose when they start and finish. Most will finish the day to go home to do their invoicing and to complete quotes. Surprisingly, the paperwork is not as much as many people would expect and most of the franchisees do a bit everyday, which keeps it totally controlled. Q: What skills do you seek in a franchisee? WB: It isn’t the skills that we look for because a skill can be taught. We can teach them everything they need to be a successful franchisee. What we look for is who they are as a person. Will they enjoy working outdoors? Will they be good with customers? Are they willing to learn? In the end, we look for good, honest

INDUSTRY SPOTLIGHT

people who want to become their own boss and really contribute to the Gutter-Vac brand. Q: What growth opportunities are there for successful franchisees? WB: When we started Gutter-Vac 20 years ago, I would never have expected the growth that we have seen and there is still so much more to come! Most franchisees begin with the thought that they will get their machine and they will work for themselves, doing all the work. Then they start to grow their business and realise they need some help and will hire their first ‘off-sider’ to work with them. From there, franchisees have grown from just themselves to having a team of several staff working with multiple machines and multiple territories. In the last couple of years, I’m really happy to say that a lot of our growth in territory numbers has come from within. Single territory owners moving into our dual category, some even going to the multi category. Many of our multi-unit owners have expanded their footprint. We have two franchisees who have bought another territory in partnership with a family member. We have had franchisees buy other franchisees’ businesses when they were ready to retire. We have even had staff members step up and buy a territory.

What we look for is who they are as a person. Will they enjoy working outdoors? Will they be good with customers? Are they willing to learn?

Q: How long is a term? WB: Five years with one renewal option. Q: What is the cost of a franchise? WB: $79,400 + GST + freight. This includes your trailer with machinery, which we have access to finance to for franchisees. It also includes all your training and a starter pack (including marketing material).

Jim Penman Jim’s Mowing

Q: How competitive is the home and gardens services sector? JP: For us, it’s hardly competitive at all. In the past year alone we’ve knocked back more than 58,000 leads for mowing and gardening work, compared with 38,000 the previous year and 24,000 in the year before that. We’ve also been training and encouraging our franchisees to charge more. Though we’re growing, we simply can’t grow fast enough to keep up with the demand. Q: How do you mark your brand out from the crowd? JP: We put a lot of attention on signage, setting up an automated system to check each trailer every two years. But our main focus has been on improving customer service. By an automated system that monitors complaints and sends out surveys, with appropriate rewards and sanctions, we’ve greatly improved our level of service in recent times. The effect is obvious.

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Franchise opportunities available! P. 1300 810 233 E. franchiseenquiries@snap.com.au snap.com.au

INDUSTRY SPOTLIGHT

You don’t do well at a job you don’t enjoy. Specific skills such as pruning are less vital. They’re easily learned.

Q: What is your strongest element of franchisee support? JP: We’ve found three elements are most important. The first is meetings, which are held about every six weeks. The second is fast and helpful response to franchisee phone calls. And the third is that the franchisor phones each franchisee regularly, at least monthly but ideally weekly. In all this, the personal relationship seems to matter far more than business advice. We monitor franchisors and figure out what works through annual, confidential franchisee surveys. Q: What can a franchisee expect a typical day to look like? JP: Most of our jobs are domestic and quite small, so a franchisee typically does quite a few. Even though we’re called ‘Jim’s Mowing’, we strongly encourage franchisees to look for extras such as gardening, landscaping, rubbish removal and gutter clearing, which typically pay better hourly rates and reduce the time spent in travel. We also counsel them to

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take more work close to home and sell off clients further away, to steadily reduce travel time. Q: What skills do you seek in a franchisee? JP: The first and most important is a passion for customers and strong aversion to letting them down. This applies to the work done, but even more to time-related actions such as phoning back fast and turning up on time. It’s also vital to have a self-critical attitude that accepts guidance and is always looking for ways to improve. Loving the job and the outdoors is also important. You don’t do well at a job you don’t enjoy. Specific skills such as pruning are less vital. They’re easily learned. Q: What growth opportunities are there for successful franchisees? JP: Many franchisees work on what we call ‘splits’, building up customers and selling the surplus to new franchisees, typically netting $20,000 to $25,000 each time. We also encourage them to employ

One franchisee bought a franchise in 2014, then became a franchisor, then took over the dog wash division, and is now pioneering our growth into the UK.

people, with several now turning over millions of dollars a year. And we are always looking for capable leaders. One franchisee bought a franchise in 2014, then became a franchisor, then took over the dog wash division, and is now pioneering our growth into the UK. Q: How long is a term? JP: Twenty years, but all our contracts

have a right to renew at the end of a term, so effectively eternal. Q: What is the cost of a franchise? JP: A mowing franchise is around $30,000 to $40,000, with equipment. Other divisions are more. Some, such as handyman, where the surplus of work is especially great, cost less to buy. n

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FRANCHISE BASICS

FRANCHISING IN THE SPOTLIGHT â&#x20AC;&#x201C; THE REAL STORY

How can the challenges facing franchising reveal the way forward for the sector?

MARY ALDRED CEO, Franchise Council of Australia

he current federal parliamentary inquiry into the Franchising Code of Conduct has created a springboard for a constructive national discussion about improving the standards, and therefore the standing, of franchising in Australia.

With franchising having received substantial media scrutiny, I have been carefully listening to the feedback and ideas put forward by Franchise Council of Australia members on how best to address these challenges. FCA members are keenly attuned to the broader franchising sector beyond the

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management of their own businesses. In my brief time as CEO, I have come to understand that FCA members are passionate about franchising as a positive way of doing business and want to see meaningful and sensible steps taken to improve the sector. There have been a number of thoughtful submissions to the parliamentary inquiry. There have also been some

assertions made during the inquiry, and amplified by media, that are not correct or provide a skewed context of some issues. The FCA is currently preparing a supplementary submission to the inquiry to address these, with the intention that recommendations and conclusions made at the end of the inquiry are based on correct information driving any policy responses the government may wish to consider.

One of the key topics that comes up regularly in my conversations with FCA members is the need to ensure disclosure documents are up-to-date and franchise agreements are compliant. The FCA receives many calls a week to our office, particularly from franchisees, who seek information or advice. One of the first questions that we ask is “What does your agreement say?” Unfortunately, the response is often “I don’t know” or, worse, “I haven’t read my agreement”. The FCA is committed to driving cultural change in the sector, particularly around the need for franchisees to be better informed in the business decisions they make. From an FCA perspective, this needs to include leading a policy discussion around mandating legal advice for prospective franchisees, to streamlining avenues of advice and mediation that better assist people seeking support on low cost, sensible outcomes. Feedback from many franchisees who approach the FCA for advice often centres around where to access expert advice and information. Many franchisees are confused about which government or regulatory body performs which role. Often, they don’t know where to go. A one-stop shop that provides expert and confidential advice, reliable information and low-cost mediation needs to be further considered. On the issue of disclosure and agreement compliance, there needs to be a frank conversation in the sector about being willing to embrace some sensible steps of reform. The FCA is actively looking at ways to address this. When the idea of a sector-wide register has previously come up in different forums, there has been some disagreement on the concept, but has to be considered in the current context. The aim is to drive higher sector standards, rebuild confidence and “social licence”, and set a higher benchmark for compliance from the moment a person starts to consider buying a franchise. As the peak sector body representing franchisees and franchisors, it may be that the FCA has a role to play in helping to shape and lead a register, and to bring the sector along with it. Businesses are often more willing to share business information with a non-government entity. No business venture is risk-free. Owning a business does not guarantee you the salaried wage of a regular job with regular hours. Emotion will always play some role in the decision-making process of buying a business. And regulation will never fully mitigate against any of these risks. But the sector does need to evolve, where a culture of entrepreneurism and enterprise can co-exist with effective

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risk-management and compliance. In its very essence, this is what franchising is all about: allowing people to realise their dream of owning a business, within a framework and system that supports, not stymies, innovation. The Nine Network’s A Current Affair recently promoted a supposed “exposé” of franchising based on an “undercover” visit to the Franchising & Business Opportunities Expo in Brisbane. A reporter with a hidden camera spoke with exhibitors and visitors about their experience. What he came away with was a consistent and sensible message – be diligent in choosing a franchise and make sure it’s right for you. Franchise exhibitions are one of many ways opportunities are introduced to prospective franchisees. Through seminars, information displays and presentations, they enable prospective franchisees to view and compare some of the 1100 franchise systems which operate in Australia. Buying a business is a serious decision. The Franchising Code includes a comprehensive pre-contractual disclosure process to assist franchisees to make an informed decision, after taking legal and business advice. Industry statistics confirm that the vast majority of franchisees are satisfied with their business decision, but there are no guarantees of success. Prospective franchisees must undertake proper due diligence before they commit to buying a franchise. To assist franchisees to make a considered decision and obtain advice, the Code contains a mandatory 14-day disclosure period, and provides franchisees with a further 7-day cooling off period from signing if they change their mind. A Current Affair posed the question “Do you deliver on your promises to franchisees?” While we can legitimately question their motivation, and no evidence was provided of franchisors failing to live up to their promises, this does not impact on the validity of the question. As a sector, we need the answer to be a resounding and demonstrable “yes!” In the current climate there is too much media-generated uncertainty around such a key question. Franchising has successfully operated in Australia for decades. Through this, the sector has seen its way through recessions, the global financial crisis and crippling interest rates, while other businesses have fallen. A key reason for this is the sector’s ability to adapt and respond. Challenged by the latest need to respond, adapt and evolve, I have no doubt that franchising has the capacity to do it again. n

FRANCHISE BASICS

ARE YOU PAYING

TOO MUCH? When buying a franchise, an independent business or any other kind of asset, how do you know when you’re paying too much? JASON GEHRKE Franchise Advisory Centre

or many people, a franchise will be the largest investment they ever make other than buying a home. There are many similarities in the journey between business and home ownership, particularly the strong emotional drivers that make us see ourselves as our own boss, or the owners of a particular home. Typically with the process of buying a house, we keep looking until we find “the one”, then we just have to have it. Yes, we will try to buy in our price range, but more often than not we will stretch ourselves to a higher price limit because we have fallen in love with the property. At least to help us in the home-buying journey there are massive amounts of information to inform us of the relative market value of the property. A search of several key Australian websites will reveal – among other things – the median housing price for the suburb in which the house is located, the price at which the house last sold and when it sold, and include comparative prices of other houses in the area which have sold in the last few months. Along with the ability to conduct inspections of the house you would like to buy and visits to many others in your journey, discussions with real estate agents, buyers and sellers, you can quickly develop a sense of whether the property you will buy is good value or not.

BUYING A BUSINESS IS NOT LIKE BUYING A HOUSE And even if you have paid over the odds for a house, you still have a house. You can live in it, rent it out, improve it and turn it into something better. But you still have a physical, tangible, meaningful and valuable asset. Businesses are completely different. These are highly volatile assets which can decline in value very quickly if they are operated badly. (Yes, a house can decline in value too, through neglect and a lack of maintenance, but unless it actually burns to the ground, its value will generally be preserved or improve over time). Most important, though, is that the information available prior to buying a business is nowhere near as comprehensive as for buying a house. You are flying largely blind and depend on the figures provided by the seller (if it is an existing business), so here are some rules of thumb to consider to avoid paying too much for a franchise.

SEVEN SIGNS YOU MIGHT BE PAYING TOO MUCH 1. If you are unable to repay the principal and interest of your business loan during the first term of the franchise 2. You can only repay the principal and interest of your business loan during the first term of the franchise by not

paying yourself a sensible wage for the work you perform. 3. If the seller of the business is not completely transparent and honest about the past trading history of the business, and about its current operating costs. 4. If you have not looked at other outlets of the same franchise nor spoken to a representative sample of both current and former franchisees. 5. If you have not put together a business plan to show how you can grow this business, and have not intensively researched every element of the plan beforehand. 6. If, after buying the business, you will have no spare cash to actually fund the operations of the business (i.e. working capital). 7. If you haven’t conducted your own detailed evaluation of the franchisor, and asked them what might be different in their support of the business under new ownership. You need to slow down, take a good look at yourself and at the proposed sale conditions, the lease agreement and rental costs. Take some time to get advice and get your family involved in the decision. n Jason Gehrke is the director of the Franchise Advisory Centre and has been involved in franchising for more than 20 years at franchisee, franchisor and advisor level. He advises both potential and existing franchisors and franchisees, and conducts franchise education programs throughout Australia.

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FRANCHISE BASICS

HOW DO I KNOW MY

TERRITORY WILL SUPPORT ME? Size matters when it comes to franchise territories â&#x20AC;&#x201C; and sometimes smaller is better. PETER BUCKINGHAM MD, Spectrum Analysis Australia

hen deciding to purchase a franchise, the issue of territories often arises. Whether it be as part of a store you are opening (as an exclusion zone), or a service business where it becomes extremely significant in your lead generation, territories can be an extremely sticky point in the negotiation. While a too-small territory can restrict the franchisee to some extent, the reality is that many territories are far too large. This creates a situation where the brand neither reaches critical mass nor achieves the heights of what was originally planned.

Right sizing the territories is a must for both the franchisee and the franchisor to gain the most from the brand. Franchisors need to have vision (with some logic) as to where they want to see the brand in 10 yearsâ&#x20AC;&#x2122; time, and set up their territories accordingly. Territory planning is not about evolving (cutting territories in half each time it becomes unworkable), but rather right sizing from the start. As you cannot unscramble an egg, similarly you cannot unscramble a poor territory plan. My view is that the franchisor established the long-term number of territories, and as the brand is rolled out, sells a franchisee their long-term territory and asks them to

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FRANCHISE BASICS

manage (maybe for five years) an adjoining area(s). In the long run a franchisor may want 150 territories across Australia but will have to work progressively towards that. If 150 is the goal, then franchisors should set up their territory planning to reflect that.

FRANCHISE BUYER Franchise buyers naturally want a reasonable area to work in, or call their own. The size of the territory can be measured as population, number of businesses, or maybe the market percentage of the city. For instance, Sydney has about 4.2 million people, and if the franchisor is aiming for 40 franchisees across the city, then territories should be about 100,000 people. We find that if the territories are too large they suffer from the tyranny of distance, and can never be serviced properly. In a service business (lawn mowing, cleaning, coffee van etc), a more compact area of operation makes for a more profitable business. What you need is a franchisor who is willing to have the territory plan established upfront and who can show how the

The census data will give you a good start, however we always stress that not all households offer similar opportunity.

other franchise areas have been set up, and that what is being offered is in line with the successful franchisees in the business. Your due diligence is then verifying the concept with other franchisees and experts in the field, and making sure the numbers pass the sniff test.

SO WHAT INFORMATION CAN ASSIST YOU? If we are going into a B2C (business to consumer) business, then residential

population and household numbers are the most important. Every five years Australia has a Census of Population and Housing, (the 2016 census was the most recent), and much of the information is available for you at the Australian Bureau of Statistics (ABS) website under QuickStats. This presents demographic information in a number of ways, including postcode or suburb level. The census data will give you a good start, however we always stress that not all households offer similar opportunity. You may have services or products that

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are best with high or low socio-economic areas, you may have services and products that suit older or younger people, or appeal to a particular cultural demographic. We believe that territories should be adjusted (larger or smaller) on the anticipated demand for the product or service by the people within. If you are taking on a B2B (business to business) opportunity, then the census data is normally irrelevant to you, and you need to understand the business data. There is annual data revealing the number of businesses by type of business and employee numbers in size categories in small geographic areas. We can identify business, industrial and commercial areas, and measure the B2B potential of the area. Clients like KwikKopy, MBE and National Drones have all their territories formed from this level of information.

FRANCHISOR RESPONSIBILITY I always say the aim of any territory planning job is that somewhere in the future the franchisor can say, “We set up the territories to give each franchisee similar opportunity, based on the following assumptions ...”

These assumptions could be, “We anticipated we would sell more in higher than lower socio-economic areas, and adjusted accordingly. We expected to sell more in areas of high families, and adjusted accordingly. We know our product sells very well with the Asian community, so adjusted accordingly.” Once the franchisor has some insight into the customers, the territories can be modified to balance the demand.

(which may also be the territory) is the area that covers somewhere between 60 and 80 per cent of the customers. In some businesses, like a homemaker business (beds, whitegoods etc), this is probably about a 6 to 8-kilometre radius. In some other businesses, like a 24/7 gym or a lotteries outlet, this is more like a 2-kilometre radius.

TERRITORIES ARE OFTEN TOO BIG

Whatever is given as a reasonable territory should be sufficient to support the business, and gains and leakage will always occur. The good franchisee just makes sure they have more net gains due to the great service they provide. n

Many franchisees will not like to hear this, but being overly generous with a territory can be detrimental to the franchise system. If the franchisee has insisted on a huge area, and cannot properly service it, or has such a big territory that no other store is within a realistic distance, then the concept of potential customers knowing that the service exists, or the product is available becomes meaningless, causing the public to support another brand where there is reasonable cover. The rough rule we try to establish when we map territories is based on the trade area. The logical trade area

SUMMARY

Peter Buckingham is both a Certified Franchise Executive (CFE) and a Certified Management Consultant (CMC). Spectrum Analysis Australia is a geodemographic and statistical consultancy.

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FRANCHISE BASICS

SEEK AND

DISCOVER Stay alert to the pitfalls and potentials of a site as you search for the perfect location, and use your access to franchisees and the franchisor to ask crucial questions.

he right location is vital for any bricks and mortar business. It can make or break it.

Sameer Babbar is CEO of strategic analytics firm SVB Group and works with franchisors to deliver location planning. He points out that business operates under many levels of hierarchy: • Things that happen in the store (staff age, number of staff, number of products, how often it is stocked etc.) and things that happen in the site (decisions that business makes, signboards, accessibility, parking etc.). • Things that happen in a trade (demographics, psychographics, population coming in, population going out, tourism, how far customers are willing to travel, how far the business delivers to customers etc.). • Things that happen in the region (policy changes, major developments etc.). Besides this, there are other geopolitical and national issues that extend to state, country or national boundaries. If you have a supportive, well-resourced franchisor there will be help on hand to evaluate the potential of a

proposed site. “You need data that is accurate, current and of high quality so that the decision will stand the test of time,” says Babbar. The more you know about the site, its potential, the overserviced and underserviced areas … the better equipped you are to make the right decision. “It is very much like peeling the layers of an onion: you need to keep going as far as you need to go,” says Babbar. In addition to all the details above, it’s crucial to understand how the franchisor views the allocation of sites, and how close is too close for a neighbouring store. Babbar explains the franchisor’s perspective. “It’s important to get a balance of distance between outlets. You want to ensure that customers who are at the fringes of an area have an alternative option to shop, particularly if they are in the gaps between the catchments and that falls in lucrative areas. “But too close proximity of stores may lead to too much cannibalisation and over-investment. This may not be evident in the short term but as the market saturates it becomes more obvious,” he says.

14 QUESTIONS TO ASK ASK THE FRANCHISOR: • Who finds the site? • How are locations evaluated? • Who negotiates the lease with the landlord? • Who will hold the head lease? • How close will you put another outlet? • Do I get first refusal of a neighbouring site? • What happens if I leave the business early? • Is there an optimum time to open a business? ASK FRANCHISEES: • How long did the site selection process take? • Is there anything the franchisor could have done better? • How accurate was the costing for the legals, lease and fitout? • What obstacles did you come across before you opened the store? • Do you have any tips on making the process as smooth as possible? • What have you learned about your location since you have been trading?n

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Uniquely owned system How does a mattress & bedding company stand out from the rest within the industry? An ownable system that is unique to the business, and adds value to the customer experience, can help create that differentiation. At Snooze, our new Snooze Profiler® can help customers choose a bed that’s right for them. The process starts with the customers answering a few simple questions about how they live and how they sleep. Then they try the test bed, a fun way to figure out their preferred mattress-feel. It only takes a few minutes and the customer will not have to spend time testing every mattress in the store.

Customised products to individual’s need Customers desire personalised items that fit their needs. The days of one size fits all are long over. A business that offers customised product helps feed this growing demand for choice. A customised product helps with a more personalised customer experience, and may lead to stronger customer loyalty. Snooze offers a range of products that cater to this demand. One example is the

SleepTailor® mattress and base range. It’s designed with the individual in mind, especially if a couple have different ideas about how they like to sleep. Each SleepTailor® mattress offers dual feel options and independent support systems for each side.

Innovation - Convenience of technological tool An investment in innovation and a drive to adapt to the market is essential for continued business growth. Snooze has an online tool known as bedBUILDER®, that makes it easy to customise a bed and see it come to life. A customer simply chooses a headboard and base in the finish or fabric of their choice, saves it for later, or sends the design to a store to have it ordered. They can also head into a Snooze store to view product samples. With countless combinations, the choice is entirely theirs. Visit a store to experience Snooze Profiler® for yourself, or for more information about becoming a Snooze Franchise Partner, contact Bettina Davis bettina.davis@snooze.com.au | 0423 077 844

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FRANCHISE BASICS

SITE

SPECIFICS

Location, location, location is the mantra for property purchases and it’s equally pertinent for commercial or retail leasing.

hat are the major pain points associated with finding and securing a site? Quite simply, getting it wrong. Any franchisee who picks a poor location will struggle to build a solid business. And choosing the appropriate setting for a business venture is dependent on several factors. Let’s start with accessibility. How easy is it for your customers to reach you? A business reliant on passing traffic will have quite different needs to an operation that is destination-driven. Typically, food outlets and other retailers thrive on a high footfall, whether that is in a shopping or homemaker centre or a strip location, whereas a tyre service or gym can operate successfully in a less prominent position. Of course both will benefit from high visibility in a highly competitive market. How will customers actually get to you? It’s important to consider whether customers will drive to the location, and if so, what parking facilities are available. Some franchises will draw customers using public transport so assess how easy it is for them to reach your door. An easy commute also helps attract staff, and will make your life as a franchisee that bit easier. Don’t forget the demands on your own time: how long

will it take you to travel from home to the franchise? Factor in the journey time both ways to get a sense of whether this is a viable option because, in the short term at least, you’ll be working long hours. Franchisees regularly choose sites that are convenient and in a locale that’s familiar. But what if a great opportunity arises in an unfamiliar suburb? Consider the neighbourhood: does it have the right demographic for your business? Will your business benefit from a burgeoning population growth as the suburb expands or is there a gradual drift away from the area? Is the location a great deal because the area is a crime hotspot? It’s important to assess whether or not customers and staff would feel safe both at, and leaving, the location, particularly if the business operates outside 9–5 hours. Security issues can affect your business and your income, so these are valuable insights.

IF THE PRICE IS RIGHT … There are plenty of franchisee tales of overspending on a franchise outlet, particularly in retail. It’s a common mistake but paying over the odds does set you back. So considering the costs is crucial.

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On top of rent you’ll be paying franchise fees, and possibly wages. Then you’ll be outlaying for business rates and utility bills so if you can, check the costs for comparative businesses. If there is parking but it’s not onsite, will you and your staff have to pay? Factor in these costs. Looking further afield within the centre, street or suburb, investigate whether there are any upcoming council works, new builds or refurbishments that are going to hinder your trade. Franchisees can be undone by significant changes to access, even in the short term. Does the site you’re considering face its own upheaval, with a refurbishment due to keep pace with the landlord’s requirements? How much work needs to be done to the site to get it business-ready? It’s worthwhile reviewing the competitive landscape too. While fighting a high volume of competitors for market share can be debilitating, having comparable businesses in a neighbourhood can attract customers. Finally, how long do you plan to be in this location, and what happens at the end of the lease renewal? Be clear on the rules, and the options, before you sign an agreement. n

FRANCHISE BASICS

CENTRE OF

ATTENTION Three industry experts take a look at the changing nature of shopping centres across the country. By Sarah Stowe

hould you buy a franchise located in a shopping centre? You’ve heard all the horror stories about high rents and seen franchise chains find alternatives to prime food court sites. So what’s happening to shopping centres? Michael Haddrick, MD, Comac Retail Property Group, believes the Australian shopping centre landscape is changing rapidly as the rise of online services continues to literally “eat” into the traditional markets of many centres. Haddrick observes that some medium sized centres are struggling to find a point of distinction. He believes there is an answer and it lies in the booming services sector such as finance, travel, beauty and health.

This is a strategy that has proved highly successful and created a new class of super neighbourhood, he says. Take Lutwyche in Brisbane. The Lutwyche– Wooloowin area has seen a fresh retail demand emerge with a significant influx of a younger demographic as a result of improved infrastructure and a spate of apartment block developments. “When Comac advised on the $50 million redesign of the Lutwyche Shopping Centre in Brisbane it analysed the data and found 59 per cent of the retail spending in regional centres is on food, liquor, groceries (FLG) and food catering. “When we studied the Lutwyche catchment further we realised the approach to fashion, food, parking and services needed to be changed. “Cafes and restaurants have increased their presence

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FRANCHISE BASICS

When we studied the Lutwyche catchment further we realised the approach to fashion, food, parking and services needed to be changed.

in the last decade to 14 per cent of the market but, in many instances, it is not the solution for medium sized centres,” Haddrick says. The solution for the 20,000+sq m Lutwyche centre was the creation of a services precinct to capitalise on the boom in personalised businesses, and the reinforcement of the FLG sector. Franchise brands at the Lutwyche centre include Tobacco Station, The Coffee Emporium, Snap Fitness, Michel’s Patisserie and Curves. The poorly performing food court was reinvented, relocated and reduced to just five food businesses with a strong local flavour to add authenticity. Haddrick says its new location, next to the new travelator leading to Coles, significantly boosted foot traffic. “We expanded the community services component to draw people into the centre. Existing Commonwealth and Westpac banks and Australia Post have been underpinned by other services including finance, health, beauty and travel. “The focus on health (such as optical and dental) and removal of fashion is very unusual for a centre of this size, but it is working very well.” Comac continues to monitor other services that are expanding including

audiology, laser treatment, plastic surgery and beauty such as day spas, that are evolving into shopping centre-ready services to cater for the boom in personal consumer demand. James Coffey has been recently appointed to lead the new shopping centre leasing division of CBRE in New South Wales. He has a background in planning, leasing and the delivery of mixed use retail. So in his view, where does food sit in the mix? “In the current market food and beverage is very important, but what isn’t often discussed is the critical mass per property. A successful tenant makes for a happy landlord, so food makes for part of the mix, but an in-depth understanding of capacity plus supporting uses needs to be a focus.” Michael Sherlock is chief marketing officer at Sentinel Property Group. But his background as CEO of Brumby’s, and a former franchisee, gives him a unique perspective on the state of shopping centre retail. “We are getting tenants in but it’s harder now,” he says. Property developers and centre owners have to create more precincts to develop shopping centres as destination spots. And that means eats and

entertainment, he says. At a recent centre unveiling in Cairns, Sentinel has put the spotlight on entertainment, with an outdoor screen and music designed to bring and keep families in the venue. Add to this a marketplace that allows for food trucks and there’s a very different flavour to today’s regional shopping centre. Another trend Sherlock has observed is the increasing presence of shoe stores and beauty salons. “There are more specialists, and there’s a boom in the wellbeing trend. We’ve got more time on our hands so what are we going to do with it?” Sherlock says an upcoming centre in Sunshine, Victoria will offer another slant on how to operate a destination shopping centre. He is clear that what worked before won’t work now. “Food courts are on the demise, rents are really intense. A lot of QSRs are opening in different zones. It’s interesting that some QSRs are going to drive-throughs.” But that option has its own challenges, he points out. “The rental area is the same but you have to allow for the queueing of cars, and that’s expensive and complex.” n

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FRANCHISE BASICS

THE DEVIL IS IN

THE DETAIL How to ensure your lease delivers what you need. ANDREW GRIMA Principal, Coleman Greig

efore signing a standard retail lease, carefully consider all aspects in light of your specific business model.

Various issues can be overlooked in the rush to have a document signed and finalised, and because of a landlordâ&#x20AC;&#x2122;s

pressure to have a standard document for a complex or centre. Such omissions may have an adverse impact on the retailer tenant. Bearing this in mind, itâ&#x20AC;&#x2122;s very important to consider the following issues so that as a tenant your particular business model will work.

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FRANCHISE BASICS

THE LEASE AND MOVING STOCK Is your business the type that needs to receive stock (both large and small shipments) throughout the day? If you donâ&#x20AC;&#x2122;t have access to a loading dock direct to your premises, you may need to receive deliveries via the common areas of the centre or complex itself. If thatâ&#x20AC;&#x2122;s the case, consider requesting the following from your landlord: 1. The ability to have access to the building/premises for a period of time before and after trading hours to receive stock deliveries. The landlord may wish to charge you for use of building services outside of trading hours (security, use of airconditioning and electricity, etc) so be prepared to negotiate. 2. If you have certain items or products that need to be received during business hours, what do you do

if your lease states that you must not interfere with common areas? Negotiate the ability to receive delivery of stock during business hours in your lease. There may be issues over the size of deliveries that can be brought through during trading hours and you may need to concede that you are not to unreasonably interfere with the quiet enjoyment of other tenants or customers within the centre. You also need to consider indemnities for damage or injury caused during deliveries.

THE LEASE AND AFTER-HOURS TRADE Sometimes a tenant who occupies a retail shopping centre offers a product reliant on after-hours trade, such as a food retailer more akin to a restaurant than a kiosk, or a medical centre located within a retail shopping centre. In such

circumstances you need to consider whether you should be liable for afterhours costs which the landlord may impose upon you for airconditioning, electricity, security, etc. Initially, what you need to ensure is that you do have the right to occupy and trade outside normal core trading hours (retail leases will contain a clause stating that tenants can only trade within core trading hours). Secondly, find out what extra costs the landlord will charge you for trading outside these hours and consider if these will be higher than what your normal outgoings proportion will be. Also consider what access your customers or clients may have to sufficient lighting and parking.

THE LEASE AND DISTURBANCE Leases usually have a clause stating that the tenant must not interfere with the

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use and enjoyment of adjoining premises. This may become an issue if, for example, your use creates loud noise, such as a 24-hour gym. If you’re proposing to set up a business in a shopping centre or in a precinct where adjoining tenants could complain about noise, you need to negotiate out of liability for any disturbances emanating from your premises to adjoining tenants because of music or in carrying out your permitted use.

THE LEASE AND A LIQUOR LICENCE Sometimes tenants need to sell liquor as part of their use, but your usual standard shopping centre lease may not give you the ability to do this or cover off responsibilities for obtaining a liquor licence. Therefore, make sure your lease gives you the ability to sell liquor and governs responsibilities for obtaining and maintaining the liquor licence, including what happens to the

liquor licence when the lease ends.

THE LEASE AND SIGNAGE Leases usually allow a tenant to install signage on the premises with the consent of the landlord and relevant authorities, which will not be unreasonably withheld. If you have specific signage requirements – for example, advertising your branding in common areas such as escalator walls or signage pods within car parks – you need your lease to specifically cater for these requirements. Otherwise, the usual standard leasing clause may not allow you to install signage in these additional areas.

PROTECTING YOUR BRAND Leases will usually allow for landlords to install ‘For Let’ or ‘For Sale’ signs

on premises. A ‘For Sale’ sign may be required at any time during your tenancy while a ‘For Let’ sign is usually used within the last three to six months of your lease (particularly if an option is not exercised or you don’t renew). If you object to such signage within the premises because of potential damage to your branding, consider negotiating with the landlord for the lease to state that there is to be no such signage. Landlords may not agree to this amendment or may agree to a limited concession such as a ‘For Sale’ sign only.

WILL YOUR LEASE REQUIRE YOU TO REDECORATE? Leases usually have a standard clause that states the tenant must redecorate their premises at the end of the lease. This can be an issue if you’re

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FRANCHISE BASICS

occupying premises over a long period or where there is a series of terms through options to renew. It can also be problematic if you’re a particular franchise or retail operation with a standard fitout aligned with your own regime and timetable for redecoration and upgrade. You run the risk of spending money at a certain point in time, only to have a landlord require you to carry out a subsequent upgrade or refurbishment which is either inconsistent with your own program or unnecessary. Look at your refurbishment clauses carefully so you’re not trapped by this. You may also consider deleting the refurbishment requirement altogether, provided that you maintain the premises in a professional standard and consistent with your corporate image.

THE LEASE AND INSURANCE Depending on your size and scale, you may have a national or global policy. However, your lease will

Leases usually have a clause stating that the tenant must not interfere with the use and enjoyment of adjoining premises.

usually require you to provide insurance in accordance with the landlord’s requirements – including an insurer approved by the landlord and the insurance to be in the joint name of the landlord or such other persons as the landlord require. Check with your broker or insurer to make sure you are able to do this. Are you able to instead note the interest of the landlord? Consider carefully what your insurance will cover – for instance, will it cover plate glass or do you self-insure? Are you able to provide a copy of the insurer’s policy or only a Certificate of Currency of insurance? These questions are very important for you to consider and you must forward a copy of the insurance provisions to your broker or insurance company for their review to ensure you will not breach your lease, and to ascertain if any special conditions are required.

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AND THE MORAL TO THE STORY IS …? The upshot to all of this is that you cannot, in an attempt to get a leasing deal over the line, accept standard leases from a landlord if they don’t cater for the specific nuances of your business model. n Andrew Grima is a principal at Coleman Greig and head of the firm’s property team. Andrew has significant experience and expertise in retail and commercial leasing, including: assisting and advising both landlords and tenants in their negotiations; drafting leases and other related transactions including major leasing and construction projects.

FRANCHISE BASICS

HIDDEN FIGURES Rent isn’t the only cost you need to consider when signing a lease for a retail business.

ANGELO KONDOS LeaseWise

o you know what costs are entailed when you sign up to a lease?

The lease has one headline number: the rent. It is very important to realise that there are several recurring costs, some monthly, some annually and some at start-up of any lease that can make or break any business. The disclosure statement, which is provided before a lease can be finalised, is the best place to summarise and find all of the hidden costs.

SHOPPING CENTRE RENTS For the purposes of simplifying the exercise, I will use a starting rent of $100,000 per annum in a shopping centre scenario. Let’s assume the site is in a large shopping centre. The actual yearly gross rent will look as follows as the further inputs will be hidden within the documents: Rent: $100,000.00 plus GST Outgoings: $23,000 plus GST Marketing: $6800 Storage: $4500 (you decided you need separate storage, so this is tacked on) Rates: $10,500 Total gross rent: $144,800 per annum, $44,800 or 50 per cent more of add-on costs that can quickly creep up on a business if not accounted for.

SHOPPING CENTRE RENTS The further hidden costs in a shopping centre new store agreement that pop up as a once off when starting are: Design review fees: $3500 Consultancy review: $3500 Category 1 costs: $80,000 (average across food and general use for 100sqm. These costs are for work such as modifying airconditioning ducts, fire systems modifications, under-floor plumbing modifications.) These further costs above are rubbery and usually well hidden in documents referred to as a fitout guidelines manual. By referring to ‘the manual’ in the disclosure statement and lease, centre owners don’t actually disclose these costs, and this has the potential to ambush the uninitiated retailer. Often, the prospective tenant is so deeply committed to the store by this stage, they have little bargaining power. In summary, in the first year we have a rent of $100,000 which has quickly become a cost of $231,800, all prior to fitout and equipment.

STRIP SHOPPING RENTS Strip site locations are far simpler, however this does not mean hidden costs do not exist. The hidden costs encountered in strip shop (independent owner) locations

generally arise because the owner or agent is not across the details and obligations. In this scenario a summary might look like this: Rent: $80,000 Outgoings: $3500 (usually rates and building insurance) The difference with such properties is that if you modify building services (fire services, drainage and the like), you will pay real-world contractors for such costs, perhaps $20,000 in total on a like-for-like comparison to the example above. The problem with strip sites is that when they are not configured to accommodate particular services the landlord will wipe their hands, as it becomes a case of buyer beware. It is not unusual for costs like installing a grease trap, upgrading power and bringing gas to a site to quickly total $20,000 to $30,000. The other problem with these sites that adds to costs is that councils are cumbersome and slow and can cause massive delays, which ultimately is a hidden cost to the retail business. In summary, specific expert advice and representation from industry experts is the key to minimising these costs and ensuring a retail business does not become burdened by any hidden costs. n Ange Kondos is managing director at Leasewise, with clients such as Mrs Fields, Schnitz and Breadtop.

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FRANCHISE BASICS

INSIDER

KNOWLEDGE Could a retail leasing expert help get the right site? Here’s a quick guide to what the role involves.

ow does a retail franchisor source the data required to inform their site selection? Some rely on the expertise in their leasing team, while others choose to work with a retail leasing expert, someone with strong retail property market knowledge and the ability to adopt this knowledge in order to maximise returns for their retail client. Ange Kondos at LeaseWise explains what’s required from the role. “Extensive industry knowledge as well as a clear understanding of the individual client’s retail vision, including which market the retailer is trying to capture, will allow a leasing expert to secure the right location at a sustainable rent with incentives so that a healthy profit can be achieved,” he says. A retail leasing expert needs to understand how to put together a proper leasing strategy. Kondos outlines what’s involved: • An estimate of retail sales and footfall counts to a site, which are the primary barometers of measurement. • A credible expert will have an extensive network within each retail environment and will have information on other businesses for comparative research. • They will assist in defining who is the customer in your core market (demographics and psychographics), what their needs are and what their spending power is. Information is king, with the most

important information encompassing rents, performance data of other tenants in an environment, average spend, customer traffic flow etc. They will assist in defining who your primary competitors are, how are they positioned, what the strengths and weaknesses of their location are, and current performance. Credible leasing experts will have access to data that will also provide: • Current sales – by centre, by floor level, by merchandise category. • Rent/sales ratios – by centre, by floor level, by merchandise category. • Current rent – how does it compare to market? (This will require a market analysis.) • Strength and balance of the tenancy mix – merchandise category, percentages represented, quality of the anchors, appropriateness of store/unit sizes and configurations. (A proper mix analysis is required.) • Due diligence and advice on lease documentation, including any hidden trapdoor clauses with commercial interpretation, which can be different to legal interpretation. • Design and delivery: clients can find their program of works ambushed but a credible leasing expert will provide assistance throughout this process, all the way to store opening. “I am always asked by people what it is we do at LeaseWise. The detail referred to in this article describes the parameters we work with but I can simplify it even further. We are in the business of wealth creation and wealth preservation and our domain is retail,” says Kondos. n

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Extensive industry knowledge as well as a clear understanding of the individual client’s retail vision, including which market the retailer is trying to capture, will allow a leasing expert to secure the right location at a sustainable rent with incentives so that a healthy profit can be achieved.

FRANCHISE BASICS

TYING THE

RETAIL KNOT Your lease is like a marriage that has the divorce already factored in.

PHILLIP CHAPMAN Lease1

our retail lease is perhaps the most complex contract that a retail business relies upon as the foundation to the success or failure of the business.

Although the principles of rent in exchange for rights over land to market your wares has been around since BC, specific retail lease legislation is only 25 years old. In this short period of time landlords have become more sophisticated, resulting in retail property delivering consistently stronger returns than any other sector, even though the legislation was originally introduced to level the playing field. And as retail property investment has become more complex so too has the focus on retail leases, with the consequence being the technology, information and leverage gap between landlord and retailer has widened even further. Landlords (large and small) invest heavily in the strategic and financial management of their retail leases – it is no longer just about the asset (the bricks and mortar) management. It is far more sophisticated, with constant reviews and assessments to manipulate even higher and higher returns from the same bricks and mortar. The stark reality is that retailers invest virtually nothing in comparison – keeping the “lord” in landlord. Every lease has embedded within it contractual and operational events, not to mention essential clauses that are critical to your rights, ongoing operation and the

future of your retail business. Treating the lease (and more so the landlord) as part of the supply chain is a fundamental change needed in retailers’/ lessees’ mindsets before you can begin to influence the outcomes along the critical path of the lease. Some of the areas of influence that are mandatory to strategically managing your lease are: • The critical path – mapping the timelines and events with the lease and planning the lead times and resources required at each event to influence outcomes. • Benchmarking and key performance indicators (KPIs) – regularly reviewing and comparing against industry norms and reacting in a timely manner to align occupancy costs. • Procedures to deal with notices and day-to-day operational issues – who deals with these when you are not available? • Relationship management – keeping the communication professional and two way. So when thinking about your lease and the processes of first entering into it, and hopefully renewing while influencing the outcomes along the way, liken this to a marriage. Where at first the couple meet and commence courting, they get to know each other better and start to understand what each wants from the other, and hopefully they decide to formalise the relationship. Although there is much excitement

about what the new relationship can bring, soon the honeymoon is over and the stark reality sinks in. This relationship, much like the relationship with your franchisor, will have its rollercoaster moments. The best relationship emerges when both parties understand the need to work together. And as your business develops and grows, there’s the knowledge that there is a use-by date on this arrangement. If the landlord–franchisee relationship is stable and sturdy, despite the ups and downs, a renewal of vows could be a possibility – this of course is dependent on the other partner in this arrangement, the franchisor. Even if things get tense, though, it’s better to avoid a messy divorce. And that means managing better outcomes for the retail lease. The takeaway for anyone looking to enter or renew a lease, or buy a retail business, is to look beyond the current lease term and have a strategy for the next lease term, as this is where you will realise the true value and ROI of your business. And remember ... "Retailers don't get what they deserve … they get what they negotiate!" n Phillip Chapman is a retail industry expert with a specialist focus on the leasing challenges and opportunities faced by tenants in the retail sector. He is the founder and chairman of Lease1, Australia’s only national retail shop lease consultancy that provides a tenant-only representation service and a lease simulator MiLease – New Rules of Leasing.

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FRANCHISE BASICS

WHAT’S THE DEAL? WHAT FRANCHISORS CAN AND CAN’T DO! Code rules that govern franchising.

MICK KEOGH Australian Competition and Consumer Commission

n Australia, franchisors and franchisees are bound by the mandatory Franchising Code of Conduct. The Australian Competition and Consumer Commission is responsible for regulating compliance with this code. The Franchising Code gives prospective and current franchisees certain protections and promotes standards of behaviour in their dealings with a franchisor.

However, each franchise system also comes with its own individual contract that sets out the franchisor’s rules about the operation of the business. This is called the ‘franchise agreement’. Like any contract, the franchise agreement can be lengthy and complex, but it’s important that you dedicate the time and resources to understand what it means for you. Knowing what each party can and can’t

do will help you to assess whether a particular business venture is right for you. The ACCC is often contacted by franchisees who are concerned about whether their franchisor has the power to act in a certain way. We have compiled a list of key things a franchise buyer should be aware of before putting pen to paper.

THE FRANCHISOR DOESN’T HAVE TO PROVIDE YOU WITH AN EXCLUSIVE TERRITORY Some prospective franchisees are under the impression that they will automatically have an exclusive territory and won’t have to worry about competing with other franchisees. However, the franchisor is not required to provide you with an exclusive territory. Your franchise could be limited to the particular

site you will occupy or you could have a non-exclusive territory that other franchisees may operate within. The franchise agreement might also allow the franchisor or its associate to operate within this territory. Check the disclosure document provided by the franchisor to see: whether you have a territory and if it’s exclusive. It’s also important to consider how current and future competitors in your market may affect the viability of the business venture.

THE FRANCHISOR CAN GENERALLY REQUIRE YOU TO PURCHASE GOODS OR SERVICES FROM SPECIFIC SUPPLIERS1 The goods and services that your franchisor requires you to purchase may be cheaper than what you could independently

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FRANCHISE BASICS

acquire – but they may not. In addition to making your own enquiries, you should speak to other franchisees to ask whether they are happy with the cost, quality and functionality of the goods or services provided. The franchisor’s disclosure document will set out whether there are restrictions on who you can source goods or services from, and will include contact details for current and former franchisees.

THE FRANCHISOR DOESN’T HAVE TO SPEND MARKETING MONEY ON YOUR SPECIFIC SITE OR TERRITORY Your franchise agreement may require you to pay a fee to cover marketing or advertising activities undertaken for the franchise system. Although the Franchising Code places some important limits on how the franchisor may spend this money, it doesn’t require the franchisor to spend it on activities that will directly benefit your business. Read the disclosure document to find out what types of activities the franchisor can use marketing funds for.

THE FRANCHISOR CAN’T MAKE YOU PAY SIGNIFICANT CAPITAL EXPENDITURE The Franchising Code prohibits franchisors from requiring franchisees to undertake significant capital expenditure, unless it meets the requirements of the Code. What qualifies as ‘significant’ will vary depending on the circumstances but could include new equipment, store upgrades or a new vehicle. If you agree to incur this expense, then this prohibition won’t apply. It also will not apply if this expenditure: • was disclosed in your disclosure document • will be incurred by all or a majority of franchisees and a majority of those franchisees approve the expense • is required in order to comply with legal obligations, or • is considered necessary by the franchisor as a justified capital investment in the franchised business. Check the disclosure document to find out about ongoing and one-off expenses that you will be expected to incur as part of the franchise. You should speak to an accountant and a business advisor to prepare financial modelling to help you work out whether the business is viable in the short and long term.

The fact that you may have been granted the right to operate your franchised business for a set period of time is not a guarantee that your franchise can’t come to an early end.

THE FRANCHISOR CAN’T KEEP ALL OF YOUR DEPOSIT IF YOU EXERCISE YOUR COOLINGOFF RIGHTS Did you know that you’re entitled to terminate a new franchise agreement (but not a renewal, extension or transfer) within seven days of entering into the agreement or making a payment under the agreement (whichever happens first)? If you change your mind and exercise this cooling-off right, the franchisor must provide you with a refund of the payments you have made within 14 days. However, the franchisor can deduct its reasonable expenses (as set out in the agreement) from this refund.

THE FRANCHISOR CAN TERMINATE YOUR AGREEMENT IN CERTAIN CIRCUMSTANCES The fact that you may have been granted the right to operate your franchised business for a set period of time is not a guarantee that your franchise can’t come to an early end. Franchisors commonly include terms in their agreements that allow them to terminate franchise agreements in certain circumstances. You should check the termination clauses in the agreement provided to you to make sure you’re willing to accept them. Under the Franchising Code, a franchisor must generally follow certain processes if they propose to terminate your agreement. These processes will usually require the franchisor to provide you with reasonable written notice of its intention to terminate. You should be aware that special circumstances might be listed in the

franchise agreement which allow a franchisor to terminate your agreement with immediate effect. For example, if you no longer hold a licence needed to carry on your business; you abandon the franchise; or you’re fraudulent in operating the business.

THE FRANCHISOR CAN’T MAKE YOU SIGN A WAIVER OF PROMISES MADE TO YOU A prospective franchisor might make certain claims when speaking to you about: • how much money you will earn • how much other franchisees have earned, or • the level or type of support the franchisor will provide to you. Under the Franchising Code, the franchisor cannot require you to sign a waiver regarding any verbal or written claims made by them. If certain promises are made to you when speaking to the franchisor, ask them to confirm it in writing.

BEFORE BUYING A FRANCHISE It’s important to know what you’re signing up for. Before deciding whether or not to purchase a franchise, invest time into assessing whether that business venture is right for you. If you don’t understand something in the documents that you’ve been provided – ask the franchisor or your professional advisor for more information. If you’re dissatisfied about particular parts of the agreement, consider whether this really is the business for you. FranchiseED delivers a free pre-entry franchise education program to help you assess franchise business opportunities. You can also visit the ACCC’s website at www.accc.gov.au for a range of educational resources on franchisors’ responsibilities under the Franchising Code. The information in this article is for guidance purposes only and does not constitute or substitute for legal advice. When considering a franchise opportunity, seek advice from a lawyer, accountant or business advisor with franchising expertise. n Mick Keogh is deputy chair of the ACCC.

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FRANCHISE BASICS

WAYS TO SECURE

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SITE Pick the top spot for a franchise business and pay the right price.

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1. UNDERSTAND THE BRAND’S CUSTOMER BASE A passion for the brand you are about to invest in needs to be balanced by clarity about who the customer is, why he or she buys the product or service, and the best way to deliver it. Consider whether the customer base of the locale you are researching has a home-grown demographic that meets the business needs, or whether customers will be travelling to the destination. If so, can they easily access the outlet? Are there neighbouring businesses that will help attract and keep your target customer?

2. REVIEW CUSTOMER TRAFFIC FLOW There are statistics available from shopping centres on their traffic flow, but nothing beats being on the ground and observing for yourself when and how customers access a business, whether or not they purchase, and the length of time they spend on site. It’s worth investing the time to do some solid research on this.

A seemingly top spot can reveal its weaknesses when you look at whether or not customers are drawn to the business or walk straight past – and the reason why.

will the landlord’s demands on how the outlet looks fit with what the brand requires?

3. EVALUATE RENTAL COSTS

Turn to the experts for help in picking the right site. Many franchisors will want to be involved in the site selection or have a team that can suggest appropriate locations. There are leasing agents who can help negotiate good rental deals. Lawyers and accountants can review the relevant documents and offer feedback on the viability of any deals. Other franchisees within the brand might also offer their tips on why their locations work – or why they don’t – and how to avoid paying so much for a property that you can’t get a return on your investment. n

If all the research points to a good position for the business then it’s time to number crunch. On top of the rent there may be initial fitouts to pay for. Landlords can be flexible over costs and can offer rent-free periods, for instance, but it’s crucial to take an objective view on whether or not the costs can be easily met by the business you will be operating.

4. CHECK LEASE TERMS It’s ideal if a franchise term and lease agreement coincide. Investigate the lease renewal terms, any extra costs, and what you will have to make good when you leave the business. Will the landlord demand refurbishment of the site after a number of years? If so, when is that due? If this is a brand new site,

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5. SEEK ADVICE

FRANCHISE BASICS

BUYING A FRANCHISE:

THE PROCESS It can take three months or 18 months to find and open up a franchise. This is the typical path that will take you to franchise ownership.

MAKE AN INQUIRY

CONDUCT DUE DILIGENCE

Fill out an inquiry form or phone the recruiter for further details of the franchise opportunity that appeals.

This is a crucial stage, so take your time and be thorough in your research. You will need to sign a document confirming that you have received independent advice, or that you have decided not to do so. Obtaining expert opinion from franchiseexperienced professionals can save you money in the long term, so it is a worthwhile investment.

FRANCHISOR RESPONDS If you have emailed an inquiry, typically a franchisor will send out an information pack to you, and follow this up with a phone call.

FIND OUT MORE Fill out an inquiry form or phone the recruiter for further details of the franchise opportunity that appeals.

CONFIDENTIALITY The franchisor will ask you to sign a confidentiality agreement before sharing sensitive information with you. Expect a copy of the disclosure document, draft franchise agreement and the Franchising Code of Conduct, plus an information statement. Your franchisor might also send more commercially sensitive information to help you consider the viability of the franchise opportunity and build your business plan.

FIRST MEETING This is the time you will get a much clearer idea of the business, and the franchise team you will be working with.

PROVE YOURSELF You will need to create a business plan and show to the franchisor you have the capacity to take ownership of and drive this particular franchise unit. A follow-up meeting will enable you to ask further questions following on from your due diligence, and for the franchisor to further quiz you.

OTHER STEPS Some brands can include a number of interviews, try-before-you-buy work experience or a panel review. The franchisor might ask you to complete a profiling assessment.

DONâ&#x20AC;&#x2122;T RUSH IT The process to get from inquiry to sign-up could be a matter of weeks, or it could be months. Buying a franchise is a significant, long-term commitment. It is important not to rush the process.

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THE

INFLUENCERS Who will be driving the business that you invest your hard-earned dollars into?

hat influence will the franchise team have over your future? Here we look at key roles in a larger franchise business that will be shaping the direction and operation of the network. Not every business will include each role and in a small franchise set-up the franchisor will be wearing several, or all, of these hats. CHIEF EXECUTIVE OFFICER/ MANAGING DIRECTOR: : The top ranking executive in a company, the CEO is focused on directing high level company strategy and growth. In a smaller company, the CEO’s role includes operational business decisions and they may be much more hands-on on a daily basis. In a larger business the CEO may have a position on the company’s board, and act as the link between corporate operations and the board of directors. The founder of a franchise typically takes a CEO role. CHIEF OPERATING OFFICER/ OPERATIONS MANAGER: A COO/ operations manager essentially works with the CEO to implement the strategy, making the decisions on how to achieve the goals set out. The role is typically responsible for daily operations, production, research and development, creating operational policies, and HR. The operations manager can influence the franchise business performance through resource allocation, cost reduction, improved efficiencies, the introduction of high quality products and services. In a franchise where the founder is the CEO, the COO may be the more experienced executive.

manages its finances, investments, and capital structure and is influential in the company’s long term success. Any funding for marketing or development initiatives will be approved by the CFO. The CFO manages the finance and accounting divisions and takes responsibility for the accuracy and timeliness of the company’s financial reports. CHIEF INFORMATION OFFICER : A CIO has responsibility for the implementation, management and efficacy of information and computer technologies, vital in today’s digital world. It’s the CIO who will investigate the benefits of any proposed technological change, and then implement the system - a website or inventory software, for instance. The role is increasingly strategic and directed to gaining and maintaining the competitive advantage of a business. CHIEF MARKETING OFFICER: The CMO is essentially charged with increasing revenue through increased sales using market research, product marketing, pricing, marketing communications, advertising and public relations. Responsible for directing the planning, development and implementation of the franchisor’s marketing and advertising campaigns, ensuring a common message across multiple channels and platforms, the CMO reports directly to the CEO. GENERAL MANAGER: A general manager has overall profit and loss responsibility for the company, and usually oversees sales, marketing and daily business operations. The responsibilities of the role may be incorporated into a CEO role.

CHIEF FINANCIAL OFFICER: This senior executive reports to the CEO but plays a strategic role in the way the company

FRANCHISE RECRUITMENT MANAGER: The franchise recruitment manager is responsible for attracting franchise buyer enquiries and for the recruitment

selection process, increasingly working with managers from other divisions and the CEO or MD in the final selection. The franchise recruitment manager needs to meet internal recruitment targets and ensure franchisees are a match for the franchise brand. BUSINESS DEVELOPMENT MANAGER/ FIELD MANAGER: Variously called a BDM, regional manager, field or area manager, this role is the interface between the franchisee and franchisor. Responsibilities include helping franchisees achieve their business goals, ensuring brand compliance across the network, communicating brand direction and strategy to franchisees. TRAINER: The person or team who will set up a franchisee to run the business. Responsibility for training may fall under operations or general management. Training may involve technical skills, customer service, business basics, and operational procedures. The trainer may train franchisee staff. PR AND COMMUNICATIONS: How the brand is presented in the media, how the brand engages with social media, how brand damage is mitigated... all these are influenced by the team that handles PR and corporate communications. This may be an internal team or an external agency. SUPPORT TEAM: The individual employees at head office who manage, monitor and deal with queries, requests and complaints from franchisees. FRANCHISE ADVISORY COUNCILLOR: A franchisee member of the Franchise Advisory Council which is typically involved in providing frontline feedback from franchisees to the franchisor, and in assessing and trialling new initiatives.

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FRANCHISE BASICS

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?

Have you evaluated the financial returns?

What are the store fit-out costs?

Do you know what it is like to be a franchisee?

If you are buying a greenfield (brand new) site, do you have sales and profit examples and know the method behind the calculations?

Are you working within a territory? If so is the area exclusive?

Do you have an exit plan?

Do you know all the expenses franchisees are required to pay?

Are you restricted in your product purchase?

Have you spoken to former and current franchisees about the business?

What royalties are there and how are they calculated?

Are you required to reach a minimum performance level?

What restrictions are there on the franchisee and guarantor operating a similar business?

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RESOURCES AUSTRALIAN COMPETITION AND CONSUMER COMMISSION (ACCC)

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.

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.

Visit: WWW.FRANCHISEBUSINESS.COM.AU

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

FRANDATA 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. 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.

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

Visit: WWW.FRANDATA.COM.AU

FRANCHISE.ED Franchise.ED (previously Asia-Pacific Centre for Franchising Excellence) was created to help people find independent information and research on franchise best practice. FranchiseED is a Not for Profit which provides education to encourage best practice; provides consultancy services; and provides access and dissemination of quality franchise research. The revenue generated by these programs will help support the social enterprise programs of FranchiseED. It extends upon the work undertaken previously by the Franchise Centre at Griffith University with the transformation into FranchiseED.

FRANCHISE COUNCIL OF AUSTRALIA

Visit: WWW.FRANCHISE-ED.ORG.AU

The FCA is the main body for representing franchisees, franchisors and service providers in the $146bn franchising sector in Australia.

THE FAIR WORK COMMISSION

Becoming a member of the FCA is a voluntary and is available for any organisation or anyone involved in the franchise industry including franchisees.

Fair Work Commission (the Commission, previously called Fair Work Australia) and the Fair Work Ombudsman (FWO) are independent government organisations that regulate Australiaâ&#x20AC;&#x2122;s workplace relations system but have different roles.

Visit: WWW.FRANCHISE.ORG.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.

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

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FRANCHISE OPPORTUNITIES STRAIGHT TO YOUR INBOX.

INSIDE FRANCHISE BUSINESS

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

MAY/JUNE 2018

ISSUE 31 VOL 3

MAY/JUNE 2018

FAST AND FURIOUS The quick-ﬁx gym trend

Franchise ﬁnance essentials

AUS $6.95|NZ $7.95

PR I N T P O S T A PPR OV E D 10 0 0 0 8121

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1300 LOCATE

1300 562 283

pipe & cable locators asset protection

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

Phone: 1800562283 Contact: Jason Kelly Franchising@1300locate.com.au www.1300locate.com.au Start up costs: Enquire

PROFILE:

Start up costs: $400,000 to $1,000,000

1300LOCATE offers a comprehensive service specialising in Subsurface Utility Locating and Mapping for the Australasian Engineering and Construction industries. As the Business owner you will have three (3) different revenue stream to maximise your income potential covering Underground Utility Locating, Vacuum Excavation and Pipe CCTV Survey. To maximise the growth of your business and creating future stability opportunities cover large areas of metropolitan and/or rural locations around Australia. Business Opportunity numbers are caped around Australia and there are opportunities around the greater Australasian area available upon request.

PROFILE: 7-Eleven is the largest convenience and independent petrol retailer in Australia with more than 670 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

Contact: Brett Turner Brett.turner@anytimefitness.com.au www.anytimefitness.com.au/own-a-gym/

Phone: 0412511630 Contact: Kevin Bugeja kevin@franchise4u.com.au www.aquariumgallery.com.au

Start up costs: $350,000- $450,000 PROFILE: Anytime Fitness is Australia’s biggest gym community, with over 500,000 members and 490+ clubs nationwide. With a 24/7 concept, alongside PT’s, Roar 30 and the Anytime Workouts app, we’re getting Australians moving for a fitter and healthier future. When you join the Anytime Fitness family, you’re investing in much more than a gym, you’re joining a fitness movement full of like-minded entrepreneurs. We topped our category in Entrepreneur Magazine’s Franchise 500 list, based on our financial strength and stability, growth rate and size of our system. We have over 3,300 clubs in 26 countries. That means an unrivalled support network to draw on, from dedicated franchise coaches and national marketing teams, to a wealth of online tools and training. As an Anytime Fitness franchisee, you’ll have the support of Australia’s largest health and wellness franchise group, Collective Wellness Group (CWG), to guide and support you every step of the way.

Start up costs: 300K-400K PROFILE: Aquarium Gallery is not your traditional pet fish shop. Think of a high standard specialty aquarium. Yes, an “Aquarium Gallery” which includes fish, aquatic plants, corals, natural aqua-scaping materials along with, of course, the best equipment and accessories to enable anyone to enjoy the wondrous beauty of aquatic life in their own home or office. We offer the customer a truly comfortable retail experience, from the moment walk in they begin their journey into the amazing and inspiring aquarium world because we pay specific attention to every detail resulting in healthy, beautiful and sustainable aquarium life. If you love the beauty of aquatic life we will show you how you can turn your passion into a business and be proud of yourself, what you do every day you are at work and make money doing it.

Phone: 1800 219 512 Fax: 1800 460 819 Contact: Peter Warwick peter@artofaquaria.com.au www.artofaquaria.com.au

Phone: 1300 287 669 Fax: 1300 795 287 Contact: Steve Wren steve@ats.com.au www.appliancetaggingservices.com.au

Start up costs: $45,000 to $200,000

Start up costs from: $52,000 + GST

PROFILE: How About A Business Opportunity Which Generates Serious Profits And An Attractive Lifestyle Art of Aquaria are in the process of releasing a number of territories with established client bases so that you can choose to either walk straight into a cash generating business or build up your own greenfield territory. Are you looking for a business that you can operate by yourself with the support of a fun and dedicated team? Are you seeking a growth industry where you can follow your passions and shape your own destiny? If you share our passion for acquaria and think you have what it takes to be part if our team, we want to hear from you!

Phone: 07 5509 0000 Contact: Mark Crapper franchise@australianskinclinics.com.au australianskinclinics.com.au/franchise

PROFILE: Australian Skin Clinics was founded in 1996 and is one of Australia’s leading cosmetic clinics focused on Skin Rejuvenation, Cosmetic Injectables, Laser Hair Removal and Fat Reduction. With up to 58 clinics nationally Australian Skin Clinics has empowered over 2 million people to look and feel proud of their reflection. Franchisee’s gain access to a turnkey operation supported by a nationally recognised brand. All training is provided via The Advanced Skills Academy, owned and operated by Australian Skin Clinics; covering all areas of running a successful clinic. This is your opportunity to join the fastest growing sector in retail!

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 56 franchisees grow profitable and successful businesses.

A-Z 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.

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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A-Z LISTINGS

Phone: +61 474 278 485 Contact: In Australia: Carsten Brink (Business Development Director for Asia-Pacific) franchise@boconcept.com Boconcept.com/franchise

Phone: 1300 309 759 Contact: Franchise Recruitment Team franchise.recruitment@bakersdelight.com.au www.bakersdelight.com.au/franchise/

A-Z LISTINGS

Start up costs: Around $600.000 AUD

PROFILE: Bakers Delight are an Australian iconic brand. We’ve been baking bread since 1980 and currently have over 550 bakeries across Australia, Canada and New Zealand. We are the largest Bakery Franchise and a household brand name. At Bakers Delight we offer a large variety of back end business support, including: • Business Operations • Marketing

• Human Resources • Property

• Projects • Purchasing

• Information Support • Full Training

If you have the passion and drive to be the local face of a bigger brand. Take the first step and contact our team to learn about any local business opportunities available within your area.

PROFILE: BECOME OUR NEW FRANCHISE PARTNER JOIN A GLOBAL FURNITURE DESIGN BRAND, OFFERING A STRONG RETAIL FRANCHISE CONCEPT From Denmark to the world since 1952, BoConcept is the brand name of Denmark’s most global retail furniture chain, specializing in premium quality interior design for the urban-minded customer and creating outstanding modern and sophisticated living spaces at affordable prices. BoConcept has grown its global presence through a unique strategic market positioning.

Phone: 03 9508 4409 Fax: 03 9508 4499 Contact: Boost Franchising boostinfo@retailzoo.com.au www.boostjuice.com.au

Boost Juice has come a long way from its humble beginnings but one thing hasn’t changed – our commitment to health, fun and loving life. Our partners are provided with an abundance of support and we strive to innovate and develop in all facets of the business. Take the steps to join one of Australia’s most loved brands today!

Our business model and core competencies are applied throughout the value chain from design, branding and marketing to production, logistics, sales and customer service, to optimize the overall sales performance in the stores. The strong toolbox and support within all areas of business and retailing makes the setup and management of a BoConcept store straightforward. Therefore, most of our partners own multiple stores.

Phone: 1300 659 676 Fax: 1300 659 675 Contact: Dan Toms customerservice@cashflowit.com.au www.cashflowit.com.au

Start up costs: $280,000 - $450,000 + GST PROFILE: Boost Juice is an Australian franchise success story. Founded by adventurer and entrepreneur, Janine Allis, the brand has taken its winning combination of healthy fresh fruit, blended and squeezed into delicious smoothies and juices to open over 485 stores across the globe.

With over 25 years of franchise experience, and 265 stores in 65 countries, our franchise model is a proven, strong and award-winning concept.

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.

Phone: 03 8727 9999 or 13 80 90 Fax: 03 9729 3266 Contact: Dirk Heinert dirk.heinert@clarkrubber.com.au www.clarkrubber.com.au

Phone: 1300 131 888 Contact: Hannah Giang Email: franchise.recruitment@dominos.com.au Web: www.dominosfranchise.com.au

Start up costs:

Start up costs: $450,000 - $600,000 + GST

From $ 420,000 + GST (including stock) Clark Rubber Store From $ 147,500 + GST (including stock) Clark Pool & Spa Shop From $ 49,500 + GST (including stock) Clark Pool Service territories

PROFILE: Clark Rubber is a well-known and iconic Australian business, and has been a part of the retailing landscape for over 70 years. Clark Rubber commenced franchising in 1995 and since then has grown its store network with 60 locations nationwide. In 2006 Clark Rubber was awarded the prestigious ‘Franchisor of the Year’ honour by the Franchise Council of Australia, and today, Clark Rubber is Australia’s leading foam, rubber and pool retailer. Clark Rubber offers a unique business proposition which includes business development, site selection and fit out assistance, comprehensive training and ongoing local area marketing and IT support.

PROFILE: Domino’s is not just Australia and New Zealand’s leading pizza brand – it’s also one of the world’s most advanced digital retailers and an undisputed leader in online ordering with Australia and New Zealand’s most advanced mobile ordering apps, pizza creation app and only real-time pizza tracker. Being a part of the Domino’s family is a rewarding way to take control of your own personal wealth and be your own boss. You’re not only joining Australia’s largest food chain but a community of passionate, excited entrepreneurs. There has never been a better time to join the Domino’s family. Enquire now to receive your copy of our Domino’s franchise information booklet.

Phone: 02 9432 5054 Contact: franchise@ellabache.com.au www.ellabache.com.au

Phone: 1300 884 165 Phone: 0421 644 661 Contact: John Stanton john.stanton@fibonaccicoffee.com.au fibonaccicoffeefranchising.com.au

Start up costs: $150,000 - $350,000

Start up costs: minimum of $100,000 PROFILE:

PROFILE:

Now in our third generation of family ownership, Ella Baché boasts the country’s largest beauty franchise network with our products and services available in over 170 salons nationwide. As a proven franchise model, we invite you to experience the success of an established, market leading skincare brand that is constantly evolving through product research, advanced techniques and commitment to education.

Fibonacci Coffee is a fresh new cafe concept in the Australian coffee landscape. Started as a family business Fibonacci Coffee keeps on building on those traditional family values. Embracing and promoting innovation in the everevolving cafe industry. Encouraging positive community impact, and providing mouthwatering food offering with flexible menus. Designed with a Co-op concept in mind we provide a platform where partners can contribute and share their ideas as well as learn and support others. Fibonacci Coffee is all about helping entrepreneurs to prosper.

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Phone: 02 8845 0100 Contact: Franchise Development Manager franchise@gelatissimo.com.au www.gelatissimo.com.au

Contact: Rebecca Hull fitstopfranchise@fsfitness.com.au www.fsfitness.com.au Start up costs: $150k – $200k

Start up costs from: $280,000

PROFILE: The launch of our first functional training facility in 2014, Fitstop has worked to educate and connect with people who want to get fit, stay fit or find fit. Our results driven, lifestyle inspired programs are designed to suit everyone from the elite to those with no athletic background, or those who have adopted unhealthy lifestyle habits. In 2017 the Fitstop Franchise was founded with the dream to help business owners share their passion with their members in their own facility. We pride ourselves on creating a space where the experience more than just a training session, its a community!

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.

Phone: 07 3357 62 70 Contact: Warren Ballantyne warren@guttervac.com.au www.guttervac.com.au Start up costs: $79,000 + GST + freight PROFILE: Gutter-Vac is an innovative cleaning franchise using revolutionary vacuum equipment to quickly and effectively clean corporate and domestic gutters, roofs, ceiling spaces, rainwater tanks, storm water sumps and much more. Gutter-Vac is now the largest gutter vacuum cleaning network in the world. The Gutter-Vac network includes 80+ franchises across 7 states and territories including Queensland, Victoria, New South Wales, ACT, South Australia, Western Australia and Tasmania. Gutter-Vac now has an international brand “Outback GutterVac” based in Atlanta Georgia, USA. Gutter-Vac is a proven model that provides a lifestyle or entrepreneurial business. A Gutter-Vac franchise is an exciting and promising small business opportunity that is constructed upon a reliable foundation of simple, innovative and effective equipment, systems and procedures.

PROFILE:

Start up costs: CIRCA $50,000 - $70,000

There is nothing quite like The HIIT Factory. We are the revolution in true fast fitness. We are more than a gym, we are a community of awesome people doing incredible things. We specialise in High Intensity Interval Training, with sessions only 30 minutes, and many using only bodyweight, delivering big results for clients, in a fun supportive environment. We have a number of franchise opportunities around Australia, with 10 new locations planned for the next 12 months. Benefit from a hugely successful model with a strong brand following in market. Low Set up costs, low overheads and great ROI + very generous territory. What are you waiting for, get in touch today and let’s make some magic.

Phone: 1300 658 311 Contact: Bill Lockett info@homecaringfranchise.com.au www.homecaringfranchise.com.au

Contact: Keith Knapp info@ibeconnect.com ibeconnect.com

Start up costs: $75,000 - $150,000

Start up costs: $10,000

PROFILE:

Home Caring provides an opportunity to be part of one of the fastest growing sectors in the Australian economy – disability, aged and dementia care. As the population ages, it is anticipated that the number of people over 65 will double in the next 30 years and the number of people accessing the NDIS will grow from 140,000 to over 500,000. Proudly Australian owned, Home Caring provides professional and compassionate personalised care services in the home and is seeking community minded franchisees who can build a solid financial future combining their local networks and the national marketing of the Home Caring and Dementia Caring brands. Home Caring is offering a limited number of locations in a joint venture arrangement, enabling more people to become involved in the industry at a lower entry cost. Full training and support is provided to ensure a successful, profitable partnership.

By partnering with IBE Connect we connect you with the best tools, resources and connections that specialize in working with businesses coming into the US. Connections such as national distribution networks, legal representation, accounting, media networks, and much more. Visit us online at IBEConnect.com to find out more.

Start up costs: $290-$350K +GST approximately

Start up costs: $64,950 + 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, Startrack and TNT to offer a complete suite of courier and freight solutions, providing increased value and service, saving valuable time and money. Operating in 14 countries with over 350 franchisees globally, InXpress is now accepting applications to grow the Australian business. Benefits to franchisees include: • Low entry costs • Low Overheads • No inventory/warehousing

IBE Connect is your first choice in expanding your business to the United States. Our successful model has helped franchises of multiple industries expand by helping get their products and services compatible with the US Market.

Phone: +61 402 171 399 Contact: Liz Seeto franchising@laserclinics.com.au www.laserclinics.com.au

Phone: 1300 097 857 Contact: David Wilkinson sales.au@inxpress.com inxpress.com.au inxpress.com.au/franchising

• Work from home • High income potential • Ongoing training and support

For more information about becoming an InXpress franchisee contact us now. *conditions apply

Phone: 0449908727 Contact: Colette McShane and Gary Arnstein colette@thehiitfactory.com.au gary@thehiitfactory.com.au franchise@thehiitfactory.com.au www.thehiitfactory.com.au

PROFILE: At Laser Clinics Australia & New Zealand, our vision is to provide affordable, effective and safe non-invasive cosmetic treatments. Since 2008, Laser Clinics Australia has grown to be the largest provider globally of laser hair removal, cosmetic injections and skin treatments. Laser Clinics Australia & New Zealand is an award-winning business with over 100 clinics in Australia and launching in New Zealand. Laser Clinics Australia & New Zealand 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 & New Zealand. 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.

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A-Z LISTINGS

Phone: 07 55 327071 Contact: Michelle Christensen franchising@lonestarribhouse.com.au lonestarribhouse.com.au

Phone: 02 9651 3444 Contact: Dom Galluccio franchise@lockandroll.com.au www.lockandroll.com.au

A-Z LISTINGS

Start up costs: Circa ($100k) PROFILE: Lock & Roll has a great opportunity for you to secure your future and become a part of an exciting venture with strong rewards and real growth opportunities. We are a specialist window and door repair, maintenance & upgrade service for domestic and commercial property owners and managers.

PROFILE: With smiles as wide as the sky, the Lone Star Rib House offer a stimulating and energetic dining atmosphere, and a taste as big as Texas! With franchise opportunities across Australia, the Lone Star Rib House offers a proven business model with robust operations, training systems and support.

With the increasing demand for our services, Lock & Roll is looking for dedicated and customer focused people to become franchisees. We will be able to show you how you can earn a strong rewarding income and ultimately be your own boss with an opportunity to grow a business that fits into your desired lifestyle.

Phone: 02 8115 9550 Contact: Phillip Blanco franchising@madmex.com.au www.madmex.com.au

Phone: 1800 625 677 Contact: Sales Enquiries info@majorsgroup.com.au www.majorsgroup.com.au

Start up costs: $375,000 to $550,000 PROFILE: As a thriving fast casual food brand with a strong growth strategy, we are actively seeking new franchise partners. Our menu is influenced by fresh, Baja-style Mexican food made with authentic ingredients true to our roots. We’re focused on leading the way in tasty, fresh and healthy with the freshest produce available, food made fresh every day and allowing our customers to tailor their meals to personal tastes and dietary requirements or health trends. If you have the drive to lead the way with fresh authentic Mexican flavour, a passion to utilise your past business knowledge & skills to deliver an outstanding customer experience, all with a cheeky grin, then this journey is for you! Become your own Head Honcho at Mad Mex, enquire today!

PROFILE: Majors Group have been specialising in the distribution of ice cream, gelato, frozen yoghurt, granita equipment, commercial refrigeration and all related products throughout Australia, New Zealand, South East Asia and the Pacific region for over 25 years. Majors group offers the best value, quality products, and excellent service to all of our customers. Majors Group is known for our innovation, efficiency and sustainability. Majors Group is committed to ongoing training and promotions for all our staff and customers to deliver the finest service and support for all. Majors Group is the one stop shop for everything delicious. We offer consultation, training, equipment, ingredients, finance and service solutions to suit your business

Phone: 02 9472 8555 Contact: Peter Elligett info@mrsfields.com.au www.mrsfields.com.au

Phone: 03 9604 9400 Fax: 03 9600 3313 robert@mmrb.com.au www.marshmaher.com.au

Start up costs: From $199,000 + GST PROFILE: Well recognised and published franchise specialist with over 30 years industry knowledge and experience. Providing advice to: 1. International Franchisors and Franchising. 2. Master Franchising. 3. Dispute Resolution – Solutions and Strategies

4. 5. 6. 7. 8.

Franchisee Advice and fixed fee reports. Sale/ Purchase of franchise systems. IP/ Trademark advice. Company structures and tax advice. CCC and Consumer Law advice.

A-Z We provide clients fixed fees based on the scope of work. Contact Robert Toth on (03) 9604 9400 or by email at robert@mmrb.com.au

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

PROFILE: Mrs. Fields Bakery Café is more than a Café… Mrs. Fields is all about making people feel good through simple, special moments. Whether it be nibbling on a softbaked cookie, enjoying an award-winning coffee, roasted exclusively by Mrs. Fields or sitting down to grab a bite for lunch – whether it be a toastie, a pie or any of our other savoury offerings… we want to serve up moments made better, every time. We have a number of delicious franchise opportunities available around Australia, so if you’re ready to call the shots and run your own Mrs. Fields Bakery Café, contact us today.

Phone: 07 3088 1232 Fax: 07 3088 1212 Contact: Holly Usher holly.usher@nightowl.com.au www.nightowl.com.au Start up costs: $300,000 - $650,000 PROFILE: NightOwl is a national convenience franchise system established in 1975 as Australia’s first 24 hour trading Convenience retail business. First franchised in 1987, we have never stopped growing and with an exceptionally strong brand presence, we now operate over 70 stores throughout Queensland and New South Wales. Retail experience is not necessary in running a NightOwl, but motivation and entrepreneurial skills are a must. You must be determined to succeed and the Franchisee Support Office will help you with the rest. We are seeking motivated and hardworking franchisees with a determination to succeed!

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Phone: 03 8851 4200 Fax: 03 8851 4277 Contact: Michael McNamara franchise@noodlebox.com.au www.noodlebox.com.au/franchise

Phone: 0413 546 565 Fax: 8 5095 456 Contact: Marc franchise@nirvanabeauty.com.au www.nirvanabeauty.com.au 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.

Start up costs: $175,000 - $200,000 PROFILE: At Noodle Box we believe in the power of the mighty wok. To transform a humble kitchen into a fiery theatre. And transform the simplest ingredients into a feast that’s out of this world. Noodle Box started life in 1996 on the back of a vision of two adventurous young Aussies who were amazed by the fiery theatre and the incredible wok-charred flavours of Southeast Asia’s hawker markets. They brought their experience back to Australia and worked with the best wok chefs in the business to bring new life to traditional recipes and satisfy Aussie tastes. Today, Noodle Box restaurant numbers continue to grow, strengthening our position as Australia’s leading Noodle-based franchise system. And while this growth has been fueled by continuous investments in our brand, our products and our systems, our success is due to the ongoing dedication and loyalty of our Franchise Partners. With franchise opportunities available nationwide, there’s never been a better time to join the Noodle Box family. Noodle Box – Wok Inspired, Market Fresh

Phone: (07) 3625 400 Contact: Ralph Marks franchising@novusautoglass.com.au www.novusautoglass.com.a

Contact: May Chang, National Franchise Sales mchang@orangetheoryfitness.com.au marketing.orangetheoryfitness.com/franchisees-int/ Start up costs: Please enquire

Start up costs: $40,000 PROFILE: Novus Glass invented Windscreen Repair Technology. A Novus Glass franchise enables you to go into business for yourself, but not by yourself. Novus Glass is an international brand with over 55 locally owned and operated franchise territories across Australia. Novus Glass also replace windscreens and all other auto glass components. Novus Glass offers a complete franchise package covering everything from initial Technical Training through to Ongoing Marketing and Operational support. Novus also offers its franchisees access to its unique patented products, equipment and specialty resins. Enquire today about owning your own Novus Glass franchise – The Clear Choice for Windscreen Repair and Replacement.

Phone: 1800 245 447 Email: joinourteam@poolwerx.com.au Web: www.poolwerx.com.au

PROFILE: Orangetheory Fitness is one of the world’s fastest growing franchises with 1000 studios open across 18 countries and zero studio closures globally. We’re growing rapidly across Australia but there are still some prime territories available. Orangetheory is a one-of-a-kind, group training experience that uses heart-rate based interval training to promote maximum calorie burn. Every single workout is scientifically developed and approved by a Medical Advisory Board to ensure it remains 100% results oriented. As an Orangetheory Fitness franchisee, you’ll have the support of Australia’s largest health and wellness franchise group, Collective Wellness Group, to guide and support you every step of the way.

Phone: 1800 809 913 Fax: 03 8699 1555 Contact: Anna Goncalves franchising@questapartments.com.au www.questfranchise.com.au Start up costs: $750,000 upwards

PROFILE: Australia’s Franchise System of the Year - Twice!! 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.

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 30 years, Quest has provided convenient locations, reliable standards and flexible living conditions for extended stay business travellers. 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.

Phone: 07 3399 3000 Fax: 07 3399 3077 Contact: Patrick Mulcahy franchisedevelopment@shingleinn.com www.shingleinn.com

Phone: 1300 729 900 Contact: Gary Glen franchising@schnitz.com.au www.schnitz.com.au Start up costs: $500k +

PROFILE: We all know the smell of home cooking. The recipe might be different for each of us, but the feeling of experiencing something that’s been made with love and care never leaves us, and brings us back to the table time and time again. Our mission is to extract that feeling via the crumbed goodness of a lovingly prepared Schnitzel. At Schnitz, we’re a franchise family obsessed with schnitzel. To this day each and every schnitzel is obsessively made by hand with fresh, locally sourced, quality ingredients, and crumbed then pan cooked and never (ever) deep fried. It’s food made the right way not the easy way. We’re proud to share the happiness that only a schnitzel cooked with passion can bring.

Start up costs: $290,000 - $430,000 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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A-Z LISTINGS

Phone: 07 54 784 014 Fax: 07 54 777 133 Contact: Leigh Wallis leigh@smithandsonshq.com www.smith-sons.com.au

A-Z LISTINGS

Start up costs: $50,000 - $80,000 PROFILE: We aim to make the world a better place – better businesses mean better families and better communities. Our happy, profitable franchisees own and run their own professional renovation businesses utilising the systems, tools and resources we provide. Smith & Sons is committed to seeing each of our franchisees and master franchisees reach their business and personal goals.

Phone: 1300 810 233 Contact: Kevin Lacey klacey@snap.com.au www.snap.com.au

PROFILE:

The sophisticated Snap Centre of today is a far cry from the convenience of the corner printer of the 60s, Snap is one of the most recognised brands in Australia with a reputation in its field of quality production and service, and a commitment to people. Snap continues to evolve its franchise model and is building on its reputation for innovation and embracing change through the introduction of new products and services combining the best of traditional print with online marketing solutions. We are Multiple Award Winning Australian Franchise Success Story that has expanded its successful franchise model into Master Franchises in Ireland, China, New Zealand.

Phone: 1300 781 735 Fax: (02) 9150 0837 Contact: Stacy Alogdellis info@soccajoeys.com www.soccajoeys.com.au/franchise

Phone: 03 9830 4166 Fax: 03 9888 6327 Contact: Bettina Davis bettina.davis@snooze.com.au www.snooze.com.au/franchising PROFILE: Snooze has been giving Australians a better night’s sleep for more than 40 years. These eight points form the basis of our franchise support system: Marketing and promotional support Benchmarking & KPI measurement Sales and merchandising support and comparison Product training Site selection and property Business management support negotiation IT services Store design & layout What’s needed to be a Snooze Franchise Partner? Enjoy working with people, have good interpersonal skills, enjoy being retailers and have a strong customer service orientation. Have an ability to organise, supervise and motivate staff. Have a hands-on approach to their business and have a strong work ethic.

PROFILE: Soccajoeys has been developed by a team of childhood development experts to provide soccer programs to children aged 2.5 to 8 years. We deliver our programs to over 35,000 children annually with over 300 classes in operation across the country. Transform lives, including yours and become a Soccajoeys Franchisee. We offer a unique opportunity for people to become mentors to the next generation of Australian kids, instilling in them a passion to lead healthy and active lives.

Phone: 1300 372 300 Contact: David Thomson Franchises@sportstaracademy.com www.sportstaracademy.com

• Ongoing training to boost your success • Continuous Head Office support (marketing, operational, financial and systems) • Access to industry leading childhood development programs • Coaching and mentoring workshops • Trusted Australian brand • Become part of a thriving and energetic network of franchisees • Your own business and exclusive franchise zone • Rewarding career in the childhood development industry • Flexible lifestyle.

Phone: 02 9037 2849 Contact: Doug Downer doug@thealternativeboard.com.au www.thealternativeboard.com.au

Start up costs: Starting From $25,000

Start up costs: from $40,000 up to $95,000

PROFILE: Sport Star Academy (SSA) believe “Champions are made, not born” and see the potential in every child. Through sport, SSA empower kids to believe in themselves and nurture a love of sport through focused attention, dedication and simply having fun.

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.

SSA is the number one provider of skill based sport programs, providing weekly sessions to over 5000 children nationally.

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.

Football Star Academy (Soccer division) was awarded “Franchise Business of the Year” in the 2017 Optus My Business Awards. Choose your franchise from the following options: Rugby, Netball, Footy (AFL), Football, Basketball, Cricket, Golf, Tennis, Sport Star Performance and Soccer Time Kids.

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.

Phone: 0412511630 Contact: Kevin Bugeja kevin@franchise4u.com.au www.thecupcakedesire.com.au

Phone: 02 9723 1011 Fax: 02 9727 6771 Contact: Nick Avgerinos nicka@cheesecake.com.au www.cheesecake.com.au

Start up costs: $200K-$300K Start up costs: New store - $389,000 + GST PROFILE: The Cheesecake Shop is one of Australia’s favourite retailers and shares in the celebrations and happy occasions of millions of people each year with their signature dessert products. With over 200 stores across Australia and New Zealand and a two time winner of the Franchise Council of Australia’s Franchisor of the Year award, The Cheesecake Shop is one of Australia’s premier franchise systems.

PROFILE: The cupcake Desire was established in 2014 as a premier speciality cupcake and cakes store. Having successfully operated for more than 4 years, we have decided to commence franchising to allow franchise partners to join our business. We believe franchising will add more resources, fresh and innovative ideas and support to constantly grow The Cupcake Desire and create product differentiation in the market. The quality of our cupcakes is what people come back for. They are baked fresh everyday using the finest ingredients. We bake Gluten –free, Vegan cupcakes and cakes . We empower and value our customers as they contribute to an overall success of “the Cupcake Desire”

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Phone: 02 8874 5000 Phone: 1300TOWNCR (1300 869 627) Contact:Glenn Hames Glenn.hames@towncarsaust.com.au info@towncarsaust.com.au www.towncarsaust.com.au

Phone: 0420 900 382 Contact: Casey Reid casey.reid@theleatherdoctor.net.au www.myleatherdoctor.com.au Start up costs: $49,000 - $75,000 PROFILE: Our Mission. “To be the worlds number one mobile franchise”. This is fast becoming a reality as The Leather Doctor is Australia’s leading franchise for mobile home services in leather. Acclaimed by the FCA as one of Australia’s top five franchise systems in 2016 and 2017, The Leather Doctor is an essential home service. Established in 1989 The Leather Doctor now support over 60 Franchisees who earn great income cleaning and repairing goods made from leather, vinyl, plastic and fabric. They service a wide variety of industries including furniture, automotive, marine, retail and hospitality. Work is abundant and these new and established small business opportunities, are some of the best in Australia.

Start up costs: $50,000 - $120,000 PROFILE: Established in 2009, Towncars Networks Australia provides executive hire car transport (limousine) solutions for both corporate & private clients. With a fleet of luxurious vehicles and accredited drivers, we offer our clients competitive fixed-prices, no meters or tolls. Towncars low entry cost, allows new franchisees the opportunity to invest in exclusive areas in both Sydney and Melbourne. Work is not limited to your area, as most corporate jobs are to and from the airports. Franchisees are supported by head office marketing and management. Tools of the trade include our in-house software along with our 7 Day Call Centre.

Phone: 04 3909 4068 Contact: Sarah Oram franchising@unique-laser.com.au www.unique-laser.com.au

Phone: 1300 193 178 Contact: Jayesh Kasim jayesh.kasim@valentabpo.com www.valentabpo.com.au/franchise

Start up costs: $100,000 to $450,000

Start up costs: $50,000 + GST PROFILE:

PROFILE: Unique Laser is revolutionising the aesthetics industry… Have you noticed that laser clinics and skin franchises all look the same? Unique Laser is the newest laser clinic and is different. Very different. We have developed a Unique, multi-award winning business model that: • Stands out from the rest in terms of initial investment, return on investment (ROI) and branding • Has exclusive rights to the fastest, newest lasers in the world • Provides complete training, ongoing support and medical supervision We have a range of partnership opportunities available that will allow you to take control of your life within a booming sector. Do not invest in another laser franchise before speaking to us. Contact to us today to see how we can change your life, and the lives of others, for the better.

Valenta BPO are specialist in Process Consulting, Technology Consulting and Outsourcing. Our Process and Technology Consulting is designed to transform businesses and enhance their competitive advantage. We work with businesses to understand their needs, identify and implement the right mix of technologies customised for their business, resulting in innovative, simplified and efficient business processes. With our outsourcing solutions, we enable hundreds of businesses globally to grow through effective staffing solutions. We ensure that they have the best resources to help relieve bottlenecks, improve expertise, deliver cost-effective and efficient employment solutions. Valenta Franchisees will be able to offer these services to businesses. Their key role is to identify the opportunities and business development while we provide all the services via our operations team.

Phone: 0414 669 101 Contact: Stephen Spitz stephen.spitz@xpressodelight.com.au www.xpressodelight.com.au

Phone: 1300 549 200 Contact: Kevin Bugeja kevin@franchise4u.com.au walkersdoughnuts.com.au

Start up costs from: $47,100-00 + GST

Start up costs: $100,000 - $250,000 PROFILE: We make food that adds a smile to your day. Just one bite and you’ll know you are eating something special; something reminiscent of your childhood. A simple model with absolutely minimal baking* in store; just filling, decorating and displaying. Our famous varieties include Boston Custard Cream, our signature Vanilla Glazed, Pretzel Choc Caramel, Cherry Bomb, Cookies & Cream and many others. Our *Hot Jam doughnuts are freshly proofed and cooked on site throughout the day. The aroma is impossible to resist! Together with our specialty-coffee created especially for Walker’s, our Classic hot dog flavours, our soda-fountain diner Milkshakes, and our speciality Heritage Sodas imported exclusively by Walker’s Doughnuts directly from the USA, you’ll find us an unbeatable and irresistible offering.

Contact: info@collectivewellness.com.au www.xtendbarre.com.au Start up costs: From $120,000

PROFILE: Barre is one of the most popular programs in boutique fitness, with a loyal client following that continues to grow. Xtend Barre leads the barre industry with its unique teaching formula, dynamic programs and personalised approach. Founded on pilates, it’s a safe and effective workout that delivers RESULTS. When you invest in Xtend Barre, you’re investing in much more than a barre studio. You’re joining the world’s biggest barre franchise, and an ambitious and supportive community that spans the globe. As an Xtend Barre franchisee, you’ll have the support of Australia’s largest health and wellness franchise group, Collective Wellness Group (CWG), to guide and support you every step of the way.

PROFILE: Invest in an Xpresso Delight franchise and seize the opportunity to profit from one of the fastest growing markets on the planet. As the number of savvy, educated coffee drinkers has boomed, the market has exploded! This pent up demand for gourmet coffee in the workplace is very poorly met. Each day, thousands of workers trek to the nearest café to pay as much as $4.00 for their morning and afternoon coffees. This is the premise of Xpresso Delight - transplanting the cafe into the heart of the workplace at a fraction of the price that people pay normally.

A-Z 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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A-Z LISTINGS

FINAL WORD

IN YOUR SITES

Multi-award winners Anthony Stahl and Daniel Mesiti have been Boost Juice franchises for 15 years and now operate five stores in Sydney and one Tommy Guns Barbershop outlet. ANTHONY STAHL AND DANIEL MESITI Multi unit franchisees, Boost Juice

he location of your business is critical and will greatly determine the success or failure of your business, so you must be diligent spending time researching your location. Consider the following factors.

DEMOGRAPHICS What are the demographics and socio-economic influences in the area? Is your business suited to the type of customer in the area; are they your target market and would they purchase from your business? Our Boost Juice Bar at Manly highlighted this as we expected Manly to be a location that complemented the brand – but as it turned out, the demographics of the area proved the store was not viable.

TYPE OF TRAFFIC FLOW Is your business a destination (like Bunnings) or does it need to be in the flow of traffic where convenience is important? Also, be careful when assessing traffic flow. Locations near transport hubs can be misleading as there may appear to be lots of people passing your location, but will they actually stop? Also consider how the weather will affect this. Rain usually drives people indoors. Does the site do better on weekends or weekdays and how does this affect your business?

WEATHER EXPOSURE Is your business seasonal? If your business is busier in summer (like Boost,) are the customers around during that time or does the area vacate during the holidays (like some CBD sites)? We thought our first Boost Juice Bar was a cracker of a site but the area vacated for six weeks over Christmas and summer when we were ready to pump.

COMMERCIALS Negotiate well. Your occupancy costs go one way only (and that’s up) so be comfortable with the details of your lease and know how much it will be in five years and the impact this will have on your profitability. General lease terms are five to seven years. Generally speaking your occupancy costs should not exceed 8–14 per cent of your turnover (though this is very dependent on industry), so do your homework and ensure the promo levies, outgoings, airconditioning, taxes and duties, and land tax are all included in your calculations. Also, is a fitout contribution included? Some shopping centres will offer a substantial contribution to your fitout costs and things like Category 1 works can become expensive very quickly. Category 1 works will include things like core drilling, range hoods, grease traps and airconditioning ducting. Daniel Mesiti and Anthony Stahl

COMPETITION Where are your competitors and what sites have they chosen? Is there an advantage their sites have over yours in terms of their location and traffic flow? Your competition can be a good yardstick for how your business might perform. Will the area be able to sustain the same product or service that you are offering?

STORE PRESENTATION AND LAYOUT COMPETITION Will the space allow you to configure your store the way you want it? What are your size and storage requirements? Do you need a large shopfront to showcase your product, or can a smaller shopfront work?

FINAL THOUGHTS ADJACENT BUSINESSES Often, having complementary businesses in your area can help drive your demographic into your store. Also consider what precinct your site is in. Is it the fashion, food or service precinct for example? Another factor may be seasonal or recurring activities the local council or centres put on such as food markets. These will have an impact on your trade if pop-up stores appear every week offering similar products.

Negotiating a lease is one of the hardest things a franchisee will have to do. It can become a very emotional experience, so work hard at maintaining objectivity. Try to consider both sides of the negotiation. Competition for the site will impact your ability to negotiate and this is just as important at the lease renewal. It is not uncommon to engage professionals within franchising to help negotiate but this doesn’t negate the need for you to be very informed and constructively involved in the process. You will bear the outcomes. n

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BRETT HAD ALL THE RIGHT INGREDIENTS TO BECOME

A 19 STORE SUPERSTAR 2007 2004

BUYS FIRST STORE

THE HITS ORE T S 10 K MAR

2016

FIRST ADDS TIONAL A N INTER ORE ST

Brett Moore Multi-Unit Franchisee

B TH UY ST IR S O D RE

06FOUR 0 2 S E

RE MO L L SE ZZA E PI OR EM V HA UN! F

Y OR ES BU M OR ST

CU S RR COTO EN U RE T 19 NT

Brett Moore always had the right ingredients to build a successful business: a belief in people, an appetite for hard work, and a hunger to succeed. As a 19 store multi-unit franchisee with stores across Australia and New Zealand, Brett’s shown that by taking the leap, you can reap the rewards.

To start building your Domino’s business, visit dominosfranchise.com.au.

Weâ&#x20AC;&#x2122;re spreading our love of flame grilled Portuguese chicken with new restaurants in QLD, VIC, WA and Regional NSW. Customer centric and business minded? Want to own your future? Enquire today: w ww.oporto.com.au / franchising