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AUG/OCT 2021
ISSUE 34 VOL 03
WEEKEND WARRIORS Elite program shapes up to be franchise-fit. WELLNESS ON TAP
MCDONALD’S IS 50!
Take the leap into health and wellbeing
Fast food giant celebrates five decades in Australia
CASUAL ENCOUNTERS Dining out is an $18bn business
Pia with Pa ion
JOIN US IN THE ERA OF THE FOODIE
WHAT ARE YOUR PLANS FOR 2021? D O YO U A L R E A DY LOVE O U R G O U R M E T P I Z Z AS ? We have just relaunched our business model and it’s never been a better time to join the Crust Franchise. With new menus, customer count growth and our lowest joining fee ever, now is the perfect time to run your own business. Join our award-winning gourmet pizza family that brings a new passion to the name, “Franchise model”. • • • • • • •
Australia’s Number One Gourmet Pizza Brand: Our pizzas are the best! Flexible work hours: Majority of stores open at 5pm Stores starting from $200k+ Experiencing fantastic customer growth Targeted local marketing support Comprehensive support and training program Easy to run
We are passionate about the quality of our food, our customers, and building business partnerships with our franchisees. If this sounds like you, why not reach out and find out more!
Kellie Cranch
M: 0401 058 607 P: 07 5655 2610 E: kellie.cranch@rfg.com.au
CONTENTS
REGULARS
LEADERSHIP
11 EDITORIAL 12 GLOBAL EYE 14 INSIGHTS 16 THE LIST 74 GLOSSARY 76 BUYING PROCESS 77 INFLUENCERS 78 CHECKLIST 79 RESOURCES 80 A-Z LISTINGS
20 COVER STORY
Body Fit Training is all about function.
30 POOCH PERFECT
Three decades, and three franchisees share their tales.
32 HAPPY BIRTHDAY MACCA’S!
Golden anniversary for the Golden Arches.
24 READ ALL ABOUT IT!
36 JOIN THE SUB DINNER CLUB
26 FIRING UP THE BARBIE
38
Dymocks book stores are forging ahead.
SPOTLIGHT: FOOD
How Barbeques Galore is transforming into a modern retailer.
US brand puts evening meal on the menu.
INCOME, GUARANTEED!
What you get for your money.
40 RASHAYS RAMPS IT UP
This restaurant chain is making it easy for franchisees.
42 CASUAL ENCOUNTERS
Five brands showcase their business.
28 WHAT’S UP WITH THE SUB?
48 BUBBLING UP
Subway is freshening up its offer.
Tea trends in action.
SPOTLIGHT: WELLNESS
SPOTLIGHT: HOME LOANS
FRANCHISE BASICS 60 THE GREAT UNKNOWN
Shopping centre facts, figures and terminology.
62 WILL I MAKE MONEY FROM THIS? The big questions for a franchise buyer.
66 ESTIMATING WORKING CAPITAL
What you'll need to keep the new business afloat.
52 WELLNESS FLEXES ITS MUSCLE How to tap into the mega trend.
57 SEEKING ADVANTAGE
Delivering extra in a home loan business.
68 7 SIGNS OF FRANCHISE RESILIENCE Positive franchisor behaviours.
70 ENGAGING WITH EMPLOYEES
Ways to share the passion with your staff. On the cover: Cameron Falloon, Hamish McLachlan and Richard Burnet of Body Fit Training. AUG/OCT 2021 | 9 | WWW.FRANCHISEBUSINESS.COM.AU
Your are the owner, not the Tutor 1-to-1 tutoring in the family home All ages and subjects National curriculum support Exam preparation Virtual tutoring also available
EDITORIAL
Franchising provides a safety-net in challenging times A year ago I don’t think anyone would have thought we would still be talking about lockdowns and border closures, yet here we are. At time of writing, Greater Sydney has had new restrictions and mask-wearing mandates imposed and residents are banned from travelling out of area, while Melbourne has just emerged from yet another shutdown. There’s no doubt Covid-19 has had a huge impact on our working and business lives. We are still yet to see the full fallout for small business but we do know it’s been a tough year for entrepreneurs and their employees. If there’s good news to be had from this, it is that franchising has proven itself a valuable business model in times of crisis. Whether it’s the franchisor’s distribution of crucial information across the network, the swift introduction of digital processes and new ways to trade, or the back-up and support field managers and head office staff have provided franchisees, either directly or through mental health programs. Good franchisors have worked to provide what franchisees need to keep their businesses going, and while there have been some franchise closures, the vast majority of the small business owners are still trading. So as we look ahead to the second half of 2021 it’s important to recognise the safety-net franchising can provide franchisees, whether they are in mega brands like McDonald’s (celebrating its 50th anniversary in Australia this year), heritage Aussie firms like Dymocks pivoting to a new retail reality, or one of the up-andcoming fitness and wellness concepts such as BodyFit Training, City Cave, KX Pilates or the brand new Recovery Lab. You can read about all these brands, and many more, in this edition. Two bumper features (wellness and casual dining) look at key sectors in the franchising space. And don’t forget to read up on all the pre-purchase advice offered in our Franchise Basics section! If you’ll be visiting the Melbourne or Brisbane Franchising & Business Opportunities Expos in August and October, come along and say hello!
EDITOR
Sarah Stowe P: 02 8224 8371 sarah.stowe@octomedia.com.au
SUB-EDITOR Karen Gee
HEAD OF SALES
Advertising coordinator
Simone Lagudi P: 02 8224 8375 simone.l@octomedia.com.au
Sarah Stowe Editor
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AUG/OCT 2021 | 11 | WWW.FRANCHISEBUSINESS.COM.AU
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GLOBAL EYE
POWERING UP THE POTENTIAL Brands are fired up to grow and innovate in 2021 and ahead.
NOW YOU CAN GET YOUR HANDS ON A CARL’S JR. FRANCHISE! US brand Carl's Jr. is opening up to brand new franchisees in Australia and plans to open up to 200 restaurants by 2031; 27 new outlets are expected to open within 12 months. Since the brand launched here in 2017 it's been operated under four separate franchise agreements, with each franchisee group building its own mini-empire of outlets. Now the Victorian operator, CJ's QSR, which already owns and operates 11 corporate sites in Victoria, and one in Wetherill Park, Sydney, has been assigned the rights as a master franchisee for Australia to roll out more franchised outlets. CJ's QSR is seeking new franchisees in all states and territories except SA/NT (which is operated under a separate exclusive agreement). Andrew Firn, managing director of CJ's QSR, told Inside Franchise Business the support office is up and running and it is "full steam ahead". "We are passionate about Carl’s Jr. and have been buoyed by the appetite that exists in the Australian market for our Chargrilled Burgers,” he said, predicting the rollout will escalate. n
DOMINO’S SAYS NO TO PLASTIC Domino’s has ended its reliance on single-use plastic straws and spoons in more than 710 stores across the country. The pizza chain estimates the change to biodegradable straws and wooden spoons will remove 2 metric tonnes or up to 2.85 million pieces of plastic from circulation each year. In an industry first, Domino’s is also trialling a recyclable ‘lineless box’, using cutting edge technology to apply an approved food grade lining that will eliminate secondary plastic packaging from the supply chain. If rolled out, the new concept is expected to boost franchisees’ business with reduced wastage and improved food preparation times in stores. n
JAX TYRES LAUNCHES DOUBLE FIRST JAX Tyres & Auto has just opened the doors to its first retail store in South Australia. The new store is also the first to be powered by solar panels. The eco-friendly outlet is company owned and part of the company’s expansion plan to add at least eight new locations to take the total retail footprint to nearly 100. The store has a commitment towards sustainable business practices and will be incorporating other environmentally conscious business programs and retail services. Customers with electric vehicles can use a free electric charging station. The store team will also be involved in the company wide initiative to phase out print invoices and participate in JAX Tyres & Auto’s national tyre recycling program via Tyrecycle. n
LIFT BRANDS TAKES STAKE IN FITSTOP Home-grown functional fitness brand Fitstop is getting backing from US business Lift Brands, the parent company of Snap Fitness and 9Round. The multi-brand business is taking a 30 per cent stake in the fledgling gym chain with the goal of fast-tracking its expansion. The aim is to double the Fitstop footprint in the next financial year. Fitstop founder Peter Hull said “It’s so rewarding to see an international organisation recognise us as the next big player in the fitness industry, not just within Australia but around the world. The next phase of growth will involve looking to introduce Fitstop to the New Zealand market, followed by the UK and US which will be of a larger scale.” n
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INFINITE CYCLE TO OPEN 20 STUDIOS Indoor cycling business Infinite Cycle will open 20 more studios this year. The fledgling franchise has so far signed up 12 studios, with outlets now open in ACT, New South Wales, Victoria and Queensland. The concept has already attracted former Sydney Swans Player, Alex
Johnson, who has signed up to take on two neighbouring Melbourne territories – Armadale and Brighton. Damien Bain heads up operations for the brand. “We aim to open another 15 by the end of 2022. We’re also looking to New Zealand and Singapore,” he said. n
7-ELEVEN MAPS OUT FAR NORTH QUEENSLAND 7-Eleven is set to enter Far North Queensland, investing more than $15m to open about 15 stores over the next two years. The convenience chain will launch in Townsville and Cairns within the year before ramping up expansion in the second year. General manager – channel, Braeden Lord, said “Recent investments in our supply chain have made it possible for us to bring our offer to Townsville and Cairns and we are incredibly excited about the chance to serve the local communities in Far North Queensland.” 7-Eleven operates new stores as corporate outlets for at least a year before franchising. The significant investment in the region will deliver plenty of employment opportunities; at least 200 full-time jobs are predicted for the construction stage and about 150 local jobs for ongoing operations. n
GYG OFFERS DRIVE-THRU OPPORTUNITIES
IN BRIEF The Tobacco Station Group opened its 500th franchised store and has plans to add up to 30 outlets by the end of 2022. Mortgage broking franchise MoneyQuest opened its 100th franchise just five years since it first unveiled its franchising model. Commercial cleaning franchise Urban Clean plans a US launch in September. Hotel apartment chain Quest has started to build its latest $70-million mixed-use development, Quest Geelong Central. Global workspace business IWG will unveil four smaller, more flexible office locations, Spaces OpenDesk, this year. Snap Print-Online opens up new markets for more than 130 franchisees in the print chain. Muffin Break named Coffee Shop of the Year 2020 by Roy Morgan. ASX listed Silk Laser Australia has reached its milestone of 60 clinics ahead of schedule. BIG4 Holiday Parks anticipates $80m sales following total online revenue growth last year of 94 per cent and cabin revenue rising 101 per cent. n
There are five Guzman y Gomez drive-thru outlets lined up for budding entrepreneurs who want a business along the east coast of Australia. The fast food chain has announced opportunities in Hervey Bay, Port Macquarie, Mackay, Cairns and Tamworth and more than 30 new restaurants are planned over the next 12 months. The five drive-thru stores will be opening between August 2021 and July 2022.
After opening in Newtown in 2006 GYG now has more than 150 restaurants across Australia, Singapore, Japan and the US. GYG founder and CEO Steven Marks said “Usually we have franchisees on a waitlist for two years or more before we make locations available so I’m really proud to make these five restaurants available to young entrepreneurs wanting to make their mark on the world.” n
10 NEW GELATISSIMO STORES Gelatissimo is to open 10 additional stores this year with Queensland a particular focus, and is backing up its search for franchisees with a new dedicated website. Domestic growth will be matched with aggressive growth plans overseas, including expansion in the US. Gelatissimo’s Houston store is set to open in June with several outlets in the pipeline for Hawaii later in the year. CEO Filipe Barbosa said “Global expansion is at the heart of our strategic plan for 2021/22. We will celebrate 20 years of successful growth in 2022 and so feel the time is now right to really ramp up our international presence and cement our brand on a world stage.” n
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INSIGHTS
THE NEW RULE BOOK
Revisions to the Franchising Code of Conduct aim to help franchisees. Check them out.
F
ranchising rules and regulations are changing. The industry code, the Franchising Code of Conduct, governs the relationship between franchisees and franchisors. In 2017 it underwent a parliamentary inquiry, which questioned the code’s effectiveness; a taskforce in 2019 made various recommendations; and now the federal government has authorised some revisions. New rules are in place from July 1 2021 so that means if you’ve looked at the code earlier than July, some of that information will now be out of date. The revisions imposed have been introduced as a way of making franchisees more secure in the franchise relationship with the franchisor. Key to the reforms have been increased transparency and boosting franchisees’ rights. While the introductions have been
welcomed by official bodies such as the Franchise Council of Australia and the Australian Small Business and Family Enterprise Ombudsman, implementing the rules is more of a challenge for franchisors and lawyers. Specialist franchise lawyer Robert Toth of law firm MMRB believes the changes after the three-year delay from the inquiry will help to better protect franchisees. But he points out there is still commercial risk going into any business opportunity and getting expert advice will limit the risks. As a franchise buyer, there are some crucial changes you need to consider.
WHAT’S CHANGED? A new key fact sheet has to be supplied by the franchisor when you receive the company’s disclosure document. It aims to provide an improved scope of financial disclosure, including information on
goodwill and supplier rebates. Franchisors must provide disclosure around leasing and any franchisor conflict of interest. If you decide to go ahead and buy a franchise, whether this is from an existing franchisee, or a brand new site you are purchasing from the franchisor, you will now have a 14-day cooling off period. This is a doubling of the previous seven-day cooling off period. This means if you change your mind after first paying any non-refundable money to the franchisor or signing the franchise agreement within the 14-day cooling off period, you can still exit the franchise. Although you are entitled to a refund the franchisor can retain a certain amount from the money you paid provided this is clearly set out in the agreement and disclosure document. Similarly, franchisees are now able to request the early termination of their franchise agreement in writing at any point
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The new mandatory Franchise Disclosure Registry, which is scheduled for release in early 2022, is key to providing prospective franchisees with vital information needed prior to entering a binding franchise agreement.
during a franchise term, giving reasons, and the franchisor must respond within 28 days in writing either agreeing to termination or rejecting it, again giving reasons. Franchisors cannot ask for franchisees to cover all the franchisor’s “indeterminate” future legal costs relating to the franchise agreement, although there is not yet clarity around what this constitutes. Franchisors can still charge an up-front fixed fee like a document fee to prepare and negotiate the franchise agreement as a once-off payment. Franchisors also cannot commit franchisees to unexpected capital expenditure across the network without agreement from a majority of the franchisees. Franchisors are also prohibited from making unilateral retrospective agreement changes without the franchisee’s consent. The code amendments also allow for improved dispute resolution processes with ASBFEO (the new Ombudsman body appointed) and include a specific multifranchisee process where a number of franchisees have a similar dispute against the franchisor. This is a win for franchisees as in the past franchisors may have tried to divide and conquer franchisees one by one. Restraints of trade restrictions on franchisees are limited now to a serious breach of an agreement and therefore non-compete clauses are less enforceable by franchisors.
Other amendments prevent a franchisor from contractually passing on to a franchisee future indeterminate legal costs, such as legal costs to renew or transfer the agreement or even for a breach notice relating to the franchise agreement. In 2022 a registry of franchise documents will be introduced, designed to bring transparency to the purchasing process by housing key franchisor documentation in one repository. Australian Small Business and Family Enterprise Ombudsman Bruce Billson said the significant reforms will help level the playing field across the franchising sector. Increased powers for the office of the ASBFEO will help resolve disputes in a cost-effective and timely manner, he said. “This supports a no-surprises, collaborative and mutually respectful commercial relationship between franchisees and franchisors. “Allowing my office to facilitate group mediation when several franchisees are in a similar dispute with the same franchisor, is another critical reform that will help restore confidence in this sector.” Bruce Billson said the code changes mean prospective and current franchisees will be better armed with the information necessary to run their business. “This includes more transparency around the marketing fund, with an annual financial statement which sets out meaningful information regarding expenditure. Greater visibility around
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rebates and leasing arrangements will be achieved by these reforms. “The new mandatory Franchise Disclosure Registry, which is scheduled for release in early 2022, is key to providing prospective franchisees with vital information needed prior to entering a binding franchise agreement.”
SO WHAT SHOULD YOU DO? You can read the code revisions for yourself at https://www.legislation.gov.au/ Details/F2021L00670 Get good advice from a specialist franchise lawyer and accountant who are members of the FCA, understand franchising and are up-to-date with the legal changes. It’s worth seeking out franchise-friendly professionals who can provide expert advice before you buy the business. Undertake a free online Pre-Entry Franchise Education course provided by Franchise-Ed and supported by the Australian Competition and Consumer Commission. Download or listen to the ACCC’s Franchisee Manual. At time of press, the ACCC was working to update the information to reflect the new rules imposed in July. n
THE LIST
BUDGET BUSTERS! 12 franchises that cost under $50,000
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uying a franchise can be a budgetfriendly process if you pick the right brand, at the right price.
The franchises here are listed for their upfront investment - expect to add GST. There will always be other costs to consider, from vehicle leasing to office set-up, legal and accounting fees, and the price of business registration and insurance, for example.
UNDER $20,000 PROTECT A WINDOW
FOX MOWING
ARAMEX
MBA SPORTS COACHING
What’s the job? Applying temporary scratch protection against glass scratches during building construction Upfront cost: $10,000 What does this include? Exclusive territory, training, marketing support What extra costs will you incur? Stock purchases, vehicle, insurance, business set-up costs How long is a term? Yearly renewal Qualifications: None required Business started: 1992
What’s the job? Lawn-mowing and landscaping services Upfront cost: $16,000+ What does this include? Your own territory, initial marketing, training, turnover guarantee of up to $1500 per week What extra costs will you incur? Equipment leasing (finance may be available) How long is a term? 10 years with one option to renew Qualifications: None required Business started: 2012
What’s the job? Courier deliveries, increasingly linked with major e-commerce sites Upfront cost: $20,000; Courier Lite $5000–$10,000 What does this include? Three-week training from regional franchisee, includes field training, exclusive territory, sales and marketing assistance, latest technology and real-time track-and-trace facilities What extra costs will you incur? Delivery van, leased or purchased How long is a term? Perpetual Qualifications: None required Business started:1983
What’s the job? Delivering multi-sports programs for children aged 2–12 years old. Working with schools, sports clubs, church organisations, families and communities Upfront cost: $20,000 What does this include? Eight days training and ongoing support – coaching, marketing strategies and materials, admin, finance and operations What extra costs will you incur? General business set-up costs How long is a term? 5 years Qualifications: Sports or education background preferred but not compulsory Business started: 2018
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THE LIST
UNDER $30,000 COMPUTER TROUBLESHOOTERS
HIRE FOR BABY
GECKO SPORTS
What’s the job? IT support services, with additional revenue from hardware and software sales Upfront cost: $22,700 What does this include? A $4000 start-up fund to market your business, training, technology tools, joint marketing, shared and individual websites, extensive start-up stationery, solutions catalogues, annual conferences What extra costs will you incur? Business set-up costs such as registration and insurance How long is a term? 10 years, with one 10-year renewal option Qualifications: IT certification preferred Business started: 1997
What’s the job? Hiring baby equipment such as prams and newborn items, installing car seats, qualified restraint fitting Upfront cost: From $25,000 What does this include? All first-year business expenses are included What extra costs will you incur? Business set-up costs such as registration and insurance How long is a term? 5 years with one 5-year renewal option Qualifications: Retail or management experience Business started: 1988
What’s the job? Delivering accredited multi-sports and fun fitness programs for kids aged 5–18 years old Upfront cost: From $25,000 What does this include? Training, marketing support How long is a term? 10 years, with a 5-year renewal option Qualifications: Sports, fitness or education background preferred but not essential Business started: 2007
UNDER $40,000 CREEPY CRAWLY
CIRCLE OF LOVE
What’s the job? Pest control services for commercial and residential customers, including insect, termite and rodent control, pre-construction termite barriers and pre-purchase termite inspections Upfront cost: $30,000+ What does this include? Pest control products and management systems, help with lead generation from marketing and SEO team, training – Creepy Crawly is a registered training organisation What extra costs will you incur? Vehicle and licensing fees How long is a term? 5 years and ongoing as set out in franchise agreement Qualifications: None required Business started: 1976; franchising since 2004
What’s the job? Home-based wedding ceremony management and decoration, reception styling, vow renewal, elopements, baby naming and special events Upfront cost: From $34,990 What does this include? Lead-generating website, guaranteed weddings and income from day one depending on region, 24/7 support, training package, equipment package, marketing package What extra costs will you incur? Business registration, stationery, insurance, software, legals, uniform, vehicle, accommodation for Sydney training How long is a term? 5 years Qualifications: None required Business started: 2010
UNDER $50,000 JIM'S MOWING What’s the job? Gardening and landscaping services Upfront cost: $20,000–$50,000 What does this include? Depending on spend, trailer and equipment, guaranteed income, training and marketing What extra costs will you incur? See above How long is a term? 5 years Qualifications: None required Business started: 1989
SERIOUSLY ADDICTIVE MATHEMATICS What’s the job? Maths tutoring using an award-winning learning and enrichment program for students in kindy to Year 6, based on Singapore Math which combines fun classroom learning with selflearning worksheets Upfront cost: $20,000–$50,000 What does this include? Start-up marketing pack, marketing support, national branding, support and resources including podcasts What extra costs will you incur? Total investment could be between $30,000–$100,000: fitout, marketing, legal fees, working capital for 12–15 months How long is a term? 3 years, with an option to renew Qualifications: None required Business started: 2010; 2016 in Australia
FIRST CLASS ACCOUNTS
PAINT AND SIP STUDIOS
What’s the job? Record keeping, GST and BAS assistance, timely reporting, providing business owners with tools to improve their bookkeeping efficiency Upfront cost: $45,000 What does this include? Uniform allowance, marketing collateral, website set-up and a 13-week Kickstart Marketing Campaign What extra costs will you incur? Business set-up How long is a term? 5 years, with three 5-year renewal options Qualifications: Basic bookkeeping Business started: 2000
What’s the job? Operating entertainment-based paint studio with cafe, wine bar Upfront cost: $50,000+ GST What does this include? Training and support, three revenue streams How long is a term? 5 years, with a 5-year renewal option Qualifications: None required Business started: 2018
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COVER STORY
FRANCHISE-FIT From Princess Diana’s personal trainer to sports and conditioning coach for elite AFL and soccer teams, Body Fit Training founder Cameron Falloon has a high-performance based background that informs the fast-growing, award-winning fitness franchise.
H
ere Cameron talks about discovering a big gap in the fitness marketplace and why being fair is the foundation of the franchise. INSIDE FRANCHISE BUSINESS: First up Cameron, congratulations on winning the Fit Summit APAC franchise of the year award for 2021! Cameron: Thanks, everyone is excited. It reflects the growth of the business, franchise sales and membership growth, financial performance. When I founded the business and set up four test pilot studios, I made a lot of mistakes and learned a lot of lessons. The traction and feedback across four sites in 18 months validated my thinking and research. Then I met Richard Burnet and Hamish McLachlan – Hamish is a silent investor, Richard has a sales and marketing background. Business owners can wear a lot of hats but we can do ourselves an injustice if we stretch too thin. I had the opportunity to get complementary skill sets to partner and grow something with people who share my vision. I’ve spent most of my life working in soccer and AFL, in high-performance management. I stepped away and moved back to Melbourne and started to think how I could utilise my skill set without getting into sport. It’s very physically demanding and time consuming, and job
security is not the best. I started to explore ways to put what I have learned in almost 30 years into business. Group fitness was trending so I researched it and felt there was a big gap for a more well-rounded approach – genuine strength training in addition to cardio and alternative preventative programs. Also a progressive method of training. For elite athletes all programs progress over a period of time. I didn’t see that happening anywhere in fitness. If the best athletes train this way why not use this methodology in the commercial space for weekend warriors? It leads to better, long-lasting results and fewer injuries. We learned some lessons around the space of the studio – making sure we had the right space, commercial viability, how many members we needed and some tweaks to programming. Learning that this is how you would do it in an elite environment but it won’t resonate in a commercial space.
4.7 weekly visits across our member database, that’s double the industry average.
IFB: What’s the specific appeal for gym users? Cameron: The target market is early 20s to mid 40s. A lot of people go to group training for high intensity aerobic exercise and a high percentage have secondary memberships, they utilise a 24-hour gym for weights. We do all of that. We have Olympic lifting equipment, cardio, lower intensity days for rehab exercises; it’s got a broader appeal. We have
IFB: Why does the business model attract potential franchisees? Cameron: It is low cost, high yield and 153 members is the average member opening number for 2021. Depending on the site rent (different for each site) studios most likely will be profitable from day one with that number. We’ve just won the APAC award, against some strong international competition.
IFB: It’s hard to grow the fitness market and bring in new customers to the sector, most users will rotate between brands. How does this compare to your experience with Body Fit? Cameron: We have three buckets – training, community and cyclical gym users. Our base is training and conditioning. The industry is driven by fads, but strength training is always a staple, it never leaves the annual reports trends. Our model is built off strength training and that underpins most human pursuits, it’s beneficial to lifestyle. Our franchises are good on communities. The sense of community, attachment to staff and feeling part of something is really big in our model. In addition to community and the progressive strength element, we have the cyclical gym users. If we can capture them and make them feel part of the community and help them get results, that’s great.
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More than anything franchisees can attest we invest in our people. We have three pillars: members, franchisees, franchisor. If we don’t invest in franchisees and staff to deliver, members don’t have a great experience. If we do our job looking after franchisees, they look after customers. IFB: What have been the challenges to growing the business so quickly and how have you overcome them? Cameron: The business started in mid 2016 under another brand, then we began franchising in April 2018. Now we have 250 units sold and 107 open. It’s been a validation of the model, taking time to learn the lessons and not rush it. There’s so much to franchising, what really set us up was the test sites. We spent seven months working hard to get the back end of the business in order. We researched models and talked to other franchisees to understand their pain points. We asked
ourselves, what do we want to stand for? We decided that if anyone said anything about us as franchisors, we would want it to be that we are fair. There are decisions we will make that won’t appeal to everyone, but as long as we can articulate what we are doing and why, and it’s fair, franchisees are more likely to be wedded to the brand. We are evolving the look/feel of our branding – after three years in the market we believe it’s time to transition from Body Fit Training to just “BFT”, so you will see this shift across digital and in-studio. We’ve made some great decisions about equipment, picking partners who are aligned from a values perspective. Those decisions took time. Before we sold one franchise, we did a stress-test, took a considered approach, and that allowed us the platform to launch from. We worked with law firm MinterEllison, which was enormously beneficial. Ultimately the feedback from the many franchisees’ lawyers we’ve dealt with, is that this is a pretty fair contract, so we
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COVER STORY
A BRUSH WITH ROYALTY It was decades ago, but being Princess Diana’s personal trainer still carries some clout, Cameron admits. “I think Diana was one of the rare famous people who transcended generations, it was a huge testament to her. I don’t talk about it a lot, I respected this was a private part of her life.” Cameron was a self-employed personal trainer, hanging out at a London gym. After hours he trained some high-profile US businessmen in the gym at the same time as Princess Diana was training. When she asked the gym owner for the top five best trainers in London, Cameron’s name was on the list. “I was 22, it was quite surreal. I take people as they are, so it’s more impressive to other people than to me. She was a very lovely lady, very personable, took an interest in my life.”
start off on the right note. We actually got shut down on March 23, we stood staff down for seven days then put them back on, did a pulse check of the business. We decided we would make it out the other side, and to use the opportunity to work on everything we usually didn’t have time to. We’ve got 16 head office staff now, and some full-time outsourced contractors. We’re about to expand again with five key positions. We’re looking for a head of sales in the US, and a New Zealand appointment. In New Zealand we have six outlets open, strong sales, and it’s been managed from here. The US is a huge opportunity. Our Santa Monica studio has been open about 18 months, it’s partly company owned and partly owned by the studio manager.The studio itself was closed during Covid but we operated outside and doubled the membership. People understand the model better there, in the US sports conditioning is ingrained through schools and colleges. We’ve also got a Fort Lauderdale studio, open seven months, and this is fully franchised. There are three studios sold in Canada, and we’re talking to a group in the UK about individual franchises. We haven’t felt the need to master franchise – there is a lot of risk in setting it up right now. What we do that resonates with franchisees is our technology. Having worked with athletes we have worked with some of the best technology. So much is available for consumers but do they have the ability
to understand and interpret and use it to help their training? I’ve been able to bring in tech and make it meaningful so trainers can personalise and improve member outcomes. We don’t introduce loads of tech, we introduce what will have a positive outcome. We want the information to be valid and reliable. I’ve also tried to bring in an elite mindset, challenging the belief that every day’s training should be different because that challenges your body. It’s not true, otherwise elite athletes would do it. They learn, they refine the skills. At a basic level, it’s hard to be motivated and see a difference if the training keeps changing. One of the other gaps in the market is in training. We invest heavily in franchisees and their trainers, educate on what they are teaching and why, and how to deliver at a very high standard. There are a lot of really great trainers out there but on average they last under 10 months. We have an opportunity to help provide a solution to that. We have a mix of owner-operators and investors (55/45), and owner-operators need to be trainers with a minimum Cert IV to be on the gym floor and be head trainer. Four to five trainers are employed in a gym. We have a thorough onboarding process, and every 13 weeks we visit sites and deliver ongoing education and training. We’ve also partnered with best-in-class organisations like StrongFirst: School of Strength and Functional Training. n
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visit appliancetaggingservices.com.au or contact Chris Longley +61 1300 287 669 franchising@ats.com.au 16 | 2 0 2 0 FR AN CHISE DIR ECTORY
LEADERSHIP
READ ALL ABOUT IT Is it time to book yourself a spot in retail as Dymocks charges ahead with innovation and growth?
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ymocks is looking to grow its network of independently owned bookstores, says CEO Mark Newman. Mark has been in the hot seat for just over one year, joining the heritage firm after a string of high-profile luxury brand appointments including Ralph Lauren and Oroton. The book world is a fresh field for the UK native, who is excited about the challenges of a new marketplace. He recently appointed a dedicated franchise development manager, and as part of the strategy to grow the brand’s footprint around the country Dymocks will exhibit at the Melbourne and Brisbane franchising expos in August and October this year. “We have a three-year plan,” he says. And that plan involves growing the network from 50 stores to 75; embracing omnichannel retailing; boosting store growth and profitability; and providing a clear market position based on Dymocks’ 140-year heritage. The catchline is “Locally owned, nationally known”. To boost the all-important profitability of Dymocks stores, there is a focus on ensuring enough products are instore to lift overall margins “to ultimately deal with the fact that rent and staff costs go up each year”. That means improving book margins and adding merchandise within clear fields of interest associated with the books instore, he says. “Cookbooks, health and gardening – it’s easy enough to imagine items in these categories. How we merchandise is vital.” Over the past decade Dymocks has effectively seen off several other scaled-up
bookstore competitors including US brand Borders, and the franchised Angus & Robertson chain. The store and online QBE chain remains a competitor but Mark is confident that Dymocks has the competitive edge. WHAT’S SPECIAL ABOUT DYMOCKS? Firstly, franchisees and staff are crucial to the success of the business. “Our people are passionate about retail and know their customers. We have people who know what they are talking about. Customers can get a book recommendation.” The stores have an extensive backlist of books if the book required is not in store. At the Sydney flagship store in George Street the backlist numbers 150,000 items. “Customers can order a book with a short lead time, just seven to 10 days. It is unique to us,” he says. The brand’s link with local communities is also important, he points out. The Dymocks Children’s Charities is an independent charity which provides new books to children across the country as part of a mission to promote a love of reading and improve literacy outcomes for children in Australia. So far, the charities programs have provided more than 200,000 books to over 140,000 children in more than 630 Aussie locations. “Each franchisee nominates a school for the donations,” says Newman. Most recently the Read at Home program has provided books, puzzles and games valued at more than $200,000 to support vulnerable children impacted by the Covid-19 pandemic.
WHY BUY A DYMOCKS BOOKSTORE? 1. Heritage and brand reputation: the brand is still going strong after 140 years 2. A focus on profitability: the franchisor is working to improve margins and introduce new merchandise 3. Buying power: it’s a national brand with a massive stock sold on the basis of sale or return 4. Investment in technology: it’s an omnichannel business and new tech is being introduced instore 5. Knowledge-sharing 6. Community action: the Dymocks Children’s Charities are a way to give back WHAT APPEALS TO FRANCHISEES? “If you’ve been in a professional career there aren’t many options for franchisees who want to buy something to keep themselves occupied. It’s a great option if you are interested in reading or education. We’ve attracted a lot of teachers,” Mark reveals. The sheer volume of products – on average 10,000 books and related products instore – is also appealing. Overall the bookstore market has grown a significant 15 per cent in the year to date according to the Nielsen BookScan
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A NETWORK OF BOOK LOVERS Some Dymocks franchisees have been in the network for more than 30 years, some are aged in their 80s. “There’s huge loyalty and depth of knowledge,” says CEO Mark Newman. “Our people are passionate about retail and know their customers.”
Australia figures, with a full year growing just under 10 per cent. Dymocks has had its share of this business boost. “Regional and suburban has done very well, the CBD is improving,” says Mark. Looking ahead to network growth, Newman confirms there will be a mix of suburban and regional locations in the plan with northern Australia a particular target. “We’re not in the Northern Territory and Queensland is under-represented,” he says. There’s plenty of potential in the booming south-east corridor, for instance. The mega footprint of the George Street store is far from typical of the new generation of Dymocks outlets, which now are right-sized at 200 to 250 square metres. Future retail is also about bringing a little bit of theatre to the shops. “We are restarting instore events,” says Mark. “They bring crowds of people and generate traffic for shopping centres.” Bringing technology into stores is also top of the list in smaller stores. That means
an improved search function, a store map that’s easy to navigate, assisted self-checkout and the capacity to order online using a touch screen. Releasing staff members from the administrative, information-giving roles means they are freed up to do what they do best: talk about books. It’s an omnichannel journey. SO WHY BUY A DYMOCKS FRANCHISE? “The brand reputation and credibility, the depth of knowledge. We have a national network and buying, marketing power. From a bookstore perspective it’s unique. It’s a great option.” Mark cites knowledge-sharing as another strong element of the business model. And he points out the children’s books section is a very strong part of the business, tying in neatly with the charities program. “It’s important for both employees and customers to have a purpose,” he says. n
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BUILDING FRANCHISE RELATIONSHIPS Newman brings some franchise experience to the role, as a franchisor with British brand Alfred Dunhill, and with Oroton. “What’s important is to develop relationships with stakeholders so I visited distributors and suppliers. What’s most important is to get to know the franchisees and understand their challenges.” Arriving at his desk right in Australia’s Covid flash point, it took some time for Newman to fulfil his commitment to meet franchisees. “I’ve now met all except two,” he reveals.
LEADERSHIP
FIRING UP THE BARBIE How does a legacy brand transition into a forward-thinking, experiential retailer? Barbeques Galore CEO Angus McDonald explains the steps taken to shift the business. By Sarah Stowe
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wo years ago a Barbeques Galore store looked much as it had done 20 years earlier. Take a stroll through a revitalised retail outlet now and it’s a world apart. Let’s start with the obvious. Barbeques Galore is experimenting with two different kinds of formats – the Explorer stores will be 1000 square metres with a sizable demonstration area, while the Express stores will be half that size. The new store format of the Explorer stores puts the focus back on the merchandise. A defined pathway helps customers clearly navigate their way through the store, while wall merchandising has been replaced with graphics and signage, sharing the stories behind the brands and products. In the centre is a large demonstration area known as “The Steakhouse”, set up like an outdoor kitchen, where employees can fire up any barbeque and cook a meal for customers. “We’re defining a much clearer customer proposition and purpose:
bringing people together around flame. This has a significant cultural role – since the dawn of time, people have gathered round fire to tell stories, enjoy a meal,” says CEO Angus McDonald. “We sell a product at the heart of this. But it’s also about how we present our brand. We’ve been looking at other dimensions: store experience, how the range is put together, our digital capabilities in terms of omnichannels. “As we think across each dimension we have to consider how we complete the solution.” Another major change to the store format is the switch from blanket fluoro lighting to dramatic track lighting, focusing only on the merchandise and creating atmosphere and ambience. “We’re not just selling a barbecue, we’re helping customers use it well, embrace different styles of cooking.” This approach has translated into adding rubs and sauces, and fuel, to the customer offer, even introducing barbecue cuts of meat through a “BBQ In A Box” online offer launched late last year.
“We’ve seen some really promising feedback early on in small trials,” says Angus. Innovation has been critical for the retailer, he says. “We focus on product development, offering exclusive brands that lead on innovation in the Australian market. We’re very focused on accelerating the introduction of new product.” He reveals that more than one-third of sales come from new products. The business has employed a strategic thought process around building the customer value proposition centred on consistency – how customers engage with the brand, a consistent level of engagement. Barbeques Galore’s social media campaigns highlighting the pleasures of enjoying a home-based lifestyle have been well received: social traffic grew at 485 per cent while overall traffic grew 143 per cent over the period. The high level of interest translated into digital sales as e-commerce revenue also grew by 328 per cent.
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But Barbeques Galore is on a much broader journey through repositioning, says Angus. “A good retail strategy has to be at the heart of everything: the customer value proposition, what makes us unique, how we can bring this to life. “It is more important than before to deliver consistency across every challenge – so to succeed at omnichannel we have to have all our plumbing working for consistent representation of the brand.”
BEHIND-THE-SCENES IMPLEMENTATION This has required acceleration of incoming systems and processes. An auto management system, a new e-commerce platform and CRM system are recent implementations. Maximising back-end efficiencies means franchisees and store managers can spend more time on the floor with customers, growing the business. “We’ve taken a broad agenda – store network, design, the range, systems and processes – and it’s a real challenge to make sure we do it at the right pace. “It’s been important to take franchisees on the journey with us. I’m connecting directly with the franchise community, ensuring they understand the journey and support us,” says Angus. Now the focus is on scaling across the network, and continuing to evolve with new products introduced every year. The Barbeques Galore footprint is a mix of corporate and franchised stores. “Our formula today is that metro is typically corporate, that’s what allows us to have a national store network. In regional areas with franchisees we have a more engaged local presence that is bringing the brand to life in that market. We’ve got a very experienced group of franchisees who have been in this for a long time. “We see opportunities for franchisees in various catchments around the country. With the investments we’ve made, we are aggressively going after opportunities to deliver a rich onmichannel experience.” Lessons learned from the new format stores will inform the rollout across the rest of the network. Right now there are nine new format stores up and running, and transitioning the whole network will be a long-term process, tied in with lease renewals. “This year has been a very big year for us,” says Angus. n
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LEADERSHIP
WHAT’S UP WITH THE SUB?
Subway is striding into the future with a new look, a fresh menu and a taste for innovation. By Sarah Stowe
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t isn’t just the brighter, modern next-generation stores that are giving Subway a fresh burst of energy; innovative retail solutions and delivery are a boost to the popular sandwich chain. By the end of this year, close to 40 per cent of the nearly 1300-store Subway network will be sporting the next-generation store livery. It’s given the much-loved brand a refresh, says Aussie boss Geoff Cockerill. The size of the business, with around 1000 franchisees and over 15,000 staff, means the network is serving more than 70 million guests annually. “We’re always striving for guest experiences,” says the Subway Australia country manager. And that means reaching the customer wherever they are. Data is showing a store’s average transaction is higher in delivery – traditionally, people at home or in the office are ordering multiple meals. “Delivery is absolutely critical in QSR, it’s what customers are demanding. What we’ve done is got highly competitive national agreements with DoorDash and Deliveroo in addition to Uber. Guests tend to use a single platform and they may not shop around. Our focus is on the right delivery in the right areas. We need to ensure we’ve got the biggest footprint. “We can negotiate competitive rates, and we have a heavy weight of programs to support third-party activities.” This paid off during the pandemic, which saw Subway step up and provide lease negotiations support and, crucially, franchise fee relief.
While a number of restaurants were temporarily closed during the pandemic – notably CBD and airport stores – Geoff reports that many are reopening or taking the opportunity to relocate within their current centres. He says the chain has been a victim of its own success when it comes to location. “It has the largest QSR footprint in Australia and over 30 years, inevitably that means restaurants are not in the right place. In the past few years we’ve focused on relocating restaurants.” Already with the biggest fast food footprint in Australia, Subway is in a unique position to negotiate with landlords to achieve favourable results for franchisees, he suggests. “We are going to grow this year. We’re focusing on incremental growth, on occupancy costs and on franchisee profitability.” Innovations on the retail front are part of the business’s progression. There is a kiosk option, food court models, and a grab-and-go trial was started and halted during Covid – this will be best suited to busy hubs and CBD sites. The latest innovation is a 24 hour pick-up concept. “It’s a brand first for us, we found a guest-driven need, a high demand for late night, early morning orders. Covid has meant people are working different hours.” So far it is exceeding expectations. Big service station sites on highways are another retail option. What will be common to new sites will be the need for delivery to be integrated into the service. New locations will follow demographic
shifts. Obvious moves are the southern corridors such as those in south-east Queensland, and the corridors from Sydney’s Northern Beaches to South Sydney. “We are feeling extremely positive about the brand, there is really strong momentum, and we are proud of the foundations put in place pre, during and post-Covid. Now we are setting up for success.” The US-based chain has been in Australia for 33 years. It recently was awarded a 4-star franchise rating by independent firm FRANData. Geoff says, “I think what helped us was the results are reflective of a long history and success over 30 years in Australia. It’s tested and proven, there is operational support, we’ve had a whole raft of things for a long time that we are always revisiting and refining. “Covid certainly sharpened us up, our field teams couldn’t focus on restaurants so they took time to look at the business and that has led to positivity; the momentum is staying with us.” n
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WHAT’S ON THE MENU? Wraps and salads join the signature sub sandwich. The Sub Savers range – snacks from $2 – are proving popular value buys. There’s more spice! Think spicy mayo, for a limited time, in response to customer demand for a spicier hit to their meal.
a proven business system be part of a successful brand
Over 40 years of successful trading shows that the Amber business system works. We aim to take advantage of the past to leverage a stronger future. The Amber brand is synonymous with style and value. Sourcing product from around the world, Inspirational living spaces are made easy with our huge range of pavers, natural stone, retaining walls, floor and wall tiles and bathroomware. With product for both the indoor and outdoor areas of the home, coupled with our group buying power, the Amber franchise model provides a unique business opportunity like no other. We currently have 29 stores across three states/territories with many thousands of
For more information contact: Head of Franchise Relations and Development Phone: 02 9621 0444 Email: franchising@ambertiles.com.au www.ambertiles.com.au
satisfied customers. Recent market research continues to confirm that Amber has a powerful unaided recall with customers - incredibly strong in fact for any retail field. The success of our network has always depended on the success of our Franchisees. Our stores are supported by market leading IT systems with a dedicated and experienced support team with a passion for the success of our franchisees. It's our intention to grow and nurture the Amber Franchisee family well into the future.
LEADERSHIP COVER STORY
HAPPY BIRTHDAY
MACCA’S!
The Golden Arches is celebrating its golden anniversary in Australia 50 years of burgers, fries and shakes.
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t’s an icon of fast food that has raised its unmistakable red and yellow branding across the Aussie landscape since opening up the first outlet in Yagoona, New South Wales back in 1971. Today the global business has more than 1000 outlets across Australia (85 per cent of them franchised), employing more than 107,000 people and serving a staggering 2 million Aussies daily. It is also the largest employer of young people in the country. In the last five decades it has created job opportunities for more than 1.5 million Australians: every new restaurant brings about 120 employment opportunities. Since McDonald’s became a Registered Training Organisation in 1995, more than 47,000 employees have completed nationally-recognised training courses in retail and food safety. Even top boss CEO Andrew Gregory started out at Macca’s as a crew member. “In my experience, McDonald’s is a business that has an amazing ability to provide opportunities for our employees, franchisees and suppliers. I’m very proud of the way our business continues to work together and always moves as one,” he tells Inside Franchise Business. McDonald's is renowned for many elements of its business - processes and systems, property ownership, constant innovation, the three-legged stool approach to partnerships, franchisee and team member training. So what is it that Andrew Gregory considers most influential to the brand's success and to franchisees' success? “One of our greatest achievements has been establishing McDonald’s as
MACCA’S BIRTHDAY CELEBRATIONS In June, McDonald’s launched three months of celebrations to mark its 50th anniversary, with promotions, menu items and unique collaborations.
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DO YOU WANT FRIES WITH THAT? In the last 50 years:
• 1.9 billion+ cheeseburgers sold • 1.1 billion+ Big Macs sold • 1.4 billion+ fries sold
50 YEARS OF MCDONALD’S AUSTRALIA
2021: Plastic cutlery and straws removed 2020: Sustainability flagship Restaurant 1000 opened 1993: Aussie innovation McCafe launched 1983: First Ronald McDonald House 1978: First drive-through opened at Warrawong. 1974: First franchised store 1971: First Aussie restaurant opened at Yagoona
a positive part of the local Australian community,” he says. “Every McDonald’s restaurant is committed to supporting the community within the area it operates through job creation, economic investment and ongoing training and development opportunities. “The established partnership between our franchisees and suppliers via the Three-Legged Stool model encourages teamwork, collaboration, and shared learnings, allowing all areas of the business to work together to achieve the best possible outcome.” The long-standing partnership with Australian farmers and suppliers is a mark of the brand’s success. “We are firm believers in the quality and taste of Australian home grown produce, and have always been, and remain committed to our local suppliers and supporting more than 15,000 Aussie farmers annually,” he says. Digital and delivery channels became a lifeline for hospitality businesses throughout 2020; McDonald’s innovated and franchisees stepped up to face the challenges of trading through lockdowns. “Our franchisees have remained agile throughout the pandemic and leaned into the new opportunities generated by the increase in delivery and digital ordering over the past 18 months,” says Andrew. “The need for convenience and a contactless experience has driven a significant shift in consumer behaviour and both delivery and the MyMacca’s App will continue to be a key part of our future growth strategy.” The quick service restaurant (QSR) sector is a fast-moving industry, driven by technical developments and customer trends. As McDonald’s moves into the 2020s, there will be more challenges ahead but the core principles will remain, says Andrew. “Macca’s has always been at the
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forefront of innovation within the Australian QSR industry, so the challenge remains to ensure we are meeting our customers’ needs and finding new opportunities to provide them with an individual personal experience. “Ultimately, it comes down to the basics of still providing great tasting food quickly, conveniently and safely when, how and in the ways our customers want it. “The guiding principle of McDonald’s is listening to our customers, supporting our franchisees, collaborating with our suppliers and providing great training and career development opportunities for our people. That’s the secret to 50 years of success, with more to follow.” The business is investing significantly in new restaurants across the country. At the beginning of 2021 it opened a sustainable flagship, the 1000th store on Aussie soil. So what’s ahead? “This year we plan to open 27 new restaurants across Australia, with every new restaurant creating 100 – 120 new jobs for the local community. “Our property and investment strategy is determined by market demand and the potential for significant growth and opportunities in new local and regional centres,” Andrew says. “We remain focused on developing more freestanding drive thru restaurants. These are our best way to serve our customers and provide the full benefits of our brand; drive thru, McCafe, inviting dining rooms and delivery.” Hard-working, business-minded individuals who have a passion for the brand, for customers and for local communities are encouraged to find out more about joining the McDonald’s network. “Franchisees play an extremely important role in driving our business forward. It’s a challenging but highly rewarding role,” Andrew Gregory says. n
Pooch perfect LEADERSHIP
Aussie Pooch Mobile franchisees are relishing the lifestyle and opportunities of this dog washing franchise, celebrating 30 years in business.
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t’s been a stellar performance for the award-winning dog washing business started back in 1991 by Christine Taylor. Today it’s helmed by Paul Walters, who still runs his own Aussie Pooch franchise. So what do franchisees on the ground think of the operation? Greg and Julie Fickel have held the master franchise for the Macarthur region since 2012. And they love the family business aspect. Greg says, “Since my wife Julie and I began as master franchisees with Aussie Pooch Mobile we have had four of our children join us in the business. In each case, the children made the decision to join Aussie Pooch because they saw the potential to take control of their financial futures in a supportive business environment, which the Aussie Pooch Mobile franchise system provides.” He says it’s been a joy to have the whole family involved. “Having the children join us has provided Julie and I with an enduring sense of satisfaction as we support them and watch them grow into self-assured, independent business owners. “On the flip side, I have no hesitation in
saying that our overall business has grown through their involvement, as they bring new ideas and perspective to our business operations.” That’s meant the business has shifted to meet the challenges of running a successful business, Greg says. It’s a smaller family affair but no less satisfying for Ayla Watt and her fiancé Daniel Lewis. The couple have operated the Brisbane Southside territory for three years. “Before I started with Aussie Pooch Mobile, I was a groomer working for someone else. I craved the freedom of running my own business but didn’t want to do it alone,” says Ayla. “I saw an opportunity with Aussie Pooch Mobile and jumped at it, and I’m glad I did. Last year throughout Covid, if I was in business alone, I would have closed up. But under the APM franchise, I was supported the whole way through and didn’t have to do anything. They did all of the leg work for us,” she reveals. In fact, the fun and freedom Ayla was having in her business tempted Daniel to join the network of franchisees. “When Ayla started with Aussie Pooch Mobile, I had an office job. I was on the phone all day, working long hours and
there was no downtime. Seeing Ayla loving her job made me step out and see what else is out there.” It’s been a brilliant move for Daniel. “I thoroughly enjoy working with dogs. It is so calming and such a change of pace. I get to hug dogs all day!” The experience of these franchisees is echoed by the longest-serving franchisee in the chain, Peter Statham. “I have been washing dogs for over 25 years now and I wouldn’t change a thing. I love the animals and the flexibility. I have managed to work around my kids when I first started, to now working around the grandkids, being able to take them to sport and drop them off at school.” Such a long tenure with the brand means Peter has seen significant changes to the business, and not just the development of the trailers. “Before we had mobile phones, having to stop at pay phones on the side of the road to return a pager message from a customer wanting their dog washed. The first dog I washed paid only $9, which was paid in cash, not card. “A lot of things have changed, but my love of dogs and how much I enjoy my career has never changed. It was definitely the best choice I made,” says Peter. n
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Don’t want to work weekends?
A Kwik Kopy franchise could be the business for you! You get to experience the best of both worlds – financial success and work-life balance with Monday to Friday business hours. A highly established and recognised brand, Kwik Kopy has an extensive network of Centres Australia-wide, providing a blend of friendly advice, design and print expertise to help businesses achieve their goals.
2020
Top 10
Easy-to-use systems Our franchisor develops a fantastic and easy to adopt new owner take over which would allow anyone with passion and drive to purchase and manage your business. They also provide all the back system which includes social media, marketing and IT support that allows me to feel confident to recommend purchasing a Kwik Kopy store. Emmanuel - Kwik Kopy Bondi Junction
Be part of the Kwik Kopy success story, visit kwikkopy.com.au/franchise or call Maria Chemali on (02) 8962 8526 to receive a franchise information pack.
LEADERSHIP
JOIN THE
SUB DINNER CLUB Taking a bite out of the US trends, Jon Smith Subs is planning to shift Aussies’ perception of the humble sub.
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espite the variety available now in any shopping centre, suburban or metro, we typically think of certain foods as lunchtime choices. The sub sandwich, for instance. Jon Smith Subs is a big name in the US but a relative newbie to Australia’s shores, only landing here in 2019. The brand has just one outlet so far, a corporate-owned store in Melbourne. Julian Chong, director of marketing, says the Jon Smith Subs outlet in the Docklands area was last year one of only a few options available in the neighbourhood, and reveals this really helped its business. “Our Jon Smith Subs outlet in the Docklands stayed open (within the Victorian guidelines) during Covid but shifted to focus more on deliveries, and sales grew. “Also, being surrounded by quite a lot of residential apartments in the area, with everyone working from home rather than travelling into the office, we were able to maximise more lunchtime trade. “Lunchtime is still our biggest revenue period during the day. In the US, however, our Jon Smith Subs do a roaring trade in the evenings. It’s very much a cultural thing to swing by a Jon Smith Subs on the way home from work, sports practice or even to dine in with the whole family for their evening meal.” Is it fair to say that trying to shift the cultural habits to encourage subs as a dinner option is one of the big challenges? “Yes, for sure. Although the majority of our fillings are cooked on a grill, having a sub isn’t the done thing here. We also see the location of the site and future sites playing a part in this as well. Although the evening traffic is growing, our first location is predominantly a daytime destination. “We’re working hard to change some of the cultural habits here in Australia to show that having a sub for dinner doesn’t have to be out of the ordinary!” The brand’s USP is that everything is
cooked fresh to order. The grill is visible to any customers so they can see their order being prepared and cooked, Julian explains. “Whether it’s beef in our Steak Bomb or chicken in our Grilled Chicken Sub it’s all cooked there and then on the spot. Nothing is heated up in a microwave.” Delivery plays a significant role in store revenue, he reveals. “We are on all the major food delivery service apps. Yes we make fewer margins, but we also view it as a bit of marketing and good for brand exposure.” Because consumers are spoilt for choice these days, Julian points out that in the District Docklands area alone there is stiff competition from other hospitality venues. “And although we have been able to enjoy extra sales through the food delivery apps, they also widen the choice for consumers even more. Jon Smith Subs has been serving subs in the US for over 30 years, so we’re confident as the brand grows with more outlets so too will our loyal following.” So what's the appeal of the brand for a franchisee? In part it’s the reassurance that the supply chain is already under way. “Part of the appeal for many franchisees across our network is knowing that relationships with vendors have already been set up. With Jon Smith Subs being part of the United Franchise Group, any franchisee that joins becomes part of a global network of franchisees with the experience of a franchisor that has been supporting fran-
chisees for over 35 years. “Sometimes just knowing that you’re not alone and have resources you can reach out to for advice or assistance gives new entrepreneurs the confidence to pursue their dreams of running their own business.” Data and systems support franchisees in developing their business and partners with Redcat for its POS management. “Having the whole system cloud-based allows our team to analyse metrics at any point in time to track trends or opportunities that we should be capitalising on in real time,” says Julian. “Within the store we also use a number of programs to help manage the kitchen and stock. These are great for a franchisee who may have not come from the food industry, to help them track and manage inventory to ensure all health guidelines are followed and to minimise any wastage, which is key to maximising profitability.” The investment starts from $550,000; full training is provided so franchisees don’t need hospitality or business experience. “We’re now looking for master partners who are looking for bigger opportunities than just owning single units as franchisees. This has worked well for us in other markets around the world. “We recently exhibited at the Sydney Franchising & Business Opportunities Expo and will have a booth at both Brisbane and Melbourne later this year as crowds return to events in Australia.” n
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Outstanding achievements in Franchising InXpress Bondi
Profiting from a Proven Business Model Beverley Taylor bought her InXpress franchise in July 2013. In 2017, Beverly won the Franchise Council of Australia’s Single Unit Franchisee of the Year award and was runner up in the Woman of the Year category. In March 2018 and in April 2021, she was the recipient of the Franchisee of the Year award at the annual InXpress Australia awards ceremony. As a new franchisee, Bev’s main goal was to get as many of the right customer account’s as possible. She didn’t set a revenue goal until the second full year of being in business. Instead, Bev set door knocking and meeting goals, which kept her motivated, on-track and gave her the belief in herself that she could make a success of the business. A few short years later, Bev was smashing her targets. “I truly believe that you reap what you sow and that the grass is greener where you water it! I naturally have a work hard mentality, but I do keep myself motivated in various ways too; every day I listen to motivational podcasts to fire me up and I reward myself with regular treats for hard work.” Attending the InXpress events is also a huge motivation for Bev. After being a franchisee for several years, enthusiasm can start to wane. Every time Bev attends the national conference, her enthusiasm is renewed. She gains new ideas, fellow franchisee tips and pointers to implement and is full of beans and ready to push forward and be the best Bev believes that if you get a ‘no’ now, it does not mean it’s a no forever! She has won business from those who’ve previously said ‘no’ simply by keeping in contact; so getting out there or making the calls and following the model. “For anyone considering the InXpress model, I would say take the leap. With all the initial hard work I’ve put in, I now enjoy the flexibility of working from anywhere in the world, whilst continuing to build on my successes and produce a generous passive income.”
Global Franchise Award Winners Our award-winning business model makes for awardwinning franchisees.
Founded in 1999, InXpress has a long history in managing successful businesses around the world. With 400+ franchises globally, the multi award-winning business continues to grow. InXpress has already established strong relationships with trusted courier partners, providing access to highly competitive rates. This leaves you free to concentrate on building sales, working towards your goals and creating the lifestyle you want.
The InXpress Franchising Opportunity Build your own successful and profitable start-up business with the security of the world’s largest franchisor of global courier services. No experience is necessary; all you need is to be salesoriented and have an aptitude for business. We’ll provide full training, with ongoing coaching and support. Recession-resistant, essential services industry Low entry and ongoing costs Proven business model for over 20 years, constantly evolving Comprehensive training and ongoing coaching No inventory, warehousing, vans or trucks Potential to earn unlimited passive income Ability to work from anywhere!
Get started with InXpress today! Phone 1300 097 857 or email sales.au@inxpress.com
inxpress.com.au
LEADERSHIP
INCOME An income guarantee can provide a sense of security for new franchisees while they establish their new business.
I
t is important before signing up to a franchise to understand exactly what is being offered, whether it is turnover or leads related, and appreciate any time and performance limitations. What is an income guarantee? It sounds like a promise of a set amount of revenue to your business, but this can take many forms. For instance, an income guarantee could be the franchisor’s commitment that if a franchisee doesn’t reach an expected revenue level within a set timeframe, the franchisor will top up the income to the benchmark amount. Of it could be a salary provided by the franchisor to the franchisee as they build up their business. Another version could be a set number of leads to convert, or existing business contracts to fulfil, which should provide the franchisee with a certain amount of revenue. Of course, there are caveats with an income guarantee, as with any element of small business. Lawyer Robert Toth cautions prospective franchise buyers to do their homework on any income guarantee and to seek legal advice before accepting it. “They can often be tied to certain pre-conditions that cannot be met, which may make the guarantee useless. This may make it also an unfair contract term and be misleading conduct, so check the fine print.” Here are some brands who offer new franchises an income guarantee.
JAMES’ HOME SERVICES
Rhiannon Simcocks, national operations manager, explains the deal. “We offer a $1000 per week income guarantee for the first 12 weeks. It is conditional upon the new business-owner adhering to our systems and procedures, and implementing the training and actions that we consider is our ‘business as usual’. “These include marketing time spend targets, following our quoting system as trained and responsiveness to enquiries received. “The conditions are our expectations for how the business is run ordinarily, so we see that implementing the income guarantee can actually assist the new business-owner to set great business management habits from the start.” Rhiannon says some, but not all, new business-owners will take up the income guarantee. “Of those that do, we find that perhaps we top up a little of their income in the first and second week, then after that, we hardly ever have a call on the income guarantee. “We set new business-owners up with a dedicated advertising package for their territory as well as a suite of marketing collateral and the training on how to market their business effectively (all included when you purchase a James’ Home Services business).” The business also utilises other strategies to drive enquiries to new business-owners. For James’ Home Services franchisees, much of the work can come from repeat customers (particularly for Interior Cleaning and Lawn Mowing & Garden Care) and that makes it all the more
important to secure the right customers early in the business. It can mean a weekly service, and once these build up there’s a level of certainty about the weekly revenue. “We also offer weekly mentoring for new business-owners to ensure we are building on the initial training they undertake, and genuinely continuing to expand their business management skills,” says Rhiannon. So why does the franchisor offer this income guarantee? “We recognise that for a lot of our new business-owners, they are leaving full-time employment, where income each week is certain. So we can appreciate the uncertainty that starting your own business may bring, particularly for those with family and mortgage commitments. “We focus on finding new business-owners who are a great fit for our network and culture, who are prepared to work hard and follow our proven systems, and who we believe have the drive to make their new business work. “If we find that right person, we are only too happy to help remove some of those initial fears and barriers to starting their own business with us. Additionally, we know that the training, support and marketing that we offer can, and does, get our new business-owners off to a strong start; we back ourselves and we are experienced in helping small business-owners to get started effectively.”
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URBAN CLEAN
An Urban Clean franchise can be started as a part-time after hours business. It is an ideal business for anyone wanting to continue their daytime career or transition gradually from a job to operating a business full-time. Included in the franchise is an initial set-up of $5000+GST per month worth of cleaning contract revenue. Founder Damien Boehm says, “Franchisees who join our system at the full investment of $31,700+GST also receive a
cleaning contract guarantee and warranty.” He explains how the guarantee works. “If, after the fourth month upon completion of training, we weren’t able to secure the $5000+GST per month set-up, we will pay the difference each month up until the original investment. “Additionally if the contract revenue falls below $5000+GST per month within the first 24 months of a franchise’s business, due to a client closing down or moving premises, we will replace the contract value
up until the original $5000+GST per month. “Like anything in life, there are conditions to these guarantees, but they are easily met by following the steps in the system,” he says. The $5000 set-up and guarantee is all about providing peace of mind for new franchisees and getting them to a good space to expand their business. “Many franchise partners [are] growing their part-time business to multiple six figures of income,” says Damien.
Brendan Green, Hire A Hubby CEO, says the brand’s income guarantee is designed to be a security blanket. “All income guarantees are for 12 months and work on gross profit figures.” Hire A Hubby has bronze, silver and gold territories, allocated according to the potential of the average person going into a territory, and each has a set income guarantee. “If you meet the criteria, at the top end it is $125,000 for gold, and $100,000 for bronze. That’s $500 a day in gross profit.” Brendan is confident the franchise’s systems, if followed, can produce the minimum figures. He is also clear that this is a stop-gap procedure, not something that franchisees can learn to rely on. “This is a top up, not a gift. This is not a chance to sit back.”
It is crucial franchisees appreciate the need to do the hard work in building the business themselves and understand they are “fully supported”, says Brendan. The guarantee was introduced 20 years ago in a much looser form than it is today. Lessons learned over the years brought a tweak of the process, providing some working conditions such as franchisees being available weekdays between 8 am and 6 pm, and an occasional Saturday; taking on new opportunities; following local area marketing initiatives; and notifying the franchisor on a specified day that upcoming bookings are low. “These are not hoops you can’t jump through,” says Brendan. There is a weekly basis for the top up, allowing franchisees to keep trading. Many have to buy materials for real estate jobs
but are not paid for 30 days. “This is a way to top up to give them the confidence that what they thought was a benefit proves to be a benefit.” Unlike some income guarantee packages, this is not optional – it’s included in the cost of every new franchise. And that has meant a more stringent approach from the franchisor in selecting sites. “We won’t sell a location anywhere we can’t meet the guarantee. We’ve been a lot more selective about this,” he says. And despite the standard inclusion the take-up of the guaranteed income is very low, says Brendan. “I’ve got one out of 29 (new franchisees) relying on it.”
Other brands offering income guarantees:
THE LOCAL GUYS An electrical test and tag business operating across Australia for more than a decade. The franchise costs $24,900 for a seven-year term with business training and includes taxes, sales generation, accounting and invoicing. To help franchisees get started there’s a $50,000 income guarantee for their first year in business.
HIRE A HUBBY
OVEN VALETS A mobile hands-on oven and barbecue cleaning business using non-toxic and non-caustic cleaning products. The business owners pride themselves on professionalism, and offer an income guarantee on a case-by-case basis.
WHAT ABOUT A SALARY GUARANTEE? Some joint venture businesses which operate on a 50/50 basis with franchisees commit to a salary package for franchisees, to allow them to make the move from a corporate world and focus on building up the business with reduced revenue pressures.
LOCK & ROLL At Lock & Roll, a specialist window and door repair, maintenance and upgrade business, franchisees can expect to pay a $40,000 franchise fee and the cost of a van to get established. An income guarantee for the first 12 weeks is designed to assist newbie franchisees establish themselves. JIM’S MOWING The franchisor’s Paid for Work Guarantee (PfWG) is available to new franchisees as a safety net. In the early stages of a franchisee’s business, in return for servicing qualified prospective clients for free or at a discounted rate, the franchisor will pay franchisees for their work. AUG/OCT 2021 | 37 | WWW.FRANCHISEBUSINESS.COM.AU
WHAT YOU NEED TO CHECK ABOUT THE INCOME GUARANTEE Speak to new franchisees about the guarantee – is it working for them, are they getting what was promised? Find out how easy it is for franchisees to build up their own database of clients within the guarantee timeframe. Check with the franchisor what actions or performance levels you have to take or achieve to get the guaranteed revenue. Get a franchise-friendly accountant to check the figures and see that the deal is financially viable.
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LEADERSHIP
RASHAYS RAMPS IT UP Simple systems, customer service and an ambitious growth plan are all on the menu at Rashays. By Sarah Stowe
H
ospitality chain Rashays has revealed a mega goal with plans to open more than 100 new stores in Australia, with New Zealand and Middle East expansion part of the bigger plan.
SIMPLE SYSTEM FOR FRANCHISEES
The casual-dining business has already spread its network along Australia’s east coast, starting with Sydney and moving into Newcastle (one store), the ACT (three stores) and Brisbane region (three). Right now there are 30 outlets operating and plenty of room for growth including three outlets planned for Victoria this year. Founder Rami Ykmour says, “We are so confident in our brand: it can be a shopping centre, standalone, a food strip or precinct. It’s family focused, holiday destination focused.” Rami hasn’t excluded regional sites from the expansion and with all stores at capacity the business is ready to ramp up the growth, he says. There are 100 locations already picked out. He reveals there is about 80 per cent capacity still to utilise at the warehousing and food preparation space, which will support business growth. And as the brand’s footprint grows interstate it will establish mini kitchens in the Melbourne and Brisbane areas to replicate the food prep processes.
Rami says the model is designed to promote franchisee work–life balance. “That’s why we give you all the systems, so you can go home at the end of the day and your staff can operate the business. ” What’s distinctive about Rashays is its business model built around a centralised kitchen. At the western Sydney head office, prepping teams start work at 2 am in a series of self-contained units (salads/ sauces/meats/pasta/bakery) to prep ingredients and meal parts, and par-cook some dishes, so store staff are required only to finish the cooking process and serve up the meals. Portion sizes are prepped and packed for daily delivery to franchisees. It’s a substantial operation given the relatively small number of outlets it caters for right now. In addition to the food prep, franchisees benefit from admin support including an accounting firm that can take on the bookkeeping. Back office demands focus on rostering and keeping supplies up to date using one central online hub to place orders. The head office facility incorporates a full Rashays kitchen and restaurant area, used not just as a staff canteen but for training and trialling menu additions.
A LEGACY BUSINESS WHAT’S ON THE MENU? CHICKEN SEAFOOD PASTA PIZZA BURGERS SALADS
SHARE PLATES DESSERTS SIGNATURE SAUCES
The Rashays story started back in 1998 in Liverpool, Sydney, when Rami and his wife Shannon set up their first restaurant. Gradually one outlet turned into several. “People knocked on my door or found a site. We’ve been building this foundation for 23 years, we could have scaled a lot faster earlier. This is about legacy,” he says. “It’s not about the bottom line today, it’s how do we build business long term? AUG/OCT 2021 | 39 | WWW.FRANCHISEBUSINESS.COM.AU
“People appreciate the slow growth, it’s real. We are reinvesting into a great platform. “We’re a family brand right through,” says Rami. “We look for franchisees who love serving people, who want to make a change in their community.” Franchisees must live within 20 kilometres of their store to ensure they become active in the community, and commit to spend five hours a week on community-focused projects. “That’s how we grew our brand, working within the community.” Giving back to charity is one of Rashays’ core foundations. In fact, the business has established the Rashays Foundation, which is committed to helping underprivileged kids and sick newborns via the Miracle Babies Foundation. “Contribute to the local community, do charity work, and watch your business flourish,” says Rami.
TRUE TO THE BUSINESS Rami points out table service has gone missing from pubs and casual dining – in part, of course, due to Covid. He is adamant personal touches are important to the business. “People don’t just pay for the plate of food, they pay for your smile, the hello, the warm feeling.” Staying true to the business, and the menu, is important – with minor adjustments; more than 20 vegetarian items are listed on the menu, and up to 20 per cent of the dishes are labelled gluten free. “We’re very inclusive but we don’t play with trends, we stay within our profile, we remain comfort food, true fresh Aussie tucker. We see brands come and go, we continue to grow.” n
SPOTLIGHT ON CASUAL DINING
CASUAL ENCOUNTERS With growth predicted for the casual dining sector, five franchises discuss future changes and challenges. By Sarah Stowe
D
espite the setbacks of the last 12 months for the hospitality industry, the next 12 to 24 months are looking up, with exciting innovations and digital-driven changes for many franchises. Casual dining’s advantage is that it sits between fine dining and takeaway/delivery. That’s also the challenge. As Aussies hunkered down last year to weather the Covid storm, takeaway and delivery kept the hospitality sector alive. Innovation, adaptability and swift implementation were the bywords for surviving 2020 and continue to be drivers for the sector. More than a year on from the first lockdown now and we’ve strolled back to cafes and restaurants, although not in the numbers previously seen. So what is the future for casual dining? According to analyst firm IBISWorld, the restaurant sector is set to grow, picking itself up from the falling revenues suffered by many last year.
A March 2021 survey, which we reported on in the last issue of Inside Franchise Business, confirmed that sit-down restaurants and cafes were among the sectors hardest hit, with cafes forming the majority of the business closures in the first calendar 2021 quarter. The good news is that cafes and restaurants are among the most optimistic businesses when it comes to future trading, according to the Australian Franchise Pulse Check March 2021 survey conducted by FRANData. As government restrictions ease and discretionary income recovers from the impacts of Covid, IBISWorld predicts the restaurant industry can expect an annualised 2.1 per cent rise through to 2026, to lift the sector’s value from $18 billion to $20.6 billion. The revenue rise is good news as operating costs remain a challenge for cafe and restaurant owners. The casual dining space is an open market, and there is no one chain claiming more than 5 per cent of Australia's dining out business.
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CHOP ’N CHILL This restaurant chain is a relative newbie on the scene, starting out in 2017 to offer the tastes and specialities of Asian cuisine and the hearty flavours of smoked meats from the Americas. Jacqueline Cudmore is the co-founder. WHAT ARE THE MAIN WAYS YOU DIFFERENTIATE THE BRAND TO CUSTOMERS? A look at the menu demonstrates how Chop ’n Chill combines the best of east and west to give people a dining experience truly unique to the Australian marketplace. We use only the best and freshest ingredients that we can source locally and for all our dishes and complement this with a casual, but attentive, style of customer service. WHAT INNOVATIONS/TECH DEVELOPMENTS ARE COMING UP IN THE NEXT YEAR? We will be introducing taking online orders right from the table (contactless table ordering, in-venue pick-up, drive-up, contactless delivery).
IN WHAT WAYS ARE YOUR OPERATIONS DIFFERENT NOW TO PRE-2020? Apart from the Covid protocols, for us little has changed in how we operate our restaurant and service our customers. WHAT ABOUT THE CHALLENGES OF RENTS AND STAFFING? We have faced the challenges of high rent by being proactive in the marketplace by increasing our customer turnover. In regards to staffing we are in the enviable position where Chop ’n Chill is regarded as a desirable place to work and initiate a career in hospitality. WHY IS THIS A GOOD BRAND FOR FRANCHISEES? We are looking to expand into only 10 regions in Australia that have the right demographics and a strong tourism economy. As such, it is our intention to franchise not just a restaurant site but an entire region. Our purpose in doing so is to allow our franchise to establish a major restaurant footprint in the main population centre, and then in time develop smaller outlets in surrounding satellite towns and communities. WHAT ARE YOUR 12-MONTH EXPANSION PLANS? Our expansion plans are to establish another smaller outlet similar to our South West Rocks franchise store in our Port Macquarie region and also actively pursue potential franchisees to realise our broader expansion strategies. AUG/OCT 2021 | 41 | WWW.FRANCHISEBUSINESS.COM.AU
SPOTLIGHT ON CASUAL DINING
THE COFFEE EMPORIUM Greg Erickson is general manager at premium cafe chain The Coffee Emporium, which has been in business nearly 30 years. HOW WILL CASUAL DINING CHANGE OVER THE NEXT 12–24 MONTHS? As confidence returns those who have survived will be looking to carve out their own unique style and also develop stronger online revenue streams. Over the next 12–24 months you’ll likely see menus become more creative with signature dishes and flavours taking centre stage. HOW DO YOU DIFFERENTIATE YOURSELF IN THE SPACE? Quite simply, at The Coffee Emporium we take our coffee seriously. Our signature blend is overseen by the owners of the business and has been a closely guarded secret since 1991. The very best beans are sourced, blended and roasted in Sydney before distribution to our franchises around the country. The coffee is fresh, and the baristas well trained. The same goes for our food – we go fresh, not frozen, never skimp on ingredients and believe that quality control is an imperative. We are also flexible enough to allow our franchise partners to put their own personality into the business, as we know being part of a community truly matters. HOW ARE DIGITAL AND DELIVERY AFFECTING YOUR BUSINESS? Online food delivery is a great addition to the mix for many of our franchises, while others have been reluctant to adopt online ordering and delivery options due to staff, timing and digital literacy issues. It comes down to what the franchise partner is comfortable with. For those who have embraced digital it’s been a welcome addition to their income streams and they’ve been able to maximise takings during this challenging period. HOW CAN FRANCHISEES MAKE THE MOST OF THEIR BUSINESS OPPORTUNITIES? Franchises really need to know and be part of their community. Joining local business centres, getting to know the council and being involved in local sports and charities are all an important part of developing both business and personal connections. Many businesses will allow a franchise to advertise direct to their staff and membership base via inclusion in newsletters and social media stories. In the end, everything is about relationships and the most successful franchises have warm and respectful relationships not only with customers, but local media and community leaders.
WHAT'S NEW AND EXCITING IN THE MARKETPLACE? Covid-19 has forced Australian restaurants to be even more creative with their ingredients. International supply chains have been interrupted, which has allowed smaller Australian-owned and run suppliers to really show what they can do. For the first time in decades, we’ve been reminded of the brilliance and competitiveness of Australian products. WHAT ARE YOUR 12-MONTH EXPANSION PLANS? The Coffee Emporium is currently negotiating a number of new sites and also plans to refresh existing sites in the near future. A retail offering is in development; watch this space! WHAT IS THE BIGGEST CHALLENGE FACING YOUR BUSINESS AS WE HEAD INTO 2022 FY? There is still concern that Covid-19 could rear its head again and trigger another lockdown. We are working to future-proof the business (as much as is possible) by diversifying the retail offering and fine-tuning the online ordering systems. WHEN WILL UNIT REVENUE RECOVER FROM THE PANDEMIC? Most of our franchises have already returned to pre-Covid sales figures while others are close behind. With a continuing increase in market confidence, adherence to advice from the Chief Medical Officer and a return to normal social activities we expect revenue to return to pre-Covid figures by early 2022.
WHAT ARE YOU DOING TO INCREASE PROFIT MARGINS? Staffing is always an important consideration so we ensure our operations team works closely with franchise partners to ensure they create and manage rosters that work for the business. We also keep a close eye on the menu – what’s popular and not so popular across the franchises. With this information we regularly refresh the menu with fresh flavours while keeping the old favourites. WHO IS YOUR CUSTOMER AND WHAT DO YOU SEE AS THE BIGGEST COMPETITION FOR THEIR DISCRETIONARY DOLLAR? Our customer base is very diverse, from young professionals to couples and families but the one thing they all share is a desire for quality and affordability. We offer both. The challenge is standing out in a sea of marketing and social media content!
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THE SPORTING GLOBE, TGI FRIDAYS James Sinclair is CEO and managing director of Signature Hospitality Group, which operates The Sporting Globe and TGI Fridays. HOW WILL CASUAL DINING CHANGE OVER THE NEXT 12–24 MONTHS? Digital and online food delivery platforms were already gaining momentum pre-Covid; the last 12 months projected a trend that was probably going to happen over a couple of years in just months. Delivery will keep growing as this service evolves and consumers continue to value convenience. We’ve been working on some exciting, different delivery initiatives designed to enhance customer experience even further, which we’ll look to roll out over the next year across both TGI Fridays and Sporting Globe. With Covid-19 and social distancing changing consumer behaviour, premiumisation will occur with consumers willing to pay for better experiences across casual dining. I believe there’ll be greater appreciation for exceptional customer service and higher spend as people reward themselves when celebrating and connecting with friends and family. HOW DO YOU DIFFERENTIATE YOURSELF IN THE SPACE? We’re still strong believers that having well-trained, highly engaged people is the foundation to standing out. From running limited time offers, constantly trialling new food and beverage items to looking at new technologies to support our offering, we’re constantly refining the vision for our “fitout of the future”. HOW ARE DIGITAL AND DELIVERY AFFECTING YOUR BUSINESS? Digital ordering has offered a positive option for guests to order ahead for pick-up or dine in. It provides convenience to order when they want and to transact easily. It also provides incredible insights for us to better understand what people want and when, so we can plan our offerings. Delivery continues to grow and we’ve
been working for some years to ensure a quality delivery offering, and our future restaurants are designed with this in mind. Presently, the cost of delivery platforms is high when benchmarked internationally, but we’re seeing direct delivery options such as DoorDash Drive coming to market, creating a more viable model. HOW CAN FRANCHISEES MAKE THE MOST OF THEIR BUSINESS OPPORTUNITIES? By placing a strong emphasis on training and retaining the best people; focusing on growth in direct takeaway and delivery with loyal guests; investing and reinvesting in technology and quality fitouts to differentiate their business from competitors. WHAT'S HAPPENING IN YOUR BUSINESS REGARDING LOCATIONS AND RENT? Brands are looking for sites outside shopping centres on the high street postCovid, in part because centres have not yet created strong delivery access. We plan to have both centre sites and high street sites across Australia. Rental levels for new sites in the market are holding rather than growing or declining. Post- Covid the pressure is on landlords to lower annual rent increases to reflect lower inflation. WHAT ARE YOUR EXPANSION PLANS FOR 2022 AND BEYOND? We have big plans to achieve 30 Sporting Globe and 30 TGI Fridays nationally by 2024 (20 per cent annual growth). Most of this will be defensively targeted towards NSW and Queensland. WHAT IS THE BIGGEST CHALLENGE FACING YOUR BUSINESS AS WE HEAD INTO 2022 FY? Our industry is facing a skills crisis with a dire lack of experienced hospitality talent due to last year, including many talented visa holders being forced to leave the country. We, along with industry bodies and industry friends, will continue to call on the government to quickly and safely bring back foreign workers to support our industry and economic recovery.
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We have a strong recruitment drive underway to fill vacancies nationwide, from managerial and chef roles to casual and part-time host roles, and anticipate we’ll fill these as things progress and some sense of industry stability returns, particularly in Victoria, in the second half of the year. As part of our recruitment efforts, we’re pleased to offer a warm, team-oriented culture with many tenured staff, clear career growth trajectories (with many of our team going on to own their own franchise business), training opportunities, sign-on bonuses for some roles, additional holiday as well as entry to a new industry with training and support for those looking to try out hospitality. WHEN WILL UNIT REVENUE RECOVER FROM THE PANDEMIC? Ours has already recovered with the exception of Melbourne CBD, with sales up to 20 per cent higher than pre-Covid in some markets around Australia. ARE CAPACITY CONSTRAINTS CONTINUING TO IMPACT YOUR FRANCHISEES’ BUSINESSES? Yes, at peak times it’s challenging, but we’re managing bookings and have still achieved required revenues. WHAT ARE YOU DOING TO INCREASE PROFIT MARGINS? We have a strong procurement strategy benefitting from our network growth and good planning around products that experience pricing fluctuation. As we innovate and develop products, our guests are willing to pay for this, and we’ve successfully passed on any increases. WHO IS YOUR CUSTOMER AND WHAT DO YOU SEE AS THE BIGGEST COMPETITION FOR THEIR DISCRETIONARY DOLLAR? At Sporting Globe, our core customers are 25 to 40-year-old middle to high income earners. They’ll spend more not being able to travel. TGI Fridays has two key groups: families with toddler and school-aged children; and 25 to 35-year-olds.
SPOTLIGHT ON CASUAL DINING
LA PORCHETTA CEO Sam Nania heads up the Italian casual dining restaurant, famed for its pizza and pasta, which started out in 1985. Sam says business is picking up after the hit from Covid lockdowns last year. “While we saw a significant shift in casual dining over the previous 12 months, we are now seeing growing consumer confidence reflected in increased in-house dining and we fully expect this to continue.” HOW DO YOU DIFFERENTIATE YOURSELF IN THE SPACE? We remain true to our promise to provide the eat live love Italian experience and we remain local and community focused. HOW ARE DIGITAL AND DELIVERY AFFECTING YOUR BUSINESS? Aggregators have an impact on our business and in the last 12 months this grew; however it’s important to acknowledge the opportunities they provide for increased sales. As a brand, we focus on our online ordering system to mitigate the impact of delivery and takeaway commissions. HOW CAN FRANCHISEES MAKE THE MOST OF THEIR BUSINESS OPPORTUNITIES? Remaining true to our core values is a key pillar to our success. Understanding the evolving market and changing
consumer expectations is vital. The casual dining market will continue to evolve and our franchisees work hard to provide consistency, while being agile when required. Reaching our customers where they are is also very important and we have a strong focus on social media marketing to increase market share. WHAT’S NEW AND EXCITING IN THE MARKETPLACE? We’re launching a new loyalty program and app that allows us to maintain our brand values and provide increased value for our strong, loyal customer base. WHAT’S HAPPENING IN YOUR BUSINESS IN REGIONAL AUSTRALIA? Our plan is to open more sites in regional Australia and we’re looking for suitable sites and quality people. While our regional restaurants experienced international tourism losses, local patronage has been exceptional and we are very well positioned for growth. WHAT ARE YOUR EXPANSION PLANS FOR 2022 AND BEYOND? Our current focus is on supporting our franchisees as we emerge from an exceptional year. At the same time, our plan for the next three years includes the rollout of a new, hybrid model.
WHAT IS THE BIGGEST CHALLENGE FACING YOUR BUSINESS AS WE HEAD INTO 2022 FY? The availability of labour is our biggest challenge right now and we know that’s an industry-wide issue. The hospitality and casual dining sector has been heavily impacted by a shortage of staff. WHEN WILL UNIT REVENUE RECOVER FROM THE PANDEMIC? That depends on the units and whether or not they closed. In our situation, the majority of our restaurants continued to trade through delivery and takeaway models. Our menu and agility allowed us to bounce back quicker than most. We were fortunate in this regard and our thoughts are with those that couldn’t adapt and were required to close. ARE CAPACITY CONSTRAINTS CONTINUING TO HAVE AN IMPACT ON YOUR FRANCHISEES’ BUSINESSES? We are in the most part a large format model with large footprints, and this enabled our franchisees to fully comply with capacity restrictions, with the added benefit of delivery and takeaway supporting the businesses cash flow. WHAT ARE YOU DOING TO INCREASE PROFIT MARGINS? We’re focusing on key areas such as operational efficiency and labour management to maximise efficiency. We continually strive to reduce our cost of goods and, most importantly, we focus on the customer and building increased retention and frequency. WHO IS YOUR CUSTOMER AND WHAT DO YOU SEE AS THE BIGGEST COMPETITION FOR THEIR DISCRETIONARY DOLLAR? We have a diverse customer base, however our primary customers are mum and dad in their mid to late 30s with their two children. Large format operators along with local pizza shops remain our strongest competition, however our focus on providing excellent service, a great customer experience and value has meant we continue to maintain and grow their customer loyalty.
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MOTTO MOTTO A fledgling franchise, this Japanese restaurant bridges the gap between casual dining and fine dining, according to Matt Fickling, chief operating officer. WHAT ARE CONSUMERS LOOKING FOR IN THE CASUAL DINING SPACE POST-COVID? Customers are looking for more – safety, value and convenience. Our guests get more value with us: a premium Wagyu beef pork belly, salmon, king fish, prawn or sashimi tuna dish for around the price of a standard at their local burger joint. Our customers get the convenience of ordering at the table, on our rewards-based My Motto membership app and shortly through takeaway ordering kiosks to make things quick, convenient, contactless and safe.
WHAT INNOVATIONS/TECH DEVELOPMENTS ARE COMING UP IN THE NEXT YEAR? My Motto membership will be tailored for each member instead of the traditional QSR “one size fits all” approach. We’ll add takeaway ordering kiosks into certain restaurants, with the ability to take away and use external seating or order quickly and skip the queue. We’re implementing brand new inventory software and a customised business intelligence system to drive performance and lower costs. WHY IS THIS A GOOD BRAND FOR FRANCHISEES? Our state of the art central production kitchen reduces the need for skilled labour
HOW DO YOU DIFFERENTIATE YOURSELF IN THE SPACE? The concept of “more” – we give our customers higher quality and a bigger range than other casual dining brands. More premium Australian ingredients and a unique menu. IN WHAT WAYS ARE YOUR OPERATIONS DIFFERENT NOW TO PRE-2020? There’s a renewed focus on our customer touch points: the ability to “order to table”, quick and easy online ordering and our revamped My Motto membership. We’ve completely reinvigorated our membership platform and how it connects into our service ecosystem in our restaurants and online to create value for our customers. We’ve grown our membership base to about 5000 members per restaurant.
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in our restaurants. A team of chefs prepare our ingredients to eliminate complexity, ensure ease of operations and training, secure product consistency and increase barriers for competition. Our executive chef specialises in Japanese fine dining, having worked across the top restaurants in Ginza, Tokyo, and leads one of Australia’s most awarded Japanese restaurants, Sono. Our national supply chain manager is dedicated to ensuring availability, quality, consistency and competitive market pricing for all products. Our COO and national operations manager have a unique perspective, having experience in franchisee operations and as a franchisor. n
ADVERTORIAL
A READY-MADE BUSINESS, INSTANT INCOME:
WHY NETWORK PACIFIC STRATA MANAGEMENT ATTRACTS FINANCE PROFESSIONALS Across Australia, there are already around 270,000 Owners Corporations, also known as strata communities or body corporates depending on the state. Over the next 15-25 years, experts are predicting more than 10 percent annual growth. As most Owners Corporations choose to have their assets professionally managed, Network Pacific Strata Management is set to expand. As a result, new franchising opportunities are opening up for customer-focused professionals with an interest in property and finance. WHAT IS STRATA MANAGEMENT? The majority of Australia’s apartments, townhouses and commercial buildings are based on a shared common property ownership model. Purchasers gain a share of the common areas such as lifts, foyers, gardens, pools and car parks. They are also automatic members of the Owners Corporation, which is legally responsible for overseeing the maintenance and overall management of the common property. This includes financial management, insurance, record keeping and compliance with various laws and regulations. Network Pacific Strata Management launched in 1994 and offered its first strata management franchise in 2015. The company is now one of Australia’s largest and most successful strata management organisations, with offices in Victoria, Queensland, Europe and South East Asia. It has achieved ISO9001 quality assurance certification and a Google star rating of 4.4.
A READY-MADE BUSINESS WITH INSTANT INCOME
“We’re currently managing $6.5 billion worth of assets on behalf of 23,000 clients,” says Stephen Briffa, Managing Director of Network Pacific Group of Companies. “Franchisees manage the common property of owners’ corporations,” he explains. “Network Pacific Strata Management franchisees walk straight into a ready-made business. We’ve been managing the properties for five or six years so we’ve settled most of the issues. “They also start earning a contracted income right away, even while they’re completing their 13-week induction training. They are getting a secure portfolio income from day one. “We do all the legislative and software training, give them practical experience in attending Owners’ Corporation meetings.” Franchisees need to have excellent communication skills and be good admin coordinators, he says.
“This is all about relationship-based contracts. We look for business experience, that’s critical. “ There’s no limit to how far the business can go as franchisees can bring in new properties to their portfolio. “On top of the base contract income stream there are additional services which generate additional revenue streams for the Franchise business.” While the individual growth opportunities are boundless, there are limited opportunities to buy into Network Pacific Strata Management. “We only offer a limited number of franchise a year because of the resources we put into supporting franchisees. We’re not interested in being a large Franchise Group, what we want are quality franchisees,” says Stephen Briffa. want are quality franchisees,” says Briffa. To find out more about the exclusive opportunities to join Network Pacific Strata Management visit the www.networkpacificstratafranchise.com.au It could be the first step to a new, fulfilling and profitable career. For a confidential discussion contact Colin Crawford at Wollermann Franchise Developments 0425 838 800 or FREECALL 1300 249 276 for further information.
We are franchising our award-winning owners corporations portfolio
STEPHEN MANAGING DIRECTOR, Winner of the 2019 Annual REA BRIFFA, (AREA) Excellence Award for Game Changer of the Year WELCOMES NEW FRANCHISEES SELINA. REIV Owners Corporation Manager of the MIN YearAND – 2017, 2018, 2019
Do you have management experience? Are you a ‘people person’ with an eye for detail? If the answer is yes, you are the candidate we are looking for. Contact us for further information today. • Earn income from day one
• Proven award-winning systems
• No selling required
• Be an owners corporations manager
• Owners corporations agreements in place
• Forty year franchise term
• Comprehensive training provided For further information visit our website: www.networkpacificstratafranchise.com.au or contact Colin Crawford on 0425 838 800 or Gary Lay on 0407 526 431 at Wollermann Franchise Developments FREECALL 1300 249 276
SPOTLIGHT ON TEA
Bubbling up
T
he bubble tea market is expanding its horizons. Here Chatime and Gotcha share insights into their 2021 plans.
CHATIME
Andrew Benefield is chief development officer at Chatime Group. Q. HOW DID CHATIME BUSINESS BOOM THROUGH 2020? A: Chatime persistently strives for excellence – even with the uncertain times that Covid brought throughout 2020. Over the last year we opened six new sites across Australia with one location being a second site for existing franchisees. Some key stats for last year are: 31 per cent of our sites returned a positive Like for Like over the course of 2020, we achieved a five-year sales compound annual growth rate (CAGR) of +14.2 per cent and reached a 5-year store count CAGR of +14.9 per cent. Q. HOW MANY STORES ARE IN AUSTRALIA NOW AND WHAT'S THE TARGET FOR THE NEXT 12–24 MONTHS? A: We currently have 126 Chatime franchises located across Australia with 29 more to come over the course of 2021. We have more than 50 per cent of our target locked in. Q. HOW DO YOU PLAN TO EXPAND THE NETWORK? A: We aim to expand our network through franchising as we have found that stores run by driven, dedicated business partners who are heavily involved in their own businesses tend to perform better. We aim to branch out right across Australia and to be in every major shopping centre and city. As well as this, we are currently working on an exciting project to expand into rural Australia, looking to hit locations such as Orange, Bathurst, Bendigo and Ballarat towards the end of 2021. Q. WHO IS THE CUSTOMER AND HOW IS THE DEMOGRAPHIC CHANGING? A: From researching into our customer base, we’ve made some really awesome discoveries that have allowed us to really tune into our demographic. For example 78 per cent of our customers are women with 71 per cent between the age of 18 to 35; while 43 per cent (and increasing)
are Australian, however 42 per cent (and declining) come from an Asiatic background. We’ve also established that our customers are high-level digital natives and although they are brand loyal, they are mainly driven by innovation. So we can see that although we have roots stemming from Taiwan, our products are definitely appealing to the western market and this is undeniably on the rise.
taste no matter what location you visit. Chatime also demystifies the concept of bubble tea, opening it up to others and appealing to the masses. This is reflected in the fact that 60 per cent of our customer base come from non-Asian backgrounds. As well as this, we focus on the concept of freshly brewed tea, making sure to brew fresh tea frequently through the day, with our most popular mix-in being the tapioca pearls cooked fresh every four hours.
Q. HOW IS CHATIME DISTINCT FROM OTHER TEA BRANDS IN THE MARKET? A: Chatime aims to delight current and new customers via delivering superior, tailored and digitally-supported experiences. Through our tastefully provocative marketing, we highlight issues in a witty way, sparking curiosity and getting our audiences to think, often leading to change. Unique to Chatime is our Loyal-Tea app, which allows our customers to get the most out of their Chatime experience. They can earn tea-riffic awards with points earned for every dollar spent, jump the queue and order via the app for pronto pick-up, locate their nearest T-brewery as well as app exclusive offers and promotions.
Q. WHAT ARE YOUR EXPECTATIONS FOR THE MARKETPLACE IN THE NEXT FIVE YEARS? A: Our expectations are that the market will consolidate to two to three key players, Chatime of course included. Our goal is set high with the aim to hit 250 stores across Australia. We believe quality operators with good systems will shine through, with fresh iced tea becoming an accepted staple end competitor to other beverages such as juice. Another growing push in the market is for brands to be more environmentally friendly and reduce plastic waste. Chatime is currently working on Project Happy Turtle, which aims for us to completely eradicate single-use plastic within our stores across Australia. We’ve trialled this through the introduction of reusable bubble tea cups, as well as paper straws across the network.
Q. WHAT'S KEY FOR SUCCESS IN THIS MARKET? A: Chatime’s secret to success is in the consistency of our product, with all our drinks served having the same amazing
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GOTCHA
Gotcha’s tea ranges are tailored to suit everyone, no matter their age, dietary preference or palate. They include handcrafted collagen teas, milk teas, cheese foam, macchiatos, Japanese-style yogurt and fruit teas. Gotcha assistant managing director, Christy Chen, says, “As Gotcha successfully combines Asian tea culture with the European salon experience, we invite all walks of life to enjoy the taste of our fresh tea.” Q. HOW MANY STORES ARE IN AUSTRALIA NOW AND WHAT'S THE TARGET FOR THE NEXT 12–24 MONTHS? A: Since 2018, Gotcha has expanded to 21 stores across Australia with five new outlets opening before midwinter and another 15 Australian expected to open by the end of the year. Gotcha is planning to expand to Saudi Arabia, New Zealand and Singapore this year, and is expanding to eight stores in Indonesia. Gotcha will continue focusing on the interior of our stores to deliver an elevated level of design. Q. HOW DO YOU PLAN TO EXPAND THE NETWORK? A: We are currently focused on building strong franchising relationships, mainly in suburban locations. Landlords and shopping centres appreciate the brand’s western design concept and sophisticated offering at a reasonable price point. Gotcha’s offering is fast and convenient, which performs well in heavy foot traffic locations. By July we plan to open stores at Fountain Gate, Epping, Broadmeadows, Watergardens, Werribee, Sunshine, Chadstone, M-City and Clayton in Victoria. In NSW, a Granville store will be unveiled. Q. WHO IS THE CUSTOMER AND HOW IS THE DEMOGRAPHIC CHANGING? A: The Gotcha consumer is aged between 14 and 50 years old. Q. HOW IS GOTCHA DISTINCT FROM OTHER TEA BRANDS IN THE MARKET? A: Gotcha has established itself as a connoisseur in the bubble tea market. We believe our strength is in our ability to harvest the highest quality teas, build impressive product ranges and by creating an unparalleled instore experience. The interior design of all Gotcha salons AUG/OCT 2021 | 49 | WWW.FRANCHISEBUSINESS.COM.AU
is a huge element of focus for the brand in ensuring that customers can indulge in the highest luxury and enjoyment of bubble tea. Our founder, Roger Fu, is exceptional at employing his smarts as a mechanical engineer and industrial designer, having designed a tea brew and quick shake machine that will cool hot tea to a chilled bubble tea in 0.5 seconds. We like to call this the Ferrari motor of bubble tea making and expect this to revolutionise the industry. Gotcha’s unique machine was created to professionalise and elevate the making of each tea, instead of traditional handshaking, which can standardise the quality of the drinks. Our brand strategy is built on the promise of providing a high-quality tea experience and education for the discerning bubble tea consumer. Gotcha remains unparalleled with rigorous quality control, from leaf to cup, with our tea being farmed and picked from our own plantation to ensure the highest quality ingredients for each customer. Q. WHAT’S KEY FOR SUCCESS IN THIS MARKET? A: We credit our success to two branches, entrepreneurship and innovation, which we believe stem from the creativity tree, that when combined create a business model that will flourish. We are always working towards enhancing our products, working towards a sustainable future, maintaining jobs for our employees, and maintaining the quality of our tea. Q. WHAT ARE YOUR EXPECTATIONS FOR THE MARKETPLACE IN THE NEXT FIVE YEARS? A: As coffee and tea are beverages consumed across the world, we are very confident the bubble tea market will continue to grow, especially as we expand into international regions. There continues a great buzz among the trends of the food and beverage industry, with boba balls, full leaf tea, high-quality milk and sustainable packaging showing no signs of the interest dwindling away. We are committed to enhancing our bubble tea experience and taking Gotcha to the next level through strategic planning, innovation and expanding our beverage options to suit all consumers. n
SPOTLIGHT ON WELLNESS
WELLNESS FLEXES
ITS MUSCLE
The wellness market is a multidisciplinary sector that’s fast gaining strength. We look at franchises across Pilates, fitness, rehabilitation and allied health that are smashing goals and setting their sights on a healthy future. By Sarah Stowe
T
he wellness industry is booming globally. Here we shine a light on what’s happening in Australia and a spotlight on what wellness means. So what do we mean when we talk about the wellness industry? “I think there is an important distinction between health on one hand, and wellness on the other,” says Back In Motion founder Jason T. Smith. “Traditionally, health has been about treating sickness, illness, pain and disease. Wellness has focused on delivering services that simply make people feel better. “Wellness has grown to encompass the spiritual, emotional and even the
intellectual, environmental, social and economic/occupational dimensions. “As our societal awareness of the integration of ‘self’ emerges, we see a blending of the health and wellness spaces.” Selina Bridge, KX Pilates CEO, says the wellness market “is in many ways undefined. It is very broad and can cover physical, mental and spiritual health”. What we do know is that this multidisciplinary sector is growing apace. Figures from the Health and Wellness Market: Global Industry Trends, Share, Size, Growth, Opportunity and Forecast 2021– 2026 show the marketplace accounted for $4.27 billion ($US3.31 billion) in 2020. Predictions for the next five years suggest a compound annual growth rate of 4.10 per
cent to reach $5.47 billion by 2026. Included in this are services based on wellness real estate, wellness tourism, health spas and thermal and mineral springs as well as personal care/beauty, nutrition, weight management, fitness and preventive/personalised medicine. Key players in the Australian franchise sector include yoga and Pilates brands, allied health providers such as physiotherapists, alternative fitness options such as electro muscle stimulation, and rehabilitation services. Matej Varhalik, SpeedFit co-founder and CEO, enjoys the constantly evolving nature of the wellness market. “That makes it a very exciting market to be part of,” he says.
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BLENDING HEALTH AND WELLNESS SPEEDFIT CEO Matej Varhalik says, “The concept for SpeedFit was based on my personal experience of having an injury that was causing me great discomfort and inconvenience and needing a solution for rehabilitation that would not take up endless hours of my day. “SpeedFit is designed to give people with busy lifestyles a fast but effective option for health and wellness, and fits well into the current market. “At SpeedFit our vision is for all people to live an active and healthy lifestyle, regardless of time constraints or physical limitations. We believe that your fitness routine shouldn't overtake your life but fit into it,” Matej says. He predicts the sector will continue to grow, the post-Covid space now bringing health issues to the fore. “Health issues like obesity and mental health are being discussed more in the media,” he points out.
BACK IN MOTION
Founder Jason T. Smith says the healthcare chain has always considered itself a brand that connects health and wellness. “We are university trained healthcare professionals delivering expert physiotherapy, chiropractic, podiatry and exercise physiology services, but design our client care models around a wellness philosophy that acknowledges the bio-psycho-social context. “We don’t want to just fix the ‘problems’ of poor health, we want to promote people’s wellness through proactive, positive lifestyle choices and habits. This is our brand’s point of difference and explains our high levels of year-on-year growth over two decades. “Our brand essence at Back In Motion is built on the belief that ‘movement is for life’. We don’t just treat the injury, we treat the whole person … by understanding their individual lifestyle, preferences and goals to design a treatment plan tailored to
WHAT ARE YOUR FIVE-YEAR GOALS FOR THE BUSINESS? “SpeedFit is Australia's largest EMS (electronic muscle stimulation) fitness franchise and we will continue to grow our presence across Australia with a goal of servicing 20,000 people by 2027. “EMS training is still quite new to the Australian market so our goal is to continue driving awareness and education about the various benefits that this training can offer.” HOW ARE YOU OVERCOMING THE CHALLENGES OF EXPANDING THE NETWORK? “We achieved a 76 per cent year-on-year growth for the period of 2020–21 and are excited to keep supporting our growth across Australia. To do this we have started recruiting for key positions which we may not need right away but will need sooner than later.”
their life needs.” Jason’s goal is to empower clients to have optimal lifelong health, and Results4Life is a proprietary philosophy of care that governs the group’s clinical approach. And rather than push products and services, Jason believes the goal should be to listen to clients and solve problems. “I think a good deal of demand for our expertise emerges from sound and consistent education. I’ve dedicated my career to being a health advocate, investing more time and effort into education of our communities than ‘selling’ our services.” WHAT ARE YOUR FIVE-YEAR GOALS FOR THE BUSINESS? “We have been growing at a steady rate of between 10–15 per cent year-on-year since inception. Our intention is not to slow down any time soon.” Jason has just launched Back In Motion’s #impact2030 strategic plan and expects to significantly increase the number of practice locations from 140 to 400 within 10 years. A rollout of new sites across Australia and New Zealand has a special emphasis on podiatry, chiropractic and dietetic services. “We are also committed to investing heavily into technology to facilitate digital health services, home-care offerings and ongoing research into healthcare and best practice,” says Jason. Expanding the network is a threepronged approach: existing staff members
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There’s an increase in broader marketing and communications initiatives as awareness and education is key for the business, he says. “We also recently introduced a part-ownership franchise model to make owning a franchise more accessible to people who would like to own their own business but do not have the upfront funds to get started. We have trialled this in a few locations and it is working really well.” BRAND BASICS How long have you been trading? Eight years How long franchising? Four years How long is a franchise term? Five years with two options to renew What is the upfront franchise investment? In our partnership model $100,000; a full stand-alone studio is between $150,000 and $220,000 What are the franchise fees/marketing fees? 7% royalties; 6% marketing levy
become franchisees; opening brand new sites; and converting existing physiotherapy practices. HOW ARE YOU ATTRACTING FRANCHISEES? “We simply invest our time educating our profession on the importance of sound business practices, strategies for growth and how to live balanced professional lives,” says Jason. “As they realise their need for solutions around this, our franchise offering presents as a high-value proposition for their consideration. It’s an organic process rather than an aggressive sales strategy. But it has worked well for us for over 20 years.” BRAND BASICS How long have you been trading? 21 years How long franchising? 16 years How long is a franchise term? Five years with ongoing options What is the upfront franchise investment? $70,000 + equipment/fitout What are the franchise fees/marketing levies? Franchisee fees are 2–7% gross sales depending on the size of business. As the practices grow, the royalties become lower. A royalty-free concession on the revenue and goodwill is available to conversion franchisees. Marketing levies are 2% of gross sales.
SPOTLIGHT ON WELLNESS
PHYSIO INQ Physio Inq is underpinned by three house rules which guide the business: employees come first; every client deserves an amazing experience; and referrals are treated like royalty. “Wellness needs to be a part of someone’s life, not the complete focus,” says founder Jonathan Moody. “Seeing progress means that clients can fail one or two days and all is not lost. Rather than having the ‘I’ll start on Monday’ mindset, the wellness industry needs to be encouraging clients to do a little bit each day, however small that might be.” He says, “The pursuit of perfection has been a focus in the past and we should instead look at progress, not perfection.” WHAT ARE YOUR FIVE-YEAR GOALS FOR THE BUSINESS? “Physio Inq is an award-winning allied health franchise with the goal to have 100 clinics across Australia in five years, as well as 500 practitioners servicing clients in-home. “We are on track to become a household name in the healthcare market and be known for our relentlessly caring approach.” HOW ARE YOU OVERCOMING THE CHALLENGES OF EXPANDING THE NETWORK? “We have made some key hires in 2021 so far, which will be integral in scaling the network.” New hires include a chief financial officer, chief data officer, a people development
and experience manager, and promoting a senior manager to the position of chief operating officer. “With this investment in people who will support and make up the infrastructure of Physio Inq, we will then streamline processes for growth. “Another decision that we made in 2020 was to lower one of the barriers to becoming an owner by allowing anyone with or without allied health practical experience to become a franchisee.” HOW ARE YOU ATTRACTING FRANCHISEES? “We are growing our network organically at the moment and looking internally on those who show the signs of a great business owner.
“Most of our new clinics have been opened by practitioners who were already working within our network but were keen on taking the next step in their careers. A few of our franchisees have also been growing their own network and opening their second unit.” BRAND BASICS How long have you been trading? 15 years How long franchising? Since 2018 How long is a franchise term? Five years but there are no lock-in contracts What is the upfront franchise investment? $6500 What are the franchise fees/marketing levies? We have a flat fee of $2750 per month
CITY CAVE “City Cave delivers clients preventative healthcare services by offering float therapy, infrared sauna and massage services,” says David Wilkinson, franchise business coach. Education is the most important aspect of City Cave’s growth strategy, he says. “Our centres are often booked out more than a week in advance and while we know we’re only scratching the surface of ‘mainstream’ we’re excited in knowing that every new centre opening exposes a new community to the benefits of float therapy and our other services.” WHAT ARE YOUR FIVE-YEAR GOALS FOR THE BUSINESS? “Five years will see City Cave complete our franchise footprint in Oceania (200 open centres) and into stage two of our North American expansion (100+). “Currently our network expansion plan is well on track, the biggest challenges in 2021 have been bottlenecks created by Covid shutdowns last year, in which many prospective franchisees hit the pause button. This has seen an influx of educated prospects who have re-entered the sales pipeline.” Many new franchisees were originally City Cave clients. BRAND BASICS How long have you been trading? Since 2016 How long franchising? Since August 2018 How long is a franchise term? Seven years with an additional seven-year option What is the upfront franchise investment? Between $450,000 and $500,000 What are the franchise fees/marketing levies? 8% royalty; no marketing levy AUG/OCT 2021 | 52 | WWW.FRANCHISEBUSINESS.COM.AU
STRETCHING IT OUT PEAK PHYSIQUE HOT YOGA
Mark Chapman, Peak Physique CEO, says “The market is competitive and while it has not reached saturation point yet, there is a demand for quality fitness-related services that cater to the demands of the busy professional who wants quality service in a family environment. “Our brand is positioned in the middle range of the market and this is also our target area. We are not ‘top brand’ service providers, nor do we want to be, and we are also not a cheap and cheerful as this does not fit in with our professional image. “We see ourselves as an affordable quality provider of fitness-related hot yoga that appeals to all ages, genders and backgrounds.” Peak Physique’s brand ethos is a positive change to lifestyle delivered by professionals. “Our mission is to make fitness, health and wellbeing accessible and to be a part of a family-focused community that promotes positive change and a healthy mindset.”
WHAT ARE YOUR FIVE-YEAR GOALS FOR THE BUSINESS? Mark has a five-year plan to expand the brand into metro and non-metro areas of all states and territories in Australia. And this will be achieved with a measured approach. “We are not rushing. The product needs to be right, and we are spending time adapting to the post-Covid climate and determining what the best model is to take forward. “At the same time, we are raising the profile of the brand, confirming our position and doing a targeted campaign in key areas.” The business is opening up its service offering as a licensed product in gyms and clubs. “Hot yoga is enjoying a popularity that is not based on a new fad or product. It is simple to run as a business and has a high return ratio if run well. We emphasise the financial gains and the community spirit of a well-run hot yoga studio.”
BRAND BASICS How long have you been trading? 2011 How long franchising? 2013 How long is a franchise term? Five years What is the upfront franchise investment? $33,000 spread over two years plus the costs of the studio fitout What are the franchise fees/marketing levies? 10% for franchise fees and a monthly admin $220 cost which includes SEO and communications
FUNCTIONAL FITNESS A mind and body fitness regime, Pilates was developed by Joseph Pilates in the early 20th century. The goal is to improve the body’s flexibility, strength and control with a focus on the core and an emphasis on breathing and alignment. “The Australian wellness market,
especially the boutique fitness market, is in a rapid state of expansion. Covid-19 has drawn people’s attention to the benefits of living a healthy/active lifestyle, with Pilates providing a sound foundation for a strong mind and body,” says Brendan James, Club Pilates Australia CEO.
CLUB PILATES “A new approach to what has historically been an elitist and inaccessible form of fitness, Club Pilates, globally, has played a major role in educating people that Pilates is in fact for everybody and every body,” says Brendan James. “We can all benefit from Pilates, so we want to empower as many people as possible to add strength, stability and balance to their lives.” Club Pilates has more than 650 active studios across 11 countries, with three more set for this year. WHAT ARE YOUR FIVE-YEAR GOALS FOR THE BUSINESS? “To open 50 studios in A-grade locations in the next five years. We will consistently deliver the highest quality franchise support from first contact, to studio opening, to a successful and sustainable business.” Club Pilates aims to be recognised as the benchmark for the Pilates experience in Australia and the number one national
provider of Pilates education. “We are affiliated with Xponential, the largest boutique fitness organisation in the world with over 4000 sold locations across nine brands. Any new challenges to us are not new challenges to the group. We can tap into the support network of Xponential to overcome any challenges.” Historically, franchisees come from three channels. “Word of mouth from existing members is the most effective way to source franchisees as they see and share the wow factor of the brand and the benefit of their experience. “Next are our instructors, who also know the brand and the way we are deploying it in Australia. “Finally we are receiving enquiries from people who are aware of Club Pilates from their travels to the US, Canada or Europe and who wish to invest in themselves and their future. “We do also offer a range of financial support options, if required to help our
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franchisees get started.” BRAND BASICS How long have you been trading? Globally, 15 years, in Australia this is our first year. How long have you been franchising? Since 2007 How long is a franchise term? The first term is for 10 years with two 5-year options to renew What is the upfront franchise investment? The actual cost is about $400,000, under $300,000 with equipment finance; other funding packages are available What are the franchise fees/marketing levies? Franchise fee is 7% on all sales; marketing levy is 2%
SPOTLIGHT ON WELLNESS
KX PILATES “KX Pilates was born from the ‘kaizen’ philosophy: where continuous improvements reap some pretty phenomenal rewards,” says CEO Selina Bridge. “We strive to create personalised experiences for our clients who can make continuous improvements in their physical wellbeing through dynamic Pilates movement. “We are inclusive and focus on strength over beauty and we champion the power of individual performance.”
receive the best service possible. “We are very excited to soon be launching our own ‘KX Former’ into the Australian market, a revolutionary and proprietary machine that will enhance the overall KX experience.” The business also has plans to expand international operations. “KX is now Australia’s largest Pilates franchise and our ability to grow and attract great clients comes down to a focus on people, systems and processes and making sure we provide the best possible experience.”
WHAT ARE YOUR FIVE-YEAR GOALS FOR THE BUSINESS? “We plan to grow the Australian network to 150 studios servicing 50,000 clients a month. We are committed to the ongoing development of our KX trainers and will continue investing in education opportunities for our trainers to ensure our clients
HOW ARE YOU ATTRACTING FRANCHISEES? “At KX Pilates we look for passion for our product and the wellbeing of the community.
We are a lifestyle business that people aspire to be part of. You can’t buy yourself success. We are therefore focused on attracting and supporting clients, trainers, owners and people through growth opportunities within the KX network.” BRAND BASICS How long have you been trading? 11 years How long franchising? Eight years How long is a franchise term? Five years with one option to renew What is the upfront franchise investment? About $350,000 including studio fitout and equipment What are the franchise fees/marketing levies? $50,000 up-front franchise fees; 8% royalty. 4% marketing
GLOBAL WELLNESS ECONOMY:
$4.5 Trillion Market Traditional & Complementary Medicine $360b
Preventive & Personalized Medicine and Public Health $575b
Wellness Real Estate $134b
Workplace Wellness $48b
Healthy Eating, Nutrition & Weight Loss $702b
Personal Care, Beauty & Anti-Aging $1,083b
Wellness Tourism $639b Thermal /Mineral Springs $56b
Physical Activity $828b
Spa Economy $119b
SCREEN SAVERS Wellness and entertainment now go hand in hand. Think Samsung Health, with 5000 hours of free fitness/meditation classes, and smart TVs that deliver personalised wellness/fitness programs through wearable technology. Think generative music technology, which is biometrics meets neuroscientistdesigned sound used as a medicinal tool.
Source: Global Wellness Summit Report, The Future of Wellness 2021.
Note: Numbers do not add due to overlap in segments. Dark colored bubbles are the sectors Note: Numbers not addin-depth, due to overlap in segments. Dark colored for which GWIdo conducts country-level primary research. Light colored bubbles are bubbles are sectors which GWI conducts in-depth, country-from secondary sources. sectors forthe which GWIfor aggregates global estimates only, drawing level primary research. Light colored bubbles are sectors for which GWI Source: Global Wellness Institute, Global Wellness Economysources. Monitor, October 2018 aggregates global estimates only, drawing from secondary
Source: Global Wellness Institute
WELLNESS GLOBALLY IN 2023 $5.42 TRILLION REVENUE OVERALL $153.53 BILLION SPA MARKET $824.41 BILLION WELLNESS TOURISM $61.93 BILLION WORKPLACE WELLNESS Figures converted from US to AUS dollars. Source: Global Wellness Summit Report, The Future of Wellness 2021.
FINANCIAL INFLUENCERS Yes, they are a thing, as attested by 3 billion views of #personalfinance content on TikTok. Financial therapists are helping manage the links between money and mental health.
Source: Global Wellness Summit Report, The Future of Wellness 2021.
PUMPING IT! The physical activity economy will surpass $1.42 trillion by 2023, predicted GWI Global Wellness Economy Monitor in October 2018, with revenue growth the greatest from mindful movement and technology.
YOU WEAR IT WELL MARKET RESEARCH FIRM IDTECHEX REPORTS A DOUBLING OF SALES OF WEARABLE MEDICAL HEALTH AND FITNESS TRACKERS BETWEEN 2014 AND 2019 TO ALMOST $US70 BILLION.
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GLOBAL PHYSICAL ACTIVITY ECONOMY:
$828 Billion in 2018 $230b
Sports & Active Recreation
RECOVERY LAB $109b
$29b
Fitness
Mindful Movement
$368b
RECREATIONAL PHYSICAL ACTIVITIES
$466b
ENABLING SECTORS
$109b
Equipment & Supplies
$333b
Apparel & Footwear
$26b
Technology
Note: Numbers do not sum to total due to overlap in segments. Source: Move to be Well: The Global Economy of Physical Activity, October 2019
IT’S A STRETCH –
YOGA OUTPACES PILATES In 2018 findings released by Roy Morgan indicated the popularity of yoga over similarly female-dominated activities, Pilates and aerobics. At the time, 11 per cent of Aussies did yoga, while 6 per cent did Pilates and 5 per cent aerobics. All three typically attract younger and more affluent metro singles and families.
Former AFL umpire and Collingwood AFLW coach Matt James is the brains behind the Recovery Lab, which is a multi-treatment studio designed to boost peak performance in athletes and everyday Australians. The Recovery Lab provides ice baths, compression boots, infrared sauna, massage guns, electrical muscle stimulation and NuCalm, a branded neuro-acoustic relaxation method endorsed by high-profile life coach Tony Robbins and exclusive to Recovery Lab. It took four years for Matt to develop the multitreatment concept, which was born from his time at Collingwood. “It was the most stressful position I’d ever been in,” he reveals. In his search for a wellness boost program to help him cope with the stress he realised there was little in the market that fitted his needs. He launched Recovery Lab in Windsor, Melbourne, and it’s been operating for two and a half years. What’s on offer is a suite of scientifically tested recovery treatments set in a relaxing studio space. Matt’s brainwave attracted the attention of Daniel Harford, former AFL player and now head coach of Carlton AFLW, who joined the venture as co-founder. Ex-CEO for St Kilda and former head of the soccer A-League, Archie Fraser, heads up business strategy while former Western Force rugby union player Ben Seymour is also a partner in the business. With the brand’s sporting pedigree it’s inevitable that Recovery Lab aims to help athletes reach peak performance levels but Matt believes the business can have a far greater reach. “The whole thing is built around a community experience, it’s about investing in yourself. It’s designed for everyone. It’s for anyone who wants to improve how they feel and perform.” Recovery Lab operates on a casual and membership basis. Membership accounts for 35 per cent of revenue and there are options for limited and unlimited access to the various treatments, with membership valid across the growing network of studios. “There’s no doubt we’re first in market and we want to be pre-eminent for wellness,” says Matt. He has an ambitious goal of opening 200 studios across Australia, with a mix of franchised and corporate ownership. The model will suit franchisees who are owner occupiers with a passion for health and wellness and perhaps a fitness background, as well as investors looking to run up to five studios all under management. “We’ve set the model as a low entry, turnkey is about $150,000,” explains Matt. He believes a return on investment can be achieved within 12 months. Matt has partnered with two friends to open a Hampton outlet and Richmond, Victoria and Townsville studios were set to open mid-2021 with 10 more deposits already paid. Sydney-based Ben Seymour has six sites in the pipeline. The goal is to achieve an 80/20 franchised/corporate mix across the network. Matt believes there is potential to extend the offering into the corporate market targeting time efficiencies and employee benefits, and is looking to sign national deals for corporate membership. Collaboration is likely with like-minded businesses such as the Love Me Love You wellness hub incorporating yoga, Pilates and wellness specialists such as psychologists. n
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TURN DREAMS INTO REALITY Contact the Quest franchising team to learn how you can join hundreds of successful business owners operating their very own Quest Apartment Hotel.
LEARN MORE QUESTFRANCHISING.COM.AU
SPOTLIGHT ON HOME LOANS
VALUE ADDED
Q&A with home loans business MoneyQuest
I
f you see a home loans business as a value-add for your career, here is what you need to know about one of the players in the market. Michael Russell, managing director of MoneyQuest, answered our questions about the market and the brand. Q: HOW LONG HAS MONEYQUEST BEEN FRANCHISING? A: Five years. We launched our franchise model in May 2016. Q: WHAT DO YOU OFFER TO FRANCHISEES THAT MAKES YOUR BUSINESS A COMPELLING INVESTMENT? A: We offer the ability to earn an uncapped income while building a readily saleable asset. The nature of our remuneration – upfront commission at the time of settling a loan and an ongoing trail commission
paid monthly for the life of a loan – is commercially attractive when joining, throughout the life cycle of the franchise, and upon exiting. Additionally, we have waived our initial franchise licence fee of $9,500, and allow our franchisees to choose their working environment, whether it be a home office, an unbranded office, or a fully branded office. Q: WHAT QUALIFICATIONS DO FRANCHISEES NEED TO HAVE TO BUY A MONEYQUEST BUSINESS? A: First and foremost, prospective franchisees need to display a passion for helping others to improve their financial positions and realise their property dreams. Franchisees need a Certificate IV in Finance & Mortgage Broking FNS40815. They also need to obtain a membership with the Australian Financial Complaints Authority (AFCA), and join an industry association.
Once they are officially onboarded, MoneyQuest franchisees must meet the accreditation requirements of our approved lenders and suppliers, and within two years they need to complete a Diploma of Finance & Mortgage Broking Management FNS50315. Q: WHAT TRAINING DOES MONEYQUEST PROVIDE? A: It is imperative that our franchisees are well trained as they assist clients with making significant financial decisions and they handle sensitive information. So the training we offer new members is extensive, and importantly, ongoing, due to the ever-changing nature of the mortgage broking industry. Initially, new franchisees are required to complete an online induction course, which is accessible via MoneyQuest’s bespoke learning portal ‘eAcademy’ before one week’s face-to-face training at head office.
SURVEY REVEALS JOB SATISFACTION A recent survey of MoneyQuest franchisees reveals 96 per cent of those who responded describe themselves as either ‘totally happy’ or ‘mostly happy’ with their decision to become a mortgage broker. Mortgage & Finance Association of Australia (MFAA) CEO, Mike Felton, says this positive response is likely linked to the pivotal role mortgage brokers play in helping others to achieve their property dreams. “The fact that the vast majority of brokers are content with their choice of profession despite the trying circumstances of recent months and years is not only a testament to the resilience of those working in our industry, but also reflects the key role mortgage brokers play in the economy and the communities they serve. “Mortgage brokers play a critical role in providing access to credit, helping people to achieve one of life’s great goals in purchasing a property. This provides tremendous professional and personal satisfaction for brokers which I believe contributes to this survey outcome,” Mike Felton says. AUG/OCT 2021 | 57 | WWW.FRANCHISEBUSINESS.COM.AU
SPOTLIGHT ON HOME LOANS
This training covers everything from loan application scenarios and role playing, to prospecting and marketing, to compliance and risk management. We also offer a variety of professional development sessions, including a fortnightly network-wide Zoom led by the CEO and executive team, a session with our lenders and franchisees held on the last Wednesday of every month, and an annual national conference. Q: WHAT OPPORTUNITIES ARE THERE FOR FRANCHISEES TO EXPAND THEIR BUSINESS? A: The options are virtually limitless; we have single operator franchisees, and franchisees that have more than 10 staff. If the demand is there, franchisees can increase the size of their teams to meet it. Q: THERE ARE A LOT OF HIGHS AND LOWS PREDICTED AROUND HOUSE PRICES. HOW DOES THIS AFFECT YOUR BUSINESS AND WHAT CAN YOU TELL US ABOUT THE MARKET POTENTIAL OVER THE NEXT FEW YEARS? A: House prices rarely stay flat for extended periods and are generally either rising or falling. It is difficult to predict changes in residential property prices too far in advance, however market economists believe that the property market will stay very buoyant, in the near term at least. However, the New Zealand Government recently introduced a series of measures to curb rising dwelling prices, and our Reserve Bank and APRA (Australian Prudential Regulation Authority) are closely monitoring this. Q: WHY IS MONEYQUEST WELLPOSITIONED TO TAKE ADVANTAGE OF THIS? A: MoneyQuest brokers are well trained to adapt to changes in the property market. Activity levels continue to remain high and our franchisees have the knowledge and resources to assist clients regardless of whether the property market is rising or falling. Q: HOW DO YOU SEE REGULATORY ISSUES AFFECTING THE BUSINESS? A: Our industry recently underwent significant regulatory change with the introduction of the Best Interests Duty and we do not anticipate any further significant changes to be made in the near future. n
IS MORTGAGE BROKING A GOOD DEAL?
IBISWorld Mortgage Brokers in Australia, October 2020 report author Yin Huey Yeoh wrote of the housing sector, “Housing prices recovered slightly in 2019-20, but are expected to fall in the current year as a result of the Covid-19 pandemic. Consequently, industry revenue is projected to fall 0.6% in 2020-21. “Residential property loan rates are anticipated to rise over the next five years, reducing investor demand for residential property. Higher competition both internally and externally will likely exert downward pressure on industry participation growth. Overall, industry revenue is projected to rise at an annualised 1.7% over the five years through 2025-26, to total $2.7 billion.” There is a more prominent place for brokers now in the market, Yin Huey Yeoh suggests. “Mortgage originators tend to consider brokers an efficient way to increase brand recognition in areas where they may not have a strong presence. Some smaller lenders find brokers particularly useful, as these companies may offer competitive rates and quality products but lack the brand recognition, size and marketing power required to compete against larger institutions. “Brokers have taken up a more prominent role in the mortgage lending market over the past five years, as borrowers have sought unbiased advice when obtaining a mortgage.”
KEY SIGNS OF SUCCESS IN MORTGAGE BROKING Having links with multiple lending institutions An experienced and knowledgeable work force A franchise operation that provides support and training Economies of scale Maintenance of excellent customer service which leads to referrals Source: IBISWorld, Mortgage Brokers in Australia, October 2020
PREDICTIONS FOR 2020-2025 1.7% annual revenue growth 3.4% wages growth 1.5% employment growth HOW BIG IS THE HOME LOANS MARKET? $2.5bn revenue $267.3m profit 10.6% profit margin 7,374 businesses 18,165 employees $1.3bn wages
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Advertorial
Crust has big plans for a very prosperous new year What are your plans 2021? Crust pizza is going for growth, including opening 10 new stores. Could one of those stores have your name on it? Australia’s #1 premium brand Since its launch in 2001 Crust has focused on quality, freshness and innovation. There are now over 140 outlets in Australia, plus two international territories, and premium products have set the brand apart. Roy Morgan Research Institute recently named the pizza chain Australia’s leading premium brand in the Quick Service Restaurant category. It's a very good place to be. The research also found that there are over 4.7 million premium consumers in Australia who spend more, and more frequently, than anyone else. But Crust doesn’t stop there when it comes to optimising franchise partners’ . “We recently opened up to a whole new segment of the market to sit alongside our premium offerings,” says Jon Paul Partyka. “An $11 pizza deal with a $5 side option is now available now from many of our stores.” Crust has already sold more than 5.4 million pizzas this year. The number of customer transactions has risen by 21.8% with 15.1% year on year growth. “The fact that sales increased significantly at the peak of lockdown demonstrates the success of our new menu options,” says Jon Paul Partyka. “In tough times, many people look forward to the lift they get from eating our gourmet pizza while other look for affordable options. It’s an example of the innovations our franchise partners welcome and enjoy.” All the support you could need “We’re not just a franchise, we’re a family,” says Jon Paul Partyka. “When you join us, your initial six-week training teaches you everything you need to know about running a Crust pizza store and a small business. You’ll then have support from our friendly team of specialists whenever and wherever you need it.” Crust offers the competitive edge that comes with an established, well known Australian brand. And you don’t even need previous experience to share the benefits – there are expert to guides you through all the key milestones and work with you every step of the way. “The whole set up is easy because we do all the hard work for you,” says Jon Paul Partyka. “You can enjoy maximum efficiency and productivity right from the start. And, with our streamlined payroll, rostering and HR systems, you can spend a lot more of your valuable time focusing on building your business.” In 2021, Crust will also be supporting current franchise partners with brand new designs for stores and the menu. “We never stop thinking about ways to Improve the opportunities for our franchisees,” says Jon Paul Partyka. Get in touch Crust stores range in price from $200,000 and leasing specialists are on hand to help you find your preferred territory and negotiate terms. So, if you’re ready to connect and cultivate customer experiences, contact Kellie Cranch on 0401 058 607 or email kellie.cranch@rfg.com.au, for your first taste of being a Crust above the rest.
FRANCHISE BASICS
SHOPPING CENTRES:
THE GREAT UNKNOWN Before taking on a franchise in a shopping centre, make sure you understand the facts, figures and terminology so you can make an informed decision. PETER BUCKINGHAM Spectrum Analysis
M
any franchise businesses operate a high percentage of their retail stores from shopping centres. Many are very successful, some are okay, and quite a few have been failing over the last few years – and additionally the impacts of Covid-19 have presented many other issues.
ESSENTIAL TERMS
The Property Council of Australia licences a national dataset on shopping centres, and the language used is common to the industry, from the Property Council of Australia to annual reports and websites discussing particular shopping centres. Following are some terms that are essential for you to know when considering taking on a franchise in a shopping centre. • GLAR: gross leasable area retail • MAT: moving annual turnover • pedestrian count • shopping centre type
Shopping centre management is charged with getting the best returns for space, and this can be at the expense of the survival of the franchisee. Historically these locations have been profitable investments, and in many cases sold into super funds and other financial institutions where the return may no longer be meeting the landlord’s expectations. This article is not aimed at scaring you
off retailing in shopping centres, but rather to explain the information available to the franchisor and the franchisee, and how this can be interpreted to help in your decision-making. Shopping centre owners have many resources available and they are very good at placing a positive spin on their premises, and it is your job to sift through this to see reality, and how that will hold up in the future.
GLAR The gross leasable area retail of a shopping centre is its retail size – in square metres. There is a formula that the owners are supposed to follow on how to measure the GLAR, and we can only assume it is consistent. Chadstone, in Melbourne, is an example of a very large shopping centre; it has a GLAR of 186,278 square metres and a total centre area of 233,243 square metres. By comparison, Stocklands at Shellharbour, NSW, is GLAR 59,905 square metres and total centre area of 72,885 square metres. MAT This is the sum of the dollar turnover as supplied by the tenants to the owners under their lease conditions. These figures are then added together and declared to the Property Council as the MAT for that shopping centre. In our example, Chadstone has a MAT of $2.301 billion, and Shellharbour $471 million. Pedestrian count We have all heard of door counters and how shopping centres measure their pedestrians – pedestrian count is the total number of visitors per year. Chadstone’s pedestrian count is 24,200,000 and Shellharbour’s is 8,182,769. Shopping centre type Shopping centres are defined primarily by the size of their retail space (GLAR) and are broken up into the following categories: TYPE
MINIMUM SIZE
MAXIMUM SIZE
COMMENT
SUPER REGIONAL
85,000 sq m
unlimited
Largest shopping centres in Australia
MAJOR REGIONAL
50,000 sq m
85,000 sq m
Strong shopping centres
REGIONAL
30,000 sq m
50,000 sq m
SUB REGIONAL
10,000 sq m
30,000 sq m
NEIGHBOURHOOD
10,000,sq m
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Supermarkets plus some specialty stores
RATIOS Things get interesting when you look at a shopping centre in terms of dollars per square metre or dollars per customer – and a variety of other possibilities – and see how they compare. For instance, if you divide a shopping centre’s MAT number with the GLAR total, the equation gives you dollars per square metre. To work out the dollar value per pedestrian in the centre, the MAT is divided by the number of pedestrians. I think you can see why Chadstone would be charging higher rents than Shellharbour and the other locations. If you are looking at some of the ratios, make sure you look at similar centres for a reasonable comparison. Sometimes a neighbourhood shopping centre may have a great supermarket and this combined with a few small specialty shops increases the dollars per square metre ratio above the bigger shopping centres, but the available market through the specialty stores may be low. The MAT/GLAR is one of the best comparisons that shows a strong, high turnover shopping centre compared to a low performing centre. Whether it be justification for rental, or assisting in quantifying your sales forecasts for the future, this is a great way to broadly compare shopping centres and to reflect your interest in going into them.
DEMOGRAPHICS
Before committing to a shopping centre site you need to consider who lives and works nearby, you need a base population, and some alignment to your product. If you are selling expensive clothing, high-priced jewellery and Tesla cars, you would be best in a high socio-economic area. If you are selling discount products, under $5 wares and discount grocery lines, you would be best in a lower socio-economic area. We can measure this in many ways, including understanding SEIFA – socio economic index for areas – or maybe by looking up the average household income on the ABS website for the area you are considering.
CENTRE
GLAR
MAT
PEDESTRIANS
$/SQ M
$/PED
CHADSTONE VIC
186,278
$2,301M
24,200,000
12,352
$95
SHELLHARBOUR NSW
59,905
$471M
8,182,769
7,862
$58
INDOOROOPILLY QLD
104,914
$659M
11,981,045
6,281
$55
FULHAM GARDENS SA
14,206
$60M
2,500,000
4,223
$24
OTHER FACTORS TO CONSIDER You may wish to consider the working population in the area: a CBD or inner city area, for example, is more likely to have a daytime working population visiting the centre than an outer metropolitan shopping centre. You may want to understand the forecast population growth. The ABS has issued population projections by gender and five-year age groups from 2017 (after the last census) to 2032. This gives us very good information on where the population expansion is expected to come from in all major areas across Australia. A shopping centre-based franchise is a major commitment in lease rental, fitout costs, stock, staff and working capital. Before you make what can be a life-changing decision, you may want to
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understand the factors influencing the success of your business. Using mapping and data should give you the best chance of having a strong business future, and whether you are a franchisor or a franchisee, due diligence should be a requirement of your decision-making process – investing in minimising the risk of failure makes great business sense. Spectrum Analysis offers web mapping services and data, including the new MallSelector as a way to view all this information from one specific data source. Peter Buckingham is the managing director of Spectrum Analysis, a geodemographic and statistical consultancy and is both a Certified Franchise Executive (CFE) and a Certified Management Consultant (CMC).
FRANCHISE BASICS
WILL I MAKE
MONEY FROM A FRANCHISE? There are no guarantees, but doing your homework first is the best way to decide whether franchising is for you. AARON MARCH
MELISSA STRAIN
Director of BlueRock Accounting
Associate director of BlueRock Law
L
ike any acquisition or new business venture, buying into a franchise needs careful consideration. Franchising provides amazing opportunities to leverage a well-known brand, quickly generate revenue and profit, and potentially create a great lifestyle. But it’s not for everyone, and you’re never guaranteed to make a profit – even if other franchisees of the same franchise system are doing so. Here are a few considerations when
it comes to better understanding your potential to make money from a franchise.
HOW MUCH MONEY CAN I MAKE FROM BUYING A FRANCHISE? Understanding how much money you can make from a business is a complex question. It’s ultimately the sum of many moving parts, including your product or service, brand equity, marketing strategy, customer experience, operational efficiencies, and the personal effort, skills
and experience you offer as the business owner. And, of course, there’s your people … and that’s a whole other story! Nothing is certain in business; however, being part of a franchise system provides a fantastic opportunity to get information (benchmarking data) from many sites, just like the one you’re looking at, so you can make a more informed decision about whether the investment is right for you. To get an indication of how your site might perform, ask the franchisor for access to data about other franchisees. Try to gather data from a wide variety
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of franchise operators, including: • sites similar to the one you’re looking at, including size and demographics of the clientele • sites that are close to yours • top-performing sites • average sites • the worst-performing sites. You’ll need to take a close look at the books, keeping in mind that franchisors will put their best foot forward. As a potential franchisee, ensure you have your head around a few key metrics: revenue; gross profit; earnings before interest, taxes, depreciation and amortisation (EBITDA); earnings before interest and taxes (EBIT); net profit; and net profit after tax (NPAT). These figures all contribute to a business’s ability to generate profit, which is crucial to its continued success. And here we come back to people. One of the major costs of almost any business is wages. As a franchise owner, you want people you can rely on to do a great job – but you can have a major impact on the profitability of the business through the amount you personally work within the business. The more hours you work, the less you are paying someone else and the greater the profit! Sounds obvious but you’ll need to weigh this up with the lifestyle you want to lead, and the skills and expertise you can offer. Modelling all these figures with your accounting advisor will allow you to consider different scenarios and impacts, while giving you an understanding of what levers you can pull over time. Don’t underestimate the importance of these forecasts. Of course, the true number that counts is cash in your pocket at the end of the day. Make sure you’re across all the franchise costs, including franchise fees, equipment purchases, loan repayments and taxes. This should all be outlined in the franchise agreement and disclosure document. The franchise agreement will outline the obligations relating to performance
criteria, payment of fees (royalties, marketing fees, training fees, transfer fees, termination fees, utility levies etc.), marketing expectations, reporting frameworks, training support, supply of products and services, territories etc. The disclosure document will provide estimates of the establishment costs and the costs that you will likely incur in operating the business. This is just a starting point so, again, make sure you really dive into the financials. If you’re required to pay a percentage royalty, it’s important to note that this is calculated as a percentage of your gross revenue (not your profit). This means that you’ll be required to pay those fees to the franchisor regardless of whether the business is running at a profit. To fully understand your money-making potential as a franchise, you should have an experienced franchise attorney or franchise consultant review the franchise contracts and disclosure documents.
HOW EASY IS IT TO SELL A FRANCHISE BUSINESS? When it comes to selling your franchise, make sure you bring a buyer’s mindset. Reconnect with why you bought the franchise in the first place and make sure you can talk to those reasons when in discussion with a potential buyer. In addition to the reasons why you bought the business, a buyer will consider the performance of the overall franchise system and the performance and profitability of your site or store. Hopefully, you will have been making good profits throughout your journey as a franchisee as this will increase the value of your business, but you should also be aiming for capital gains at the time of sale, so consider if the timing is right. Generally speaking, franchisees have the right to sell their business during the term of the agreement, subject to the
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franchisor’s consent. In some cases, a franchisee may have to offer to sell the business to the franchisor before selling it to a third party. If you’re selling to a third party, the purchaser will have to pass the franchisor’s approval process, which may include an interview with the franchisor. The buyer will most likely also have to provide financial information and business references. If the franchisor is not satisfied that the prospective purchaser is capable or suitable to run the business, they will generally have the right to withhold their consent to the proposed sale. Similarly, if you’re in breach of the franchise agreement, this is often grounds for the franchisor to withhold consent to a proposed sale. Franchisors can generally require a purchaser to enter into the current version of the franchise agreement on sale of the business, which can include significantly different terms to your agreement. This can impact the sale of the business. Ultimately, buying (and selling) a franchise can be a great way to make money if you’ve done your due diligence, financial modelling and market research and have confidence in the profit potential. Our key call-outs are to talk to as many franchisees as possible, consider the role you will play in the business, and engage trustworthy advisors to ensure you properly understand your obligations under the franchise agreement and the information that has been provided by the franchisor in the disclosure document. If it all stacks up, you’re most likely in a good position to make money through investing in a franchise. n Aaron March is director of BlueRock Accounting and Melissa Strain, associate director of BlueRock Law. BlueRock is an Australian entrepreneurial advisory practice that works with founders and business owners to connect them to an incredible community and help them reach their business and life goals.
FRANCHISE BASICS
HOW TO ESTIMATE WORKING CAPITAL What you need to know about having the funds to operate your new business.
MARIA MCQUILLEN Concinnate Financial Services
W
orking capital is a very important measure in your business. Put simply, it measures a business’s ability to pay its bills.
THE ACCOUNTING STUFF The definition of working capital is “current assets minus current liabilities”. Current assets includes cash, accounts receivable (money a business is owed) and inventory (stock). I will refer to this as “revenue”. Current liabilities includes accounts payable, loan repayments, operating costs. I will call this “bills” or “expenses”. The working capital ratio = current assets divided by current liabilities. For example, if you have $1000 of current
assets and $800 of current liabilities your working capital ratio is 1000/800 = 1.25. In very simple terms this means that for every $1 of bills, you have $1.25 of revenue in your business. Your working capital ratio needs to be more than 1.00 otherwise it means your current liabilities are more than your current assets – that is, you don’t have sufficient money to pay your bills. Understanding the working capital needs of your business is imperative to the survival of your business. This is particularly important when buying a new business but it is also something you need to monitor on an ongoing basis. The working capital requirements of different business models and industries can vary enormously. We will explore two of these: retail food and mobile service industries.
RETAIL FOOD BUSINESS When you are looking at buying a retail food business you will consider: • set-up costs • working capital requirements • ongoing capital expense requirements. The set-up costs will include the costs associated with setting up your business such as a franchise fee, professional fees (legal, financial and accounting advice) and fitout costs. When buying a franchise you can use the disclosure document as a starting point to identify how much it will cost you to set up the business. For retail food businesses, fitting out your store will generally be an expensive exercise. By
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! s u h t i w r a St r u o y h c t i H
! G N I S I H C NOW FRAN
Walker’s Doughnuts; the FASTEST growing Doughnut Franchise system in Australia! Our ultra-simple model is suitable for experienced operators or first-timers with a passion for food and retail. You will own a business that is easy to operate AND will maximise your return on investment. Above all, you will be in control of your own destiny AND make people happy!
NOW FRANCHISING in Victoria, SE Qld, NSW & ACT with opportunities available NATIONWIDE! Contact Kevin Bugeja on 0412 511 630 or kevin@franchise4u.com.au
ALWAYS DELICIOUS!
FRANCHISE BASICS
knowing the set-up costs you can ensure that you have sufficient capital (money) to cover these costs, whether the capital comes from savings or a loan. The next step in any financial due diligence is determining how much working capital you will need. When setting up a new business you need to allow time for the revenue to build up. It may take time for customers to realise you exist, to decide to leave their favourite cafe and try the new one that’s just opened. And it will take time to develop a loyal following of regular customers. During this time where the business is getting established and growing you will have certain costs that need to be met. Some are fixed costs such as rent (these costs are the same regardless of how much revenue the business generates) and some are variable costs such as food and beverage supplies (inventory) and wages (costs go up as the business revenue goes up). Initially it is reasonable, and most likely prudent, to assume that
the working capital ratio will be less than 1 – business revenue will be less than business expenses. When looking at setting up a new business it is imperative that you consider how long it will take for the business to reach and sustain the break-even point, the point where revenue = expenses or the working capital ratio is 1. You will need to forecast and calculate how much the shortfall between revenue and expenses will be for the period prior to break-even and ensure you have these funds available to access and utilise in your business. One of the benefits of a food retail business is that customers generally pay as they order so the accounts receivable days are very low. MOBILE SERVICE BUSINESS Mobile service businesses are businesses where fixed premises such as a shop or office are not required and inventory requirements are low. Well-known examples would be lawn mowing,
painting, mortgage broking, bookkeeping and home-based legal services businesses. Just like a retail food business, in setting up a mobile service business you will need to consider: • set-up costs • working capital requirements • ongoing capital expense requirements. These three costs tend to be lower in a mobile service business. The set-up cost will include items such as the franchise fee, professional fees, a vehicle and some equipment (gardening tools or a laptop). Many of these businesses don’t require staff at first (possibly not ever) and this, along with the absence of a shop or warehouse, saves the business owner thousands in set-up and working capital costs. It is still important to determine when your business is likely to achieve sustained break-even and how much working capital you require to get you through to this point. A consideration for working capital in
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AUG/OCT 2021 | 66 | WWW.FRANCHISEBUSINESS.COM.AU
a mobile service business is the accounts receivable days. For example, a mortgage broker may get paid 60 days after a loan settles, a lawyer may get paid 14 days after an invoice is issued and a lawn mower may get paid seven days after an invoice is issued. Finding ways to reduce the accounts receivable days can improve your working capital situation quite a bit. AN IMPORTANT INGREDIENT A very important consideration in the working capital calculations is whether the owner of the business needs to draw an income from the business. Best practice would be for a business owner to complete a household budget. If they have a partner who earns sufficient income to cover all these costs a business owner may decide not to draw an income from the business for a period of time. Eventually, though, the business owner needs to be compensated for their time and effort at least to the level of what the typical salary would be for someone to
perform the tasks they do. If the business owner does not have a partner, or their partner’s income will not cover all household expenses, then a salary/drawings for the business owner needs to be included in the working capital calculations. For example, if household expenses are $8000 per month for living expenses, rent, school fees and loan repayments and the business owner’s partner will retain their job earning $5000 per month net, there will be a monthly shortfall of $3000 per month. This amount (or more if drawn as salary and withholding tax applies) needs to be included as an expense in the business’s working capital calculations. ESTABLISHED BUSINESSES Determining the working capital requirement is important not only when setting up a new business but also: • When buying an established business because: ◦◦ the previous owner may be selling
•
because the business was not performing well ◦◦ you may run the business slightly differently to the previous owner and that impacts the projected revenue and costs of the business ◦◦ the income you need to draw from the business may be different to the previous owner When considering a capital expense, reinvestment back into the business and taking on a new loan in the business. During these events you need to determine what the impact will be to the business’s working capital. For example, does the business have sufficient working capital to absorb the loan repayments for a $150,000 new commercial kitchen in the cafe? n
Maria McQuillan is director and senior finance broker at Concinnate Financial Services.
PARTNER WITH A LEGAL PROFESSIONAL WITH COMMERCIAL ACUMEN Franchising is an important decision for both franchisors and franchisees. We are on hand to provide strategic, practical solutions to help you plan and achieve your short and long term goals. Unlike other legal firms which provide legal advice piecemeal, we look at the whole picture, help you with risk management, compliance requirements to eliminate unwanted surprises. Our principal is an Accredited Specialist in Commercial Law and has valuable in-house experience, has advised businesses for more than 25 years and understands first hand the many challenges faced by business owners. Contact Christine Lau on (03) 9653 9203 or via email at Christine@laulegal.consulting for a confidential discussion to start or grow your business AUG/OCT 2021 | 67 | WWW.FRANCHISEBUSINESS.COM.AU
FRANCHISE BASICS
TOP 7 SIGNS OF FRANCHISE RESILIENCE
Franchisees and franchisors have shown remarkable resilience in the face of the Covid challenges. STEPHEN GILES Norton Rose Fulbright
M
any franchisors have seen the pandemic as a moment of progress rather than crisis and are planning to expand their businesses in the next 12 months. Here are our top seven positive behaviours we have observed that demonstrate the best of resilience in franchising… 1. STRONG FRANCHISOR LEADERSHIP In tough times franchisees, customers, suppliers and landlords value strong leadership. Leadership is manifested in qualities such as heightened franchisor visibility, demonstrated empathy, calmness, continued focus on the customer and more frequent communications. In tough times trust becomes critical, as action needs to be taken quickly and all need to follow the leader. 2. RAPID ADJUSTMENT TO FULFIL NEW CUSTOMER REQUIREMENTS FOR GOODS OR SERVICES One of our clients quickly pivoted from selling baked goods to selling flour and baking ingredients at some of their franchised stores, thereby not only keeping the stores trading but clearing ingredients that would otherwise have perished. This was also an excellent example of franchisor and franchisee collaboration for mutual benefit. 3. ACCELERATION OF ONLINE CAPABILITY Although consumer spending online has been increasing every year for the past 20 years, the lockdowns caused by the pandemic meant online became almost the only channel to market for most businesses. For established franchise networks, the online channel can sometimes be viewed with suspicion by franchisees. Covid demonstrated that consumer preferences
cannot be ignored, and online and retail channels can successfully complement each other. If a brand does not have an effective online channel, it will end up in palliative care, and customers will drift from franchisees to the competitors that offer a more integrated model. 4. DIVERSIFICATION AND TAKING ADVANTAGE OF COLLATERAL OPPORTUNITIES In particular, a focus on supply chain efficiencies, vertical integration and strategic acquisitions. There are great expansion opportunities presented by the current economic conditions. Covid showed up flaws in many supply chains, and smart franchisors have taken the opportunity to strike more attractive arrangements or acquire smaller strategic suppliers. The capacity of franchisors and franchisees to rebound quickly sees them better placed to take advantage of new opportunities. 5. SWITCHING TO MULTIPLE DELIVERY OPTIONS Rapid movement to multiple delivery options that enable customers to receive what they want where they want it. Again Covid demonstrated that the traditional bricks and mortar offering needs to interface with the online channel, not just be standalone. Interestingly customers were happy to modify their behaviour, and embraced touch-free pick up arrangements and click and collect. We saw an uptick in franchisee engagement with online, and greater preparedness to embrace multi-channel distribution of goods and services. From a customer perspective the wellrun franchise systems outperformed the pure online models, many of which were
totally reliant on delivery when franchise systems could also offer click and collect and other options including local delivery by franchisees. 6. EMBRACING PAYMENT FLEXIBILITY Cash is no longer king, customers require multiple payment mechanisms including paperless options and all technology solutions. New payment mechanisms such as Afterpay are very popular with customers, and we expect to see demand for acceptance of new cryptocurrencies such as Bitcoin. Covid meant franchisors had to move quickly to accommodate changed customer expectations, and likewise franchisees realised they needed to provide multiple payment options and be technologically literate. Franchisors and franchisees realised change was essential for survival, so just got on with it. 7. EXCELLENCE IN DATA USE AND SECURITY Data is critical, and precious. The best franchise systems collect and use data effectively in their businesses, supplementing their own data with sophisticated additional data relating to their customers. They also take great care to ensure the security of data. Cybersecurity threats are profound, and potentially existential. Customers also demand the highest standards in data protection. We saw franchise clients experience issues with cyberattacks, but observed that franchise systems have data spread throughout their network, so have an ability to recover more quickly. n Stephen Giles is a partner at law firm Norton Rose Fulbright specialising in franchising, competition and consumer law and commercial transactions.
AUG/OCT 2021 | 68 | WWW.FRANCHISEBUSINESS.COM.AU
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FRANCHISE BASICS
HOW TO APPROACH EMPLOYEE ENGAGEMENT You’ve bought the franchise, you’re paying appropriate wages and meeting all compliance requirements. But are your employees truly engaged?
PIA ENGSTROM HR Dept
L
et’s look ahead to those early days in your new business. While your staff may not be as committed to the business as you, it’s important they share the passion.
WHAT IS EMPLOYEE ENGAGEMENT? A simple definition of the term would be, how connected staff feel to your business. Are they passionate about work, having forged an emotional connection to their place in the company? Employees can be competent and content without loyalty or being truly engaged. No matter the size of your business, staff engagement has the potential to greatly influence your industry presence.
EFFECT ON BUSINESS Research continually shows disengaged employees translate into loss of revenue as a result of lower productivity, increased days off and decreased staff retention. Overall, that’s a substantial impact. Employees who feel valued and empowered are generally more engaged. But how do you achieve this? Determining
the best way forward can be difficult, especially if feedback is minimal.
GENERAL WAYS TO INCREASE ENGAGEMENT Ideally, feedback facilitated through an HR program can be channelled into a targeted strategy for ongoing increases in employee engagement. In the meantime, there are key areas that can be examined for general improvement: • Define vision and values so staff can emotionally and ethically engage, believe in upper management’s lead, and feel comfortable in the culture of the business. • Offer ways to improve skill set that span training opportunities, but also involvement in events that allow for networking and industry recognition. • Listen, and compromise to avoid a resentment-fuelled us-versusthem dichotomy between staff and management becoming entrenched and normalised. • Understand money isn’t everything and embrace flexible working hours, reward through time off, or offer recognition with work-from-home days where viable.
Frustration, mistrust and overwork equal a toxic work environment. Listen to what staff are telling you about the situation.
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•
•
Prioritise community, within and without by encouraging team-building, including involvement with charities and environmentally-conscious office practices. Consider employee health and wellbeing by initiating steps that address stress and anxiety in staff, whether arising from a personal or professional source.
THE IMPORTANCE OF FEEDBACK Listening to your employees is important but is sometimes easier said than done. While you can ask for honest commentary, reasons employees hold back may include: • not wishing to appear critical of the company • unwillingness to complain about management • avoidance of addressing problematic team dynamics • hesitancy about bringing up personal wants and goals • worry that feedback may impact promotional opportunities • workplace culture does not support or implement suggestions • apathy or sense of disconnect from business has set in. The choice of feedback system matters.
Communication is easier if trust is present, and feedback also needs to be part of an ongoing strategy. Questions must enable responses that offer helpful insights. There are many ways to research employee engagement, often through human resources. Find out what tools and systems your franchisor might have to help you with this. You’ll want to have programs that consider both long-term and short-term goals for increased employee engagement.
impacted by ineffectual management. Frustration, mistrust and overwork equal a toxic work environment. Listen to what staff are telling you about the situation. If feedback highlights an issue such as ineffective management or understaffed departments, and the need for change is obvious, an HR team can help with any company restructuring.
ACTING ON FEEDBACK
Does the franchisor create strategies and programs that address employee engagement, from sourcing regular feedback to suggested avenues of response? Employee health and wellbeing may also require attention. Providing affordable support services positively affects employee engagement and many franchisors are now offering employee assistance programs.n
Feedback itself is only one step. Once the collated data offers insight into what could improve your staff’s workplace experience, it’s time to decide on a path and introduce changes. If a business ignores feedback, employee engagement will worsen. But changes that only benefit one group may increase resentment. Feedback-based initiatives need to be carefully considered.
WHEN THE CORE OF THE ISSUE IS STRUCTURAL Employee engagement will always be
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HOW HR AND EMPLOYEE ENGAGEMENT ENTWINE
Pia Engstrom is managing director of HR Dept Australia, and director of HR Dept Western Suburbs Perth.
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FRANCHISE BASICS FRANCHISE BASICS
LEARNING THE
BUZZWORDS
Like any area of endeavour, the franchise sector has its own particular terminology that new franchisees need to understand.
ACCREDITATION
a banking loan scheme that provides franchisees with some of the finance they may need when buying the franchise. It is based on a bank’s understanding of the brand and its business methods. While this funding option is popular, it is not common across the sector.
ASSIGNMENT
when a franchisee sells their business to a new franchisee, it is referred to as assignment. It is common for the franchisor to retain the right to interview and accept or reject any proposed buyer. The franchisor may also have the right to buy back the franchise. The vendor franchisee can set the value of the franchise.
BUSINESS-FORMAT FRANCHISE
a business model with four criteria – a franchise agreement, a trademark or symbol, payment of a fee, and a system or marketing plan. A franchise business falls under the jurisdiction of the Franchising Code of Conduct and franchisors have certain obligations to fulfil.
COMPANY-OWNED UNITS
locations run by the franchisor rather than a franchisee.
FIELD MANAGER
an individual tasked with managing a group of franchisees, with a focus on relationships, brand alignment, and sales and profit. This role might also be called business development manager or area manager.
FIXED SERVICE FEE
franchisees may pay their franchisor a weekly or monthly fixed-amount payment, or a service fee calculated as a percentage of turnover (above a minimum payment).
FRANCHISE AGREEMENT
this is the legally binding business between the franchisor and the franchisee.
FRANCHISEE
an individual who runs a franchised business using the intellectual property of the franchisor.
FRANCHISEE ADVISORY COUNCIL
a structure for franchisors to seek and receive feedback from their franchisees. Participating franchisees may be elected or chosen by the franchisor.
FRANCHISE FEE
CONVERSION
an up-front cost paid to the franchisor. It covers the use of the brand name and business system.
DISCLOSURE DOCUMENT
a mandatory code that governs franchising in Australia. It is designed to guide the behaviour of franchisors and provide certain protections to franchisees. It is administered through the Australian Competition and Consumer Commission (ACCC).
an existing independent business that joins a franchise network.
FRANCHISING CODE OF CONDUCT
this document provides information about a franchise system, the franchisor and the franchised business. It must be supplied to a prospective franchisee in accordance with the Franchising Code of Conduct.
DUE DILIGENCE
the process of conducting in-depth research on a business before purchase.
FRANCHISE TERM
this is the period granted for trading under the franchise agreement. Most franchise terms are on a renewable three or five year term but they can vary from one year to perpetuity. Franchisors often refer to a term with two options to renew as 5 + 5 + 5, for instance.
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FRANCHISOR
the franchisor grants permission to the franchisee to conduct business using its intellectual property, brand name, working methods and marketing.
GREENFIELD SITE
OPERATIONS MANUAL
the franchisee’s guide to operating the franchise business. The franchisor may produce several manuals for different areas of the business, and should regularly update the information.
REGIONAL FRANCHISEE
a brand new site.
GOODWILL
this is a calculation of the value of trade in an existing business that is likely to continue and benefit the incoming business owner.
INFORMATION STATEMENT
this is a two-page standard document that outlines what franchise buyers need to know about franchising.
INTELLECTUAL PROPERTY
similar to master franchisees, regional franchisees operate a large territory and appoints franchisees within the area.
RENEWAL
once a franchise term nears its end, franchisees may or may not be given a right to renew their agreement for a further term. This process is bound by the Franchising Code of Conduct. There is no automatic right of renewal.
this term refers to the trademarks, copyright, know-how, trade secrets, designs, patents, branding, operational manuals, methodologies and/or recipes franchisors license to franchisees.
ROYALTY
LICENSE
TERMINATION
LOCAL AREA MARKETING
TERRITORY
MARKETING & ADVERTISING LEVY
TOTAL INVESTMENT
the right to use intellectual property in business, such as sales rights in a territory, manufacturing technology or access to a trademark. A license is not the same as a franchise. often abbreviated to LAM, this is marketing the franchisee is responsible in their territory or designated marketing area. a regular flat or percentagebased-fee paid into a centralised advertising or marketing fund.
MASTER FRANCHISEE
a franchisee who is responsible for a large territory, appointing other franchisees within the territory with direct agreements, and ensuring that the franchisor’s systems and methods are applied.
MULTI-UNIT FRANCHISEE
a franchisee who has been granted the rights to run more than one franchise outlet. Not every franchise system allows for franchisees to be multiple operators.
fee paid by the franchisee to the franchisor for the ongoing use of the brand and systems, management and technical support. It may be a flat fee or a percentage of sales or profit. the ending of the franchise contract between franchisee and franchisor, usually for breach of contract. Some franchise agreements allow the franchisor to terminate the agreement even if the franchisee has not breached the agreement. is the area assigned to franchisees for their business. Territories can be exclusive or nonexclusive. the total amount of money a franchisee requires to set up in business. This includes the franchise fee, working capital and any equipment purchases required.
TURNKEY FRANCHISE
a franchise package that includes all the equipment, information and systems required for a franchisee to open up the business and start trading.
WORKING CAPITAL
the funds required by any business to pay its costs before it starts making a profit, and as ongoing cash flow to counter any dips in business activity.
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FRANCHISE BASICS 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.
1. MAKE AN INQUIRY
2. FRANCHISOR RESPONDS
3. FIND OUT MORE
4. CONFIDENTIALITY
5. FIRST MEETING
6. CONDUCT DUE DILIGENCE
7. PROVE YOURSELF
8. OTHER STEPS
9. DON’T RUSH IT
Fill out an inquiry form or phone the recruiter for further details of the franchise opportunity that appeals.
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.
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.
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.
This is the time you will get a much clearer idea of the business, and the franchise team you will be working with.
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.
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 franchise-experienced professionals can save you money in the long term, so it is a worthwhile investment.
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?
W
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.
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 EXECUTIVE OFFICER/ MANAGING DIRECTOR
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.
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
CHIEF MARKETING OFFICER
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.
CHIEF FINANCIAL OFFICER
This senior executive reports to the CEO but plays a strategic role in the way the company manages its finances, investments, and capital structure and is influential
CHIEF INFORMATION 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.
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
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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.
FRANCHISE BASICS FRANCHISE BASICS
30
THINGS TO CHECK R 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)
FRANDATA
The ACCC is an independent Commonwealth statutory authority which regulates the mandatory Franchising Code of Conduct (Code) and can investigate alleged breaches of the Code. The ACCC is responsible for enforcing the Competition and Consumer Act 2010 as well as legislation, promoting competition, fair trading and regulating national infrastructure. Its role is to protect, strengthen and improve the way competition works in Australian markets and industries.
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.
Visit: WWW.ACCC.GOV.AU
Visit: WWW.FRANDATA.COM.AU
BUSINESS.GOV.AU
FRANCHISE.ED
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.FRANCHISE-ED.ORG.AU
THE FAIR WORK COMMISSION
FRANCHISE COUNCIL OF AUSTRALIA
The FCA is the main body for representing franchisees, franchisors and service providers in the $146bn franchising sector in Australia. Becoming a member of the FCA is a voluntary and is available for any organisation or anyone involved in the franchise industry including franchisees. Visit: WWW.FRANCHISE.ORG.AU
FRANCHISEBUSINESS.COM.AU
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.
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 lists franchising opportunities available in Australia. Potential franchisees looking to move into the franchising sphere can explore opportunities that currently exist in the market and enquire about the franchisor or brand. Users also have access to franchise consultants and advisors who can assist prospective or existing franchisees and franchisors with legal, financial educational and training, IT and other services.
Fair Work Commission (the Commission, previously called Fair Work Australia) and the Fair Work Ombudsman (FWO) are independent government organisations that regulate Australia’s workplace relations system but have different roles. The Commission is the independent national workplace relations tribunal. It is responsible for maintaining a safety net of minimum wages and employment conditions, as well as a range of other workplace functions and regulation. The FWO enforces compliance with the Fair Work Act, related legislation, awards and registered agreements. It also helps employers and employees by providing advice and education on pay rates and workplace conditions. Visit: WWW.FAIRWORK.GOV.AU
Visit: WWW.FRANCHISEBUSINESS.COM.AU AUG/OCT 2021 | 79 | WWW.FRANCHISEBUSINESS.COM.AU
Phone: 02 9621 0444 Fax: 02 9621 0401 Contact: Head of Franchise Relations & Development
A-Z LISTINGS
franchising@ambertiles.com.au ambertiles.com.au Start up costs: Dependent on store and site: $280K-$450K plus stock. PROFILE: We are the premium supplier of quality floor tiles, wall tiles, natural stone, pavers, retaining walls, and synthetic grass to retail, trade and designer customers. The first Amber store was opened in 1973, and the first store was franchised in 1993. Today we have an enviable base of 22 franchised stores and 7 company stores. Now is an exciting time to join Amber. Amber has ambitious plans utilising the proven Amber Franchise System. So, if you’re • Highly motivated to achieve • Seeking personal and financial independence • Enjoy serving customers and enjoy working as part of a team then, an Amber franchise may be the answer for you.
Phone: 1300 287 669 Contact: Chris Longley franchising@ats.com.au www.appliancetaggingservices.com.au
Phone: 1300 361 397 Website: www.aussie.com.au/business-opportunities
Start up costs from: $57,000 + GST PROFILE: Your business, your way
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.
Become an Aussie Franchise supported by industry leading training and mentoring in a location you want to be. As a franchisee, you’ll receive your Cert IV in Finance and Mortgage Brokering and be accredited with our panel of lenders. You get your own territory to build your business from scratch or find an existing franchise for sale. You’ll also have access to a range of e-learning, face to face development, online training, videos and webinars - your success will only be limited by your effort. Ready to take the next step? Get in touch with us today!
No prior electrical experience is required - just a passion for safety and a commitment to growing your business. With low entry fees and minimal franchisee administration, an ATS franchise may just be the opportunity for you.
Phone: 0432 244 136 Contact: Jarryd Cayfe jarryd.cayfe@burritobar.com.au www.burritobar.com.au
Phone: 1300 920 875 Contact: support@bizcover.com.au www.bizcover.com.au
Start up costs: $150,000 - $400,000 (location and size dependant)
PROFILE: BizCover is Australia’s largest online business insurance service for Australian SMEs. Through the BizCover platform you can compare quotes from selected leading Australian insurers and get your cover online in minutes. Over 140,000 SMEs currently trust BizCover to insure their business with cover including Public Liability, Professional Indemnity, Business Packs, Management Liability, Cyber Liability and more.
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PROFILE: Established in 2011, Burrito Bar was inspired by the streets of San Francisco, where traditional Mexican street food meets art to create a wholesome experience. The diverse and flavoursome menu and extensive bar offering make Burrito Bar a leader amongst Mexican restaurants. Our strategic, adaptable, supportive and locally responsive approach to franchising, which puts Franchise Partner sales, profitability, return on investment and success at the centre of everything we do has seen our restaurants continually grow. Burrito Bar is accredited and pre-approved with several lenders, so obtaining finance is simple and straight forward. No experience is necessary as full training and ongoing support is provided at every step of the way.
Inside Franchise Business brings potential franchisees news, insights, advice and a directory of available franchise opportunities: it is your essential guide to buying a franchise in Australia.
JEFF PURSER
HEAD OF SALES, OCTOMEDIA +61 408 401 076 JEFF.P@OCTOMEDIA.COM.AU
Visit our website to find out more!
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www.franchisebusiness.com.au
Phone: 1300 097 857 Contact: Franchise Sales Team Sales.au@inxpress.com au.inxpress.com/franchise-opportunities
Phone: 0401 058 607 Contact: Kellie Cranch Kellie.cranch@rfg.com.au rfg.com.au (follow prompt to Franchising) / crustpizza.com.au Start up costs: $200k +
Start up costs: $64,950 + GST PROFILE:
PROFILE: Join us in the era of the foodie! Since its launch in 2001 Crust has focused on quality, freshness and innovation. There are now over 140 outlets in Australia, plus two international territories, and premium products have set the brand apart. Crust offers the competitive edge that comes with an established, well known Australian brand. And you don’t even need previous experience to share the benefits – there are expert to guides you through all the key milestones and work with you every step of the way. Crust stores range in price from $200k+ and leasing specialists are on hand to help you find your preferred territory and negotiate terms.
InXpress is a global express logistics business with over 400 franchisees, located in 14 countries, providing consultative services and innovative software to SMEs. Founded in 1999, InXpress has a long history in managing successful businesses, with the know-how to train and support franchisees in running a sales and business management franchise. InXpress has established strong relationships with global courier partners, providing access to highly competitive rates, leaving you free to concentrate on sales and build your own successful and profitable start-up business: • Low entry and ongoing costs • Proven model for over 21 years, constantly evolving • Comprehensive training and ongoing coaching • No inventory, warehousing, vans or trucks • No employee base initially, opportunity to grow • Potential to earn unlimited passive income • Ability to work from anywhere! For more information about becoming an InXpress Franchisee, contact us now.
Phone: 1800 497 086
Phone: (02) 8962 8526
Contact: Lisa Schubert
Contact: Maria Chemali
franchisesales@jameshomeservices.com.au
franchise@kwikkopy.com.au
www.jameshomeservices.com.au
www.kwikkopy.com.au/franchise
Start up costs: $43,900 - $56,000 + GST
Start up costs: $150,000 - for a New (Greenfield) Centre PROFILE:
PROFILE: James Home Services is a 100% Australian owned and operated franchise network with 27 + years’ experience in supporting everyday Aussies into their own businesses in the growing home services sector. We offer service franchises in:
Start your franchising journey with Kwik Kopy, the leading provider of design, print and online solutions throughout Australia. Kwik Kopy offers a flexible franchise model, where each Centre is fully equipped to create high quality services on-site. Owning your B2B franchise means operating business hours Monday to Friday so you’ll also enjoy work-life balance.
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Interior Cleaning
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Mobile Pet Grooming & Hydrobath
As a Kwik Kopy franchisee you get to become your own boss and be part of
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Lawn & Garden Care
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Window & Exterior House Cleaning
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Mobile Car Cleaning
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Carpet Cleaning & Pest Control
a supportive community committed to your success. You’ll also receive all the training you require, so no prior print or design experience necessary. A Kwik Kopy franchisee is young at heart with business experience,
We also offer Regional Franchise territories, where your role is to build your region and support Franchisees within your region to achieve their business and lifestyle goals.
entrepreneurial flair and most of all – an absolute passion for customer service. We have both existing and new locations for sale throughout Australia.
Contact: Victoria Head Details: Franchising@madmex.com.au +61 468 952 900 Website: franchising.madmex.com.au Start up costs: $300,000 - $500,000
Phone: 07 3221 2221 Contact: Bill Morgan info@morganmac.com.au www.morganmac.com.au
PROFILE: Do you want to run a business that is both successful and makes you feel good about what you’re doing? Mad Mex delivers flavourful, honest, and healthy Mexican food that is packed with flavours customers crave.
PROFILE: Morgan Mac Lawyers is an experienced commercial law and commercial litigation firm with a specific focus in franchising law.
Join the Mad Mex familia and you’ll:
Bill Morgan, has over 20 years’ experience in complex commercial litigation involving disputes between franchisors and franchisees. Since 2016, Morgan Mac Lawyers has acted in over 40 franchise dispute mediations.
• Become part of one of Australia’s fastest-growing fast dining franchises.
The franchise related legal services Morgan Mac Lawyers provides include:
• Take ownership of your business and use your experience and acumen to deliver an award-winning customer experience.
• Commercial litigation • Alternative dispute resolution and franchise mediation • Franchise Dispute solutions • Corporate and business structuring • Purchase or sale of franchise businesses
• Get access to a suite of resources and the support of a dedicated Operations Manager. Find out more and start your franchise journey today at franchising.madmex.com.au
Inside Franchise Business Executive is a dedicated resource for franchise professionals It provides essential news, opinion and expert advice, alongside a suppliers directory. Visit our website to find out more!
executive.franchisebusiness.com.au
• • • • • •
Advising on franchise documents Franchise employment law advice Preparing franchise documents Risk and compliance advice Commercial and retail leasing Privacy and privacy policy advice
A-Z L I S T I N GS
FOR A-Z LISTINGS ENQUIRIES CONTACT:
ALEX AGIUS
SENIOR ACCOUNT MANAGER 0431 369 608 ALEX.A@OCTOMEDIA.COM.AU
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A-Z LISTINGS
Phone: (07) 3215 6000 Contact: Tanya Kanaris tkanaris@priceattack.com.au www.priceattack.com.au
A-Z LISTINGS
Phone: 1800 809 913 Fax: 03 8699 1555 Contact: Anna Goncalves franchising@questapartments.com.au
Start up costs: From $150,000.00 (greenfield & including stock)
www.questfranchise.com.au Start up costs: $750,000 upwards
PROFILE: Retailer of professional hair and beauty products with full service hair salon. Key benefits: • Economically resilient industry • Proven operational support systems • Designated business development & support manager • Unlimited earning potential for motivated operator What we require: • Fearless ambition with a collaborative approach to success • Retail experience with an interest in hair and beauty services • Hairdressing qualification with a passion for retail
PROFILE: Quest Apartment Hotels is the largest and fastest growing apartment hotel operator in Australasia, with a network of over 170 Franchised properties across Australia, New Zealand, UK and Fiji. For over 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: +61 492 837 020 Fax: +1 416 646 0366 Contact: Greg Sweney opportunity@tutordoctor.com www.tutordoctoropportunity.com
Phone: 0477 929 393 Contact: Peter Fiasco franchiseenquiries@snap.com.au www.snap.com.au/franchising/franchising.html Start up costs: $150,000 to $600,000 PROFILE: When you elect to take ownership of a Snap Franchise, you are not only making a decision to join one of the leading franchises in Australia, with a history of innovation that dates back over a century, you will be joining the Snap family, who provide you with all the support that you need to succeed. Snap is a world leader in technology and equipment and a franchisor that works with our Franchisees to get them set for success, all whilst living the lifestyle they deserve. Take the step and come and see the SNAP Difference today!
Start up costs: $60,000 PROFILE: Tutor Doctor is a leader in providing one-on-one supplementary education to students and adults through in-home tutoring. Tutor Doctor franchisees, who manage a team of professional tutors and work on the business rather than in it, follow an award-winning home-based business model that requires no educational background to operate. Private tutoring is a multi-billion-dollar industry, and Tutor Doctor is experiencing one of the fastest growing international expansions of any educational company in the history of franchising. With over 700 locations around the world, Tutor Doctor has changed the lives of 300,000+ people by helping them achieve their academic goals.
Phone: 1300 549 200 Contact: Kevin Bugeja kevin@franchise4u.com.au walkersdoughnuts.com.au Start up costs: $175,000 - $300,000 PROFILE: At Walker’s Doughnuts, we create the World’s Tastiest Doughnuts! Soft, melt in your mouth Pillows of Perfection; our Doughnuts are created by Doughnut Lovers for Doughnut Lovers. Now it’s your turn to own a piece of something special. A simple model with minimal baking in-store; just filling, decorating & displaying! Our famous varieties include our signature Vanilla Glazed, Boston Cream, Bavarian Custard Cream, Triple Choc, French Toast, Rocky Road, Raspberry Cheesecake and many others. Our Hot Jam Doughnuts are freshly cooked to perfection and available all day long! But that’s not all! Together with our award-winning Black Rose Coffee blend, our Classic Hot Dog flavours, Traditional Milkshakes and specialty Heritage Sodas imported exclusively from the USA, you’ll find us an unbeatable and irresistible offering.
Inside Franchise Business brings potential franchisees news, insights, advice and a directory of available franchise opportunities: it is your essential guide to buying a franchise in Australia.
A-Z A-Z NOW FRANCHISING in Victoria, SE Qld, NSW & ACT with opportunities available NATIONWIDE!
Visit our website to find out more!
L I S T I N GS
L I S T I N GS
FOR A-Z LISTINGS ENQUIRIES CONTACT:
JEFF PURSER
HEAD OF SALES, OCTOMEDIA +61 408 401 076 JEFF.P@OCTOMEDIA.COM.AU
www.franchisebusiness.com.au
FOR A-Z LISTINGS ENQUIRIES CONTACT:
ALEX AGIUS
SENIOR ACCOUNT MANAGER 0431 369 608 ALEX.A@OCTOMEDIA.COM.AU
AUG/OCT 2021 | 82 | WWW.FRANCHISEBUSINESS.COM.AU
NEW DIRECTIONS IN RESOLVING FRANCHISE DISPUTES Resolving disputes is a key part of business and any new avenue that facilitates the quick resolution of disputes is a positive development. Given our extensive experience in resolving franchise disputes and in the franchise dispute mediation process, Morgan Mac Lawyers welcome the recent changes to the Franchising Code of Conduct that took effect on 2 June 2021 for disputes arising from this date and which provide for multi-party dispute resolution where two or more franchisees with the same franchisor have a similar dispute. The changes to the Franchising Code of Conduct also introduce an arbitration process when parties have agreed to resolve by arbitration all or part of a dispute. Avoiding litigation, or ending it early and cost effectively, on the best achievable terms, should be at the centre of the strategic approach to dispute resolution. Using alternative dispute resolution processes such as mediation and arbitration would normally be used as early as possible to resolve disputes unless circumstances of urgency necessitate immediate court intervention.
At Morgan Mac Lawyers we have implemented a strategic approach in resolving hundreds of disputes, with few matters proceeding to trial.
CONTACT US 07 3221 2221 | info@morganmac.com.au
