franchise buyer, Feb 2019 by franchise buyer

February 2019

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The path to a multi-million dollar family run franchise location

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Inside this Edition of February 2019 05 News Bites: n Fastway Couriers helping flood-affected Townsville community n Dell Technologies launched its Digital Transformation Index 12 Insights: Just how much is our market like the USA? Glenn Walford

The path to a multi-million dollar family run franchise location. By Paul Robinson

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16 Digital Marketing: Quick wins for your digital strategy Robb Snell 20 Business Location: How much is Uber Eats changing the Quick Service Restaurant (QSR) environment? Peter Buckingham 24 Business Technology: Top 5 Things to Look for in a Modern Point Of Sales System Rob Marsden 28 Researching Franchises: Make the Most of Your Expo Visit Glenn Walford 30 Consumer Trends: What Will Everyone be Eating in 2019 and Why? Mel Brown 32 Franchise Funding: Making the Move To A Multi-Unit Franchisee James Scurr franchisebuyer.com.au

w w w . f r a n c h i s e b u y e r . c o m . a u Published by

FRANCHISE MEDIA GROUP PTY LTD Editor GLENN WALFORD glenn@franchisebuyer.com.au Art Director KATHERINE BERCASIO Campaign Administrator MELANIE BROWN Digital & Technology Strategy ROBB SNELL Writer PAUL ROBINSON

Contributors PETER BUCKINGHAM ROB MARSDEN JAMES SCURR ROBB SNELL

Published by Published by Franchise Media Group Pty Ltd Opinions expressed in Franchise Buyer are not necessarily those of Franchise Buyer or the Publisher. Persons entering into a franchise agreement are strongly urged to seek their own independent advice. All material is copyright and reproduction in whole or in part is not allowable unless specific permission from the Editor is provided.

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News Bites

Fastway Couriers is helping the floodaffected Townsville community

astway Couriers Cairns is proud to have delivered almost 1 tonne of donated goods to the St Vincent de Paul Society in Townsville following the devastating February floods. Much needed items such as linen, batteries and cleaning products will be distributed by the team at St Vincent de Paul. Fastway Couriers Cairns Regional Franchisee Josh Bollman has thanked the Cairns community for their support. “Thousands of residents have been impacted by the recent floods in North Queensland and many of these are our customers, staff and their families,” says Josh Bollman. “Fastway Couriers Cairns has been accepting donations from the community and are pleased to be delivering almost a tonne of much needed goods to Fastway Townsville who will then liaise with the St Vincent de Paul

Society. We thank everyone who has already generously donated. The 7 cages of donations include much needed items that will help those impacted get through this difficult time.” Fastways Couriers Townsville Regional Franchisees Robyn and Darren Woolage say they’re touched by the support from

the community. “It’s wonderful to see the North Queensland community coming together to help support Townsville at this difficult time. We thank everyone who has donated for their support and will continue to work with local charities to get donated goods distributed to those in need in the community,” says Darren Woolage. n franchisebuyer.com.au

News Bites

Dell Technologies launched it’s Digital Transformation Index, revealing that Australia ranks as the 5th most digitally mature country in APJC and 13th globally.

onducted by UK research company Vanson Bourne in collaboration with Intel, the study surveyed businesses across 40+ countries to determine digital maturity with the findings released 30 January 2019. Australian businesses aren’t as worried as the rest of the APJC (Asia-Pacific Japan China) region about being left behind. Says Mark Fioretto, Vice President and Managing Director, Enterprise, Dell EMC ANZ, ‘Australian businesses have a positive outlook for the next five years. We are confident we will meet customer demands, remain competitive with our peers, and believe our employees have the right skill sets to drive success. Yet 80% of business leaders believe that digital transformation should be more widespread 6

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throughout their organisations, signaling that more work still needs to be done. From the research, we can also see that emerging markets in APJC are quickly becoming digitally mature. Businesses in Australia must continue to share knowledge across businesses and industries as we support each other in the digital transformation journey to ensure that we stay ahead of the curve.’

88% are investing, or have already invested, in their digital transformation journey. Australian businesses are planning to invest, investing or have already invested in: n Security 93% n Multi-cloud 91% n Data Centre Modernisation 88% n Software Defined Technology 89% n Converged Infrastructure 82%

Key Findings for Australia:

Australian businesses are the second most confident in APJC that they will meet customers demands over the next five years and believe they are trustworthy, as 79% trust their organization will comply with regulations. Australia believes it has the right skills to achieve digital transformation with almost two thirds (62%) of Australian businesses sharing knowledge across business functions.

Only 18% of Australian businesses surveyed are worried they will be left behind compared to our closest neighbor, New Zealand, at 26%. The rest of the region surveyed are much more concerned, 50% in Japan, 48% in Malaysia and 47% in Taiwan. This could be because 78% of Australian businesses believe they are continually innovating and

News Bites Benchmark Groups

Description

Australia Today

Australia 2016

Digital Leaders

Digital transformation is ingrained in their DNA

2.7%

Digital Adopters

Have a mature digital plan, investments and innovations in place

19%

13.3%

Digital Evaluators

Gradually embracing digital transformation; planning and investing for the future

43%

45.3%

Digital Followers

Make very few digital investments; tentatively starting to make plans

28%

31%

Digital Laggards

Do not have a digital plan; limited initiatives an investments in place

7.7%

The top five global barriers to digital transformation success: 1. Data privacy and security concerns (#1 in Australia) 2. Lack of budget and resources (#2 in Australia) 3. Lack of the right in-house skill sets and expertise (#7 in Australia) 4. Regulation and legislative changes (#5 in Australia) 5. Immature digital culture (#3 in Australia) Jocelyn Macedo, Vice President, Human Resources, Asia Pacific and Japan, Dell Technologies says, ‘Developing a positive and supportive company culture is essential for a successful digital transformation journey. Developing in-house digital skills and talent – teaching

more employees how to code, for example – will help transform the workforce. Almost two thirds of Australian businesses are sharing knowledge about their digital transformation across their organization, equipping IT leaders with business skills and business leaders with IT skills. It’s encouraging that leaders are integrating digital goals into departmental and staff objectives – setting the right mindset now will set businesses on track to success’. By sharing knowledge and

creating a positive culture, business leaders will be better placed to overcome barriers to digital transformation. n

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COVER STORY

The path to a multi-million dollar family run franchise location. By Paul Robinson

s the franchise owner of SafetyQuip Melbourne East, Mark Bartlett has structured his multimillion-dollar family operation so that he and his wife, Bev, can have regular overseas holidays while still remaining across all facets of the business. Think SafetyQuip and you think industrial site safety supplies and personal protective equipment (PPE). From hard hats and work boots, first aid and defibrillators, to signage and uniforms — SafetyQuip is all about keeping your staff safe in the workshop and home. A bloke called Gary Shearer started the business on the Sunshine Coast in 1992. When he decided to franchise the operation 10 years later, one of the first people to jump on board was Mark Bartlett, 8

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now owner of SafetyQuip Melbourne East. “I was the third franchisee. We’ve been doing it for 15 years now, my wife, Bev, and I,” says Mark. “There are now 13 franchises around the country — three here in Melbourne.” He has found a profitable niche market targeting the Workplace Health and Safety (WHS) requirements of small to medium enterprises. “Our specialty is small to medium companies with less than 100 staff, says Mark. “Big companies tend to have their own professional buyer or OHS person. We’ve got 15,000 lines of product — and then the customer still asks for something you’ve never heard of! We estimate 80 per cent Photo above: SafetyQuipBayswater

of our stuff goes out with a courier after a visit by a rep or an email query. Some of my best customers have even seen the sign out the front and walked in. One bloke was getting his car windows tinted a few doors away one morning and was just filling in time. He’s still a customer.” A chartered accountant by profession, Mark had been helping run the family business in Melbourne and found himself out of a job when that business was sold. He credits the state government for sparking his interest in WHS. “The government in Victoria at the time was pushing the point about health and safety to such a degree that if you were the business

COVER STORY general manager, you’d go to jail if someone got hurt,” he says. “I was interested in getting a bit more information so I went to a trade show and Gary Shearer was there, advertising what was at the time, this mobile safety business. I thought you beauty, that’s what I want to get involved in. That was in October, and we started the training the following January. Once I’d found what I wanted to do, that was it.” “It started off as a great idea, but good ideas need to be sold to somebody (building a customer base),” says Mark. “You need to find your customers and we didn’t have a single one. The original model (at the time they joined SafetyQuip) was to run it as a small business from home and then graduate into a shop over time. So you’d start with one van, working out of the garage with an office in the lounge room. But working from your garage, it’s not like someone’s going to drop in. You’ve got to physically go out the door every morning. It was hard because there’s only so much

you can do delivering everything yourself. We realised pretty fast it wasn’t going to work. So we started a shop about a year or so into the business. The moment we opened a shop, sales doubled.” Working from home initially, has now been replaced by a small ‘blind shop’ however, the SafetyQuip business model requires the Safety Centre to be open within 12 months. The Bartlett’s also quickly realised the Melbourne market wasn’t going to roll out the red carpet for SafetyQuip. “The market in Melbourne didn’t know anything about us,” says Mark. “It was different up on the Sunshine Coast (where the business started), but they didn’t have a Bunnings Warehouse on every corner! For the first five years, it was hard, a lot of trial and error, a lot of blood, sweat and tears, and not a lot of money coming back in. Plus we had four teenagers, which didn’t make it that easy, either.” The first step out of the garage was to a warehouse close to home

in the semi-industrial suburb of Nunawading in east Melbourne. “Moving into new premises and then employing my son Ryan were my next major steps,” says Mark. “We’d tried to employ an on-road salesperson but operating from home it didn’t get traction. People didn’t want to work for a business based in someone’s garage. They didn’t think we were serious. Nunawading was a good introductory spot because a competitor had just moved out of that area, leaving a bit of a vacuum. But the place was a bit of a dog’s breakfast. When we moved there, we only had one van, but when we moved out we had seven staff, but only two parking spots. We outgrew it.” Mark is pretty chuffed with his most recent move and reckons SafetyQuip’s new HQ ticks all the boxes. “Now we’re in Bayswater, which is very much the commercial centre of our territory. We’ve got a nice place with proper office, proper lunchroom and parking for staff — it’s a good place to come to work.”

Warehouse stock movement

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COVER STORY

Inside the Bayswater store

Now turning over an in excess of $3 million a year, Mark notes it took time to build the business up to where it is today. As many business owners will attest to, lessons get learnt along the way. “We weren’t capitalised correctly at the start,” he says. “Initially we thought it would be a little more cashflow-positive than it was. But after those first years, it’s been good to us. But it’s still hard work. In hindsight, if I was to do it again I’d come in with a bigger pile of cash and do that initial churn to get it up to speed — maybe start with three people instead of just me plus one other.” Mark is looking at getting all of his SafetyQuip’s ducks in a row to future-proof the business for sustainable growth — and factor in a bit of well-deserved holiday time for he and Bev. Moving to the new premises and setting up a succession plan were the first stages. “About five years ago, we set 10

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in train a plan to escalate Ryan to take over managing the business,” says Mark. “Four years ago, after completing his Masters of Business Development, he was promoted into the role of General Manager and now looks after the day-to-day running of the place — the staff, customers and suppliers. After (all the hard work building it up), my wife and I basically took a year off. I went back to part-time for the year and she didn’t come in at all for a year. We took a couple of months in NSW then nine months in Europe. It took us two years to set all that up.” Mark reckons the time was right to seize the opportunity for a bit of much-needed downtime. “We were very lucky that all the boxes got ticked — our parents were healthy, our kids were healthy and working, everything on the personal side was good, business was good. It was a sign telling us to take advantage of the position we were in. That said, we cut our expenses back to bare bones so that we could

do what we wanted to do. We bought a 14-year-old motor home and bummed around Europe. We liked it so much we left the motor home there so hopefully we can go back every year for a couple of months and potter around.” After that initial break, Mark returned to the company in a different role. His first order of business was sorting the move out of the old premises at Nunawading. “Since we’ve been back, we aren’t needed in the day-to-day operations,” says Mark. “But I can now concentrate on more long-term matters. For example, in 2017, I decided the business was big enough to be set up elsewhere for the future. That took a whole year — to find somewhere, outfit it, move and not disrupt the customers. Putting on and training up new people also takes a lot of time and effort.” The Bartlett’s made a conscious decision they were going to enjoy life while they were still young,

COVER STORY but Mark says that’s easier said than done — running a successful company while factoring in regular holidays is still a juggling act. “My wife and I want to be able to enjoy walking in Spain in our fifties rather than going on a cruise in our eighties. But there’s a cost. I’ve had to employ someone to look after the place when I’m not here. Out of our $3m plus turnover, I’ve got to pay someone, say, $150,000 to do the work I’d normally do. Sure, in 2018 we had a couple of months off, but in 2017 we didn’t

have any time off at all. I worked six days a week for 12 months on the transition between the two sites. Which meant our profitability dropped because we had double overheads — but it was an investment in our future.” While the Bartlett’s own their franchise, Mark remains appreciative of the input from the SafetyQuip Headquarters office. “We get fantastic marketing resources from the franchise system. (SafetyQuip Australia General Manager) Wayne Johnstone liaises with the majority of our Mark and Bev in Paris suppliers and what he doesn’t know in the industry isn’t worth knowing. He negotiates the pricing and knows the people. OK, we don’t have a huge marketing department — we’re not a Donut King with racing cars running around with our branding all over them — but we do get good support on the supply front and a lot of support from the branding. One thing I

like is that the name says it all and the logo is clear-cut and descriptive with its hearing, head and foot protection graphics. It’s obvious from the name — as opposed to, say, Mark Bartlett & Sons!” For Mark, one huge advantage for his business over his potential competitors is the buying power clout that SafetyQuip has with bigname suppliers such as Bollé and 3M. “We can get 3M products at what we are assured is their best discount structure — we get the right brand at the right price. That enables us to meet the competition head-on. There’s always someone (a competitor in the market) saying, ‘Oh, I can’t do it at that price’. We rarely have to come up with that sort of excuse. They’re the premium suppliers in the country and I have the ability to go direct to them and get their products to my customers, the small to medium end of the market. I can actually get 3M’s industrial safety expert to come out and help my small to medium business clients. That makes me look good, but it also helps the customer solve his problems.”n Find out more about Mark and SafetyQuip HERE Feedback session with Wayne Johnstone SafetyQuip HQ

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INSIGHTS

Just how much is our Australian market like the USA?

A few notable things stood out to me on my recent visit to the US, so I thought I’d share them with you! By Glenn Walford

recent trip to California was interesting and enjoyable for a whole bunch of reasons, but a few things really stood out for me. Whether you have been there before or not, it is undeniable that the American culture heavily influences Australian culture. As a result, taking a top-level view of what’s happening there, can give us some handy insights for the future in business, as well as just being plain old interesting! It’s not designed to be a definitive list of the differences in 12

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our culture and market, but just a bunch of observations from a very keen observer

It’s very much like Australia I only travelled within California, and America is a much bigger place than just California. Nonetheless, it is still 13,000 odd km away, so this observation is significant. I found it remarkably so much like back home. There are so many things in the states that are the same as in Australia, the look and feel of the people and places made it feel to

me like I’d hardly left Australia at times – that is how similar I found our comparative ways of life. Maybe this is obvious to some, but I don’t at all recall that feeling on previous visits 10+ years ago.

Where are all the McDonald’s and KFC’s? Being so heavily involved in franchising, and always on the lookout for the major chains and what they are up to anywhere, it really stood out to me how minimal the representation was from the big brands McDonalds and KFC. In all my travels in LA and San Diego in particular, I could count on one hand how many I came across. It’s not that there were not franchise fast food chains all around me at times, it was just that these two big

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ones were rarely sighted. Not sure why. I reckon one of the best gut feel response surveys possible, is asking the people I come across their thoughts on varying things, and Uber drivers in areas are often a great source of local insights and opinions. When I posed this question, their pretty common response basically suggested that in their view, I’d come across more McDonalds in the lower socio-economic areas. Interesting.

Automation of ordering and pick-up I saw very consistent and heavy use of App enabled service so people can avoid wasting time in queues. Starbucks customers in particular, anywhere we went, were heavy users of the order via the app and walk-in for immediate pick up and leave. Payment was already made through the App. I know that this happens in Australia as well, but certainly to a much smaller degree

that I have seen thus far. In my estimation, in the time I spent in the multiple Starbucks I visited across LA and San Diego, around 40-50% of the orders were pre-ordered via the App for walk-in and no waiting pick up. This was heavier in early morning periods with people no doubt on the way to work. Definitely something to work on for Australian cafes and food operators especially.

People have much more tolerance on the roads This one really surprised me. I always expected, and I guess viewed Americans generally as more brash and more willing to give their opinion on things, and that includes when driving on the roads! Yes, this is an absolute generalisation, but I’d suggest it’s a fairly commonly held belief by Australians of Americans. However, I found them so much more tolerant and polite on the roads than we are. Maybe it’s because LA traffic is such a

nightmare and they all realise they are in it together! By contrast we are so much more aggressive and intolerant. We drove several hundred kilometres all up through the state, and we never experienced, saw or heard a single disagreement of any sort. We were in cars that were basically cut off a number of times in our journey’s, and nobody reacted to anything! What I observed was that over there, people can see for example, that you are wanting to get across franchisebuyer.com.au

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a couple of lanes for your exit. They can see that’s what you are trying to do, so they let you do it. They don’t honk their horn and or wave their arms about complaining and verbalising “what the hell are you doing?”. Here in Australia, we also know what people are trying to do on most occasions, but we don’t seem to want to happily allow them to do it. Only three days ago, I saw an older lady desperately trying to get to her exit on a freeway in Brisbane, only to be greeted with horns, the finger, and coupled with getting in front of her and brake testing her. Just unbelievable behaviour, and it happens all the time in Australia… I found the tolerance on the roads incredibly refreshing where I was in the states.

Food is much more expensive now On previous visits, I always found the food in casual dining and fast 14

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food really cheap - not anymore. Even without the Australian $ value equation, I found that the USD $ price of casual dining and fast food to basically be on par with our pricing, THEN you add the pain of our Australian $ at 70 cents to the USD, THEN you add tips! Tips are now firmly in the expected 15-20% range on top of the price. I recall 10% being pretty acceptable and the commonly mentioned tip suggestion on visits 10 or so years ago. However, receipts now mostly come with tip amounts pre-calculated at 10%, 15% and 20% increments for your convenience.

Cars are really cheap Wow, I could not believe how cheap cars are over there! Linked to cheap cars, I can also see how their finance options make it very easy to constantly own a late model car. Coupled with prescription drug advertising, car advertising

was the most prominent on TV. The range of European and American cars advertised at prices like $400 payments per month for cars that here are $60-$70k plus, was everywhere. Again, the good old Uber driver poll! I asked many of our Uber drivers about how they fund their vehicle for their driving and it seemed apparent that the ability for them to inexpensively finance their late model cars, made driving for Uber and Lyft a potentially more profitable venture over there. The average price of fuel was approximately $3.60 per gallon (in USD), which makes it around 95 cents per litre of fuel to put into an Australian context. And this is with LA fuel being much more expensive with the average fuel price across the US according to USAToday on 30 Apr 2018, being $2.81. Comparative cheap fuel to Australia, and low monthly repayments on big new cars,

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In-N-Out – don’t believe the hype American consumers are significantly better placed than us in their motoring options.

Americana nostalgia is big and cost-effective to dine in One thing that surprised me was the prevalence of a number of large casual dining chains that are tapping into the 1950’s type diner experience with all the nostalgia that comes with it. Think Hard Rock level commitment to the full theming, and then you will get the picture. The concepts we visited have not gone in half-baked, they have gone all the way with the theming and consumers clearly enjoy it. Dining at these concepts was up there with the most costeffective for the entire trip. I’d think the Australian market could

be a lucrative location for such a themed diner concept, as I reckon Australian’s would ‘get into it’ in sufficient numbers if the value was equally as good.

Serving sizes are huge (just as you’ve heard) Yes, the serving sizes are as enormous as you hear / assume. This is an assumption I’ve heard many make, and it rings true. I couldn’t believe some of the serving sizes that come out, especially breakfast menus. Some of the breakfast dishes we had and saw, would have been enough for three people in our dining equivalent environments. It just made me wonder, can you imagine how shocked Americans are when they come to Australia and eat in many of our establishments? I wonder what they make of that!

I’m tacking this one on after it I wrote about it in a previous article HERE. I’d heard a lot about ‘how amazing’ the burgers and meal was at the burger chain In-N-Out. Suffice to say, I was not as impressed by the meal in comparison to the level of hype. Again, I stress that it was in no way bad, just that the level of hype that surrounds that brand simply does not justify the product in my view. It was priced well for sure, as at $38 odd for 5 people, it was the best value meal of the trip. But, the reports of people lining up for hours to get a taste of the ‘legendary’ burger at the random pop-up stores they have at times in the Australian market, is just crazy. I assure you, if ever tempted to line up for hours for an In-N-Out, you most certainly have better things to do with your time! n franchisebuyer.com.au

QUICK WINS FOR YOUR DIGITAL STRATEGY With digital marketing consultants and service providers hovering all around you, sometimes it can be hard to wade through what is the best course of action to take, and in what order. Here are some quick wins to help you identify where to focus first. By Robb Snell

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’ve written about “Digital Strategy” a couple of times before and in the first of those articles I covered off what a digital strategy actually is. The ultra-short version is: your digital strategy is your framework of software tools, content, and processes that enable you to run your business the way you need to. Typically that framework uses technology to help you market your business, transact, fulfil orders and communicate with customers. In its purest sense the term “digital strategy” is hugely broad, but when most people say it, they usually mean the marketing side of it. All the tools that you can use to put your name out there, attract leads and funnel them towards a sale. For the purpose of this article I’m also going to stick to the marketing side as I step through a range of

quick wins that you can consider when trying to create or revitalise a digital marketing strategy for your business. Not all of these quick wins will apply to your situation, and if you’re really switched on then it’s probable that you already have many or all of these areas covered, however, this is a handy list of easy tweaks that you can make to close important gaps, and I see these gaps on a daily basis, even in big businesses with dedicated marketing resources.

Spruce up your products The whole point of developing a digital marketing strategy is for you to attract new customers to your business. To do that you’ll need to be able to instantly engage a prospect and explain to them what products you have and why your products are

DIGITAL MARKETING better than others. Here are the mistakes you need to avoid.

Talking about your products

The very first thing you need to do is make sure you’re explaining your products the best way you can and usually you’re not the best judge, no one person is. You’ll have to test a range of different descriptions to see which ones bite. Even in large businesses I often see products being poorly described to the market and often that’s caused by a discord between the product development team and the marketing team. Ironing that out and nailing your product descriptions is a huge win.

Displaying your products In the digital age images are king, how do yours look? If you’ve got product images taken on your travel camera with the built-in flash, flat focal length, or washed-out colours, you’re doing your business a massive disservice. It’s very cost effective these days to get a professional photographer to help you take some professionallooking photos. Bear in mind that it’s not just about the technical aspects of photography, the art direction is just as important. If you have a photographer coming to your premises you will need to make sure that you have every photo planned out, simple things like: n Is there a common treatment, filter or style that your photography should use? n What’s in the foreground of each shot?

n What’s in the background of each shot? n Is there a person in the photo and if so, what are they doing, and what are they wearing? n What time of day gives you the best light? n Is everything clean and ready to be photographed?

With a couple of hours effort and a small amount of money you can transform the face of your products with photography and/or video that’s ready made for digital marketing channels. Depending on your line of business, good photography can increase lead or sales conversion rates dramatically, not just 10% or 20%, sometimes it’s in the 100s.

Grabbing attention To people that don’t know your brand, your products probably just look like everything else in the sea of options, they’re not as eye catching as you think they are. To break through this type of same-same vibe perhaps try creating a bundle offer, something you don’t see too often. For example, say you sell highend hair care products, rather

than offering just shampoo at $33/ bottle, why not create an offer for 10 bottles at $299. How many people by shampoo 10 bottles at a time? Not many I’d wager, but that offer looks different enough for someone to do a double take and think, who would want 10 bottles of this stuff? What is it exactly? All you’re really trying to do is stand out long enough for someone to notice of your product, and in many cases they don’t end up buying the bundle, they simply buy your standalone product, which they wouldn’t have noticed before.

Re-engage customers and prospects You’ve heard it a thousand times before, and it’s dead right, you’ll make a vastly higher margin when selling to your existing customers rather than selling to new customers. Even when armed with that etched-in-stone rule of business, I frequently see clients that have no plan in place for re-engaging with their existing customers. Even when they do have a process in place they make the mistake of being lazy about it. franchisebuyer.com.au

DIGITAL MARKETING

Here’s how you should look at it: You need to keep good customer records and set up some method of getting back in touch with them at relatively regular intervals. Don’t send too much, and make sure it’s genuinely interesting, each unsubscribe is a lost asset to your business. Given that they’ve purchased from you, make the effort to know something about them. How about dividing them into groups based on their preferences, such as those people that liked your premium range of products vs. those that liked your budget range. This is called “segmentation”. Use this information to make your communication more targeted and relevant. Treat your existing customers like they’re already in the fold, don’t just give them the same offers that you’re giving to new customers. 18

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Offering something a little different will make them feel a little more special. So the quick win is definitely to re-engage with your existing customers, but you can also take a big step forward in your marketing by growing a database of prospects as well. A little further down I talk about stepping out into the traffic to grab some leads. When you do that you need to do more than just hope for a sale. You should be looking to earn their permission to communicate and collect some contact details for that purpose. The easiest way to do that is by developing a “lead magnet”, which is a fancy name for putting together some useful information from your business or from the industry that you’re in and offering it to prospects on your website. Typically you will offer to send that information to them via email if they provide their email address.

By creating a lead magnet you’re establishing yourself as an expert in your industry, you’re collecting prospect details for ongoing marketing, and you’re increasing the ROI of your outbound marketing campaigns.

Stepping into the traffic Let’s say that you have your products ready to roll and you’re confident that driving traffic to your website or a product landing page is going to convert into sales. At this point it’s all about increasing the number of prospects that see your product, you’ve got to step out into the traffic. There are literally hundreds of places you can go to find traffic quickly, they all cost money of course. If you’ve been running a content strategy then it’s likely that you’ll also be getting some decent “organic” traffic from search engines and social channels, but if you’re

DIGITAL MARKETING looking at turning on the tap for some fast sales then you need to go to paid channels. The two best places for sales conversions are typically Partner Channels and Search Engine Advertising. Let’s look at those.

Partner Channels Most industries have a range of specialised channels dedicated to providing lead generation, for accommodation it would be Booking. com and Expedia. If these channels are actively driving traffic and they’re transactional i.e. you can make a purchase on them directly or they have a strong focus on lead capture, then they’re usually pretty good at showing quick results. If the service is more of a directory that simply aims to list your details then it’s unlikely that you’ll see an uptick in leads any time soon. When working with partner channels just be mindful of the ROI. Quick results usually come at a cost and you need to factor that cost into your equation. I personally don’t view that cost as a negative, after all they’re working hard to generate traffic for you and I view it as the digital version of office rent. If you want an office in a prominent location with high foot traffic then your rent will be higher. That being said, I would encourage you to exercise caution when using discount sites for lead generation. Although it’s true that discount sites can generate a lot of traffic they often work as a doubleedged sword by decreasing the perceived value of your product. If a customer buys your product at a 30% discount once then it’s

incredibly unlikely that they’ll happily pay the full price the next time around.

Search Engine Marketing (SEM) Search engines have been the golden child of digital advertising since Google took off like a rocket in the late 1990s. The biggest advantage search engines have is their crystal clear understanding of “buyer intent”. That is, when a prospect goes to a search engine they will type in something like “black school shoes” and from that moment on they are actively engaged in reviewing the results with a strong intent to review and possibly purchase a pair of black school shoes. If you sell school shoes then you can get your product in front of those prospects very easily using pay-per-click (PPC) search engine marketing, and the biggest players are Google Adwords and Bing Ads. SEM in itself is a huge topic which I’ll have to tackle at another time, but here are some considerations when looking at advertising with search engines. Search engines have buyer intent, the display networks and social networks do not.

Search engine ads need to be hyper-targeted to the keywords and prospect locations if you want to get good ROI. Be very mindful of the text in your ads and where your ads are sending prospects once they click. You should try out several options for each ad to see what’s working. Never set and forget, you need to monitor your ad performance regularly, particularly when reviewing the Max Cost Per Click (CPC) that you’re willing to pay. Setup conversion tracking on your landing pages so you can see which ads actually result in a conversion action. Sometimes they’re not the ads that get the most clicks. Hopefully this article has helped you uncover a couple of digital marketing quick wins for your business. All of the ideas described here can be executed in a matter of days with good potential for improvements in short term and long term results. Of course a well-rounded digital marketing strategy will have several more components to it, many of which build value over the medium to long term, but as you can see, there are plenty of short term levers you can pull too. n

From the start of the online revolution, Robb Snell has crafted technology solutions to get the best out of any business. From the biggest corporates to ‘Day One’ startups, Robb’s work has launched companies, won international acclaim and revitalized P&L’s time and time again. www.MagneticFranchising.com.au franchisebuyer.com.au

BUSINESS LOCATION

How is Uber changing the Quick Service Restaurant (QSR) environment? It may be convenient and give more options to all of us as consumers, but at what cost to business which ultimately needs to be passed on? By Peter Buckingham CFE

ber deliveries may seem fantastic for the customer, but what is the business and social reality hiding behind Uber Eats, the flashy app and feel good brand? For 3-month period recently, I have personally availed myself of the convenience Uber Eats deliveries offers (and we are 60+). In the tech-savvy hipster enclaves of inner city Melbourne, Uber Eats usage is approaching binge proportions! Antony Crowther, Managing Director of New York Minute Burgers, and a 20-year QSR industry veteran, argues that the massive uptake of Uber Eats represents the single biggest industry shake up of the last

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50 years. Operating an expanding gourmet burger franchise, Antony knows that the Uber economy means that businesses must change their models or perish. Unbeknown to most consumers of Uber Eats, the multinational tech-giant carves 30 – 40% of the sale price for every order away from small business, and into their substantial coffers. For an industry based on a 10 – 20% profit margin, Antony says you don’t have to be a genius to understand that Uber’s 30 – 40% commission effectively obliterates small business’s profit margin. As a business owner, and even as a consumer, you may be seeing these sorts of things start to happen

in an environment where Uber Eats is operating heavily. n Store sales seem to be constant n You are seeing fewer customers at the tables, and less people coming through the door, n Expenses seem to have gone up, as owners now have a new and growing expense called “Payment to Uber”. n The Net Profit is now lower than before, and the Net Profit : Sales ratio is decreasing. In the meantime, as a business owner in this scenario, you are continually under pressure for: n Rental increases, as your lease has set annual increases well above CPI, n Labour costs are rising, n If you don’t offer Uber delivery, will your sales drop? n You don’t want to re-employ your own delivery drivers, as they are too inflexible.

BUSINESS LOCATION Some may put this down to seasonal adjustments, or possibly the financial changes have not been realised yet. My guess is that this Uber East impact is happening for many QSR business owners, and they don’t fully comprehend the impact yet. How did it come to this? Uber Eats started as a great idea to help utilise the vehicles and drivers who would be relatively quiet over dinner time. It began where Uber would charge a 20% commission on the Sales, and at first it looked like some incremental business over your competitors. In many cases this gave businesses access to the delivery market without having to employ delivery drivers. Uber have progressively pushed the commissions up to now be around 30% of Sales (or higher), and as ‘nearly everybody’ is using this service, the incremental business has dropped back to your normal market share. What does life with Uber look like? From a customer’s viewpoint, we now enjoy a quicker delivery, and the convenience of an App, including payment taken directly from our accounts. Being able to see the arrival of our food coming on our phone all combines to make Uber a far superior service to having your own delivery drivers, or other 3rd party delivery services, who do not have the flexibility of the numbers of Uber vehicles. From the store owner’s view, the negative issues that come from these Uber sales include minimal incremental sales you may have enjoyed as the customer previously

came to the restaurant, maybe bought a drink, and generally stayed longer and spent more money. My take on it is that a simplified monthly P & L could now look something like this: Before Uber

With Uber

Sales

$60,000

$58,000

Less COGS at 30%

$18,000

Franchise fees 10%

$6,000

Rent (15%)

$9,000

Labour

$18,000

$16,000

Other

$5,000

$6,960

$4,000

<$2,960>

Uber (30% commission) Net Profit

Based on 40% sales now Uber delivered $2K saving in table service $2K reduction in sales (incrementals not purchased) How might this play out? Antony predicts that the financial implications of Uber will be felt right across the retail industry. Shopping centres have been able to replace the lesser demand in specialty businesses like clothing, and large department stores with increased food offers. Restaurants have become larger as the casual

dining fad has taken effect, and we have been seeing the growth of the alfresco centres like Knox Ozone, Charleston Square and many other Super and Major Regionals (shopping centres) who have moved into these areas. If rentals keep climbing, and we see less people eating in the restaurants as these sales are outsourced to Uber Eats, then the rental pressures will drive many of these businesses broke, or a re-adjusted rental level will be necessary.

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BUSINESS LOCATION

There seem to be two other options that could be considered: Right Sizing the restaurant. If Uber is becoming the largest “client” of the restaurant, then should you be looking at a smaller footprint, less tables and chairs, hopefully a smaller rent, and re align the business to the new operations? Many facets of the business could be addressed including levels of table service, convenient parking and pick up for the Uber drivers – so they are not in the way, and even a person solely responsible for this category of sales. The Black Kitchen I believe some businesses have looked at a separate “non-retail” kitchen, set up more in an industrial area or lower cost, back-street establishment. This facility would be where the Uber sales can be cooked, made up and picked up from. Whilst distance to customer can be an issue, for areas of inner Melbourne and inner Sydney this could be a good option to decongest the more formal restaurants, and reduce the high rentals paid for purely kitchen facilities. The Black Kitchen would need to work on a set of economics knowing all the business will be paying the 22

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Uber delivery charges (around 30% of Sales), but a low rent, and tailor made environment may be able to handle the Uber sales for about a 5km radius area quite easily. According to Antony, this is the biggest game changer in the food business in his 20+ years, and those that do not address it now may be out of business before they know it. Whilst great restaurants with unique products may see the benefit

of incremental sales through Uber deliveries, most will just see the same sales through the store, with a new additional cost that is reducing their net margin very quickly. I’d suggest we all think of Uber more as a cost than additional business, and something that needs to be monitored for its impact to a QSR establishments’ long term economics. n

Peter Buckingham is the Managing Director of Spectrum Analysis Australia Pty Ltd, a Geodemographic and statistical consultancy. Peter is the Go To person as to where to open new stores in Australia. Peter is both a Certified Franchise Executive (CFE) and a Certified Management Consultant (CMC). To contact Peter email peterb@ spectrumanalysis.com.au or visit www.spectrumanalysis.com.au

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BUSINESS TECHNOLOGY

Five (5) things to look for in a modern point of sale system (POS) Whether you have a business already or not, understanding what’s possible with modern point of sale systems (POS) is crucial to ensuring you have the tools to allow your business to trade and grow without being hamstrung… By Robert Marsden

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modern day POS (point of sale system) should be much more than just a replacement for a mechanical cash register. They are however, just one spoke in an ever growing technology wheel that is widely underutilised, dismissed or not exploited to their full potential to extract the operational efficiencies they can absolutely deliver. That’s why when entering a business, it’s so important to understand what you are getting. If you are already in a business, don’t let the next time you review your choice in which direction to go, until boxing day 2020 when your offline, short staffed and all you have done for 2019 is continue to go down the same broken POS path all year.

Don’t rely on Google only Firstly, it’s important to not just google ‘Best POS systems for business’. You will no doubt be sent to a review site that will have active ‘affiliate’ commissions for linking you through to the POS partners website for you to purchase. This maybe ok if you are technically savvy and only have plans for a single location. However, if you’ve got passion and drive for your business and the operational nuances that only your brand can deliver, then you need to pay the same level of attention to your front end POS system.

Evaluate your needs Evaluation against your own business needs is key. Your business is successful because

BUSINESS TECHNOLOGY it has learnt and customised its products, services and experience to the needs of its clientele. A Modern POS system should also be a management tool with enough capacity to be fully customised to suite your operational needs. When it comes to modules and add on options for POS, the list is very long, so to get the most benefit and assistance to for you out of this short article, I’ve compiled a list of the 10 most useful functions or features I think would be relevant to most businesses. My golden rule though when evaluating, would be to try and work with a vendor who has 80% of the core features and functions your brand needs, and has the ability to customise and configure the remaining 20% which is unique to how your business needs to run. One size does not fit all here.

Fit for purpose There are many different POS systems on the market but if your core business is Drive-Thru, you don’t want a POS system that was purely designed for Retail. Some modern POS systems can have different interface layouts that will completely transform the operational outcomes meaning that the same vendor system can be used in a large sitewithin-site configuration, such as a large club or RSL where one system can operate with a Quick Service Interface and another terminal can be operated with an interface to suit fine dining. If the only interface design option is a retail layout, and you only do traditional retail, then tick that box. However, if your concept ever transforms so will the need to rip out

and replace your POS system and that is far from ideal.

Customisation There are those POS Systems whose architecture was designed to support custom changes and functionality, and those that weren’t. It is perfectly OK if they wish to charge for such a service, but are they equipped to handle requests and work deeply with their clients, or is the system for the masses and you’ll have to make do with a ‘take it or leave it’ approach. If you’re happy to go with the large scale system and it ticks the boxes for you then that’s great.

Multi-site capable, scalable and hybrid Maybe the demo from the salesperson went well in your lounge or boardroom, but has the system been designed to be operated in real time with two way data synchronisation and the ability to make global changes and run global reports from one online location? Or is it a case of that system is multisite capable but there’s a process that needs to run and you have to wait a few days for the data to be collected.

A true modern day POS will have the ability to control your menu and product offerings as well as all other sites of your business from either a central location or preferably an online location in either your data or a public or private cloud. Whilst we are here, where is your data stored? Do you own it and can you export it at any time?

All great questions… Does the system work only online or can it work in both online and offline modes? If your internet is down, can you still launch your POS and start the trading day, or is it only useful offline if it was already launched before the internet went dark? Do you research here and look for a ‘hybrid’ system which is one that can be launched and used whilst the internet is off and will fully sync up all of its settings and report its sales when the internet connection is restored.

A strong partner program with support Name a POS system and I’ll name some examples of them burning their channel partners. An integral part of any POS implementation is the network and people supporting franchisebuyer.com.au

BUSINESS TECHNOLOGY

the platform and ensuring they really understand your business. If you have downloaded your POS application and configured it yourself and it works great, then you also need to count on yourself in difficult technical support times as that particular brand probably wonâ&#x20AC;&#x2122;t understand a lot about your dead UPS battery or failed internet router. Make sure your working with competent integrators and not part of a larger affiliate network of commissions for purchasing your POS software. In a modern retail environment there are many moving parts and integrated systems, make sure you have support from your POS provider and an awareness of who is responsible for each part as the POS vendor is typically your first line of support calls and you certainly do not want finger pointing between vendors when your site is not trading. 26

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Security Levels and Loss prevention A very common weakness of many popular POS systems is that they may be able to support multiple sites, but they lack the granularity when it comes to security and product control. A true multi-site POS platform is one that built security into the equation from the first store. The ability to delegate sales reports and to restrict menu or content changes in a multi-site

environment is also crucial. A strong and granular security hierarchy is the first step in any half decent implementation of loss prevention, however integration with payment systems and CCTV systems with some smarts will form the basis of a strong loss prevention system. There you go, some tips on what to look for and expect in modern point of sale systems. Getting the choice right from the outset can set you on a path to business success now and well into the future! n

Robert Marsden is the founder of Addictive Technology Solutions,a one-stop-shop for business technology solutions. Addictive works with businesses (franchises) from start-up, all the way through to enterprise level, on a broad range of technology uses, implementation and ongoing IT management support. â&#x20AC;&#x153;Stopping the finger pointing by multiple suppliers in technology in businessâ&#x20AC;? is the reason Addictive exists.

THE MAN BEHIND Do you need insight or assistance in your franchise with? 1. BUSINESS IT 2. COMMERCIAL SECURITY 3. RETAIL TECHNOLOGY 4. DIGITAL TRANSFORMATION

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RESEARCHING FRANCHISES

How to make the most of a visit to a franchising expo By Glenn Walford

here are many ways to go about finding the business that fits you best. One tried and tested way when it comes to choosing a business to invest in, is by spending some time in research mode at the franchise expos in major cities. The longstanding Franchising & Business Opportunities Expo series kicks off again soon in Sydney at ICC Darling Harbour on 23 – 24 March. If you are serious about getting into your own business, a franchise expo is just about the best window shopping you can do. In my view, the individuals who present, and the 28

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way a display booth is presented, says a lot about a franchise company. I’ve seen some extraordinary presentations from franchise brands at expos, as well as some very ordinary. But in saying that, some of the slickest presentations look just too slick for my liking. But that is of course up to you to determine! When engaging with representatives on display stands at expos the best you should be looking for is someone who is open and engaging and is interested in you as much as you are in them. It should not just be all about them ‘pitching’

you. They should be informative about their opportunity, but the best are also wanting to know more about you and your expectations and what you are looking for in a business. The challenge with all the activity in a franchising expo, is that with all the buzz, you can easily be distracted from your goal of short listing the business opportunities that suit you best. So…. how do you make the most of your time there? n Narrow the search before you go – what don’t you want to do? We’ve been to every franchise

RESEARCHING FRANCHISES expo for about 10 years, and we always ask people this question - ‘What type of business are you looking for?’. Unfortunately, the most common answer we get is ‘I’m really not sure, but I’m hoping something will jump out at me.” If this sounds like you, our best suggestion is to start before you go by eliminating the businesses that don’t suit you. For example, if you don’t want to work outdoors, then you could rule out a mowing run and some mobile business options. If you can rule out a large number of potentially distracting options, then you can focus on what business may be a much better fit for you. n Ask yourself what type of things you DO want to do. You can identify a sub-set of businesses and filter down to a smaller list by being aware of your motivation, capabilities and capacity to afford the business. n Consider a business that complements your existing skills and

experience. If you have experience and skills that can be leveraged into a certain kind of business, then that may be an advantage. Even if you don’t like what you are currently doing in a certain business or industry, you could use that experience in a different way. For example, if you no longer wish to be a teacher, leveraging into a tutoring or education type of franchise may be the answer. n Look for a franchise that’s interested in what you can bring. Some of the sales pitches are more slick than others, but good franchise businesses are very interested in YOU as a person and your skill-set and experience. They are after a great fit all-round for all concerned. n Ask lots of questions. Don’t be afraid to ask a lot of questions and really clarify the opportunity. Drilling down into the details of the concepts is the best way to rapidly increase your

knowledge and understanding of any business opportunity. So, now you know how to make the most of your visit, here’s some more info about the upcoming Sydney Expo at ICC at Darling Harbour 23 – 24 March 19. We’ve got some FREE tickets for you here just make sure you enter code FBM on the site. This will save you paying $20 for entry at the door With a rich 30+ year history, the expo gives you access to opportunities priced from $10,000 to more than $500,000+. Over 100 franchise business concepts are already lined up for the Sydney show that include Poolwerx, Snap, GutterVac, MBE, Signarama, Yellow Brick Road, Wendy’s Milk Bar, Jim’s, Subway, Degani and more. The show runs for 10am to 5pm on both the Saturday and Sunday, with the Brisbane and Melbourne shows running in June and August respectively. We’ll see you there!n

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CONSUMER TRENDS

What Will Everyone be Eating in 2019 and Why? Trend awareness is just good business – new discoveries and innovations regularly occur and consumer choices can change as a result. by Mel Brown

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ood consumption is an everyday necessity so… What will everyone be eating in 2019 and why? We decided to do some research and after trawling through numerous foodie sites, this is what we have arrived at:

Top 3 Australian Food Trend Predictions for This Year

Sustainability

Consumers want to know where food was grown, caught, farmed or processed. Best answer – Australian and ethical! There is a growing ‘No Waste’ movement,

which encompasses using every part of a product (nose to tail, root to shoot) and eco friendly packaging.

Food As Medicine

Fermented – Fermented foods are growing in popularity. These foods increase probiotics and improve the immune system. Omega 3 – There’s been a resurgence in consumers seeking foods rich in Omega 3, such as salmon and walnuts, for brain and cardiovascular health. Dairy Free – A rise in allergies has led to consumers seeking dairy alternatives. Products such as

CONSUMER TRENDS almond, soy, rice, oat and coconut milk are common and now there’s even hemp milk!

Vegetables are the new Wagyu

Plant based eating was the biggest trend of 2018, according to Australian Food News and vegetables are tipped to play an even bigger role moving forward. More and more people are expected to embrace meat-free lifestyles, due to the increased environmental and financial cost of proteins. With these thoughts in the forefront of consumer’s minds, it seems likely that food trends will have an impact on people’s everyday choices and the businesses they buy from. n

Of course, not everyone will be joining the healthy dairy-free bandwagon in 2019. According to Natacha Maloon at 9Honey Kitchen, Starbucks has started an adorable trend with their puppaccino (whipped cream in a takeaway cup) for dogs. Love that!! To see more on fur-babies being treated to puppaccino’s, go to the full story at: kitchen.nine.com. au/2019/02/05/12/24/ dogs-who-lovestarbucks-cream

Sources: ‘Top Australian Food Trends for 2019’, Kerry Heaney, Eat Drink & Be Kerry ‘The Top Food Trends of 2019, as predicted by Chefs and Experts’, Max Brearley, WA Restaurant Critic, Delicious Magazine ‘The 6 Food Trends You’ll be Seeing Everywhere in 2019’, Jonah Waterhouse, Elle Australia ‘Lactose Intolerance on the Rise in Australia’, TJ Ryan, Canstar ‘Milk Alternatives are the New Cash Cow’, Naturally Good ‘Find Out the Food Trends for 2019’, Australian Food News ‘Dogs are Having a Thing With Starbucks Cream’, Natacha Muloon, 9Honey Kitchen franchisebuyer.com.au

FUNDING YOUR FRANCHISE

Making The Move To A Multi-Unit Franchisee Many dream of having multiple franchise locations to build their ‘empire’ and wealth. Here’s some insight into the benefits and commonalities with aspiring multi-site owners. By James Scurr

hilst some franchisees have the aspiration of becoming a multi-unit operation from the outset, others begin to consider the possibility after the success of their first location. There is no doubt that operating several locations requires a different set of skills than the more hands on approach taken by single-unit franchisees, however for those willing to make the jump, the return can scale significantly.

The benefits of multi-site for franchisee’s The trend of the multi-unit franchisees is growing and offers a range of benefits for both the franchisee and franchisor. For franchisees, opening an additional unit scales the potential for

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profitability and establishes a foothold for future growth. Many franchisees find the economies of scale allow them to operate a second unit without doubling the overhead costs. Aspects such as a shared back of house (BOH) and larger buying power contribute to the potential savings as well. Another benefit of the multi-unit approach is stability, franchisees are no longer relying on the success of just one location for their income, as the risk is diversified across a number of units. This also applies to franchisees who choose to diversify across multiple franchise brands, further dissipating their risk.

The benefits of multi-site for franchisors From the franchisors perspective, multi-unit franchisees allow for a rapid increase in growth without

FUNDING YOUR FRANCHISE a significant outlay of expenses. Encouraging successful franchisees to expand into a multi-site operation allows the brand to open more units without the additional costs of recruitment and training. Whilst the initial effort of establishing the infrastructure to support franchisees through the multi-unit journey is significant, the return is well worth the investment.

Multi-unit franchisees approach business differently Franchisors have also reported that when seeking multi-unit franchisees, they are often met with people that approach the role of business ownership with a different mindset. Going on to comment that those aspiring to run a multi-unit operation from the onset often come on board with a clear vision and are willing to invest more. Further to this, the experience and knowledge of multi-unit franchisees is valuable and can help build up the skill set of new recruits through mentoring programs.

Funding multi-site aspirations For franchisees looking to make the leap, a high level of importance is placed on planning and forethought, especially when it comes to managing debt and equity finance. Lenders are very open to the prospect of funding multi-unit franchisees, as they often present a more sound investment than someone new into the network. The business owner has already proven their ability to raise capital and in most cases have successfully managed an existing loan.

There are a number of things that lenders will be looking for from franchisees seeking finance to expand into a second, or third location. Most importantly, lenders will be looking to see that the franchisee has built considerable equity in the first unit before looking to open another. Franchisees should be able to show a well thought out plan regarding the growth of their businesses, and show that they have a strategy to build up the new location without making a negative financial impact on their existing locations. Ultimately, making the move to becoming a multi-unit franchisee

opens the door for a wealth of potential growth and revenue. There is a big change between owning and operation of one franchise to owning multiple, which often means that the franchisee has to take a step back, and adopt more of a leadership role to manage their teams across each location. However, along with the additional responsibilities and challenges comes many opportunities. For the franchisor, helping their aspiring franchisees through this learning curve is well worth the benefit of building a strong network of successful franchise owners. n

James Scurr is the Founder and Managing Director of Cashflow It, a specialist equipment finance company and the only equipmentfunder focused solely on the Australian franchise industry. He has almost 20 yearsâ&#x20AC;&#x2122; experience in the franchise industry having spent time as a successful multi-unit franchisee for campanies, including Boost Juice Bars. James has extensive franchising and small business experience and has an acute understanding of franchiseesâ&#x20AC;&#x2122; requirements. Phone: 1300 659 676 Email: james@cashflowit.com.au Web: www.cashflowit.com.au

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