速
M
A
G
A
Z
I
N
E
Why Franchise Success Comes Down To Location
March 2012
Franchise Opportunities for Mumpreneurs maxiom
What’s in this month’s Magazine?
Regular Features Page 4:
Welcome
Page 8:
Franchise Focus
Page 26:
Modern Franchise
Special Features
24 26
Page 6:
So You Think You Can Dance?
Page 14:
Franchise Success Comes Down to Location
Page 20:
Why Don’t All Franchisees Perform to the Same Level?
Page 24:
The Buck Stops With You
Page 36:
The Hidden Reason Why Some Franchisees are Unhappy
Page 46:
What Does it Take to Become a Successful Franchisee?
Page 58:
How the Internet Effects the Franchise Industry
maxiom
ÂŽ
M
A
G
A
Z
I
N
E
54 Profiles Page 8:
fasset
Page 28:
MPH
Page 30:
Empowerkit - Franchise Websites
58
Articles Page 10:
Benefits of Franchising Your Business
Page 16:
Franchise Satisfaction Dipping
Page 18:
Should we Stop Employing Fat Workers?
Page 30:
5 Steps to Finding the Right Franchise
Page 32:
Dysfunctional families Don’t Just Happen at Home
Page 42:
Franchise Opportunities For Women
Page 48:
Is Bigger Better?
Page 58:
Finding the Most Profitable Franchise
maxiom
60 08 Modern Franchise Magazine | 3
The Modern Franchise with Mark Matthews Welcome to the March 2012 Issue of Modern Franchise Magazine. Franchise success is what everyone in franchising strives for. Meeting franchisee expectations can be challenging. In this issue we look at what it takes from the franchisor and the franchisee to get the best results for both. Sales & Marketing
With increasing consolidation of franchise networks likely in 2012, Content is no longer king - it is now we ask “is bigger better when it master of the universe - this month we comes to franchises?” investigate How the Internet is We also look at some of the Effecting F ranchises. “Franchise Myths and Misconceptions” Why when considering a franchise Chris Anderson also tells us more you should always look for “A about the Secrets to Successful Sustainable Franchise Business Franchise Websites Concept or Walk” and “The Hidden reason why some franchisees are Much is written about franchise unhappy” success, but in the end Franchise Success Comes Down to Location Franchise Management Franchising Your Business
Features In “franchise focus” we talk to fasset about their social enterprise franchise and how they plan to change the way we look at business. Michael Polo Homes have now recruited 5 franchisees to their network. In the past 8 months since partnering with Maxiom and Modern Franchise Magazine. We talk to their CEO about the challenges of franchising a new business and what the future has installed in “Modern Franchise”.
The franchise relationship is one built on mutual trust and giving each Franchising offers significant other our best. We look at how to And we also look into what it takes advantages compared to other forms build trust and a stronger franchise to be a successful franchisee… of business development, but it isn’t for culture. everyone. We take a look at The There are also a number a really Benefits of franchising your With the changing workplace great franchise opportunities business demographics, and insurers advertised! concerns about the health of older, Looking for a franchise? overweight and unfit workers, Siimon Reynolds is also holding Joanne Solis asks “should we stop Strategic Entrepreneur events Mark Fernandez from BDA looks at employing fat people?” around the country. Be sure to the impact becoming a franchisee download his new ebook “How to can have on the lives of you and Franchise systems can be a bit like Attract New Customers Quickly your family. a family. But we found out that and Easily” from page 15. It’s “dysfunctional families just don’t absolutely free and has some great We look at the “5 steps to finding happen at home.” tips even the most seasoned the right franchise” and “how to find marketer will find valuable. the most profitable franchises”. Franchise success is reliant on following proven systems and Enjoy the magazine. All feedback is Kristin McNicol also looks into processes, but sometimes appreciated. Visit our website at: franchise opportunities for “demanding compliance can cost mumpreneurs. www.maxiom.com.au more than it’s worth. “
4 | Modern Franchise Magazine
maxiom
DIGITAL PUBLICATIONS FOR SMARTER BUSINESS Smart decision makers across a wide range of industries and sectors rely on Maxiom to save time and stay ahead of the game. Maxiom delivers the Business information and advice you need - straight to your inbox. Best of all, it is completely FREE and open to everyone. We save you time and keep you smart about your industry - and your job.
Subscribe
Subscribe
maxiom
Subscribe
Subscribe
Subscribe
Subscribe
Modern Franchise Magazine | 5
SO YOU THINK YOU CAN DANCE? How do I know that the franchise system I am buying into is viable in the medium to long term? By Mark Fernandez So your about to be a franchisee? Well let’s hope that you have evaluated the franchise system and satisfied all the key areas that will keep you dancing in the system you have chosen. This decision will have a large impact on the lives of you and all members of your family. Whether it is a mobile domestic service such as Lawn Mowing, Car Detailing, or a retail based business in a suburban or regional shopping centre, you should conduct a detailed and thorough evaluation of that franchise to ensure that it is the best opportunity for you and your family. Some key areas of your review should cover: The Concept – is it proven? Consider the Franchisor’s Management Team The content of the Operations Manual should cover all the ‘day to day’ activities of running the business
6 | Modern Franchise Magazine
The Market - the organisations market share and competitor analysis The Future – what are the expansion and business plans? Franchise Agreement and Disclosure Documents – get expert advice from franchise advisors.
Can you check from the Disclosure Document? Can your accountant talk to theirs’? What are the growth and development plans for the next five years? Is any deposit that you pay to the Franchisor refundable?
You may feel like you are dancing with wolves at times, but knowing the right questions to ask will keep you from tripping on your two left feet!!!!
Does the Franchisor have enough experience within the organisation to provide worthwhile ongoing support?
Ask these further questions of the Franchisor:
Is there sufficient advertising?
How experienced is the Franchisor? What's the track record of the franchise? What has the growth rate been for the past three years? Is the Franchisor financially sound?
Does the Franchisor contribute? Is training provided initially and later? Who pays? How good is the training? Is there a uniform performance monitoring system?
maxiom
THE “MUST READ” MAGAZINE FOR ALL BUSINESS LEADERS & ENTREPRENEURS
What are the arrangements for providing field support? How many outlets are there?
Hopefully, the franchise that you have chosen passes your evaluation process and the lessons learnt along the way will help you choose the right dance instructor that will take you to the Nationals.
MODERN BUSINESS MAGAZINE
How many are companyowned? The key is to find out if the instructor you have chosen can How many failures have actually dance the Waltz, there been? Details? Quickstep and when required the Rumba as there will Can I contact existing inevitably be different tunes Franchisees of my own playing over the next 5 - 10 choice? years that will require different Are they a member of the expertise. FCA – Franchise Council It’s no good if all they know is the of Australia Macarena!!!
Mark Fernandez is a Director at Business Development Alliance For more information on franchising please visit our website www.bda-online.com.au Or email Mark at mark@bda-online.com.au
maxiom
CLICK HERE TO GET YOUR FREE COPY DELIVERED DIRECT TO YOUR INBOX EVERY MONTH
Modern Franchise Magazine | 7
franchise focus THE SOCIAL ENTERPRISE FRANCHISE Fasset is a new kind on social enterprise - one that is scaleable - creating jobs, opportunity and wealth for the disadvantaged in our communities. 1. So what is fasset all about exactly? asset is a hybrid organisation, a social enterprise that brings about social change through market-focused business activities. We understand that disadvantage will not be addressed until wealth is spread more evenly throughout our community. That is why we have created this social enterprise - to provide employment, training, skills and business opportunities to those who need them most. fasset believes large intractable social problems are borne out of disadvantage. That's why we work towards a creative, large-scale response. Our service industry social enterprises are dedicated to providing a supported 8 | Modern Franchise Magazine
pathway to long term employment and wealth creation for people both young and old from a diverse range of backgrounds.
change that tackles the root causes of poverty, marginalization, environmental deterioration and accompanying loss of human dignity.
We combine social support with industry training, employment and business opportunities across a wide variety of sectors.
The key concepts of social entrepreneurship are innovation, market orientation and systems change.
We offer customers the chance to participate in this exciting and rewarding change, while benefitting their own lives and business.
fasset is about creating opportunity, a sense of self worth, dignity and increasing wealth for disadvantaged people from all walks of life.
2. How what is a social enterprise?
3. Hoe does franchising fit into a social enterprise?
Social entrepreneurship is about innovative, marketoriented approaches underpinned by a passion for social equity and environmental sustainability.
We believe that any response to disadvantage has to be coordinated and scaleable. Franchising is the perfect business model for this type of social enterprise.
Ultimately, social entrepreneurship is aimed at transformational systems
It gives people a job opportunity so many desperately need, to learn, build their skills, and the opportunity to work towards owning their own business.
maxiom
fasset
Empowering Communities - Unleashing Potential - Creating Enterprise
4. How does fasset hope to address disadvantage via franchising?
We have had several enquiries from existing businesses that want to particpate in this social We have decided to concentrate enterprise model. Social entrepreneurs are drivers of service franchises and food of change. Together with 6. So how does someone franchsies as this is where the institutions, networks, and become involved with fasset? demand is and it offers people communities, social the best opportunity to work entrepreneurs create solutions That will depend on what through the ranks to become a that are efficient, sustainable, franchisee as there are no highly involvement they want to have. transparent, and have My best advice is to visit our specialised skills or education measurable impact. website and decide if social requirements required. entrepreneurship is right for you, There are many ways in which you can become a supporter of 5. Do you think you will face a then contact us and we can have a discussion about how you can fasset and help drive this change backlash from existing to a better society. One of these franchisors by offering what become involved. You can contact fasset at: is in effect free franchises? is to become a supporter of fasset, either financially, through www.fassetsocialenterprise.com Actually the opposite has training, becoming a franchise or email us occured. We have had a great partner or even volunteering. response from the franchise By building a strong network of sector. dedicated social entrepreneurs we are helping people from disadvantaged backgrounds to build a better life for themselves, build wealth and create a more equitable society. Our franchise model starts with employment opportunities and builds to franchise ownership, so with training and some hard work we can help anyone, regardless of education and financial position can become a successful business person. Empowering Communities - Unleashing Potential - Creating Enterprise 24 | Modern Franchise Magazine maxiom
5. What type of franchises does fasset offer?
Modern Franchise Magazine | 9
BENEFITS OF FRANCHISING YOUR BUSINESS Quite a lot of well established businesses are faced with the issue of how to develop their business further than its current potential. By Jaz Campbell Owning a successful business is more than just about making money; efficient planning and strategy are needed to be successful. The option of staying a small, low growth business is not appealing to most entrepreneurs. Simply put, most businesses that fail to grow faster than the cost of living increases end up going out of business, which is why there is such a high failure rate of small businesses. Business expansion can be done in different ways but the most common strategy for successful smaller businesses is via franchising. Franchising is appealing to many highly innovative and ambitious ‘fast’ growth businesses - SMEs with rapid growth potential and larger companies that realise the value of reinvention through franchising to stay ahead.
business name for a fixed period at the start of the business. This of time”. includes arranging the lease agreements, design and fit-out if Franchising has the potential to the franchise operates from a greatly increase the parent premises, and marketing company’s revenues and profits. strategies. The parent company provides licenses to other businesses for Another benefit of franchising is selling their products and quicker growth and expansion. services. With a much lower level of investment, franchisors can drive One benefit of franchising is the the growth and development of lower capital requirement. Rather their company. This allows the than opening a second or franchisor to open in new subsequent operation(s), markets and as the franchise franchisors can limit their costs network grows all the franchises by granting franchises to others benefit from the increased brand to open the new operation under awareness, brand penetration the franchisors business name and economies of scale. and using their successful and proven systems. Reducing overheads for both the franchisor and franchisee, growth Once a franchisee acquires the through franchising has much to new operation, the franchisor will offer all participants in the only need to pay for training and franchise network. administrative aspects. Another strong benefit is that Franchisees will be responsible franchisors themselves become for financing the rent, staff, and part of a larger network that has all other aspects of the business. strong industry support and access to a wider pool of talent, However, depending upon the expertise, advice and strategic business, franchisees may need support than would otherwise be to have a significant amount of available to a smaller or cash at hand before they can independent multi-branch acquire the franchise. business.
The Franchise Council of Australia defines franchising as “a business relationship in which the franchisor (the owner of the business providing the product or service) assigns to independent people (the franchisees) the right to market Although they may pay an upFor the franchisee, this method and distribute the franchisor's front fee, franchisees will be of business expansion is easier goods or service, and to use the assisted by the parent company. and with far lower risk than starting a business from scratch. 10 | Modern Franchise Magazine
maxiom
maxiom Group of Companies
Custom Publishing for Business, Associations & Not For Profits Custom Magazines & eNewsletters - The idea of sharing content as a means of persuading decision-making has opened the opportunity for leading content marketers to create new information and share it via any and all media. Content marketing products frequently take the form of custom magazines, or online newsletters. Position yourself and your organisation as the experts or go to person in your field. Maxiom looks after all the content and distribution and share a percentage of the advertising revenue with your organisation. Maxiom also provides comprehensive reporting that shows exactly how your audience interacts with your content including who is viewing it. Accurately measuring your marketing effectiveness and ROI has never been easier. EBooks, Whitepapers & Reports - Create valuable and timely industry leading information to share with your audience. Maxiom looks after the content, hosting, technology and reporting. Digital Catalogues - Create interactive digital catalogues for web, mobile and tablet distribution, or let us do it for you. Increases average shopping basket value by 50% compared to Web-sites & traditional ecommerce sites - plus huge savings on print and distribution. Optimised For Desktops, Laptops, Mobile and Tablets
For More information Click Here or phone us on 1300 855 696 maxiom
Modern Franchise Magazine | 11
12 | Modern Franchise Magazine
maxiom
maxiom
Modern Franchise Magazine | 13
FRANCHISE SUCCESS COMES DOWN TO LOCATION! When it comes to franchise opportunities, there are hundreds to choose from. Everything from restaurants to senior care to children's franchises is available. Success comes down to may factors. Location though can be the key! When it comes to franchise Remember, exclusive rights to the opportunities, there are hundreds to area are a large part of what you choose from. Everything from are paying for when you are restaurants to senior care to considering franchise opportunities. children's franchises is available. You are also buying a business that has an established credibility, However, one of the most experience in the area, and the important things to consider when power of numbers. choosing a franchise to purchase is location. It does not matter what Definition of Exclusivity type of franchise you are Different companies offer different considering, you will need to do definitions of exclusivity to their some research on the franchisees. However, if you are demographics of your area to make seeking a franchise opportunity it is sure that it is a good fit. Otherwise, important that you insist that the it is possible that your business will company does a complex fail, even with the support you get demographic research. from the franchise. Franchisors should provide you Location with more than the population of The most important thing to your area and the per capita consider for any of the available income. You need to be smart franchise opportunities that are about your purchase and insist that available is location. Location is the company provide you with one of the most influential factors demographics that are detailed in when it comes to determining regards to the specific business whether or not your business is model along with the product or going to succeed. A quality service that you are planning to franchisor will offer to protect your provide. territory from any type of competition within their system. For example, let's say there is a franchise opportunity available in a This means that they will not allow high population market that has a another person to purchase and large number of high income pursue a similar franchise professionals that are somewhat opportunity within a certain area young. This sounds like the perfect after you become one of their situation, but what if the franchise franchisees. is a senior care service. This protection may be through tracking potential customers based on post codes or another type of tracking system.
14 | Modern Franchise Magazine
If the franchisor can provide you with demographic research that shows a market to support the business, even if the geographic
location is not in a large population area, this could be a better opportunity. Take Your Time The most important thing to do when considering franchise opportunities is to take your time. Dig deep into the information that is provided about the community or area that you are considering for your franchise. Remember; think outside the box when it comes to demographics. Also consider the psychographics. These are what motivates customers to buy your product or service. Consider your competition and any future competition you are likely to have in your territory and how they will effect you, or if you will have a competitive advantage over them? Really determine what type of people are going to be using the product or service provided by your franchise and if they will support your business. Just because you are located in a busy shopping centre doesn’t mean people will buy from your franchise. Where you are located within the centre, how many people who visit the centre who actually want your product or service and your competition will all effect your success. If you take the time to study the demographics and the location that is being considered, your franchise is much more likely be a success.
maxiom
If you want to attract more customers fast… but don’t know exactly how or where to start, here’s some great news for you. Siimon Reynolds, one of Australia’s most well known advertising experts along with marketing expert and best selling author Brian Sher have written this book which helps you truly understand how to attract more customers fast. No one comes close to having the body of knowledge, experience and results that Siimon does. ...If you're 40+ you might remember the "Grim Reaper ad." Siimon was the creator of that campaign and it launched him into a successful journey of entrepreneurship in this country. He knows what it takes to be successful and you'll love the ideas that he shares in this bite-sized book. Siimon is an incredible success story and responsible for many of Australia's major business brands.
click here And get your free copy of "How to Attract More Customers Quickly and Easily."
maxiom
Modern Franchise Magazine | 15
FRANCHISEE SATISFACTION DIPPING The arguments over franchise regulation, increasing and more heated franchise disputes are having an effect on franchisee satisfaction and the general confidence in the franchise sector according to a new report. With the enormous amount of information about franchising and a seeming endless number of different franchise sector reports out there it is becoming more difficult for potential franchisees to find valuable information that is directly relevant to their franchise research. A new franchise sector report has painted the franchise sector as one in need of a major refresh, both in its’ business model and its’ brand. Similarly a recent report into the sector by Korda Mentha also found that “inherent weaknesses in the franchise business model” were responsible for under-performance, Australia is effectively “oversupplied” with franchises and an industry undergoing change, with more franchisor consolidation (mergers or acquisitions) likely in the coming year. So what confidence can a prospective franchisee have when considering investing their hard earned dollars in a franchise? Well, it seems from the Goodes report, that this depends on the franchise itself. Without getting into specifics about individual franchise systems, these reports clearly found that some franchise business models are simply designed to prop up franchisor earnings, share prices and satisfy the requirement of venture capitalists and private equity firms at the expense of franchisees.
16 | Modern Franchise Magazine
Attacks by former leading franchisor executives such as former McDonalds senior executive Merrill Pereyra on certain franchise profit models won’t give prospective franchisees any confidence, nor will it help those franchisees that have already invested in these systems any heart. Another disturbing fact reported was the failure of franchises that topped the Topfranchise.com.au franchise satisfaction ratings. In 2009 Souvlaki Hut was rated by Topfranchise as the number one franchise. By late 2010 this franchise had fallen into administration with poor sales, threats of litigation and high numbers of disgruntled franchisees blamed for the collapse. Something else that was noted from the reports worth discussing was what on the surface looks like relatively low levels of disputes across the wider franchise sector. A closer look into this paints a different picture. Last year the ACCC received a record 600 complaints from franchisees. The Franchise Council of Australia concedes that between 2 and 3% of franchisees are in serious dispute with their franchisor. This means that litigation is involved. Given that the average term a franchisee remains in a franchise system in Australia is 7 years, this means that with approximately
69,000 franchisees across the sector, that franchisees that have taken to complaining to the ACCC (which is really the last resort of the most disgruntled franchises) is running at closer to 6% during the average franchise term. And with serious disputes running at 2 - 3% at any one time, this means that dispute rates could exceed 20% over the same 7 year average franchise term. Now while some of the serious disputes are amicably settled and others run longer than a year which will reduce the total percentage, this is still a very high number of complaints and disputes when measured over the average franchise term. And according to the Franchise Australia report conducted by Griffith University, roughly 1000 franchises per year cease to operate or are not renewed. And of course all this is just fuel to those wanting to see tougher franchise regulation and penalties imposed. It also supports the argument of many in the franchise industry that are saying the industry is in need of reform and the franchise business model must be improved to ensure long term franchisee viability. Measuring franchise success and satisfaction over the entire franchise term is the only true way of determining which franchise is the top franchise.
maxiom
Goodes & Co The unique Goodes business model enables you to work from home or our offices with minimal overheads, access to marketing campaigns and head office support to grow your professional services business across a varitey of disciplines. An excellent return on their investment No Staff to manage No premises to rent No inventory to acquire No long or unsocial working hours No extensive business travel No custom designed equipment or signage
Goodes & Co
When you want someone to deliver the “Goodes� for your business. www.goodes.com.au maxiom
Modern Franchise Magazine | 17
SHOULD WE STOP EMPLOYING FAT WORKERS? If Occupational Health and Safety wasn’t already confusing and burdensome enough, now employers must start to monitoring their employees weight, physical and mental fitness. By Joanne Solis With more and more people remaining in the workforce longer, the health, well-being and fitness of employees is now under scrutiny. The poor performance of superannuation funds, share and property markets and with uncertain outlooks across all these areas many older Australians are concerned about their retirement income and maintaining their lifestyles. Changes to pensions and the tightened availability of other government benefits means that the average Australian will work longer, harder and with less return, remaining in the workforce long past the traditional retirement age. Unfortunately, with our more sedentary and affluent lifestyles, many older Australians are getting fatter and sicker. With Australia’s rate of obesity, overweight and under-fit workers skyrocketing, insurance companies are increasingly becoming concerned about the potential risks to such employees and their work colleagues, particularly where operating machinery, heavy lifting or manual labour is involved.
are demographically likelier to have higher levels of health problems such as diabetes and excessive weight. They also often have riskier lifestyle factors, such as poor diet and limited exercise, in respect to their health. So why are insurers worried? Well it simply means that people who once could work safely are now continuing to work when it is not safe to do so. Health economics shows that there is almost twice the number of trips and slips for people in the workforce aged over 50 years of age compared to those who are between 18 and 25. The evidence further reveals that the longevity of injury for people who make claims for workers' compensation is significantly higher in the older age bracket. None of these figures should be surprising. They reflect the medical reality of what happens to people.
Australian industry, however, has failed to recognise this impending injury epidemic to our older workforce. You simply cannot ask a person of depleted capacity to do The medical evidence the same work when it involves overwhelmingly shows that age heavy lifting or repetitious work that reduces the muscle strength, bone exposes the person to joint and soft density and cognitive function that tissue damage. relates to people's physical judgement. Those working in industries such as manufacturing and health are Furthermore, the health statistics moving inexorably towards warn that those people working in damage. Strangely, although manual handling and heavy industry employees have job descriptions,
18 | Modern Franchise Magazine
employers have not taken the time to develop appropriate task analysis nor conduct regular health assessments to determine if employees can undertake those tasks. Although more mature workers hold the intellectual property, skills and experience necessary for business to profit, the failure to analyse their capacity to undertake duties means these particular talents are at risk of being lost through injury. So what Must Employers Do? 1. Employers must immediately undertake an accurate task assessment of all job descriptions to determine the physical and mental capabilities required to do the work. 2. They must introduce a health assessment process that determines if particular employees can undertake the work. 3. They must then look at reengineering their business to keep the requisite knowledge, skills, and intellectual property within the business but ensure that people are not placed at risk of injury. Age discrimination simply doesn’t come into it. Employers will have to redefine job descriptions to suit employees capacity to safely fulfil their duties. Failure to do so could have catastrophic consequences for your employees and your business.
maxiom
SPECIALISTS IN WHS MANAGEMENT AND TRAINING WHS (OH&S) CONSULTANTS PROCDURE DEVELOPMENT & TRAINING RECRUITMENT OF WHS PERSONNEL WHS AUDITS CHANGE MANAEGEMENT SOLUTIONS MANUALS AND POLICIES
maxiom
Modern Franchise Magazine | 19
WHY DON’T ALL FRANCHISEES PERFORM TO THE SAME LEVEL? In the December issue of Outsource Resource Magazine we ran an article about the methodologies of outsourcing for optimum results. There are some excellent lessons that can be applied to franchising utilising the same strategy and processes. A key element of successful outsourcing is concentrating on the business functions that match your “unique ability” which allow you to work “in the zone”. What this means is that for yourself, your employees and franchisees that you can improve the odds of being in your “zone” by matching jobs, challenges and goals to your skill level. You can also get into your “zone” by increasing your skill level. The concept of being in the “zone” is discussed in the book Developing Personal Leadership written by Rex Houze. Houze is a leadership development coach and the former president of a US based franchise company. The article in Outsource Resource Magazine is also particularly relevant to anyone wanting to franchise their business. You can read the full article by clicking the following clink:
20 | Modern Franchise Magazine
The message is clear and simple. Once you have worked out the unique ability that is required to be successful in your particular franchise then all you have to ask is “Will the franchise meet the franchisee’s capabilities?”
In every franchise system, the most successful franchisees – the best franchisees – work “effortlessly” and they get “optimum results.” The problem is, in every franchise system there are always too few of these top performing franchisees.
For new franchise recruits, the question is do they possess the unique ability required to be a top performing franchisee who can work in the “zone”. The same system can be applied to franchise staff and contractors.
Even with sophisticated franchisee recruitment models and ideal franchisee profiles many franchisors are still struggling to recruit the top performers. “Why is that so?”
Well it is most likely because the According to Houze, people can franchise recruitment team hasn’t be described as being in their truly identified the unique ability “zone” when they appear to be required to be a top performing working effortlessly and getting franchisee, who shares the same optimum results. When a task or vision and goal as the franchisor, job challenges a person’s loves their business so much abilities, the opportunity to be in they would operate the franchise the “zone” exists. When for free - other than they have challenge is low and ability is bills to pay. So who gets the high, the person may become concept of unique ability? Most bored, distracted, and have a franchisees don’t. tendency to be sloppy or make mistakes. When a challenge is If some franchisees can work above a person’s skill level, it “effortlessly” and get “optimum can cause stress, frustration and results,” how come all tension, which leads to poor franchisees can’t do so? performance.
maxiom
If only franchisees were all alike. The franchise doesn’t match the And there’s the problem! Not all unique ability of the franchisee franchisees are created equal. (And - I’ll add this - the franchisor isn’t doing anything to help the Many (and in some franchise franchisee understand how to networks, most) franchisees are work in the “zone”). not prepared to be franchisees. They love the idea of selfThree reasons explain why this employment. They’ve got a occurs. dream. They are aspirational and want to be successful. 1. Because neither the They’re ready to be franchisor nor the franchisee entrepreneurial. They’re ready to realized the importance of build their own business. And so aligning talents, values and skills on and so on and so on . . . and with operational challenges. Not they purchase a franchise and all franchisees want to do, or can the next thing you know they’re do, the same type of work. And miserable. They’re working 24/7. not all franchisors do a good job No one wants to be around them of helping franchisees improve because they’re negative and their skill sets. grumbling all the time. They’re almost out of money. The 2. Because the franchisee didn’t business isn’t what they thought realize – or didn’t want to hear – it would be. The franchisor isn’t that he can’t do everything or all that helpful anymore. And life anything he wants. Some people sucks. are better than other people at doing some things. It turns out What happened? it’s important to know what you can do well and want to do well. Houze’s answer is that either the Your “unique ability”. franchisee is bored, or the franchisee is in over his head. 3. Because the franchisor didn’t realize that not all franchisees The better question is: Why did are created equal - they’re not all going to perform exactly the that happen? same way unless they’re all Houze answered that question, exactly the same way! And they never are. too. The franchisee is not working in his “zone”.
maxiom
However, some of them are very similar, and it’s the franchisor’s job to find those people (and continually help them to improve their skills). Find the franchise prospects whose “unique ability” match the franchise and who can work in the franchise “zone” and the franchise network will include more people who “get it” and fewer that don’t. If you’re buying a franchise, write down what your unique ability is, what it is you excel at and love doing (and would do for free if you didn’t need the money) before you start looking for a franchise, then find out if you can work in the “zone” of that franchise business you are considering. If you’re selling franchises, it’s your job (and responsibility) to identify the “unique ability’ required then find (and prepare) the franchisees who will prosper while working in the ‘zone”. And that’s also how you can develop personal leadership, whether you are a franchisee or a franchisor.
Modern Franchise Magazine | 21
A SUSTAINABLE FRANCHISE BUSINESS CONCEPT OR WALK With literally thousands of franchises in business today, how can you determine which franchises have a sustainable business concept? When looking at a potential franchise, determining whether the business concept will be successful in the long term is vital to your business success. Occasionally, some businesses that are based on a fad or gimmick end up being franchised, as the owner thought it might be a good idea. Look into the history of the franchise, how long it has been established and if the system has been proven across different markets over time, during good times and tougher times. We often see businesses based on gimmicks such as a night club, where customers ordered drinks in syringes or drips and sat on hospital beds or wheel chairs, businesses based on a gimmick generally go out of business - just like that one did. There are a range of businesses that pop up based on themes or gimmicks such as vampires or the latest fad however they just don’t last. Market fit and ability to attract the right franchisee Almost any business can be franchised, but most should not. 22 | Modern Franchise Magazine
Not every business has a sustainable concept and point of difference that will make it unique enough to stand out in the market but attractive to potential franchise investors.
In Australia, the largest 10% of franchisors, control over 70% of all franchise outlets and operations.
This is evidence that many smaller franchise systems are For instance franchising a tattoo based on unsustainable studio could be difficult. This concepts, particularly if they have highlights two key elements of a been franchising for a while and sustainable franchise concept - have no or very few franchises. market fit and ability to attract the Sometimes the business is very right franchisees. reliant on the owner themselves and as such can not be easily Tattooists need to be artistic with replicated and isn’t scaleable good hand-eye coordination. two of the key components of a Apart from the obvious successful franchise. challenges of trying to train someone in the art of tattoo, Some businesses such as those those who’ve already mastered it requiring a high degree of tend to have their own technical knowledge are also businesses. less likely to be successfully franchised Therefore they are unlikely to want to join a franchise, and if Due diligence they do join there is a high possibility they won’t follow the According to the franchise systems as they’re used to Council of Australia, almost 10% having their independence. of franchisors ceased to operate between 2008 & 2010. Korda Proof of franchise business Mentha reported in Feb 2012 concept there is an oversupply of franchises in Australia with consolidation likely to increase The majority of franchisors this year. So when it comes to operate their businesses for at least 3 years before franchising, due diligence franchisors are equally responsible for ensuring and while there will always be their business is fit for franchising exceptions, it’s important you as a franchisee is in ensuring the prove your business is franchise is the right fit for them. sustainable before franchising
maxiom
Latest Technologies Here at Telecube we aim to do things a little differently. We will provide your business with services that are feature rich and economically efficient. Then we’ll give you control over those services. You can change everything, online and in real time, every time. 1300/1800 Numbers VoIP Phone Systems Email to Fax AutoProvisioned Hardware Auto Attendant (IVR) NZ 0800 Numbers
VoIP Phone Systems A complete range of PBX functions at a fraction of the cost
100% Satisfaction Guarantee 1300 Numbers : 1800 Numbers We guarantee that you will be satisfied with our available 1300 number selection. We handpick our numbers and they are almost always better numbers than the others are touting as ‘Gold Numbers’ or ‘Premium Numbers’ We absolutely guarantee that if you are not 100% satisfied with the numbers available to you we will refund 100% of your signup.
Signup Now Are you ready to signup with the #1 provider of 1300 numbers and 1800 numbers? Click through to the signup process and you’ll have your new number up and running in a few minutes.
maxiom
Modern Franchise Magazine | 23
CREATING TRUST - WHETHER YOUR THE FRANCHISOR OR THE FRANCHISEE - THE BUCK STOPS WITH YOU Trust. It's a word that describes a characteristic in the way the people deal with one another that is seldom experienced. It's something that people in general no longer have for politicians, business men and women, and entire industries, such as banking, oil & gas drilling, and maybe now franchising? Former US President, Harry Truman had a sign on his desk that read, "The buck stops here." Yet, today the buck usually gets passed to someone else. Few are willing to accept any responsibility for the state of affairs. Even in their businesses, it's not uncommon to hear owners speak in a derogatory manner of their customers, the very people who enable them to be in business in the first place. Trust. It's one of those things that most everyone would like to experience again, but few are willing to begin the process. What is the reason for this? It's probably because of the fact that few people understand how they would benefit by doing so. It's part of the "me first" and “business only exists to make a profit” mindset. How do you create trust with anyone? It starts by building relationships, those which are based on the integrity and honesty
24 | Modern Franchise Magazine
of all parties. Quid pro quo. There's never any sense of keeping score or getting your own back. Rather, it's the desire to make sure that the other party always gets your best. With customers, it's not that they're always right; it's that you have their best interests at heart. You're not looking for a fast or cheap pay-off. You're not just trying to get them out of your hair. You genuinely care about them, and they know it.
Does the buck stop with you, or when customers are dissatisfied you immediately jump to the conclusion that the problem is with an external supplier or blame your employees? In franchise relationships the buck often gets passed. Franchisees blame Head Office and franchisors often blame poor performance or slack customer service directly on franchisees.
To achieve that, you must over deliver whenever possible. That may mean anticipating their needs before they realise that they need them. It may also mean you challenging your customers. Are they overlooking something in their business that could be costing them or are they ignoring a problem you can fix because it is simply too hard.
If the franchisee isn’t meeting performance expectations the franchisee must take responsibility for what they can control. Likewise the franchisor must take responsibility for what it can control and both parties must work together to achieve the best outcome for mutual benefit. And yes, sometime this means challenging the other party to fix a problem that you can help with. It Even something a simple as a also takes courage from the other reminder from your dentist that your party to admit there is a problem. check up is due or your accountant reminding you when your BAS or When we start thinking about “me tax is due are examples of first” and “business only exists to someone showing that they have make a profit” then both the your interests at heart. franchisor and the franchisee have much to lose. But it is surprising how few people do this. Stopping the buck, takes courage, but it will reap untold benefits.
maxiom
maxiom
Modern Franchise Magazine | 25
modern franchise A HOME BUILDING FRANCHISE WITH ONGOING WORK READY & WAITING FOR THE RIGHT FRANCHISEES. Starting a home building franchise from scratch has provided some interesting challenges as Mike James from Micheal Polo Homes explains. 1. What inspired your business idea? MPH is part of a strong and exciting industry. Having constant contact with people from all walks of life, creating thier dream home and realising their personal vision, combined with an environment of working so closely with clients that they become your friends, it is hard not to be inspired.
we needed to find the right strategy to tackle the increased work load that we had created. In the back of our minds however, we felt that franchising was a viable option as the industry we operate in is a very fragmented except for the largest players. The top 100 builders now hold around 40% market share. But there are around 50,000 other buidlers fighting for about 30% of the total market, with owner builders comprising most of the rest.
2. How did you know franchising was right for you The disadvantage of these and what ultimately smaller business structuctures influenced your decision? purchasing power, state of the In addressing our future growth art marketing and innovation is plans we engaged the services restricted, so we decided that of a leading franchise consultant. we needed to become a top 100 builder ourselves. We were open to
The franchising system we have created with the assistance of our franchise consultant provides the advantage of buying power, innovation as a group to be at the fore front of market trends, professional marketing campaigns, long established industry experience, all whilst maintaining the personal level of service to our clients as they will be dealing directly with an owner of the business. 3. What previous experience did you have in the business before franchising?
Having come from a long line of builders in the UK and Europe, on both sides of the family, building & design have been in our blood. This extensive recomendation for the most In this assessment of the industry and technical applicable path for our company. industry franchising was the right knowledge and our broad decision for MPH. business experience, enables Having worked with Maxiom’s us to direct the MPH business marketing people to grow our well into the future. business as quickly as we have, 26 | Modern Franchise Magazine
maxiom
services, share our vision and fit our culture. Many builders still have that “tradesman mentality” which holds them back from achieving their business goals. 7. Tell us about some of the expectations that you had. Have they been met? So far everything has been in line with our expectations. These are exciting times. Michael Polo Homes lives by its’ service promise designer homes “built on time and on budget; every time” .
8. Who is the target market for your franchise?
We are looking for people to join our team who are passionate 4. How long did it take to 6. What challenges did you about servicing clients, who develop and set up your face in setting up your ideally have a building business? franchise? background or who have been involved in some area of the Whilst we have had over 30 The biggest challenge in setting industry, and who have a keen years building & business up a customised franchise eye for detail. More important is experience, franchsing took us system is the amount a can do attitude and someone some time to learn and we spent of variables to work through. who enjoys being creative. over 2 years setting up the franchise system. Developing This challenge can be overcome 9. How many units of your our business is constant and as long as you maintain the franchise do you plan to always will be, everyday we are intergrity of your company values establish in Australia? developing more and more. at every decision point, and make a decision that best Over the next 3 years we plan to 5. What was the driving force provides the oppotunity for both establish 18 franchises and 40 the franchisee and the franchisor within 5 years. behind your decision to to make healthy profits so the franchise? business system is sustainable 10. Do you have any plans for in the future. Sales growth left us no option overseas expansion? other than to expand. Our decision to franchise was based We have a long term building At this stage we intend to make on wanting to maintain product contract for multi-unit investment sure that our franchise system is properties with a superannuation quality, engage people with a succesful in Australia and that true passion for their work, have fund which is generating a sold we meet all our targets for base for each new franchise. strong technical knowledge growth and customer and personalised service to the The hardest part is finding satisfaction before we look at client. All of this can be achieved suitable franchisees that can other markets. But we would through the franchise structure. maintain our quality of never say never. 24 | Modern Franchise Magazine maxiom
Modern Franchise Magazine | 27 maxiom
5 STEPS TO FINDING THE RIGHT FRANCHISE We have gathered up 5 tips that can help you find the right franchise business and start making good money. By Mike Burnside We have gathered up 5 tips that can help you find the right franchise business and start making good money. Finding the right franchise takes a lot of time and research. If you are lucky you find the right business and start getting excited about the possibilities. You also need to understand that buying a franchise does not guarantee that you will make any money no matter what their track record seems to be. However, by following these 5 tips you can increase your chances of finding the right franchise and making money. 1. Seeing Yourself in a Franchise Most experts will tell you that to be successful in a franchise you need to choose one that you can believe in. The franchise that you are looking to buy needs to one that closely matches your interests and your skills. That will mean that you need to take a good look at yourself and decide what your strengths and weaknesses are before buying. Investigate other owners of franchises you are interested in and see if they have similar personalities as yours.
28 | Modern Franchise Magazine
Offer to buy them coffee and ask 4. Franchise Complaints them about any inside information they are willing to give you about Another part of investigating a owning a franchise business. franchise to buy is to look for complaints. By checking the 2. Stay Away From Fad Internet you may find complaints Franchises from current or former franchise owners. This could be information that is important to you in your As everyone knows, fads will decision to buy that business. come and go. Investing your money in a franchise that will only be a flash in the pan and not have Remember though, you will always find some complaints a long-term future is foolish. about a business. If there are only Franchises that are hot now could a few of them you can usually cool off just as quickly. Stay away chalk it up to a few disgruntled from franchises that have a lot of former owners. imitators in the market. That kind 5. Avoid the Start-Up Franchise of competition will probably keep you from being successful. Starting up a new business can be 3. Search for Successful tough especially if that franchise is new. All you have to do is look over Franchises the history of franchises to see that many start-ups have come It is all about the sales and you and gone. want to invest in a franchise that has good sales numbers. To increase your chances of being successful look for a well If you find that a particular franchise has a lot of units up for established franchise, one that sale that could mean the company has been in business for at least is having problems and you should five years. A well established franchise will reduce your risk and steer clear. you will have the benefit of other One way to verify is to check out owners that have good business plans you can use. franchise brokerage websites to see if other franchise businesses Do the research, read the are selling, especially at low franchise documents very closely, prices. and get introduced to those owners that are in the business. If you do all those before signing on the dotted line, your chances to be successful are almost guaranteed.
maxiom
PROJECT MANAGEMENT SOFTWARE MAKES MANAGING & TRACKING YOUR FRANCHISE PROJECTS A BREEZE!
Wrike gives you the full insight into your business “The best and most intuitive project management software on the market.” Read Clarke, Business Builder Alliance, Inc.
Take a tour before your 15 day free trail Wrike's unique project management features have been proven to: Help easily manage 50+ projects in one workspace. Solve the email inbox chaos problem. Boost team collaboration. Save managers up to 25 hours a month. Double team productivity. Multi Award Winning Used in 55 countries with thousands of happy users
Take a tour before your 15 day free trail maxiom
Modern Franchise Magazine | 29
THE 5 SECRETS TO EFFECTIVE FRANCHISE WEBSITES By Chris Anderson
It’s shocking that in 2012, so many small businesses and franchisees are still without a proper marketing website to help boost lead generation, sales, and if nothing else just to get on the radar of would-be customers. Blaming the economy or uncertain retail conditions is a tired excuse for why your business is suffering. Stop worrying about things you can’t control, and start focusing on the things you can…like having a real website! For all of the franchisors out there with your heads in the sand, here are some of the top reasons you NEED to have effective websites for your franchisees (and for those reading who simply have cookiecutter, template pages that are almost exactly the same across the board, this applies to you too): 1. Investing Time in Social Media is a Waste Without a Website Take a look at your social media presence, and research your franchisees’ Facebook, LinkedIn, and Twitter profiles – surprised to see how much activity there is? Now, look closer to see if there’s an underlying strategy to convert those discussions in social media into leads and ultimately sales. Chances are this is where the ball is dropped. That’s where a website comes into play – all of that great momentum can be channeled to a controlled website optimised to convert traffic in paying customers.
30 | Modern Franchise Magazine
2. Control Your Business’s Voice Online
The solution is to have a website that you can ALWAYS point people to, regardless of the With a website that is designed to communication channel (traditional have frequent content updates, you advertising, banner ads, PPC, can take control of the messaging, social media, etc.). and have a strong positive influence on your search engine 5. Generate Leads and Sell! rankings (SEO). Social media is the great equalizer allowing Most importantly, you need to have customers to join the conversation a SALES channel online that is the without barriers to entry. But hub where you’re looking to convert owning the control of your brand traffic into leads, leads into and messaging through having a customers, and customer into website is still vital. evangelists. Social media is an excellent vehicle to connect with 3. Gather Customer Information people, build personal relationships, improve branding, Collecting visitors’ emails and other and a host of other benefits, but it’s information through your website pretty tough to convert those warm opens an amazing opportunity to fuzzy discussions into sales. With maintain communication with a website, you can have a potential and existing customers prominent sales call to action and through email marketing, which an easy way to collect customer can have a strong impact on information, and you can constantly customer retention. work towards increasing your conversion rates. It’s also a great way to disperse new promotions to an audience Do you just have basic template who has already volunteered to pages, or worse listings, for your stay updated about news and franchisees, and are now happenings related to your reconsidering doing it the right franchise. way? Click on the link on the next page for a personal demo to see 4. Have a Homebase to Point how easy it is to make a change to Customers To having search engine optimised, lead converting, social media In today’s fragmented social media integrated websites for your and Internet marketing arena, it’s franchisees. very easy to become completely disorganized and lose control of Or, if you’re more of a do-it-yourself your lead conversion funnel – not to guy or gal, click the big mention convoluting the experience Try it Free for potential customers looking to purchase your products or link and you can dive into a free services, or just learn more. trial.
maxiom
the best platform to create + manage
local websites for your franchisees Sell More Franchises
Preserve Your Brand Online
"How am I going to market myself online?" Have a good answer. Differentiate yourself.
Rogue sites are bad for you and your franchisees. They destroy your brand and waste your franchisees' money.
What's included with Empowerkit? For Your Customers
For Your Franchisees
For You
An easy use to use website with An intuitive web editor, social media A comprehensive admin to create, relevant local info that can be found in and tracking tools, and a powerful manage, track and fine tune control on a snap! marketing tool your local sites
Instant Demo maxiom
Modern Franchise IntelBuildMagazine Magazine| |31 3
DYSFUNCTIONAL FAMILIES DON'T ONLY HAPPEN AT HOME How do I know that the franchise system I am buying into is viable in the medium to long term? By Trevor Cooke What is "family?" According to Wikipedia, a family is a group of people affiliated by coresidence.
consulting with other affected parties. It can definitely create a culture of "us vs. them."
Now, I wouldn't normally think I 2. Strategy of the day. We've co-reside with my colleagues, all seen this. A few of the but Australians spend the most "ivory tower" executives time at work of any country in the decide it's in the entire world with the exception of South organization's best interest Korea. to take it in a new direction. This often occurs because In franchising, we spend even of one piece of data and more time at work, managing results in many the business and the disorganised, ad-hoc relationships, between meetings without key franchisor & franchisee, with decision makers. employees and customers. In short, you don't need a 3. Decision paralysis. Is this psychologist to tell you that one? Isn't this one? Oh wait, dysfunctional franchise family this is when executives units can definitely take a toll. chronically debate issues to death without actually How can you tell if you "reside" making decisions because in a dysfunctional franchise? there's no clear leadership to drive consensus. And more importantly, what can be done about it? Steve Tobak 4. Pet project. Ah, yes. The (cbsnews.com) says there are "sacred cow" project that is tell-tell signs your "second usually created by a founder home" (i.e., place of business) is and is immune to criticism dysfunctional. Here are just a and the company's few: standard processes. In other words, it continues to 1. Ivory tower effect. This be funded or enforced long happens when after it shouldn't or management makes “because this is how we’ve decisions without always done it”. communicating or 32 | Modern Franchise Magazine
So, do any of these *ding ding ding* in your head?Sound familiar? What can be done about it? Well, I may sound like Captain Obvious (insert caped super hero here), but dysfunctionality has to be recognized first before "treatment" can begin. If left untreated, you risk losing your customer base, your profits, and your loyal workforce. Once recognized, there is one simple solution. Open and clear communication. Sound too simple? Take the examples above and apply the open and clear communication solution. Would they still be a problem if all involved parties were allowed to share their suggestions, opinions, hesitations, etc. in a constructive format? Maybe. But most likely, they would resolve themselves.
maxiom
Amaze Creative Keeping it clear and simple.
Amaze Creative Strategies Creating, distributing and analysing engaging, recurring digital content experiences across multiple channels. MWA Design can help you get your marketing message to your target clients in the most effective way to boost your sales and your profit. We are not just interested in great design and the latest technologies we’re interested in your business, your customers and your commercial success too.
Inspire Your Customers & Franchisees Inspire them to buy Inspire them to share Inspire their loyalty Increase brand recognition Increase interaction with your brand Create a consistent brand experience
Brand Design | Print & Digital | Web Design | Web Development
www.amazecreativestrategies.com
maxiom
Modern Franchise Magazine | 33
Premier Corporate Gifts CORPORATE GIFTS YOUR STAFF OR CLIENTS ARE GUARANTEED TO LOVE! Our Corporate Gifts range is well presented, extensive and completely customisable to suit your Business needs.
Choose from a huge selection of unique gifts and corporate gift ideas that will set of any occasion.
We deliver our corporate gifts nationwide throughout Australia and can cater for any company no matter how big or small.
Premier Corporate Gifts appropriately reflects your corporate image and professionalism.
Our gifts include items from perfume to barbeque sets.
Call 1300 522 611 today to talk about your company's requirements for corporate gifts.
Simply Premier Gifts can help you choose the right gift for any Corporate occasion.
34 | Modern Franchise Magazine
Reward your staff or impress your clients with something special that reflects you brand both personally and corporate.
Gifts are beautifully gift wrapped, include a personalised card and are directly delivered to your recipients address(es) Australia wide.
maxiom
The Corporate Gift Experts! Reward Your Clients, Staff Contractors or Franchisees. From Simple Gift Bags to Premium Rewards
We can brand any of our gifts and we are ready to help with your corporate gift selection. Client Gifts Staff Rewards Christmas Gifts Conference Gifts Corporate Events Awards Nights Marketing Events
Rewards to Enjoy Specialising in superior presentation, we are committed to ensuring your company’s gifts are an appropriate reflection of your corporate image and professionalism. www.premiergifts.com.au email: gifts@premiergifts.com.au
Ph: 1300 522 611 maxiom
PREMIER CORPORATE REWARDS
Modern Franchise Magazine | 35
IS THIS THE HIDDEN REASON WHY SOME FRANCHISEES END UP UNHAPPY? Recruiting new franchisees can be challenging for many franchise systems. But once you’ve recruited the franchisee, helping them become successful and happy can be just as big a challenge. By Joanne Porter Probably the most misunderstood aspect of franchising is when franchisees believe they have “bought” a franchise. The term “buy” a franchise is used by franchise salespeople, many franchisors and franchisees alike. However, you don’t “buy” a franchise. Franchising is a business method whereby one party (the franchisor) grants the right to another party (the franchisee) to use this business method under the franchisors brand for a certain period of time (usually referred to as the “term”).
expectation of “ownership” at the issue when entering into a end of it. franchise agreement. But of course in franchising, the franchisee never truly owns the business. They have just purchased the rights to operate a business using the franchisors Intellectual Property for a period of time.
The other consideration potential franchisees must take into account is that in franchising “ownership” of the right to operate the business is secondary to the performance of the conditions on which the grant is based.
Once this period of time has expired, unless the franchise has been terminated earlier or the rights to operate it transferred to another party, then depending on the franchise agreement, the franchisee must either pay to renew the agreement to use the franchisors Intellectual property for a further term or simply walk away.
Hence many franchisees complain about having the follow mandatory procedures enforced by the franchisor who is only doing so to maintain high standards (or at least this should be the reason). Franchisees Finding the right franchisees is often believe that once they sign one of the most challenging and the franchise agreement that now costly aspects of franchising. they “own” the franchise they can operate it pretty much as they So it is little wonder that many This is where franchisees see fit. Nothing could be further franchise sales people use the become frustrated. In the past from the truth. Operational term “buy” a franchise in order to there have been court challenges performance is the key factor to recruit franchisees. to end of term rights - or lack of maintaining a franchisee’s right them. to retain the grant of the This is something that is culturally franchise. embedded in most franchise What happens at the end of a systems and sales people. franchise term can have a huge The Franchise Code of Conduct effect on franchisees business requires a franchisor to have When a person forks out a large and the return on their evidence that the franchisee has sum of money there is an investment. Most franchisees obtained professional advice simply don;t think about this before entering into a franchise agreement. But when the 36 | Modern Franchise Magazine
maxiom
advisors, often franchise consultants also use the term “buy” a franchise then can anyone be surprised when franchisees do not fully understand the nature of the contract?
performance and the nature of the people it attracts.
Some franchisors are nothing more than sales organisations when it comes to recruiting franchisees. These franchise sales people will cast the net as Franchisee selection has broadly as possible and become a sophisticated encouraging all comers. If you practice over the years. It begins feel any pressure to sign before with identifying what a perfect you are ready or before you franchisee might look like, and have completed proper due then attempts to find those diligence then the chances are candidates which have the that you are being “sold”. With desired attributes - those people these franchises you may not whose unique ability fits the end up being what you thought franchise culture and profile. you were.
The selection of a franchisee and subsequent grant of a franchise is by its very nature a discriminatory process as not everyone will qualify. Even those who do qualify may still be not be accepted because they have unrealistic expectations, their motivation is unclear or unsound, or for some other reason.
It is certainly possible that a misunderstanding about what a franchise actually is could be the hidden reason that there is growing franchisee dissatisfaction. People don’t like Franchisors that themselves The best franchises will have a being “sold” something they consider the difference between franchise recruitment process don’t “own”. Understanding the granting and selling a franchise that eliminates unsuitable fundamental basis of a franchise before embarking on a candidates. Any franchisee that is the starting point to any franchisee recruitment doesn’t fully understand they are franchise investment. campaign are generally more not “buying” a franchise but likely to have developed a highly being granted the rights to A franchisor that understands evolved franchisee profile and operate a business for a period the value of the franchise have a stronger understanding of time should not be recruited relationship and maintains a of the characteristics of the by a franchisor. It is the high level of integrity and interest “right” franchisee for their franchisor’s responsibility to in the well-being and particular business. ensure it’s sales people know performance of the franchisee that the franchisee understands from point of first contact, can They will have also developed a this before entering into the also make a world of difference deep understanding of their franchise agreement. to the long-term prosperity and business, its drivers, its happiness of both the franchisee and the franchisor.
maxiom
Modern Franchise Magazine | 37
ARE YOU A BUILDER LOOKING TO GET OFF THE TOOLS? When you stop and think about it, as a builder you will use many types of coatings during the construction of even the most basic home. Whether its the interior or exterior paints, renders, texture coatings, timber stains, decking oils, waterproofing membranes, sealants, primers, bonding agents, impact coats, concrete sealers, patterned concrete toppings and many more, you will most likely be dealing with multiple suppliers, different trades, different products and all the while diluting your buying power and costing valuable time scheduling and managing all these different companies and trades on site. How would it be if you could deal with one company that took care of all these coating procedures for you with one phone call! PowerCoat are the only company in Australia, that has the expertise and experience to successfully project manage all your coating requirements. We can even take care of wall system installation, full wet area waterproofing and seamless flooring applications regardless of the product or system specified, with very few exceptions. No matter whether you are a builder of homes, units, high-rise developments or industrial and infrastructure, PowerCoat will tailor a coatings solution to suit your business, preferred products and construction schedule. Franchise opportunities now available Australia wide.
38 Franchise Magazine 10| Modern | Careers Magazine
maxiom maxiom
Specialists in construction coatings since 1989 Residential Commercial Industrial Infrastructure www.powercoat.com.au
maxiom
Modern Franchise IntelBuildMagazine Magazine| |39 3
FRANCHISE MYTHS & MISCONCEPTIONS Looking into whether franchising is the right option for you? Franchising is widely known to offer aspiring new business owners the best possible chance of success with the least amount of risk, yet there are still some myths and misconceptions out there that can alienate even the most savvy and experienced business person. By David Marks Owning A Franchise Guarantees Success.
Brand Name Means Everything.
You need to get clear on the myth that by owning a franchise, you absolutely cannot fail.
While you cannot dismiss the importance of a highly recognizable brand, it is only one part of the equation.
There are numerous factors, both controllable and uncontrollable, that can determine the fate or level of your success.
However, there are many different types of franchises operating in different industries and sectors. Some you may not even be aware of, where the brand isn’t in the consumer spotlight, but that doesn't translate to a lack of success.
However, a huge statistic is in your favour: is that overall, the success rate of franchisees is as high as 95%. Of course, there are no guarantees here, but with proper research before buying a franchise and a determined effort on your part, franchising is the obvious choice.
Their brand doesn’t have to be a household name like McDonald's in order to be a franchising success. Business to business franchises are a great example of this. There are hundreds of professional services or consulting type franchises that most people have never heard of by name. Many are extremely successful, with much less overhead, than traditional food and retail franchises.
40 | Modern Franchise Magazine
A significant investment is involved, so the only one getting rich is the franchisor. Don’t be fooled. Generally, the up front cost of a franchise is lower than the set-up costs of an equivalent stand alone business. And don’t forget franchisors absolutely need profitable, successful franchisees to flourish. The fact that ongoing royalties are paid by franchisees on a regular basis indicates that a fair an equitable relationship exists between the two parties, and that the franchise is profitable. Franchisee success is also dependant on this. If they weren't, who would pay these fees? A poor performing franchisee will not last very long. The franchising business model is structured specifically so that both the franchisor and the franchisee succeed.
maxiom
Bigger Is Always Better.
Owning A Franchise Means You're On Your Own.
You’re Better off on Your Own
This is rarely true, especially in the franchising world.
While franchising certainly isn’t Nothing could be further from the for everybody, sometimes the general disposition of our truth. Yes, ultimately, whether a Think about it: would you rather franchise succeeds or fails is society tends to be negative, so invest every last dollar you have largely the responsibility of the positive aspects regarding into a fast food or retails anything, including franchising, franchisee. business that operates long and business success can hours or 24/7 in the hope of become distorted. However, a huge benefit of making a decent income, deal being a franchisee is that there with high turnover, high is always support staff provided This is particularly so if one overhead, theft, staffing issues doesn’t have first hand by the franchisor, ready to help and worry about what is going on you with any issue you may experience or a deep at your store when you are not knowledge and understanding of encounter regarding your around to supervise. the business or industry. business. Or, would you prefer a service franchise that costs less to establish, allows for plenty of family and free time, and generates as good or even better income than the food or retail business? Most potential franchisees are better suited, and would even prefer, a small franchise with limited, but highly skilled, employees.
Most franchises offer business coaching & mentoring, staffing &training programs, marketing programs and local area marketing support , along with other valuable business support.
There are many franchise myths, and new ones will surely appear in the future, but the reality is franchising is the most successful business model ever developed.
There is also proven systems and procedures that when implemented effectively go a long way to ensuring franchisee success.
Do your research and get advice from experienced franchise advisors who can provide you with the necessary facts so that you're able to make an educated and informed decision about a specific business opportunity.
You are most definitely in business for yourself, but not by yourself.
Of course, many of the biggest brands are larger franchise operations, but many of these are corporate units or owned by In fact, you are part of a dynamic corporate franchisees. and vibrant team.
maxiom
Modern Franchise Magazine | 41
ARE THERE ANY FRANCHISE OPPORTUNITIES FOR WOMEN? Without a single shred of doubt, women have certainly earned their place in the business world. So why are there few good franchise opportunities for mumpreneurs? By Kristin McNicol As an entrepreneur myself, I have been helping corporate boards, the C-suite and franchise management create and develop a united and positive corporate culture across a wide variety of sectors. What has struck me in almost 20 years dealing at this senior level is despite the advances women have made in the last 30 or 40 years, at his level most organisations are still male-dominated. The franchise industry is no exception. While women have already proven that they are more than capable of mixing it with the best in the corporate setting, there are a not enough good franchise opportunities aimed specifically at women, particularly those who have decided to put their careers on hold while raising a young family. While some women have prioritised their career there are many others who have chosen to become stay at home mums. This doesn't mean that women who forego immediate career opportunities to raise a family are in any way less capable, in fact, many women have successfully combined motherhood and entrepreneurship through various franchise opportunities - when 42 | Modern Franchise Magazine
they can find a genuine income producing business.
Women have become a major demographic in franchise buyers and many are opting for lower Not only do franchise cost flexible home based opportunities for women need to franchise opportunities. be financially rewarding, but they must be flexible enough to fit in The trick Is finding the right with a stay at home mum’s franchise to suit your schedule, not working to a rigid geographical location, skills, corporate schedule. expertise and income requirements, all for the A flexible franchise business investment level you are model allows many women to be comfortable with. their own boss and dictate their own pace. This great level of Franchisors also should consider freedom is very liberating to how they can make their many women and helps earn franchise opportunities more them greater respect. attractive to women who require some degree of flexibility, In the modern world, most particularly in recent times when families need more than one there are dwindling numbers of income to live comfortably and suitable franchisees. still be able to provide for their long term future. As a entrepreneur and a mum, I often wonder if I hadn’t had the Finding a flexible and profitable opportunity to work with so many home based franchise great business leaders on my opportunity allows stay at home terms and to my schedule where I mums to earn a reasonable would be today. Having a income while managing the degree, experience and skills responsibilities of taking care of only counts for so much. When her family. women choose to put their family before their careers, at least in In the past few years, statistically the shorter term, a well packaged there has been a gradual home based franchise increase in female owned opportunity could well make a franchises and these numbers world of difference to many are continuing to rise. women’s lives.
maxiom
Professional
Screencasting Studio
Now Only $99.00 With ScreenFlow you can record the contents of your entire monitor while also capturing your video camera, microphone and your computer audio. The easy-to-use editing interface lets you creatively edit your video, and add additional images, text, music and transitions for a truly professional-looking video. The finished result is a QuickTime or Windows Media movie, ready for publishing to your Web site or blog or directly to YouTube or Vimeo.
maxiom
Modern Franchise Magazine | 43
INTRODUCING A DIFFERENT KIND OF RECRUITMENT SERVICE Maxiom Jobs is built on our network of digital publications with over 300,000 business leaders and talented professionals subscribing across a wide range of industries and sectors, you can now reach a greater pool of active and passive job seekers. The Opportunity
The Process
Utilising this network of subscribers, along with traditional talent search channels, we help you identify the best talent that fits your organisation’s culture, business goals and vision.
Candidates apply via the Maxiom Jobs web site. Rather than just have them forward resumes, we ask them to complete an online application developed in conjunction with you that is tailored to reflect the qualities required to succeed in each individual role and that match your business goals.
Maxiom’s specialist recruitment marketing team advertise your position on the Maxiom Jobs web site, as well as on the publication web site(s) that best match your vacancy, industry and the role. In some cases, you will also have the opportunity to post your job on the web site of our association or corporate partners and affiliates. A candidate attraction campaign is also launched via social media (including LinkedIn). A comprehensive candidate search is also undertaken within the Maxiom subscriber base. We don’t charge commissions or placement fees, there are no monthly charges or contracts to tie you in. You simply purchase a Job Pack that reflects your recruitment needs. There are no extra costs!
44 | Modern Franchise Magazine
This includes a first round interview questionnaire. This enables you to more easily and evenly compare candidates and candidates can see that there is a “level playing field” and that their application will get seen by the person who counts…YOU! They also know exactly what the role entails and what qualifications are needed before they apply, saving you valuable time. Applications are forwarded to both your inbox and to a Maxiom Jobs Client Services Manager. Depending on the Job Pack purchased and level of support required, Your Client Services Manager then walks you through the process of short-listing, interviewing and selecting the best candidate(s).
The Ultimate Recruitment Back Office! Our screening process ensures you get the candidates whose unique ability match those required to be successful in the specific role and in your organisation. You can employ as many of the candidates as you like without any additional cost. As a strategic marketing specialist, publishing and advertising business, we also understand what it takes to make a business successful and how we can best pitch the job to people in your market. As a successful digital publisher we have a professional copywriting and design team who specialise in creating advertisements to grab potential applicants’ attention. We also have a specialist recruitment team with experience in over 22 industries and sectors. Maxiom Jobs gives you a structured and innovative recruitment marketing campaign designed to attract the best applicants to your team. Most importantly, you retain complete control over the whole process.
maxiom
maxiom Group of Companies
Maxiom Jobs
A DIFFERENT KIND OF RECRUITMENT SERVICE
THE BEST VALUE & MOST COST EFFECTIVE RECRUITMENT GUARANTEED! Over 300,000 Business Leaders & Educated Professional Subscribe to Maxiom’s Publications Access Both Active & Passive Job Seekers No Hidden Costs, Commissions or Placement Fees You Remain In Control of the Hiring Process Professional Recruitment Specialists
For more information on Maxiom Jobs call us on 1300 855 696 or visit our website: maxiom
www.maxiom.com.au Modern Franchise IntelBuildMagazine Magazine| 45 |3
WHAT DOES IT TAKE TO BECOME A SUCCESSFUL FRANCHISEE? Do you have what it takes to start up and be successful in a franchise opportunity? Then consider the following attributes of the most successful franchisees. By John Morgan If you are considering of buying a franchise, you need to understand the psychology that is behind a franchisor's decision to award a franchise to the "right" person.
Regardless of which specific franchise you are considering, you need to possess and exhibit some basic, key skills that will fuel the overall potential for success of your franchise business.
It is also imperative that you are passionate about the product or service and are completely committed to executing the company's marketing plan. If not, consider starting your own business instead.
There are certain essential skills and personality characteristics that encompass a "model" franchisee which franchisors absolutely require, so before you go any further down the road to franchise ownership, you had better do a self-inventory and make absolute certain you have them.
Franchisors have spent plenty of Superior People Skills. time and money researching what the profile of the ideal You need to enjoy working well franchisee looks like. with others as a team. If you don't like interacting with others, Here are the traits of most you'll become stressed, your successful franchisees: employees and customers will sense it, and ultimately your Commitment to implementing business will suffer. and following a proven Obviously, if you are considering system. Instead, display the positive a handyman or home behaviour that you want your improvement franchise and Franchise systems are in place employees to model when you've never used a hammer or because they work. It's that dealing with your customers. A a saw, this could be a serious happy, positive, "customer is simple. If you're nickname is problem. always right" attitude must "Genius" because of your prevail at all times by you, your brilliant, super creative ideas Or if you are looking at a certain that you come up with daily, then managers, and the employees. business to business franchise, franchising is not for you. but you hate selling, you are all Strong Work Ethic. but guaranteeing misery. But Franchisors want implementers those aren't the kind of skills that not entrepreneurs. A must for any potential I'm referring to here. franchisee. If you don't possess Go back and read the previous strong, disciplined work habits sentence again. and have burning desire, you might as well work for someone else and punch a time clock. 46 | Modern Franchise Magazine
maxiom
Any successful franchisee will Well-Capitalized. tell you that they work until the job is done. They don't quit when Obviously, franchising costs can the whistle blows. be significant. Franchisors will not recruit franchisees that are They'll do anything it takes to get under capitalized. You're facing the job done. Having true an initial investment, the passion to work for yourself will franchise fee, and ongoing tend bring out this work ethic royalties due to the franchisor automatically. plus operating capital.
Make sure you have a good team of advisors that have franchise specific experience and qualifications. Many franchise consultants can help you with this. Franchising is a great business model if you have the necessary skills and mindset to follow a proven and successful formula.
Team Oriented
Royalties are usually a percentage of the income that As a franchisee, you are part of your business generates, which a team in which you have a vital you in turn pay the franchisor, typically ranging from 3%role. This role includes implementing the systems of the 7%. Don't let these costs scare you, though. In return, you are franchise, its’ marketing plan, receiving the franchisor’s staffing plans and operating support, and the benefit of its’ procedures. brand, which is significant. The whole franchise network requires you to do this well or it Many franchisors offer can affect the success not only assistance with financing. You will also be able to benefit from of your franchise but others better pricing and more within the business. favourable purchasing terms as Understanding you are part of a a result of being a franchisee. team and how important your Research. role in implementing the franchise systems even if it contradicts what you have been Seek out assistance. It's virtually used to in the past is something impossible to conduct a that can’t be understated. thorough franchise search, undertake due diligence, and Put simply, it is usually the financial management alone. difference between success and failure.
maxiom
If you truly possess the characteristics spelled out above, chances are you have a solid foundation to be a successful franchisee.
Modern Franchise Magazine | 47
FRANCHISE BRANDS - IS BIGGER BETTER WHEN LOOKING FOR A FRANCHISE OPPORTUNITY? It is widely accepted that Australia has an oversupply of franchise systems. So, with consolidation within the franchise industry gathering force, will this benefit the industry and in particular franchisees? By Naomi Walshe In simple terms bigger isn’t always better. But like any business, not all franchises are created equal. There are some great franchises, both large and small. There are however, some fundamental differences when investigating new, lesser-known franchise brands compared to larger household names which serve essentially the same market.
The next factor is that size is irrelevant when it comes down to systems. Franchise success is based upon implementing tried and proven systems. Many smaller franchises have better systems and procedures than some larger franchises.
Provided the franchise procedures are well and clearly documented and franchisee recruitment is of a high standard, then a smaller franchise might offer many benefits to larger One key factor to consider is the alternatives. entry cost will usually be lower for the new and lesser-known One fundamental difference is brands as these franchisors will that newer or smaller franchises be less likely to charge as much often have fewer resources to for access to their brand, allocate to franchisee training, intellectual property and training. ongoing support, marketing and quality control, all of which are If the franchise occupies a key to the long-term success of premises, then larger franchises the brand and its franchisees. might have greater buying power and cost savings when it comes Another fundamental difference to construction, fitout, equipment is that being one of the first costs and efficiencies. franchisees in a franchise system can often come with some fantastic benefits including a wider choice of territories.
48 | Modern Franchise Magazine
Some larger franchises have limited territories or sites available so find the franchisee to suit that territory instead. This can also result in one franchisee taking business from a neighbouring franchisee if there are too many franchises within close proximity of each other. Conversely, there is often much greater scope for innovation and opportunity for growth for early adopters of a newer franchise brand. While growth into additional outlets (becoming a multi-unit franchisee) will still sometimes be possible in established brands, the capacity to purchase neighbouring franchises or influence the overall direction of the franchise is greatly reduced. When considering any franchise, completing adequate due diligence is vital to ensure you are entering into the franchise knowing as much about the business as possible.
maxiom
As a rule of thumb, when investigating a franchise opportunity, potential franchisees are encouraged to spend one hour of due diligence and research for each $1,000 to be invested in the business. This might require hundreds of hours of research and due diligence up front, depending on the cost of the investment, but if a potential franchisee is thorough in their assessment of a franchise opportunity, they will vastly increase their likelihood of becoming a successful and top performing franchisee. Failing to complete adequate due diligence, however, can quickly result in the franchise performance failing to meet expectations - no matter how attractive the franchise offer, level of investment or initial enthusiasm of the franchisee. Something else to consider is that when a new franchisor starts franchising, they hope to take advantage of a market niche that can be exploited. The unique way this new franchise handles its niche will be the deciding factor in its success - at least the initial success that will enable it to at least reach the greater challenges that will lie ahead as it matures.
maxiom
There will have to be a reason why people will want to buy from this business. You must make sure that any system you consider becoming a part of has a point of difference or unique offering as part of its reason for being in business. Before you join any new franchise, you should be sure that others have already demonstrated that it works. If the franchisor hasn’t opened and successfully run at least one pilot franchise there is simply no way that you can be certain that the system is proven and that it works.
In response a number of larger franchisors are looking to take advantage of the increasing number of smaller players that are struggling to maintain profitability by engaging in consolidation activity. Australian franchising is expected to experience a consolidation path similar to that which the US and UK have experienced over the past 5 or so years.
What this means for franchisees is that even if you invest in a newer or smaller franchise there is an increased chance you might end up part of a much larger franchise network. This will have some advantages, but Australia has the most franchise might also reduce growth systems per capita in the world. opportunities, depending on the The majority of these franchise terms of the consolidation. It systems lack critical mass so might also expose smaller effectively Australia is franchise systems to stronger oversupplied. The industry is and more cashed up ripe for consolidation. consolidated competitors. Larger franchise systems are struggling to fuel organic growth as a result of a dwindling supply of suitable franchisees and quality retail sites at the right price. At the same time many retail franchises are facing increased competition and price pressures from online and international competitors while battling with fluctuations in consumer confidence
In determining whether to invest in a relatively new franchise, compared to a long-established brand, potential franchisees must assess themselves, their appetite for risk and their ability to capitalise on opportunities, as well as the future prospects of the franchisor and where they sit in the market and their industry.
Modern Franchise Magazine | 49
TRAINING YOUR STAFF WITH CLARIFY TRAINING Wouldn’t it be great if all your staff had the same passion and vision for your business and you? Clarify Training can help you create a dynamic culture where your staff thrive enabling you to reach your business goals faster. Our organisation has a deep commitment to you and your people and offers a unique service based on the values of Accountability, Respect and High Performance. Our professional services are tailored to be tightly aligned to the commercial aims of your business: In line with your organization’s strategy, we will formulate, lead and implement a learning framework that is linked to business performance, maximise individual capability and builds leadership competence. Coach business leaders in your organization so as to ensure the optimal delivery of all tactical people programs and to ensure business results are achieved.
As accomplished practitioners your business to ensure business they can help your people display results are achieved. effective influencing skills, the Attract & Recruit the Best ability to inspire and engage others Talent and the capability to lead and Provide an Environment empower change in a for Your Talent to Thrive performance driven setting. Optimise Individual Capacity With extensive experience in Build Influencing Skills and helping organizations analyze their Leadership Capacity needs and design strategic Ensure Business Results learning and development Are Achieved solutions, our highly qualified See the Results in Your consultants will work closely with Bottom Line you to determine your company’s individual requirements. We can design tailored solutions for individual employees, project teams, departments and entire companies.
We will help you implement a suite We can also help you develop a of HR practices and policies to learning culture, while fitting in with reflect contemporary, consistent the overall strategic goals of your best practice. organization. Our consultants are individuals Our programs are strategically who have carved their careers within leading, complex business aligned to the commercial aims of environments.
50 | Modern Franchise Magazine
If you want to optimise your business, give Clarify Training a call.
CLARIFY T R A I N I N G
CT
Clarify Training Pty Ltd Level 2, 1 Riverside Drive Melbourne Vic 3000 Ph: (03) 9982 4545 Fax: (03) 9982 4546 info@clarifytraining.com www.clarifytraining.com
maxiom
DON’T LET YOUR COMPETITORS OVERTAKE YOU!
Wouldn’t it be great if all your staff had the same passion and vision for your business and you? Clarify Training can help you create a dynamic culture where your staff thrive enabling you to reach your business goals faster. Attract & Recruit the Best Talent Provide an Environment for Your Talent to Thrive Optimise Individual Capacity Build Influencing Skills and Leadership Capacity Ensure Business Results Are Achieved See the Results in Your Bottom Line
maxiom
Modern Franchise Magazine | 51
HOW THE INTERNET AFFECTS THE FRANCHISE INDUSTRY There has been much discussion over the past 12 months regarding the effect of online on traditional forms of business. Although 34 per cent of franchisors are utilising online retailing, they are using it to build brand awareness and increase coverage. This indicates that franchises have been fairly slow in the uptake of Internet technologies. Despite this franchises are certainly focused on the importance of the web and other tools to the success of their business with 23 per cent looking to increase their online retailing activities over the next 12 months. It is predicted that 57 per cent of franchises will utilise online selling over the next two years. In a day and age where everyone from your children to your great grandparents are online, it's a no-brainer that the Internet is playing a significant role in the business world. When it comes to franchising, is your franchise benefiting from Internet technologies? The most obvious advantage of using the Internet to benefit your franchise is that it puts your name out there. In marketing, you need to advertise in places where the most people will find it - so if the people are online, that's where your brand name needs to go.
52 | Modern Franchise Magazine
The trick in this arena is to be well familiarised with your demographic and what online platforms they are using.
Social Media do so in order to get discounts and make purchases. Many companies still haven’t worked out how to harness this for their benefit, Do your consumers frequent many mistakenly believing that Facebook? Twitter? Pinterest? Social Media is a tool to help LinkedIn or Google+? Whatever people feel connected with their it is, it's where you need to be. brand or purely as an after sales and customer service utility. The primary benefit of advertising on the Internet is that In fact, more than 80% of you can reach such a wide companies just use social audience. media to pump out marketing content and don’t even bother In the PwC 2011 Franchise interacting with their audience. Sector Report they found that 85 per cent of franchise groups are However, consumers are now using or planning to use interacting with brands on Social Social Media for marketing, Media and this is being fuelled customer engagement and by the soaring number of mobile customer feedback. Facebook and tablet devices in use in is the most popular social media Australia (expected to increase channel, but Twitter, YouTube to over 5.5 million in 2015). and corporate blogs are also widely used. Online services and Social Media are proving to be natural However, as IBM found in its complements to more Global Marketing report (From traditional advertising media. Stretched to Strengthened), that over 70 per cent of all people Smart franchisors are finding that interact with brands on that social media is a powerful tool to improve and strengthen
maxiom
customer awareness and loyalty. They are also using it as a mechanism to engage with their customers. Of the franchisors that are currently retailing online, 23 per cent reported that over 20 per cent of their revenue is generated through online sales. This compares to only 5.5 per cent of overall Australian retail sales currently online. This shows that those franchises leading the online revolution are way ahead of the general business community, including most other franchise systems. Franchisors have reported that using online retailing has had a positive impact on brand and market coverage. They reported minimal negative consequences associated with using online retailing as a strategy. It appears that franchisors are using online channels as an opportunity to raise brand awareness of their businesses and broaden accessibility; rather than being forced to go down this channel due to the threat of online competition.
shows in 83 per cent of franchise systems that franchisees receive the full or partial revenue generated from online sales. This is a positive trend indicating that franchisors are using online retailing as a group-wide collaboration to boost franchisees’ bottom lines rather than keeping the income for themselves. With online sales predicted to double in the next 2 years, if you are considering buying any franchise it would be wise to check if you will be receiving a fair share of online revenue. The other big change that is impacting franchises is the increased use of cloud based technologies and systems. The cloud is now the preferred choice for leading businesses to manage many aspects of their franchise business from marketing to human resources management to document control and Intellectual Property.
expenditure) to operational expenditure. Remember, the key factor that is driving the shift to greater Internet utilisation by franchises is that you must be where your customers are. Ignore this at your peril. Franchisors and franchisees alike must have an Internet presence. Local marketing, mobile and comparison shopping makes it even more important for franchisees to have a strong online presence themselves, not just rely on the franchisor.
A key fact that you should never ignore is that every day we are spending over 1 billion dollars online - after midnight! And this is growing fast. Even if you were to stay open 24 hours a day, you are still missing out. The Internet is having a big impact on how we do business, not just how we find information. Franchises that Cloud based systems are ideal have seen the potential and are for franchises as they are already leading the way are infinitely scaleable, provide reaping the rewards. Others are flexibility to cope with fluctuating now trying to play catchup. But is business demand and greatly it already too late for them? In spite of previous concerns that reduce the up-front investment online retail may cannibalise required, moving cost from Is your franchise leading the franchisee sales and create infrastructure (capital race or trying to shut the gate channel conflict, the PwC Report after the horse has bolted?
maxiom
Modern Franchise Magazine | 53
NEW BUILDER PARTNER PROGRAM Builder Partner Program How does it work? We are seeking quality registered builders to build our designer homes in your region.
Design & Marketing
We know and understand what good small builders do best, build good homes.
Micheal Polo Designer Homes offers a sales, marketing, design and estimating service that will ensure enough genuine The opportunity to become Many builders feel that they opportunity to build a good part of an innovative have to do everything profitable business within market leading home within their own business, your own region. builder has arrived. often spreading Intensive initial themsleves thinly and Micheal Polo Designer training program and working many extra hours. Homes - gives you an ongoing professional opportunity, at a low cost, development Being part of the Micheal to develop your own Polo Designer Homes Local state office business, backed by a team means having assistance for the comprehensive design and support structures in place franchise lifetime marketing structure and so that your time is best professional company used doing what you do Professional culture. best and freeing up your Marketing & Sales time to spend with your Best of all Michael Polo Estimating service family and friends and Homes support structure more time doing the things and national buying rates National Purchasing that you want to be doing. enable most builders that agreements and trade join our group to increase sharing Michael Polo Homes gives their margins even after all you the opportunity to get the associated Head To find out more, simply off the tools and Office costs are factored click the link below and fill concentrate on building in. It’s a no brainer really in the “become a Micheal your business - not just higher profitability with all Polo Designer Homes homes. the support you need to Builder enquiry form�. build a strong business.
For more information about joining the Michael Polo Homes Team please visit our website at www.michealpolohomes.com 54 | Modern Franchise Magazine
maxiom
MICHAEL POLO HOMES
DESIGNER HOMES BUILT ON TIME AND TO BUDGET...EVERY TIME! BECOME A BUILDER PARTNER NOW
www.michaelpolohomes.com
Michael Polo Homes
maxiom
Modern Franchise Magazine | 55
WHEN DEMANDING COMPLIANCE COSTS YOU A FORTUNE Operating a franchise is about following a proven, tried and tested system. But what happens when we take demanding compliance to the extreme? By Richard Wozniak A recent article in CBS Moneywatch about an unfair dismissal lawsuit when an employee refused to wear a sticker with 666 printed on it due to their religious belief and the negative ramifications that had for the brand concerned reminded me of another recent over the top compliance demand, this time in a leading UK food franchise. The Scenario: Head Office decided that it was time to “refresh the brand” and ordered all company owned and franchised stores to comply. This wasn’t the problem. While there was the usual murmurings over cost and inconvenience, pretty much everyone agreed the brand needed to be modernised. The problems grew over how this was to be delivered. In a classic textbook example of “how not to refresh your brand” this particular food franchise had engaged one of the owner’s family, a graphic design student, to design the new corporate image including restaurant fit-outs, staff uniforms, signage, etc The finsished product was, well let’s say, less than optimal. But despite this, Head Office demanded full compliance from all
56 | Modern Franchise Magazine
outlets across all aspects of the brand refreshment.
The strange thing about this whole thing was that nothing else changed. The product was as good Growing discontent from as ever, the branch managers and employees over the look of their franchisees were still the same new unforms, the image they brilliant dedicated people they had portrayred about them and their always been and the staff were still job, level of self worth and impact the same hardworking employees on confidence didn’t deter Head but customers stayed away in office one bit. In fact they came droves. What was once a strong down hard when many staff simply employment brand became a refused to comply. Franchisees laughing stock and the butt of jokes were forced to make sure all staff from customers, friends, passers wore the hideous new unforms. by, competitors - all and sundry. As customers began to make fun of them, staff became quickly disinclined to offer the same levels of customer service, their confidence dropped as did the company’s sales!
12 months on I still get phone calls from previously happy, now disgruntled branch managers and franchisees.
As a franchisor or a manager, you may have Head Office, a Were the staff and franchisees franchisee, an employee or even a justified? Well the new uniforms customer make requests that made Ronald McDonald look like a seem ridiculous. snappy dresser! The female uniforms made them look like Before you shout, "I'm the boss!" technocolour prostitutes. Or I’m the franchisor!” and "because I said so!" stop and think, But still Head Office demanded "what's the worst thing that can compliance. Franchisees were happen here?" threatened with termination, staff were threatened with dismissal. If the refresh was put on hold until Head Office improved new design Senior staff including the COO, no one would even remember the CMO and Franchise Development first “draft”. Manager all decided it was time to move on. How do I know this? Well, I was one of them.
maxiom
Mypac - Building Your Dreams Trades Marketing Solutions Building Businesses For Building Trades Mypac are the trades services specialists. We services residential and commercial builders, owner builders and the renovation market. We have more work than we can handle. Franchises territories for most trades are available with plenty of ongoing work throughout Victoria & NSW.
Franchises Available Across All Trades with Work Ready to Go Franchises available throughout Victoria & NSW Grow Your Business as Large as You want Exclusive Territory National Marketing Campaigns 100% Finance to Approved Applicants No Ongoing Franchise Fees
Franchises Start from as little as $15,000 with finance to approved applicants *(Prices exclude GST)
For more information or to enquire visit our website
www.mypac.com.au maxiom
Modern Franchise Magazine | 57
FINDING THE MOST PROFITABLE FRANCHISES There are many franchises to choose from, but some are more profitable than others. Some locations are also more profitable than others. So how to you find the most profitable franchise? By Aiden Williams The most profitable franchises are the ones that are least affected by changes in consumer buying habits, economic circumstances or technology.
1. Low Investment: Obtaining finance for a new business startup is extremely hard nowadays - even for successful proven franchise systems.
Winning over franchise buyers simply comes down to money. Many franchises have shrunk or achieved only minimal growth over the past few years, yet others are thriving and experiencing rapid growth despite the challenging conditions and lack of adequate access to finance that exist.
Therefore, buyers in today's market need to find lower investment levels. The average franchise investment may have been about $250,000 four years ago, with perhaps 60%-70% of that amount financed, but today many rapid growth franchises have total investments of $125,000 or less.
These companies are usually the ones that have powerful brand names, such as McDonalds, Dominos, and 7-Eleven. We all know them, and a person buying into them can have reasonable confidence and security that they will succeed. Without a famous brand name to rely on, however, a franchise looking for rapid growth will need to have the numbers on their side. To look for the most profitable franchises, you should be aware of three factors that lesser known but rapidly growing franchises have in common.
2. Rapid Break even: Traditionally a business was considered successful if it was profitable by the second or third year. In the modern business world, franchise buyers are looking for a much quicker road to profit. You do not want to keep feeding additional money into a new business to cover operating deficits for a long period.
The most profitable franchises should score well on these monetary factors, but still need to convince potential franchisees that there exists strong consumer demand for their products or services with plenty of paying customers. Service based franchises seem to be the best in terms of satisfying both the financial requirements and the need for reliable demand. Lower overheads and ingoing costs make these franchises more desirable.
Finding the most profitable franchises requires you to do due diligence on any business you are interested in. You should look for Many of the fastest growing franchises will accomplish a break the three factors discussed above, get to know the staff at the even point within the first year of franchise company, and carefully operation and, in some cases, read their disclosure documents. within a few months. 3. High Margins: It is important to be able to achieve high profit margins. That way, a business can quickly increase its total profit to a significant level once it starts making money.
58 | Modern Franchise Magazine
A traditional stand alone business might normally put five or ten cents of every sales dollar toward the bottom line after reaching break even but today's franchise buyer wants a business with sales margins at least three to five times that level.
This is a good start to finding a franchise business that interests and excites you, and you can see the long-term potential for success.
maxiom
maxiom Group of Companies
CLOUD PUBLISHING SOLUTIONS Creative & Secure Solutions for all your Digital Documents Create the Content Yourself or Have Our Professional Designers & Writers Create It for You
Solutions Catalogues Brochures Manuals Training Sales & Marketing Presentations Report and Accounts Business Publications Corporate Magazines eBooks Textbooks Learning Materials Presentations & Reports Internal Communications For more information on Cloud Publishing Solutions visit our website: or call us on 1300 855 696 maxiom
www.maxiom.com.au Modern Franchise Magazine | 59
DIGITAL BROCHURES for Web, Mobile and Tablet Devices Maxiom produce beautiful and engaging brochures that can be enhanced to carry video and much more. Return on Investment While there is a cost for design, brochures are hosted free so ROI is all about reducing print and distribution cost, which is dramatic. More importantly, by showcasing your product or company using a digital brochure you can reach audiences all over the globe for little extra cost. Maxiom can produce digital assets for the web or deliver your brochures into container apps that are branded to suit you. You can keep them updated and push new brochures to all those users who have the app installed. Great push marketing is now here with the Apple and Android tablets. The digital content can be easily integrated into your existing customer intelligence systems or be used to stimulate calls to action that can generate new enquiries and tangible new business that can be tracked. Data Collection & Comprehensive Reporting Data is an important element in any customer engagement process and Maxiom can help you capture customer information. These digital publications can be used to help segment your database through intelligent content creation and delivery. Over 38% of digital brochure users opt-in to provide their data without any additional incentives and some customers have built segmented databases with tens of thousands of users in as little as 3 months. The statistics system is accessible online and you are able to use this to identify customer usage patterns.
www.maxiom.com.au 60 | Modern Franchise Magazine
maxiom
maxiom Group of Companies
PARTNER WITH US Digital Magazines & Online Publications Maxiom partners with associations, businesses and Not-For-Profits to deliver essential industry relevant content and insights straight to your readers’ e-mail inboxes. Educate and engage members, clients and other important stakeholders with your own branded, Maxiom custom publications. Choose the format that works best for your audience - from digital magazines, newsletters, reports, whitepapers, manuals and ebooks. Increase revenues Maxiom secures sponsorships and advertising to support each publication and shares a percentage of the publication's revenue with the association or corporate partner. Let us do the work From design to drafting to distribution, Maxiom’s team of experts handles every aspect of every publication. Extend your brand Each co-branded publication captures your brand’s look and feel, keeping it front and centre in readers’ minds every day. Connect with your audience Maxiom subscribers are highly engaged and unusually loyal. That means partner messages are read and acted upon. Association marketing has never been easier.
For More Information on Partnering with Maxiom Call Us on 1300 855 696 or Visit Our Website: 24 | Modern Franchise Magazine maxiom
www.maxiom.com.au Modern Franchise Magazine | 61 maxiom
About Modern Franchise Magazine Publisher Maxiom Group Pty Ltd 2/710 Collins Street Docklands Vic 3008 Australia www.maxiom.com.au Editor Mark Matthews Digital Magazine Created By Modern Franchise Magazine Online www.modernfranchisemagazine.com Advertising Enquiries 1300 855 696 (within Australia) + 613 9097 1606 (International) modernfranchise@maxiom.com.au Editorial, Media Releases & Article Submission magazine@maxiom.com.au
62 | Modern Franchise Magazine
maxiom
PRIVACY POLICY: Modern Franchise Magazine is published as a service to subscribers. We adhere to strict Privacy Policy concerning all subscribers on our database and will not disclose your details to any third parties without your prior written permission. If you have any queries about our privacy policy or this magazine, please contact our office on (03) 9707 1606 or email privacy@maxiom.com.au. A full copy of our Privacy Policy is available on our website at www.maxiom.com.au/subscribers/privacypolicy. In the meantime, thank you and we trust you enjoyed this issue of Modern Franchise Magazine!
DISCLAIMER Information published in this online magazine has been compiled with due care and attention, but it does not clam to be exhaustive. Maxiom Group and/or Modern Franchise Magazine cannot be held responsible for the content of external sites reached via a hyperlink from this site. We accept submissions from outside contributors, and whilst great care is taken, the author of the submitted article is responsible for what they write, and Modern Franchise Magazine will not be liable for any loss or inaccurate information or any other omission or error by outside contributors. This online magazine is provided for information only. It is not intended to replace a consultation with a qualified industry professional. Modern Franchise Magazine does not accept responsibility for any loss, damage or injury that arises from the use of this online publication.
maxiom maxiom
10Franchise | Careers Magazine Modern Magazine | 63
www.modernfranchisemagazine.com
Published by:
Maxiom Group Pty Ltd Level 2, 710 Collins Street Docklands Vic 3008 Ph: 1300 855 696 Fax: 1300 799 493 info@maxiom.com.au www.maxiom.com.au
maxiom