FRANCHISING - NOVEMBER / DECEMBER 2011 by Cirrus Media

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Franchising www.franchise.net.au

Nov/Dec 2011 VOL.24/No.6

Your essential guide to buying a franchise

Do you have enough

Inspire

working capital?

HAIR PLAY FUEL FOR MEN

Opportunities WHY DESSERTS ARE THE NEW CHILL OUT ZONE

Sweetening the deal Discounts that mean business

AUS $6.95 NZ $7.95

Living the lifestyle What you need to know about flexible working

TEN YEARS AND 100 STORES FOR CRUST GOURMET PIZZA

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Contents NOVEMBER–DECEMBER 2011 |YOUR ESSENTIAL GUIDE TO BUYING A FRANCHISE

60 Inspire 18 Splash-ﬁlled adventure BIG4 Holiday Parks are dipping into a water world 23 Fuelling fast growth Beers, Playstations and haircuts 26 Selling smiles with sweets Customer service is the key for Cold Rock franchisees

Opportunities

66 REGULARS 5

Editorial

News

Interview

115 Legal 117 Sketch 119 FCA view 122 People 125 Competition 126 Checklist 142 Company listings

30 The chill factor Why sweet treats are good for business 40 From online to in line How home and garden retailers are embracing online 49 Performance enhanced Coaching franchises help give business an edge 54 Property potential The pros and cons of real estate

66 Sweetening the deal Financial incentives to entice new recruits 75 The path to franchisee success Finance and the franchisee 78 Facing a tech attack Opportunities and threats for franchise retailers

How to... 83 Beware the warning signs Tips for avoiding a bad investment 89 Are you cashed up? How much working capital do you need? 99 Lines of communication The role of online training in a franchise system

Issues

104 Expanding your success Be the best you can be

60 Living the lifestyle Realistic expectations are the key to ﬂexibility

110 What happens… ...if I can’t pay my tax?

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NOV/DEC 2011 FRANCHISING | 3

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Welcome

Franchising Publisher Michelle Graves michelle.graves@reedbusiness.com.au Editor Sarah Stowe sarah.stowe@reedbusiness.com.au Direct: 02 9422 8900 Journalist Danielle Bowling danielle.bowling@reedbusiness.com.au Direct: 02 9422 2667 Sub Editor Richie Kenzie richie.kenzie@reedbusiness.com.au Direct: 02 9422 8851

Deals to be done

National Sales and Marketing Manager David Strong david.strong@reedbusiness.com.au Direct: 02 9422 2905 Contributing Journalists Domini Stuart Stephanie McDonald Columnists Greg Nathan Andrew Terry Esther Gutnick Steve Wright Production Co-ordinator Eryk Koziol eryk.koziol@reedbusiness.com.au Direct: 02 9422 2379 Creative Art Director Julie Coughlan julie.coughlan@reedbusiness.com.au Designer Louis Santos louis.santos@reedbusiness.com.au Managing Director Jeremy Knibbs jeremy.knibbs@reedbusiness.com.au Editorial Inquiries Tel: 02 9422 8900 Advertising Inquiries Tel: 02 9422 2905 Fax: 02 9422 2722 Subscription Inquiries Tel: 1300 360 126 Fax: 02 9422 2633 Franchising is a publication of Reed Business Information ABN 132 719 861

SYDNEY OFFICE Tower 2, 475 Victoria Ave Chatswood NSW 2067 Tel: (+612) 9422 2999 Fax: (+612) 9422 2722 www.reedbusiness.com.au

Average Net Distribution 6,936 as at March 2011

SARAH STOWE Editor

he opportunity to snag a great business at a good price is always appealing, particularly in this difficult economic climate. In this issue we look at ways franchisors are encouraging potential franchisees to invest in their systems, whether that’s through a straightforward upfront discount, a reduction in ongoing fees or a structured manageto-buy arrangement. There are some great deals to be had in franchising, the trick is to find one that suits in terms of return on investment and lifestyle demands. That word ‘lifestyle’ is thrown around liberally by both franchisees and franchisors but the definition remains fluid. In this edition we look at what it can mean to search for a franchise that allows for a balanced lifestyle, and the countering forces of economic demand and day to day realities of business management. And in setting up a business the importance of working capital can never be over-estimated; any experienced business person understands the role of back-up funds in getting a start-up operation through the difficult early trading times when incoming monies don’t match the outgoing financials demanded by the business. Our feature on working capital addresses this and offers some practical advice. We also look at a variety of business opportunities, from real estate franchising to business coaching, from home and garden retailing to the niche dessert market. Add in some legal advice on due diligence, the ACCC’s mini guide to franchising warning signs, our inspirational franchisee and franchisor tales, and our regular columnists, and you have the latest edition of Franchising magazine, available in newsagents, by subscription, and in digital format online. If you’re not keeping up to date with franchise happenings, sign up to our twice-weekly free e-newsletter 5 Minute Franchising, visit our Facebook page and Like us, and follow us on Twitter to stay in touch. From all of us at the Franchising team, we wish you a merry Christmas and a happy New Year.

The importance of working capital can never be over-estimated

Sarah Stowe Editor

All Franchising material is copyright. Reproduction in whole or in part is not allowed without written permission from the Editor. © 2011. Opinions expressed in Franchising are not necessarily those of Franchising or Reed Business Information.

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News ONLINE NEWS | WWW.FRANCHISE.NET.AU

End of a chapter for Dymocks CEO THE Dymocks Group CEO, Don Grover has resigned and will leave the company in February 2012, after eight years in the role. Dymocks released a statement explaining that Grover’s resignation and opportunities offered by the closure of major competitors like Borders and Angus & Robertson have led to a change in the structure of the company. The Dymocks Group includes 90 Dymocks Book and Stationery stores; Dymocks Digital, online and e-books; D Publishing; 36 Healthy Habits fast food stores; Paton’s Macadamias; extensive farming interests and a property investment portfolio. The new structure will focus

6| FRANCHISING NOV/DEC 2011

on each business, each with its own managing director to drive growth and proﬁtability. “Dymocks Books now leads the market in terms of proﬁtability and market share and has a senior leadsership team in place which is committed and enthusiastic about the future. We have a franchise model that is one of the most robust, underpinning Dymocks as the largest bookseller in the country,” said Dymocks chairman, John Forsyth. When talking to Franchising, Grover said that while he can’t disclose what his future holds, now is the right time for him to leave The Dymocks Group. “I think it’s a good time for me to move on. I’ve been in the role for eight years. The business is substantially different in

structure from when I joined … I think it’s a good opportunity for me right now to move out and look for some new challenges,” he said. Grover’s proudest achievement, he said, is his work with the Dymocks Book business, which has had to compete against other large book chains and also deal with a number of new technologies threatening the relevance of bricks and mortar book stores. “It just goes to show that even in a market where the book industry is under a

Don Grover

great deal of change with new competitors and all sorts of issues out of our control, we’ve been able to maintain and grow our business proﬁtably. That is undoubtedly the achievement that I hope I’ll be remembered for,” he said.

Congratulations to Brad Donnelly from Victoria who won the iPad2 competition in our July/August issue. Turn to page 125 for your chance to win an iPhone 4S.

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See page 54 for details

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News ONLINE NEWS | WWW.FRANCHISE.NET.AU

NEWS BRIEFS Lenard’s, the specialty chicken retailer, has taken the ﬁrst step into the Asian market with expansion into Singapore. It has taken a major equity interest in The Butcher, a Singaporean retail, wholesale and online meat provider, and will see its brand sold through Asia’s supermarket operator, Cold Storage Rams Home Loans has appointed Huw Bough as new general manager of its franchise business

Crust celebrates 10th birthday with 100th store opening GOURMET pizza chain Crust has just celebrated its 100th store with the opening of the Robina outlet in the Gold Coast, Queensland, an event that also marked the company’s 10th birthday. And the growth is set to continue, promised co-founder Costa Anastasiadis. “Crust has turned an important corner. We’ve been steadily branching out across the country, increasing our footprint nationally, and taking our quality product offering into most of the major regional centres.” Anastasiadis and co-founder Michael Logos celebrated the newest store alongside local celebrities, Crust’s Queensland franchisees, and franchise industry ﬁgures. The Robina franchisees, Damian Richens and Rachael Humphries, are also the owners of the Dee Why Crust outlet in Sydney’s northern beaches. For the ﬁrst six months of trading Richens will head up the new Robina store and look for a strong management team while Humphries oversees the Dee Why outlet. Richens told Franchising “We always wanted to be multi-unit franchisees.

Johnny Singh, multi-site 7-Eleven franchisee at Turramurra, Manly, Chatswood, Mosman and Killara in NSW, was recognised as the convenience franchise’s Franchisee of the Year, at its 1st Choice National Conference Pizza franchise, Domino’s, is doing its bit for the environment, purchasing a small quantity of electric drive scooters for trial in the business’ delivery ﬂeet Bernie McCahill, the former New Zealand All-Black centre has purchased a 50 percent stake in the 52 Jim’s Mowing franchises in Auckland

Further growth is on the cards for Crust

Sydney has started to ﬁll up and we knew the potential here, we like the Gold Coast, we used to live here. The infrastructure is good.” The Crust site is opposite the Robina train station and the new NRL stadium, with a hospital and planned council building as neighbours. “The rent is on a par with Sydney,” Richens said. Outdoor seating is a part of the store’s footprint, and a liquor licence is planned too.

“We are rapidly expanding

and need more people who have commitment and energy, basic business acumen and excellent customer service skills. We have a very clear mandate to ensure the success of our franchisees, no matter how little or how much business experience they bring to the Inkspot family.” - Toner and cartridge franchise, Inkspot’s director and strategy manager, Vincent Teubler

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Food franchise Go Sushi has introduced a Manage to Own Program, designed to encourage talented, capital-poor individuals to get started on running their own business A multi-sport and exercise program for preschoolers, Ready Steady Go Kids has expanded into Melbourne’s western suburbs, Geelong and the Bellarine Peninsula, operated by Carmen and Byron Dodds Commercial equipment ﬁnance company GoGetta Equipment Funding has introduced go.Own.plus, a rent to own solution for a number of industries, including transport, ﬁtness, construction and earthmoving, plumbers, butchers and bakeries Coffee franchise, Hudsons Coffee, has lent a helping hand to students from NSW’s Corowa High School, teaching them some tricks of the trade for the coffee shop they’ve set up on school grounds

NOV/DEC 2011 FRANCHISING | 7

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News ONLINE NEWS | WWW.FRANCHISE.NET.AU

FCA awards excellence in the industry THE Franchise Council of Australia honoured high achievers in the franchise sector at the 2011 Westpac FCA Excellence in Franchising Awards Gala Dinner, held recently in Melbourne. Hairhouse Warehouse won the major award of the evening, Established Franchisor of the Year. Co-founders Tony Lattouf and Joseph Lattouf said the recognition proves the success of their business model. “Our business has been recognised by the most credible authority in franchising. This award reinforces our leadership position in the hair and beauty industry. It means that we can leverage the award to attract a greater team and greater franchisee prospects.” The Coffee Club was also a big winner with awards in three categories including Excellence in Marketing, Multi-unit Franchisee of the Year and Franchisee of the Year - two or more staff. Nick Vincent, general manager marketing at The Coffee Club said the awards built credibility for the team. “The marketing award means more franchisee engagement in our marketing programs because we have been recognised as being marketing leaders within the franchise industry. “The entire awards submission process was beneﬁcial because it gave buy-in across all departments. It reminded us too, of the efforts the marketing team put in to rolling out national promotions.” Chair of the independent judging panel Professor Andrew Terry from University

The Hairhouse Warehouse team, which won Established Franchisor of the Year

of Sydney Business School said the calibre of this year’s award winners was extremely high. “All of this year’s winners have certainly set the bar very high for others in the franchising sector to try and emulate,” Professor Terry said.

* Accolades and More, Australian’s only awards and recognition franchise, was the ofﬁcial awards supplier. Adam Marshall, franchisor, said “We are delighted to be a part of the FCA National Awards again this year.”

Other winners on the night included: Emerging Franchisor of the Year Winner: Appliance Tagging Services [Runner-up: Mad Mex Fresh Mex Grill] Franchisee of the Year – less than two staff Winner: Fiona Edis City Farmers Dogwash, Como WA [Runner-up: Rosemary Harmata Lollypotz, Chatswood

and Sydney CBD NSW] Franchise Woman of the Year Winner: Belinda Sugars, Mortgage Choice [Runner-up: Louise Curtis, Lollypotz] Franchise Executive of the Year Winner: Cameron Graham, ANZ Mobile Lending Field Manager of the Year Winner: Andrew

Walker, PoolWerx [Runner-up: Judd Sandwell, Chicken Treat] Supplier of the Year Winner: Silver Chef [Runner-up: Whirlwind Print] Contribution to Franchising Winner: Derek Sutherland, ICON Law [Runner-up: John O’Brien, PoolWerx]

Tax deductions for renewal fees – if the wording’s right COULD the renewal fees in a franchise system be tax deductible? Yes, if the wording shows the fees are a cost of conducting business, according to Professor Andrew Terry, special counsel with DCS Lawyers and Professor of Business Regulation at Sydney University’s Business School. Terry has commented

8| FRANCHISING NOV/DEC 2011

on a recent decision by the Administrative Appeals Tribunal. The AAT rejected the Commissioner of Taxation’s view that fees paid by a Bendigo Bank community franchisee to secure renewal of the franchise agreement were not deductible. Key to the decision was whether the payment was a fee on a capital, or revenue,

account. Considerations were the franchisee’s lack of exclusivity in territory, no secondary business activity, and a limited renewal time. However, Terry said “The decision does not suggest that renewal fees will be deductible in all cases.”

What can you do? Marwan Kojok, lawyer at DCS Lawyers, said the

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result suggests this is a subjective test, but advises “franchisors can help franchisees by the phrasing of renewal, or any, fees in the franchise agreement.” This is good news for franchisees so potential franchisees should take legal advice about the wording of renewal fees in any franchise agreement before signing.

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Inspire|Interview

Crust Gourmet Pizzas has notched up 10 years in business, built a network of 100 stores, and sliced out a niche in the competitive pizza arena

TOPPING IT OFF C

osta Anastasiadis can’t remember a moment when he and his cousin, Michael Logos, decided to go into business together, it just happened. “We are a family with a southern European background, we’ve all grown up together. Crust for us was a natural evolution, and our partners have experience in fast food and retail food,” says Anastasiadis. “Michael’s my older cousin, my brother (Terry Anastasiadis) is a natural numbers man and he’s our ﬁnancial controller.” The other founders are Peter Augoustis and Peter Koutsovasilis. >> continues on page 12 10| FRANCHISING NOV/DEC 2011

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Inspire|Interview

>> continued from page 10

Co-founders Costa Anastasiadis and Michael Logos

The no-nonsense approach means you can’t get away with a second rate product if it’s all on display

12| FRANCHISING NOV/DEC 2011

What was identiﬁed was a market for a standout pizza offering with an open style kitchen allowing customers a full view of the food preparation. The ﬁrst store opened in 2001 in the inner west Sydney suburb of Annandale. Nine months later a second store opened in Richmond in Victoria. Despite the shared background in food businesses, the co-founders discovered running their own operation was still a huge challenge. Says Anastasiadis, “This was a different beast. We didn’t know what we were doing, we were 23 and 27, very green but with lots of energy and passion. We’ve got marketing and HR teams now. When we started we were just two guys and their guts.” Instinct has served them well and listening to customers has been an important part of the brand’s development. “We knew the product offer was what would keep customers coming back, he says. “The no-nonsense approach means you can’t get away with a second rate product if it’s all on display.” Customer demand for a healthier alternative drove the introduction of the gluten free pizza. The next product-based move that would distinguish the brand was to get the pizzas tested for nutritional value. With a favourable outcome the brand stacked up well against the competition, says Anastasiadis. Well before the talk of legislation to serve up nutritional information alongside the product was raised, Crust published the pizzas’

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vital statistics so customers could make informed choices. But the big win was gaining The Heart Foundation’s Tick, a coup that put the pizza brand on the map as a healthier option. [Changing its focus to food ingredients, the Foundation is withdrawing its Tick from fast food outlets from mid 2012.]

Expanding the model Clever marketing has helped grow brand awareness and Crust reached a point when big decisions about expansion needed to be made. “We were gaining some real momentum as far as stores go. It doesn’t take a lot; ﬁve or six stores, and all of a sudden people are wanting to be part of it. We looked at the franchise model because we didn’t have capital and knew we’d struggle to meet the quality of service and product if we added more company stores. It would have been a nightmare. “We spent a good nine to 12 months setting up the agreement and the manuals. We went from being store operators to doing an MBA in franchising!” he jokes. But the option of franchising outlets is in itself not a low cost choice; Crust was able to fund the migration to a franchise model in 2007 because the business was already successful. The company spent in the region of $250,000 and Anastasiadis admits he didn’t really see the value straight away. And the move to franchising wasn’t always easy. “It’s been a grind at times,” he says. Entering the franchising arena required a different mindset, with a new emphasis on corporate infrastructure and

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Inspire|Interview

TAKING A BIGGER SLICE The company has heavily invested in its online portal, which 18 months ago was a relatively unknown part of the business. It now counts for 20 percent of all revenue, a ďŹ gure which Costa expects to double within three years.

business planning. But Anastasiadis strongly believes the companyâ&#x20AC;&#x2122;s progression so far is evident of the ability to adapt. Product diversity has now been matched by innovation in the franchise system. The slice model, which serves a pizza portion in a high footfall zone, has been developed to maintain the integrity of the product while putting pizza in a fast food court. The ďŹ&#x201A;agship is in WestďŹ eldâ&#x20AC;&#x2122;s Sydney centre, with a second outlet located in the Macquarie Centre, catering for a younger demographic. Thereâ&#x20AC;&#x2122;s been interest in other Australian airports after the launch of the model into the Sydney International Airport food court. Itâ&#x20AC;&#x2122;s an in-between model that could add another 20 to 30 outlets to the Australian portfolio, bringing it to 200. Regional opportunities are focused on the original takeaway model and Anastasiadis estimates there are only 12 to 15 outlets to be developed outside the metro centres. â&#x20AC;&#x153;We want to open up stores that

will make money,â&#x20AC;? he says. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;ve got very high turnovers in our stores, twice the industry average. In food the best proďŹ t level would be 25 percent and some of our owner operators would be taking between 15 and 25 percent of turnover in proďŹ t.â&#x20AC;?

Relationships Anastasiadis is equally pleased with the relationships enjoyed between franchisor and franchisees. â&#x20AC;&#x153;There are no franchisees in the system causing real issues. Most of the time weâ&#x20AC;&#x2122;ve resolved our differences very quickly, theyâ&#x20AC;&#x2122;ve usually been caused by miscommunication. We are proud of our track record of no disputes with our franchisees.â&#x20AC;? A sign of conďŹ dence in any franchise brand is exhibited by the presence of multi-unit operators and for Crust multiple ownership is welcomed and examples include family-run operations with various siblings owning three or ďŹ ve stores in a partnership. The latest recruit to the Crust portfolio, which brings

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Inspire|Franchisees

eld Sydney The slice model ﬂagship store in Westﬁ

Damian Richens and Rachael Humphries, Robina and

We want to open up stores that will make money... and some of our owner operators would be taking between 15 and 25 percent of turnover in proﬁt the store count to 100, the Robina outlet in the Gold Coast, is run by a couple from Sydney who already own the Dee Why store on the city’s northern beaches. “Damian and Rachael are a

great example of franchisees with a skillset that is way beyond the operation of just one outlet,” says Anastasiadis. For Damian Richens, who will spend six months building the Robina store while Rachael Humphries keeps an eye on the Dee Why outlet, the Crust model has been a passion. “The model is great. We started to eat the product and loved it. We were looking for a franchise and liked the transparency of product, that the ingredients are on show. They’re market leaders, they were

INTERNATIONAL FOCUS “Moving into franchising was based on a desire to work for myself. I researched into food (I had a ﬁnance background) and wanted to buy into a good network and a good brand. Crust really stood out. “We opened Gymea three years ago and we were the 30th store in the network. “I’m in partnership with a good friend and since I used to work in Singapore and the pizza there is pretty sloppy, it seemed like a really obvious move to take Crust there. “We took a proposition to head ofﬁce and they loved it. We’ve running a joint venture with Crust and have two stores now. Our plans are pretty aggressive for

16| FRANCHISING NOV/DEC 2011

Steve Shirley, Crust Gymea and Singapore

Singapore and further aﬁeld in the region. Our plan was to have 10 stores but we could easily double it. “It’s a hugely competitive market – here you get a handful of pizza competitors, there it’s wall to wall food, it’s vastly different. Everyone is a competitor. “We joined the group early, and had a strong relationship with the

franchisors. The more you grow the harder it is but we have a lot of engagement with them. Our relationship is strong and they have a mateship approach to business, it’s very friendly. “They are really responsive about what we want to do. Everything is on the table. They are so passionate about their brand.”

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Dee Why franchisees

ﬁrst with the Heart Foundation Tick and the coeliac association.” Humphries has been a fan of the support available to new franchisees. “The ﬁrst time we met we liked them, and the support we got from the founders is fantastic. It’s still run like a family business.”

So where next? Fifty extra stores are planned in the next 18 months but one of the key challenges facing Crust is reaching saturation point in Australia. “If we don’t innovate we could stagnate.” Overseas expansion has started with two stores in Singapore, managed as a joint venture with an existing Sydney-based franchisee partnership, and New Zealand is next. Down the track the Crust brand will be launching into the US market with an initial store in Los Angeles. The big draw is the size of the population, over 311 million. “I got a shock at how big the business is in the US, with some individual franchisees having 100 stores, it’s astounding. We’ve aligned with the strongest company, who are in retail food and really understand the brand. From the point of ﬁrst contact to an agreement it took 18 months. We’re aware it will be tough but we’re conﬁdent our product offer can make waves out there.” This will prove a huge test of the adaptability, commitment and resources of the Crust business. But, says Anastasiadis “We’ve never been shy of a challenge.” F

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Inspire|Franchisees

Investment in a fun aquatic facility has boosted business for holiday park franchisee Andrew Tribe

SPLASH-FILLED

ADVENTURE K

eeping ahead of the trends in any business sector is crucial, as franchisee Andrew Tribe, owner of BIG4 Saltwater at Yamba Holiday Park, can testify. The Yamba Holiday Park in northern New South Wales features Salty’s Cove, an environmentally friendly water park which includes a pirate theme with skulls, cannons, steering wheels and parrots; four water slides catering for toddlers; a big tube slide for the bigger kids; and a giant pirate’s head bucket which tips out half a tonne of water every

18| FRANCHISING NOV/DEC 2011

35 seconds onto thrilled children. Says Andrew, “The interactive element of Salty Cove really captivates young children and I’m sure the parents will ﬁnd it an added bonus to their family holiday too. The pool is very environmentally friendly, which is something we consider with any new facility we introduce, with water saving technology and even a device that converts dissolved particles in the water into chlorine.” With a June opening, the water park has already received phenomenal WWW.FRANCHISE.NET.AU

feedback, with comments such as “I can’t believe I can get this facility,” reports Andrew. “It has made a huge difference. We’re a bit out of the town, and compete with large private parks and council parks who have the pick of the locations. In some respects we’re now moving ahead.” One reason Andrew introduced the waterpark was to return the main pool to an adult-friendly zone by tempting away the children to a more enjoyable environment. Andrew is so enthusiastic about the newly installed water park and the added

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Franchisees|Inspire

The BIG4 water parks are family friendly

value it will bring his business that he has become a distributor of the hardware too. The waterpark was a $600,000 investment but Andrew explains that “We did quite a bit of the installation ourselves.” As a canny franchisee, he’s never shied away from spending to maximise potential, investing about $1.5 million to upgrade cabins at Yamba when he took over the business.

The interactive element of Salty Cove really captivates young children and I’m sure the parents will ﬁnd it an added bonus to their family holiday too When h it comes to ﬁnanciall impact, Andrew views the waterpark as a tool to increase occupancy rather than a way to nudge up the costs for a guest. He stresses that waterparks are not just for sites like Yamba which

sit on 130 acres, they h can ﬁt into smaller footprints too. And he expects to see more of this splashﬁlled adventure coming to other resorts. “Due to the robustness of our industry and the family focus of

most BIG4 Parks, I believe we will see a number of the larger BIG4 properties installing water parks over the next ﬁve to seven years. I would also imagine that any smaller parks that decided to install a water park would see a >> continues on page 21

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signiﬁcant increase in the number of guests they attract.” And this is not just a local trend. The BIG4 Holiday Parks sees the addition of interactive water parks increasing around the world. The US has a chain of exclusive water park resorts called Great Wolf Resorts and Center Parcs in the UK has lifted the holiday park experience with restaurants, spa treatments, shops and a sub-tropical swimming paradise at each of its four parks with water activities such as a wave machine and outdoor rapids. BIG4 Holiday Parks CEO Ray Schleibs says he is never surprised by the new technologies and facilities that BIG4 member parks introduce to create the ultimate holiday experience for guests. “We are excited to now be a part of the next big thing, the interactive water park. With seven BIG4 Parks already showcasing aquatic playgrounds

Andrew Tribe BIG4 franchisee

waterpark distribution business while maintaining a focus on the two holiday parks under his wing is the focus now. “We’ve got two parks. Our park in Tweed Heads was built from scratch by my parents and became a BIG4 franchise 20 years ago. I took it on about 11 years ago. And we’ve been in Yamba for ﬁve years, which has always y been part p of the BIG4

The pool is very environmentally friendly, which is something we consider with any new facility we introduce, with water saving technology and even a device that converts dissolved particles in the water into chlorine and ﬁve more in the planning or installation stage, we expect to see the trend gain momentum quickly over the next couple of years,” Schleibs adds. For Andrew, building up the

chain. The franchisor has a big impact – increasing the value of the business instantly, it’s a no brainer. The brand awareness is so far ahead of competing brands.” F

Recurring Revenue!

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Franchisor|Inspire

Fuel for Men customers can relax with beer and sport as they wait for their haircut

FUELLING FAST

GROWTH B

low Dry Bar is a growing franchise in Australia that focuses purely on styling womens’ hair. There are no cuts or colours, just a bit of preening and pampering for women who have somewhere to be. Founder Nathan Cuneen has recently launched another similar system,

except this time it’s targeting men – the beer and sport loving ones, who also want to turn heads as they walk down the street. Fuel for Men recently opened its first concept store in Sydney’s Pitt Street Mall, where men are flocking to have their hair cut and styled, get a cut throat shave (something hard to find

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these days), and while they’re waiting they can drink beer, play PlayStation and watch Fox Sports. “We’ve created a niche in the industry, so obviously with Blow Dry Bar we specialise in blow drying and blow drying only, and obviously we cater for women, but we’ve found a gap in NOV/DEC 2011 FRANCHISING | 23

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Inspire|Franchisor

Blow Dry Bar is designed for busy professional women

the men’s market where you’ve got your traditional barber who does your $15 haircuts and you’re not too sure what you’ll walk out of there looking like, and then you’ve got your high end salons which are normally unisex but a lot of guys don’t like them because they’re often full of women and can be a bit claustrophobic,” Cuneen says. At Fuel for Men, however, the clientele can come into a relaxed, masculine environment and walk out with the latest look, all for $29.

transferred it over to Fuel too. We understand that Fuel’s still new but we’ve got a proven track record now in the franchising industry,” he says. To incentivise franchisees coming onboard, Fuel for Men is waiving the franchise fee and only charging approximately $70,000 for the store ﬁt-out. This is unlike Blow Dry Bar, which has a $35,000 franchise fee and ﬁt-out costs of about $100,000. Cuneen is hoping his expansion plans for Fuel for Men

If you’re going to invest your hard earned cash, whether it be $70,000 or $120,000, you don’t want to be buying a job. This is where a lot of people make the mistake; they buy a business or a franchise and they work 15 hour days, they run themselves into the ground Cuneen has serious expansion plans for the new franchise: 100 stores in three years, and he believes franchising is the best way to achieve this. “At the moment, because we’re quite new, we’ve taken the Blow Dry Bar management and 24| FRANCHISING NOV/DEC 2011

will be helped along by Blow Dry Bar franchisees who are keen to expand their portfolio. “A Blow Dry Bar franchisee might have a territory in Bondi Beach, for instance, so obviously they couldn’t go and put another Blow Dry Bar near that, but

WWW.FRANCHISE.NET.AU

they could put a Fuel in the same area, and obviously from a management point of view, they could keep an eye on both salons. “They know how quickly they can get a return on their investment with Blow Dry Bar and they know the profit margins, and Fuel can potentially be even better because we need a smaller space, and with rent and labour being our biggest costs, the smaller the salon the more those overheads are reduced.” Cunnen isn’t being too specific in his search for franchisees – he’s just looking for people who are ready for a new and exciting career, but not necessarily as a hairdresser. Franchisees don’t need to have any qualifications or experience in the industry because all training is provided by the franchise, which will also source, trial and train the business’ staff. “We encourage all our franchisees not to work in the business but rather work on it. It’s achieving great results. Most of our Blow Dry Bar franchisees are moving onto their second site, and they’ve got a return on their investment within 12 months,” Cuneen explains. “I think if you’re going to invest your hard earned cash, whether it be $70,000 or $120,000, you don’t want to be buying a job. And this is where a lot of people make the mistake; they buy a business or a franchise and they work 15 hour days, they run themselves into the ground and by the time they get home from working in the job they don’t have much energy left in the tank to actually spend on working and promoting, interacting with the local community, and growing the business. “We’re just looking for franchisees who understand and are passionate about their own business and can manage a team... they want to join a company that’s growing and can get a great return on their investment.” F

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Inspire|Franchisees

Sheryl Paul and Rose O’Neill with and Hayden Ramsey

Customer service and keeping the brand front of mind all year round have been the keys to success for these Cold Rock franchisees

SELLING SMILES WITH

SWEETS M

ost franchisors would agree that for a franchise to make a real impact, and a real proﬁt, it needs to connect with its local market. This is something that Cold Rock franchisees Paul and Rosa O’Neill and Hayden and Sheryl Ramsey have deﬁnitely got under control. The two couples, who are also long term friends, have this year claimed the fast food/takeaway category of the Penrith Local Business Awards for the third year in a row. And Penrith isn’t the team’s only store, they also operate one in Wollongong and are preparing for the opening of their third store,

26| FRANCHISING NOV/DEC 2011

Stockland Shellharbour, in May next year. Hayden Ramsey believes the success of both his Penrith and Wollongong stores comes down to good old fashioned customer service. “I think the customer service part of the awards, which is a mystery shop at the end of the process, is probably the most critical part,” he says. And it’s not difﬁcult to have happy staff at Cold Rock, when your day consists of mixing chocolate, fruit, nuts and lolly ‘mix-ins’ into different ice creams. “People come in for a treat. They come in for a good time so there are no grumpy salespeople behind the counter, because

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they’ve been serving smiling kids all day and the whole idea is fun.” Apart from explaining the Cold Rock offering and what makes it unique, the key to providing excellent customer service is simple. Smile and acknowledge your customer, Hayden says. “You’ve got to greet the customer ﬁrst. As soon as they walk in the door it’s about the greeting. Even if you’re busy on the rock serving someone else, you should still look at and greet the customer. The theory is that once they’re inside the door and you’ve greeted them, they’ll stay.” Hayden and his fellow franchisees are ﬁrm believers in the ‘work on your business not in your business’ mantra, and with

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three stores on their hands, there’s plenty of work to go round. “We’ve been pretty lucky. Because our stores have been successful from day one, and earning a decent income, we’ve been able to step back and work on the store as opposed to working in the stores,” he says. “That’s worked really well for us. In the partnership, the four of us have deﬁned roles; one will do rostering, the girls do HR and recruitment, we try to specialise

for Hayden and his team, who use the typically quieter winter months to sponsor netball teams in the Illawarra and Penrith regions in order to stay front of mind with their target market. “We’re focusing on the really young, up to 12 years old, girls at netball. We give them merit awards so each week the coach gives one to the best player of the day. That brings the kids into our store and once you get them hooked as kids, they’ll

People come in for a treat. They come in for a good time so there are no grumpy salespeople behind the counter, because they’ve been serving smiling kids all day and the whole idea is fun in certain areas, so we share the load rather than all of us trying to do a bit of everything. “We spend a lot of time in the stores but we’re training staff and keeping an eye on KPIs and organising our own mystery shops and doing all those things that keep our stores in check.” Local area marketing is a big focus

come back as teenagers. Our biggest market has always been the 16 to 34 year old females,” says Hayden. On top of what’s offered by head ofﬁce, the O’Neills and Ramsays also promote the Cold Rock brand in their local areas. “The thing about our concept is that you need to see the process to understand it. So you need to see an ad where it shows

the icecream being mixed up on the rock, otherwise people don’t understand, they think we’re just another icecream shop. And in order to do an advertising campaign on a network, a Sydney market for example, it’s very expensive. So head ofﬁce does that in Easter and spring, they look after all the TV marketing, because we can’t afford it, and we do the radio and the newspapers and magazines in the local paper.” With a very full schedule and an opening around the corner, it would be safe to assume that four franchisees might be too many cooks in the kitchen. But after working with Paul previously and sharing a long term friendship, and personal partnership, with Rosa and Sheryl respectively, business is mostly smooth sailing, Hayden says. “We have our moments, like any partnership does, but we’ve gotten on really well for the period of time that we’ve been together and because our roles are deﬁned and different, it’s almost like we all go off in our own directions. “We’re not in each other’s back pockets and at the end of the day everything seems to function really well for us.” F

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Opportunities|Sweet treats

THE CHILL

FACTOR When Australians indulge their taste for dessert, what do they want? Great ﬂavour of course, and high quality ingredients. But these need to be matched with a pleasant buying experience, particularly if the sweet treat is a shared event. Sarah Stowe reports

ost of us love a sweet treat. For children, sugar-coated confections are always a big hit, and even for adults with more sophisticated palates, the temptation of a delicious dessert can often be hard to resist. In Australia statistics reveal that spoonfuls of

In general the retail market is quite saturated but there is scope for new players if they have a new idea 30| FRANCHISING NOV/DEC 2011

fabulous ﬂavour can be big business too. The ice cream and dessert market through takeaway outlets, cafes and restaurants, is worth $1.5 billion for 2010 to 2011, according to analyst group IbisWorld. A large portion of the sweets business is the ice cream trade, a seemingly elastic market that, according to the franchisors in the arena, continues to expand to ﬁt the ever-increasing number of entrants. Jonny Hammond, brand manager at Ben & Jerry’s, sees the Australian arena as

WWW.FRANCHISE.NET.AU

quite a competitive market but says “We’re the third largest ice cream market in the world. We love our ice cream and we love choice. We feel there’s enough room in the market.” The distinguishing factor of the Ben & Jerry’s brand is ingredients. “What brings people in is the chunks and swirls. We use quality ingredients and no emulsiﬁers. And the product is made in a sustainable way. We’re hoping to be fully Fairtrade certiﬁed for our ingredients by 2013.”

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Sweet treats|Opportunities

Movenpick’s ice cream

boutiques

Ben & Jerry’s is famous for its ice cream’s chunks and swirls, a taste explosion that’s the result of co-founder Ben Cohen’s taste deﬁciency. Nick Prohasky, general manager Australia at Ben & Jerry’s, insists that it’s important for franchisees that every customer who comes into the store, should have a truly fantastic and memorable experience. The starting point of this is a clean, presentable, and fun environment, not just painted walls and decors.

Setting the scene “Sampling is a huge part of the experience, as a customer not being sure what you want, the scooper helps you, tries to engage the customer. At the heart of the business, pints don’t talk to customers but scoopers do,” he says, reﬂecting on the question of whether the strong wholesale distribution arm of the American brand that sees the name on shelves in video rental stores and supermarkets competes for the same dollar. The team insists the two elements are complementary. Creating a great experience is important too at Movenpick, a Swiss brand that refers to its stores as ice cream boutiques. Fit outs are top end, with a colour palette of black, white and a little red. “Like the Chanel of ice cream,” says Renato Maiale, national business development manager. He agrees it’s a

competitive marketplace ce with more brands entering it every year. “But what differentiates us is the premium end market. When people indulge they want the best and this is the best. We’re 100 percent natural, imported from Switzerland. Our research shows [consumers look for] budget or top end. We believe at the premium end we don’t have a real competitor, except for the independent gelato business where gelato is made on-site. We believe we have a gap in the market. The product speaks for itself.” The latest store in Doncaster’s Westﬁeld is a 40 square metre

Afternoons are important, and there’s a 7pm to 9pm rush at Ben & Jerry’s . Says Prohasky, “At a high level, we’re competing with frozen yogurt and after dinner desserts, chocolaterias, in some way.” Wow Cow founder Carl Harwin says “We compete with anyone with dessert discretional spend. Wow Cow is a fusion between frozen dessert and the chocolate concept. For us, we’re known for outstanding product, and the price point is right. Once the product ticks all the boxes, it’s about the experience.

Sampling is a huge part of experience, as a customer not being sure what you want, the scooper helps you, tries to engage the customer. At the heart of the business, pints don’t talk to customers but scoopers do dessert parlour. In Brisbane the Southbank outlet has become a mid-week evening destination, he says. “People aren’t spending $120 on meals in this climate. They’d rather cook at home then meet and catch up with friends for an ice cream.” It’s a commonly held view among the dessert franchisors.

“We’ve created a dessert lounge. The lights come down, candles are out, the music’s turned up, it’s fun and vibrant. You can see people enjoying themselves. It’s a meet and greet venue. We’re very selective about

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Opportunities|Sweet treats

Miranda Kerr enjoying a Gela tissimo Dark Chocolate Bambino cone at an intimate charity event for Kids Helpline

F I CE OF

the location, very conservative on the site. A lot of business is done in the evening. People associate us with a dessert offer, we pull people from other restaurants, and passing trafﬁc. Customers are looking to relax in a cool lounge, a place they can go and hang out and spend as little as $3 and have that experience.” Gaining customers is all about word of mouth and lots of repeat business. “Lots of competitors have tried to expand quickly. We’re getting momentum going, and are looking for steady growth,” says Harwin. A very new name to Australian shores is another American brand, Tasti D-Lite, brought over by Georgina and John Crawford. He says “We know our product is well differentiated. It’s not ice cream and it’s not yoghurt. It has far lower fat and sugar levels than ice cream. If you go into an ice cream shop and get a small serving it will be about 250 calories, our equivalent is about 70 calories.” The obvious appeal is to the health and ﬁtness aspect of the market, particularly female customers aged 15 to 45, the major demographic for the brand in the US where in New York’s east side many customers eat one every day. “It’s a fun, happy experience, a small indulgence,” says Crawford.

A healthier bite Craig Shulman, senior analyst at IbisWorld, says this health consciousness of the consumer is a big trend affecting the market. “There’s been a drop in the less healthy options as brands cater for this with single serves, low fat, and yogurts. There are organic, gluten-free and soy labels attached now too. “Even though people are increasingly health conscious they still enjoy a treat and consider ice cream to be a snack. Increasingly, people are time poor and >> continues on page 35

We’ve created a dessert lounge. The lights come down, candles are out, the music is turned up, it’s fun and vibrant 32| FRANCHISING NOV/DEC 2011

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Chocolate Bouquets

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Sweet treats|Opportunities

Tasti D-Lite is the new kid on the dessert block >> continued from page 32

time poor behaviour leads to increased snacking.” The ﬁrst Tasti D-Lite outlet, a company store, has just opened in South Yarra’s Chapel Street, a seven days a week destination location chosen for the vibrancy, the food options and its fashion mood. Says Crawford, “It’s a browsing crowd, people who can become attached [to our product] because of the quality. This is a small discretionary purchase by someone not normally tempted, and it won’t weigh heavily.” Imported from a dairy in Missouri and blast frozen, the dessert can be sourced from an Australian dairy once the franchise network reaches a critical mass. There is a great opportunity to tweak, according to Crawford, who insists Aussie ﬂavours will be brought into the system. “One of the favourites, Nutella, was the

Is the best thing about your job your morning coffee?

suggestion off a customer to a franchisee in Mexico City. We’ll be experimenting.” In addition to the iced dessert, the franchise manufactures ice cream cakes and pies, sundaes, smoothies, sells energy bars, coffee and hot chocolate. “It’s a full service offer,” says Crawford. Victorian-based

We’d like to think the Australian consumer relates more to an Australian brand and the Aussie sense of humour; we keep our references local

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NOV/DEC 2011 FRANCHISING | 35

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Opportunities|Sweet treats

Trampoline is focused on creating healthy options free from artificial ingredients, and with genuine flavour, explains Amanda Walton. “Our focus is on creating flavour that tastes like its name, it actually tastes like what it’s meant to. We want to be constrained, and hope that brings in repeat business.” Whether a customer set on devouring a frozen yoghurt might not be tempted by a gelato, Walton believes there is competition for the dollar spend. There is no doubt in her mind the chilled desserts offer has become an increasingly competitive market, and the nature has changed with multinationals bringing in overseas brands. So getting the message across to the consumer is essential.

It’s a treat “Our point of difference, what we focus a bit more on, is Australian made, locally sourced

Franchisee flavour Peir Lai is an IT consultant who has lived in 10 countries and has two Movenpick franchises, one in Doncaster, one in Brisbane’s Southbank. “I had grown up eating Movenpick as a child. Investing in the business was a match of brand and franchisor with the passion for dessert in the first place. “For the consumer the quality speaks for itself. We encourage people to sample, it’s very creamy and smooth. The varieties are quite European – flavours like maple, walnut and pannacotta. “In any new stores people can see a point of difference straight away. We’re not a scoop and go business. We’ve invested a lot in cafe style, a fully functioning dessert parlour. We bake waffles and pancakes fresh. “The team comes with a lot of experience in franchising, and it’s fairly flexible.” milk, the concept of supporting Australian business. We’d like to think the Australian consumer relates more to an Australian brand and the Aussie sense of humour; we keep our references local. “We’re an irreverent brand, we try to have fun. For instance, our t-shirt slogans, the copy, flavour

names and quirky personality,” says Walton. One t-shirt wittily emphasised the home-grown product and ingredients with a typically Australian catchphrase – Aussie cows, no bull. Ben & Jerry’s has also generated a distinct sense of >> continues on page 38

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Interested?

Contact Tania Katsanis 36| FRANCHISING NOV/DEC 2011

E: franchising@flowersbyfruit.com P: 1300 767 325 W: flowersbyfruit.com

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Opportunities|Sweet treats

>> continued from page 36

humour, translated into product names and marketing material. The ﬂavours are given memorable names, a practice that immediately highlights the company’s fun approach to business. But the ﬂipside of the playful attitude to marketing messages is the serious nature of community

involvement, a philosophy that infuses all levels of the Ben & Jerry’s business, right down to franchisees’ regular and continual commitment to charitable causes. For instance the Australian business has partnered with Mission Australia and raised $43,000 for OzHarvest through giveaways.

The Cheesecake Shop

The Cheesecake Shop is a distinct business with very few head to head competitors, believes general manager Ken Rosebery. He considers the competition: “Cake it away, some regional stores, Ferguson Plarre in Victoria, its about people nibbling on the edges. Michel’s, supermarkets, a range of local bakers, super deluxe boutiques. “We position ourselves as a quality provider, it’s a quality proposition, and that differentiates us from the supermarkets. If it’s an important event, you don’t want to turn up with a cake from the supermarket, you want to have something pretty special.” The Cheesecake Shop merchandise is baked on the premises, so it’s fresh, as opposed to factory baked and frozen. And not everyone knows this, admits Rosebery. More often than not the franchisee is the baker. “The way we can succeed is by being a specialist, this will distinguish us from local bakers who bake cakes sometimes. And the franchisee can be more successful with a quality proposition rather than by competing with supermarkets.” When it comes to ingredients, quality counts because cakes have to deliver a superior taste. But, says Rosebery, taste alone doesn’t cut it, its presentation has to be immaculate. Showcasing the gateaux in a well-presented shop, that offers drive and park convenience to the customer, is essential to the business.

38| FRANCHISING NOV/DEC 2011

Community action coupled d with sustainability are equally y part of the Ben & Jerry’s package, and as much of a reason for customers (most of whom are young and very social media savvy) to choose the brand over its competitors.. Visiting a scoop shop is to see the fun philosophy in action – it’s an experience. “It’s important to understand the role scoop shops play in Ben & Jerry’s to understand the limited rollout. People don’t go to scoop shops every day, they want to enjoy [ice cream] in places where people are,” says Prohasky. Hammond sums up the Ben & Jerry’s package: “It’s a combination of experience, great quality product, and purchasing, so you feel good all round. It’s the best possible ice cream in the best possible way.” Walton echoes the importance of the feel-good factor. “Treat each customer with the respect they deserve. Customers have not come in to buy a loaf of bread, but treat themselves, and

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The dessert lounge style at Wow Cow

they The h want to ffeell good. d Th greatest thing franchisees can do is to get customers to leave feeling the way they want to feel.” Gelatissimo’s CEO, Dominic Lopresti, agrees with the sentiment though he phrases it differently “We’re in the business of selling smiles and happiness.” In the current ﬁnancial environment, a sweet treat equates to an affordable treat. Despite the economic turbulence of the past four years the business has posted store growth, the CEO adds, something he views as

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Sweet treats|Opportunities

testament to the success of the brand. And perhaps there is no more striking validation of the concept than taking gelato to the Italians with the opening of Gelatissimo in an iconic Italian site, Florence’s renowned Ponte Vecchio. “In Ponte Vecchio, we’re well received, our product stands up to the local produce, customers seek out the mango and macademia from Australia,” explains Lopresti. While the brand plays on its Aussie heritage it has to be said that some of the key ingredients on the menu, such as hazelnuts and pistachios, have been consistently sourced from speciﬁc regions in Italy to ensure

top quality produce. “We set ourselves apart, make the gelato fresh in store. It’s a point of difference, artisan, hand-made, produced in the store, it gives us a really competitive advantage.” When it comes to growth, IbisWorld’s Shulman believes the industry has demonstrated “resilience in adapting to changing consumer behavour. “People still have healthy disposable income and groups without kids are increasing their spend per purchase which is directed to the premium market. “In general the retail market is quite saturated but there is scope for new players if they have a new idea.” F

We make the gelato fresh in store. It’s a point of difference, it gives us a really competitive advantage

Mrs Fields Andrew Beneﬁeld says the network of cookie outlets has remained niche, until now. “We have until the last couple of weeks, now we’ve introduced toasted sandwiches as a way to compete around lunchtime. “My belief is that you need to stay true to your concept and brand. We’re about treats. About 60 percent is takeaway, generally a small purchase. Mrs Fields is a soft baked cookie and good quality ingredients, the best butter, sugar and chocolate. “We know the customer absolutely loves the product, so we have to be very careful what we introduce.” The cookie mix is imported as a raw product and baked off in Australia.

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“I always say to franchisees, people come to us for a treat, to cheer themselves up or to reward themselves. Its all about the customer experience. What a franchisee needs to do is to engage with the customer, give them a positive experience. It’s an easy sell. Price doesn’t matter that much. People recognise quality food and ingredients.” The company bought Cookie Man last December to secure a competitor, and after consolidating the brands is now focused on Mrs Fields’ growth. And part of this is looking to expand the sweet treats selection, with more tarts and slices within the baked items category.

NOV/DEC 2011 FRANCHISING | 39

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Opportunities|Retail

Online and in-store retailing don’t have to be two separate facets of a business. Combining the two with clever marketing and promotions is proving to be a very successful tactic for growing businesses, Danielle Bowling writes

FROM ONLINE

TO IN LINE W

henever a business owner is asked about the retail landscape today, a few roadblocks to proﬁt can sometimes pop up: the GFC, the Australian dollar, the cautious consumer. And of course, the dreaded rise of online – stealing customers from shopping centres and tempting them with cheaper products shipped in from overseas; cheapening the value of real customer service, it is said. But what of the beneﬁts

40| FRANCHISING NOV/DEC 2011

that online can do for your business? The beauty of being part of a franchise system is that you often have access to a head ofﬁce team who will manage your online presence and ensure you’re making the most of this valuable marketing tool. The home and garden industries in particular can often rest assured that people will come in-store, because the products within these markets are the kind that need to be seen, touched or tested.

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Connecting with the consumer Carpet franchise, Carpet Court, is in the process of relaunching its website to include a broader range of product information, giving the consumer everything they need to know before making their purchase in-store. “I think a lot of people who are time poor are starting their purchasing journey at the online site, and there they get the initial information that they need to

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Retail|Opportunities

progress,” says Carpet Court chief executive, Andrew Brand. “I think our work on the website is making it much more friendly in terms of consumer engagement, and I think it’ll actually allow us to progress the consumer down the chain and into our store.” Brand says the internet is simply another marketing and advertising opportunity for the franchise, and it’s one that retailers really do need to be a part of, especially considering today’s time poor, information hungry consumer. “If we engage the consumer on the internet we are then creating a link so they can actually ask for a quotation or ask a question and we send them, by postcode, to the appropriate store, so it’s very important to us in the lead generation phase. The consumer then goes into the store and the store asks questions, creating the relationship with the consumer. It’s just another lead in for us,” he says.

matter what time the consumer wants to engage. We’re always in that space.”

Expert in-store attent ion

is a must in the bed ding industry

Tried and tested If there’s one purchase you don’t want to gamble with, it’s a bed. Customer service and staff expertise are essential when looking for a good night’s rest. Gavin Culmsee, BedShed’s chief operating ofﬁcer, recognises that this gives the bedding franchise some immunity to the threat of online retailing. However, that doesn’t mean BedShed can dismiss the online space entirely. It needs to capitalise on it and use it to expand its customer base, he says. “We’ve just relaunched nched our website and we’ve probably seen about a 60 percent increase in trafﬁc to it and more clickthroughs as well as a lot more time spent on there, so

We’re everywhere at once. The penetration into the consumer base is huge ... it doesn’t matter at what time the consumer wants to engage. We’re always in that space Unlike other, more temporary or intermittent forms of advertising, an online presence is constant and can be accessed by the consumer when and where they like. Brand says the beneﬁt for franchisees is obvious – it all comes down to exposure. “We’re everywhere at once. The penetration into the consumer base is huge. If we adopt any of the other types of advertisements that are available – pay TV, free to air, catalogues, or any of those other vehicles – they tend to be speciﬁc markets, whereas we’re in the cloud, we’re out there, so it doesn’t

we’re starting to see a real trend towards more research being done on the web. “Our current strategy is about continuing to educate consumers via our website and making sure people know what’s going on, but driving them to our stores to get the right expert attention and the understanding they need to get the right bed,” Culmsee explains. “You might spend $2,000 or $3,000 on a mattress for your master bedroom and you might have problems with your back

nching its website Carpet Court is in the process of relau

or shoulder pain or something like that, so you want to talk to an expert.” Culmsee says BedShed franchisees don’t need to worry about managing their digital presence. That’s the beauty of being in a franchise system and paying a franchise fee - you’re entitled to that kind of support by head ofﬁce. Even if BedShed starts to retail online,

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Opportunities|Retail

Retailers can still beneﬁt from sales made online

franchisees will still benefit. “We have an agreement with our franchisees that they won’t be disadvantaged by any activity we do on the web, so if we start retailing on the web then our franchisees will share in whatever success that brings. That’s our agreement and our commitment with them,” he says. Like BedShed, King of Knives is working to disprove the idea that online retailing is a threat to bricks and mortar stores, by giving franchisees a cut of each online sale. “We have addressed this problem with our franchisees. What we offer them, I think, is terrific. It is more than most [franchises] will offer their franchisees. Basically we give them the sale. If you own one of our stores and if the product purchased comes from your postal code, then that sale goes to you. The selling price, less the GST, less the cost of goods and five percent handling, goes to the store. They’ve done no work for it and in addition there’s no royalty or advertising paid on that sale,” said Ron Baskin, CEO. King of Knives’ online presence includes a website from which they retail and an 42| FRANCHISING NOV/DEC 2011

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In-store, most of our customers come in for the high level of service that we offer in terms of information and product knowledge. You don’t get that online email database that receives alerts on special offers and promotions. “The purpose of [being online] is to sell products,” Baskin says. “It also directs a lot of business in-store. We’ve

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Opportunities|Retail

level in-store is a very important component of our business. Online it’s not. They may look up products, but the ability to ask questions doesn’t exist.” Independent retail network Home Timber & Hardware specialises in a variety of products and services including hand and power tools; paints; garden equipment and advice; outdoor furniture; timber and building products as well as information and advice on DIY projects. With more than 220 stores in the group and plans for more, Home Timber & Hardware uses a loyalty program to drive customers in-store and keep them coming back. “Our Home Team consumer

Home Timber & Hardware’s loyalty program has an online component too

done tests running online specials where you can pick up in-store, and it’s very heavily weighted to people going in-store, seeing the product, trying it on our demonstration table and buying it in-store rather than online.”

The basics still count Once a customer is driven in-store from the website, it all comes down to good old fashioned customer service, Baskin says. When online, customers want lots of information easily and quickly, but when they come in-store they

We have an agreement with our franchisees that they won’t be disadvantaged by any activity we do on the web, so if we start retailing on the web then our franchisees will share in whatever success that brings. That’s our agreement and our commitment with them still want lots of information, but it needs to be delivered with a smile and a sense of professionalism. “We’re in the advice business. Our products require a certain amount of advice, we sell quality products and the people coming 44| FRANCHISING NOV/DEC 2011

in are seeking expertise,” he says. “In-store, most of our customers come in for the high level of service that we offer in terms of information and product knowledge. You don’t get that online. So the service

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Excellent customer serv ice is essential at King of Kni ves

loyalty program also has an effective online component,” says Andrew Senyard, national marketing manager. “We send regular email newsletters to loyalty members highlighting exclusive deals and discounts. Home stores also have the ability to use the email broadcast templates and send tailor-made emails to their own members database. This can be used to celebrate the anniversary the customer joined the Home Team with a special discount, or to

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Retail|Opportunities

Achieve Your Personal and Business Goals Faster An effective online presence will drive consumers in-store

communicate with loyalty customers inline with a store event.â&#x20AC;? While Home Timber & Hardware customers inevitably end up in-store, the company has put a wide range of information and â&#x20AC;&#x2DC;how toâ&#x20AC;&#x2122; guides online to prepare them for their purchase and/or their DIY project. This includes digital copies of the groupâ&#x20AC;&#x2122;s renowned â&#x20AC;&#x2DC;dogaloguesâ&#x20AC;&#x2122; â&#x20AC;&#x201C; cataloguess featuring Home Timberâ&#x20AC;&#x2122;s two canine mascots. Having the dogalogues online isnâ&#x20AC;&#x2122;t an indication that the days of hard copy catalogues, have passed, itâ&#x20AC;&#x2122;s just more exposure for the company, Senyard says. â&#x20AC;&#x153;Consumer research tell us the Home dogalogues are the most liked in the hardware cateogory ... Our dogalogues are all about providing consumers with the right product offers at the right time of year, at the right price. â&#x20AC;&#x153;They are a great way to build awareness of the Home brand at a local level, but more importantantly they are a great way to generate in-store trafďŹ c for our store owners. Catalogues will

Searching for a business Searching for to match your andskills? Value? Credibility Our Business Model Includes:

continue to be a key part of our marketing mix for a long time to come,â&#x20AC;? he says. Embracing online and its ability to boost sales in-store, combined with exceptional customer service and experienced staff is what home and garden retailers like Home Timber & Hardware are doing to ensure their stores remain proďŹ table. â&#x20AC;&#x153;Our store owners are great at delivering proper service, proper advice, local knowledge and the right range of products at store level,â&#x20AC;? says Senyard. â&#x20AC;&#x153;They know this is what sets them apart, and that staying relevant is dependent on continuing to deliver all of these thingsâ&#x20AC;?. F

Toll Free 1800 634 227 E andrew@brian andrew@briantracyanz.com

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Coaching|Opportunities

The world’s best athletes have coaches, so why not a business? In these tough economic conditions, coaching can give a business a sporting advantage, writes Stephanie McDonald

PERFORMANCE

ENHANCED B

usiness coaching aims to improve the performance of a business. Those who seek coaching range from businesses struggling to make a proﬁt to those who are simply looking to build on their success. HR Coach provides business and human resources coaching. Most of its clients have 25 staff or less and want to use business coaching to build internal capabilities. Louise Broekman, managing director at HR Coach, says the concept of business coaching is still relatively new and has been through a “pioneering” period of educating the market. But as the practice

becomes more accepted, “every business will need one”, she says. Business coaching at HR Coach can include one-off training sessions or can run to a series of sessions.

Strategic Broekman says research shows businesses typically sign up for a three-month period, but that

is changing. Now, the role of the business coach is about being a partner to a business where the coach works with the client over a longer period of time to get a more strategic result. “The role of the business coach is also evolving; it’s being more formalised into establishing advisory boards where it’s

We’re seeing huge growth in the women’s market. I really suggest to women who are not happy in their corporate environment that these are great alternatives; to be able to build something for yourself and make a difference and have the ﬂexibility that you want WWW.FRANCHISE.NET.AU

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Opportunities|Coaching

strategically helping that business to grow,” she says. For those considering a business coaching franchise, Broekman says one of the key traits people need to have is to be a people person. “We focus on the people element… You’ve got to make sure you’re technically proﬁcient at what you do and your motivations are right for doing it,” she says. Business coaching franchises suit people who can empathise with business owners and the challenges they face, she believes. This means being a good listener,

franchisees need to have solid technical skills. A successful track record in running a business also helps. A franchisee’s training will depend on the individual’s skillset and may be shorter for franchisees with prior experience of business ownership. There is also ongoing development for franchisees as the market continually evolves and changes. HR Coach’s initial two-week strategy program for new members of the network is followed by a further threemonth business coaching process

Training organisation means accredited and non-accredited courses. Accredited means we’re a registered training organisation through the Department of Education and we have access to government subsidies for each qualiﬁcation not being judgmental, focusing on understanding the drivers within the business and being able to create trusting relationships. “Really assess your skills and make sure that whatever system you’re looking at assesses your skills too, because you’re not only technically delivering what you need to for a client, but you also have to operate your own business as well and you need to be able to balance both,” Broekman says. Although experience in business coaching is not a prerequisite, she insists

50| FRANCHISING NOV/DEC 2011

and an ongoing professional development program. However, Broekman warns that you can’t take a cookie cutter approach to development and it’s not one-size-fits-all. The rewards of business coaching can be vast, such as helping a business achieve the results they set out to and supporting them to make it happen. And, says Broekman, “being able to be in control of your own destiny and making something happen for yourself and for other people [is] liberating.” In particular, it gives women an opportunity to leave a restricted corporate career for greater flexibility and opportunities. “We’re seeing huge growth in the women’s market. I really suggest to women who are not happy in their corporate environment that these are great alternatives; to be able to build something for yourself and make a difference and have the flexibility that you want,” Broekman says.

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Training courses Business coaching can also include formal training and qualiﬁcations which are accredited by the government and sometimes subsidised. For example, government subsidies provide up to $4000 per individual for training course expenses for some retail and business certiﬁcates and diplomas. Louise Targett, managing director at Target Training, believes business coaching is all about working with business owners to identify key issues in the business and develop strategies to help them improve. It has become so important she sees it as a necessary part of any business. This means franchisees must be adept at working with business owners and managers across small, medium and large organisations and be comfortable in communicating with them. Franchisees also need to “love communication with businesses … because it’s a key part of their role. [They should also be] passionate about growing a business via people development, because that’s our number one focus,” Targett says. Of course, franchisees also need self-discipline to work for themselves as a business manager of their own small business. However, there are differences between business training and business coaching. Training is typically a longer-term process where staff learn about key areas of their job and can include formal assessments. “Business coaching, on the other hand, is not accredited at all, so it can be one-off or it can be long-term, but at the end of the day, it may or may not get results because it’s not formally accredited,” Targett says. Companies typically come to Target Training when their sales are down – they could have strong market demand for their

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Opportunities|Coaching

product or service, but they don’t know how to maximise sales. Such companies often want training to improve their business, which can be formalised training through a nationally recognised diploma or certiﬁcate or through business coaching, which isn’t a formal qualiﬁcation. Targett is quick to point out Target Training is selling a franchise to run a training organisation, not a business coaching franchise.

qualiﬁcation,” Targett says. “Business coaching does not offer that because they’re not accredited as business coaches and they don’t have access to Australian government subsidies. Our model is completely different to the business coaching organisations out there.”

Motivation Some ﬁrms however, such as Brian Tracy International, are purely focused on business

People come to coaching primarily to make changes, so they’re already in their groove of wanting to get different results “Training organisation means accredited and non-accredited courses. Accredited means we’re a registered training organisation through the Department of Education and we have access to government subsidies for each

52| FRANCHISING NOV/DEC 2011

coaching and encompass psychological and motivationalbased training. Business coaching at the company is focused on understanding the psychology of a business’s goals and why they

WWW.FRANCHISE.NET.AU

have achieved their current level of success. The company then helps organisations to discover habitual patterns – positive and negative – and helps to alter those patterns for greater success. “People come to coaching primarily to make changes, so they’re already in their groove of wanting to get different results,” says Andrew Phillips, principal at Brian Tracy International, Australia and New Zealand. “But the worst thing that you can do is not to dig deep and ﬁnd out why people have got the current results that they’ve got.” Clients at Brian Tracy International include LJ Hooker, BMW and Wendy’s. At LJ Hooker, the company’s hierarchy needed to engender motivation and goal setting skills “and get their agents to understand that success is 85 percent attitudinal and 15 percent skills and knowledge,” Phillips says. “The goal there was to make people understand that they’re

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Coaching|Opportunities

responsible for their own success, to make them more self aware and to make them more goal oriented.” The most common reason business coaching fails, according to Phillips, is because coaches don’t understand the psychology of people’s attitudes and feelings, which means they can easily “slip back into the same pattern they tried to get out of the ﬁrst time”. On practical terms, coaching is typically carried out in conference rooms, most often at the client’s ofﬁce. Trainers at Brian Tracy International also have their own premises where clients can conduct their training. This training is focused around audio, visual and roleplaying techniques. However, Phillips says there are different models of business coaching and there are not enough criteria to assess potential business coaches.

“A lot of franchisor business systems will allow you in if you’ve got a pulse and you’ve got some cash. It’s not good enough, and we’ve seen large companies implode because the coaches don’t know how to do the job and they don’t have the resources,” Phillips says. He says people who make good business coaches are experienced business people who have had successful careers of their own and “climbed a personal mountain. They know what failure can look like”. They also need to be self-aware, understand the psychology of success, be excellent listeners, have empathy and want to genuinely help people achieve success. Phillips says dominant personalities are ideal, but they also need to be able to inﬂuence people and socialise. “So you do need these characteristics up front.

Hopefully [the] franchise provides good training,” Phillips says. The main difficulty franchisees may experience in the beginning is finding clients. “Payment can also be a challenge, so good systems are needed and a real internal understanding of the value of their own time,” Phillips says. However, like any business, there can be many rewards and personal satisfaction – Phillips says the greatest reward is seeing the tangible success of its clients. He says: “Business is about gaining and keeping a client. A profit is a by-product of doing it well.” F

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Opportunities|Real estate

Domini Stuart

PROPERTY

investigates the real estate market

POTENTIAL S

ome statistics suggest this isn’t the best time to be buying into a real estate franchise. The latest ﬁgures from the Housing Industry Association, for instance, show that new home sales suffered a sharp decline for a second consecutive month in July 2011. Over the past year, more than 10,000 people have left the industry. And the recent news that Go Gecko has gone into receivership provides even more evidence of tough times in the sector. Yet other statistics tell a completely different story. In 2010, the LJ Hooker team outperformed

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the market and there’s no sign of decline in the momentum. Last month, Ray White’s sales easily topped their monthly $2 billion benchmark. And McGrath franchisee Dean Mackie is not only continuing to double his business every 12 months, in August his business was up 40 percent on the same period last year. So is the real estate industry thriving or diving? “Both,” says Mackie. “For some people this is a very difﬁcult environment. A lot of people were tempted into real estate when the economy was booming, sales were headed in one direction and

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it was easy for anyone to do well. But now things have started to dry up, the people who weren’t well trained, weren’t committed or were working in a business that hadn’t invested in infrastructure are likely to be struggling.” Mackie was already working for McGrath when the business started franchising five years ago. He was one of the first to open an office and he began by employing five people. Today he has three offices and 90 staff. “That growth has all been built on the simple philosophy of providing great service, having the best possible processes and systems in place and having the discipline to stick to them,” he says. Mackie works in the lower north shore of Sydney. This is an affluent area where activity levels are generally above average but, even here, the overall market fell by 20 percent last year. Again, Mackie bucked the trend with a 10 percent increase in sales.

It’s a sad fact that some franchisors are not as involved as they might be in terms of what they provide. It makes sense to focus on the brands that have some cut through and a proven track record of support and infrastructure “We’re consistently focused on more training, better systems, better service and changing our process so that we’re not going to be caught out trying to do business the same way we were doing it two or three years ago,” he says. “Business is evolving and shifting and we need to be adjusting to it. For instance, some of the recent changes we’ve seen include a growing tendency for people to focus on lifestyle rather than a particular suburb – they’re more open and ﬂexible than in the past. They’re also more likely to downsize to an apartment of similar value to the large house they’ve sold rather than looking for somewhere less expensive.” One of the more challenging trends is towards much shorter and sharper business cycles – a matter of two or three months rather than years. People

Dean Mackie at McGrath Neutral Bay

are also doing much more research before they even approach a real estate agent. “The internet and social media now provide access to a level of information that was unthinkable even a few years ago,” says Mackie. “Clients are much better informed – and that’s more bad news for agents who are lazy or think they can pull the wool over someone’s eyes.”

Franchising success According to Bill Russell, head of network performance and development, LJ Hooker franchisees are also coping extremely well with the economic uncertainty. “Good operators and top offices in the LJ Hooker network are continuing to provide good quality service to customers and enjoying the rewards that come from solid results,” he says. He believes that the company’s commitment to support, training and technological innovation is key to their success, with technology at the forefront of the business. “Innovative technology can help set our franchises apart,” he continues. “We offer well-researched, tested and integrated technology solutions to help raise a franchisee’s profile and create a powerful online presence.” Ray White encourages franchisees to focus on running efficient businesses – the core of their original business model. “By continuing to provide leadership WWW.FRANCHISE.NET.AU

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during the ﬁrst 12 months while they’re building their business.” Mackie believes that people who are willing to take a very disciplined approach to business, do what they say they’re going to do, give sound advice and talk honestly and openly to clients can do well in any environment. He also believes that the rewards justify the effort. “Real estate is a pretty cool industry to work in,” he says. “You get to assist people with some of the most important decisions they’ll ever make – you’re effectively helping them to achieve their ﬁnancial, lifestyle and family goals. You can also earn some pretty good money. But there are a lot of very good agents out there and you must be prepared to do whatever it takes to stand out from the crowd.” If you’re right for real estate, which real estate franchise is right for you? “It’s a sad fact that some franchisors are not as involved as they might be in terms of what they provide,” warns Mackie. “They let you put a shingle outside but that’s about all they offer. It makes

LJ Hooker is looking for 500 franchisees

and innovative marketing to our franchisees we are able to keep on growing our network and maintain a leading edge brand,” says NSW chief executive ofﬁcer Stephen Nell.

Qualifications and training In Australia, all sales agents and property investment managers need to be qualified or accredited. The details vary from state to state and are available from a local Office of Fair Trading. “We’re unique in that we have our own LJ Hooker Institute,” says Russell. “This covers all of the relevant state and federal legislation and delivers world’s best practice real estate training for agents within the LJ Hooker network.” Despite a contracting market there are still plenty of opportunities for the right people to get into the industry. LJ Hooker, for example, is investing for growth; in July and August this year they recruited 20 new franchisees into the network and they are currently looking for 500 more.

So what makes someone right for real estate? “Our successful franchisees have a love of both property and of interacting with people in their local community,” says Russell. “They also have the skills and acumen to run a successful business, a willingness to work hard to drive their business and enough ﬁnancial backing or funding to support them 56| FRANCHISING NOV/DEC 2011

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Innovative technology can help set our franchises apart. We offer wellresearched, tested and integrated technology solutions to help raise a franchisee’s profile and create a powerful online presence sense to focus on the brands that have some cut through and a proven track record of support and infrastructure.” Today’s franchisees can expect access to systems that keep everything they need to manage the business at their fingertips and also provide complete visibility in terms of business and financial performance. The latest in marketing support includes ways of connecting with people in a real and relevant way as well as traditional print and TV advertising. And, as running any business can be lonely, coaching and leadership support is critical. “One of the real benefits of a franchise is that you have the camaraderie of real estate professionals to learn with and from,” says Russell. “My goal is to double my business >> continues on page 59

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>> continued from page 56

every year,â&#x20AC;? adds Mackie. â&#x20AC;&#x153;If I didnâ&#x20AC;&#x2122;t have the right support from my franchisor I would be limited in my ability to achieve that goal.â&#x20AC;? Before making a decision, every wouldbe franchisee should investigate what consumers think and feel about a brand and what checks and balances are in place to ensure brand integrity. Perhaps most important of all, does the franchisor have a vision for how the brand should develop in the future? â&#x20AC;&#x153;If they donâ&#x20AC;&#x2122;t have a clear goal for what they want to deliver to clients and then have everything they do aligned with that, it really doesnâ&#x20AC;&#x2122;t matter what infrastructure they have in place,â&#x20AC;? Mackie says. F

What does it cost? LJ Hooker was the very ďŹ rst real estate agent to start franchising in Australia; the ďŹ rst franchised ofďŹ ce was opened in 1968. They now have over 650 ofďŹ ces across Australasia and one of the largest residential sales teams in the industry â&#x20AC;&#x201C; over 3000 sales professionals and a support team more than 2000 members strong. Each business is unique, so the set up costs for a new franchise will depend on the size of the operation, the location and the method of operation as well as the ofďŹ ce ďŹ t-out and the amount of equipment needed to be purchased or leased. McGrath is a relative newcomer to franchising, however in just ďŹ ve years

the company has built up a network of more than 40 franchisees throughout Sydney, the Central and North Coast, Southern Highlands, Wollongong, the ACT and South-East Queensland. Upfront fees to the franchisor range from $25,000 excluding costs such as the ďŹ tout and other start-up costs. Ray White is the largest real

estate franchise in the country, with nearly 1,000 ofďŹ ces worldwide and about 7,500 members. How you want to market your business, how you want your business to look and what perception you want to give about the types of property you service â&#x20AC;&#x201C; top end, general metropolitan or regional â&#x20AC;&#x201C; will determine the fee structure.

Pump up your portfolio with a partner who helps you with the heavy lifting. Take control of your ďŹ nancial future and partner with Snap Fitness, the worldâ&#x20AC;&#x2122;s fastest-growing ďŹ tness franchise! t TVSOLFZ CVTJOFTT NPEFM BMMPXT GPS TFNJ BCTFOUFF PXOFSTIJQ t 0WFS 5 MPDBUJPOT XPSMEXJEF t -PX JOJUJBM JOWFTUNFOU t &RVJQNFOU 'JOBODJOH "WBJMBCMF

$BMM PS 4/"1 (:. or visit www.snapďŹ tness.com.au

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Match hard work with passion for your franchise and a ďŹ&#x201A;exible lifestyle could be yours!

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eet up, drink in hand, sunning yourself on the beach? That might be the picture conjured up at the mention of the lifestyle of a franchisee but today the focus on a great lifestyle through franchising is firmly on flexibility. Time on your hands won’t be an issue as you set up the business, learn the ropes, grapple with trading challenges, deal with staff and management issues, and work constantly to grow your business. As Smartline’s top franchisee, Cathy Anderson, says “Initially you have to be prepared to work a six day week and you’ll probably never have worked harder.” At Topfranchise.com, a website run by market survey firm 10 Thousand Feet, franchisee satisfaction levels are measured each year. For 2011 Smartline came top in lifestyle satisfaction, thanks to votes of confidence from its franchisees who undertake the online survey on which the awards are based. Anderson says “People do bandy the term lifestyle around and people have this vision that by being selfemployed they will have a lot

of freedom.” Franchising gives you freedom of flexibility in your working hours, perhaps working around children, she says. But as part of the package you have to have commitment and a passion to achieve. “You have to be fairly focused. You are going to get flexibility out of your day but couple the flexibility with commitment because without that, you’ll be stressed because you’re not making money.” Having it all is possible, Anderson insists, as long it’s

with passion, be selective about the business choice, and careful with staff selection she advises. Determining the true sense of lifestyle is key, she says. The deﬁnition of lifestyle will vary from franchisee to franchisee, and may not match the franchisor’s understanding of the word either. “It may be one of these factors: is it time related, is it ﬁnancially driven, is it internal or external rewards based, is it about praise on a regular basis? Some franchisees might want the

You are going to get ﬂexibility out of your day but couple the ﬂexibility with commitment because without that, you’ll be stressed because you’re not making money understood that nothing comes without hard work. “You can have everything you want and more, a sense of ownership and whatever you choose you can have if you have the passion to make it happen. If you think it’s a shortcut to achieve good income, it’s not. Do it for the love.” Vicki Prout, head of the Sherpa Group, agrees achieving the dream is possible. But how is this achieved? Franchisees need to start out

CASE STUDY: CATHY ANDERSON Why did you choose franchising? “I didn’t want a job that I had to be in the ofﬁce by 8.30 and couldn’t leave till 5. I like the ﬂexibility to come and go. I believe in working hard then have family time and be able to travel and see things. “I do think I achieve a lifestyle balance during the week.”

Describe your day “Generally I start at 9am and I’m fairly manic till 2pm, then take a break, have some time for me, then start up again. I prefer to have a busy period at the end of the day. “I have a 19 year old son and a 16 year old daughter. I don’t work weekends any more because I prefer to work harder during the week and give myself time at the weekends.”

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lifestyle of the rich and famous – but then we still need to ask what do they mean by this?”

Honest and transparent Grant Garraway, franchise consultant at The Franchise Shop, believes the issue is relevant to both franchisees and franchisors. “I think both parties need to be realistic. You see people looking to buy a franchise who are hopelessly optimistic about how much time they will put into a business. But the franchisor is not always as honest as they should be. Honesty is the first thing.” Kim Davies, national franchise development manager for beauty franchise Brazilian Butterfly, agrees the franchisor has a responsibility to provide an honest and realistic picture of a franchisee’s business obligations and what is involved in establishing a franchise. “There is no benefit to either a franchisee or a franchisor NOV/DEC 2011 FRANCHISING | 61

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to enter into a partnership with unrealistic beliefs and expectations. Brazilian Butterﬂy provides prospective franchisees with a realistic picture of what is involved, as well as encouraging them to visit our salons and meet independently with existing franchisees.” Nader Seifen is now a consultant and advisor but notched up several years as a franchisee with La Porchetta, the casual dining Italian restaurant chain. When he looks at the franchise sector, Seifen believes some businesses are being oversold with stories that don’t tell the full

You see people looking to buy a franchise who are hopelessly optimistic about how much time they will put into a business

CASE STUDY: NADER SEIFEN How did you manage your work hours? “I got it down to three and a half days a week at La Porchetta after three years. That was 9am until 10 or 11pm two days, one day working till 5pm. “Most of the time when I had a day off I wouldn’t contact the restaurant, unless there was something exceptional, or a problem with staff members. “The business thrived because I had put a lot of time and effort into processes. It’s about the structure, I had mechanisms in place.” tale. Potential franchisees need to read the small print and look deeper than the initial image promoting a brand, he suggests. For instance, franchisees who are enjoying a great lifestyle during the day spending time on hobbies, sport or family time, will almost certainly be working at night. “Working from home, weekends, at night – that’s a clear deﬁnition [of how to make it work]. You still have to work in the business,” he says. That franchisees have to work hard is a given, says Daniel Hochberg, franchise manager at King of Knives. “I’ve found franchisee expectations are less about skiing down mountains and boating in the Whitsundays and more about being in control of how they work and when they can commit to family events. “They accept retail is hard work, 24/7, and that they need to ﬁnd a balance which comes through managing staff.” Some franchisees are reaping the rewards of their efforts, reporting between 20 and 40 percent sales growth, he says, achieved by sheer hard work. In Hochberg’s experience, King of Knives’ franchisees fall into two categories: those who achieve a level that allows them to step back from the business and enjoy more leisure time, and those who invest in a second franchise once they’ve met their initial goals.

Getting it right It takes time to build a business that you can step back from

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Franchisees need to align their personal expectations with the reality of a franchise system and the opportunities there are WWW.FRANCHISE.NET.AU

either for expansion or for a more hands-off role. As Kim Davies reiterates, doing the homework before committing to a franchise investment is essential. “It is very important for prospective franchisees to undertake their own thorough due diligence before entering into a franchise. As a prospective franchisee, you need to give careful consideration to all of the other important aspects of your life, your partner, your children, your hobbies and your personal and business goals and identify how much you are really prepared to commit to your business. Take time to create a realistic business plan that will help you to identify your stafﬁng needs and how much time you will need to devote to your business, particularly during the very important establishment phase. Then, prepare a list of all of the really pertinent questions and ask, not just the franchisor, but also as many existing franchisees as you can.”

Making it work

Once the investment and commitment is made, there are ways for franchisees to give themselves a better chance of succeeding at business and reaching the ﬁnancial goals that will fund the desired lifestyle. To achieve minimal input into the business means delegation, and that’s not something Nader Seifen recommends in the early stages of building up a business. “Working on the business is critical, but don’t plan on becoming an executive and

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delegate the operational side of the business,” he advises. “Some franchisees think ‘I’ll give it all to a manager and I’ll come up with grand ideas’, but you have to hold on until the manager is a replica in your thinking,” he says. “It’s like rock climbing. You have to have three points of contact at any one time. If you let go of one hand, you have to have the other hand, and both feet, on the rock. It’s the same in managing a business. You can only let go of one thing at a time.” New franchisees are often inefﬁcient in their use of time, and this is an area in which franchisors can really give advice, suggests Grant Garraway. “Most small retail businesses with the owner being hands on will raise the performance by 10 to 15 percent,” he says. So it makes sense for the franchisee to

HOW TO MAKE A FRANCHISE WORK FOR YOU 1. Do the due diligence that interrogates the lifestyle that you’re looking for 2. Don’t be sold a rosy story. If it’s too good to be true, it probably is 3. Just run the business 4. Concentrate on quality, service, cashﬂow and marketing all the time Nader Seifen It’s also worth remembering that newer franchise systems often have a great idea or product but that might not be backed up by a strong system. Those that do have great processes in place need to stay on top of the changes that business expansion requires. “What might conceptually be good with two franchisees can be exposed as not

It’s like rock climbing. You have to have three points of contact at any one time. If you let go of one hand, you have to have the other hand, and both feet, on the rock be in store on the busiest day – a Saturday. Putting in casual staff at the weekend so the franchisee can enjoy a weekend off is a poor choice. Choose the jobs you can delegate easily, Garraway advises. For instance, an hour of your time bookkeeping might equate to just 30 minutes for a bookkeeper. “Get experts to help in the little jobs,” he says. And remember that you can’t do everything you used to do at home. “Hire someone to do the one job you hate. You might consider it a luxury but it gives you back a little bit of quality time.” 64| FRANCHISING NOV/DEC 2011

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such a great system once the business reaches 10 franchises, and then that changes when it reaches 20,” says Garraway. Potential franchisees need to look for franchisors who are investing in their systems and technology, who are tapping into the social media arena and are interested in developing it in the long term. Like any good partnership, a successful franchisee/ franchisor relationship stands a better chance of success when there’s mutual understanding and shared expectations. F

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Join a World LEADER! Keys to SUCCESS ffor an efficient Fr Franchise Concept Recognition of man and founder, Franck Provost, engendering a strong business philosophy. A high-end, fashion brand which is #1 in Paris and throughout France. Salon concept featuring an elegant, minimalist design with emphasis on the retail products area. Beautiful, wearable and easy-maintainable hairstyles that are timeless and commercial. Training based on excellence, carried out within an academy dedicated to Franck Provost techniques and know-how. Efficient marketing and communication tools. Selective recruitment of Franchisees.

OWN your Franck Provost Hair Salon // SITES AVAILABLE AUSTRALIA-WIDE! // OPPORTUNITIES FOR HAIRDRESSERS OR INVESTORS! // BE INDEPENDENT, BUT NOT ALONE! // GREAT PERSONALISED SUPPORT! // EXCLUSIVE AGREEMENT WITH Lâ&#x20AC;&#x2122;OREAL AND KERASTASE!

Call Franchise Selection on 1300 372 624 or e-mail: franchise@franckprovost.com.au

650 salons 30 countries 10 million clients per year 100 salon openings per year More than 6 000 associates

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Issues|Financial incentives

Money talks - it’s a saying we’ve all heard before, and when it comes to investing in a business it’s true. Here Danielle Bowling looks at the discounts and ﬁnancial incentives that a number of franchise systems are offering to help them increase their footprint

SWEETENING

wning your own business as part of a franchise system has a number of beneﬁts over doing it on your own. There’s the support offered by the franchisor in terms of marketing and territory allocations, there’s the tried and tested business model and there’s often a degree of bulk buying power as well. That doesn’t mean that there’s no element of

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risk however, and the current economic climate can’t be doing much for consumer or investor conﬁdence. In order to convince potential franchisees to take that leap of faith, or for existing franchisees to expand, a number of franchises around the coutry are offering ﬁnancial incentives. For example, Flowers by Fruit

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founder, Tania Katsanis, is hoping ﬁnancial incentives will help to get her business up and running. “We only started looking to expand via the franchise model in June or July of this year, and we did get a bit of interest, but we also understand the economic climate and the fact that we need to incentivise people,” Katsanis says.

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Katsanis has split the Flowers by Fruit franchise model into two distinct opportunities for franchisees: creation centres and EGGS or Edible Gift Gurus. “A creation centre franchisee will be responsible for a region and they’ll need to make and deliver the goods, and then within that region will be anywhere between three and five territories,” she says. “Within each territory will be an EGG, who we consider to be a foot soldier, and their responsibility is to sell and market the product.” The franchise fees for both roles have been reduced to get the business on its feet, but only for the first EGG and first two creation centre franchisees. “One of the challenges that we’ve discovered is that we don’t have any franchisees at the moment, so that raises concerns for people wanting to come in because they’ve got no one to talk to and there’s no history. So we’re encouraging some pilots to come on board and we’re offering them 50 percent off the franchisee fee.” Costs for an EGG now stand at $5000, down from $10,000, and a creation centre now costs $25,000. Katsanis says that while there is interest in the product – edible fresh fruit bouquets – potential franchisees are still reluctant to invest in a franchise that has no track record, and so a financial incentive is a good option. “It’s a good way of getting people in because there is genuine interest in the business and genuine excitement, but there’s also that little bit of fear, so if you give them the incentive that they’ll save some money, I think that’s quite important,” she says. Tina Towers from Begin Bright, an early learning and primary school education program, is also tempting potential franchisees with a discounted offer, successfully signing two new franchisees. “Because we’re a new franchise we can’t offer much in

terms of funding ourselves, we’re not big enough to be able to do that yet, so we’re doing it in other ways. We only cost $20,000 to start up ... so it’s very discounted for the return on investment, and we’re hoping that that way we can have a lot of franchises start up and show a good proﬁtability and return on investment, and that will sustain our growth,” Towers says. For that $20,000, new Begin Bright franchisees get all of their

fee, which is fairly standard throughout the industry, it wouldn’t be enough to have a whole national campaign so there’d be no point. We don’t plan to introduce a marketing fee until about ﬁve years down the track,” Towers says. Financial incentives don’t have to come in the form of a discounted franchise fee. A number of well established franchises are looking to expand by offering potential and existing

It’s a good way of getting people in because there is genuine interest in the business and genuine excitement, but there’s also that little bit of fear promotional activity designed and printed including posters and 15,000 ﬂyers, four days of induction training, local area marketing research as well as their own budgets, business and marketing plans. The $20,000 franchise fee includes $3,000 for marketing, with any ongoing marketing fees waived for new franchisees, further enticing them towards being the business’s “guinea pigs”. “We thought that with the size of our business, starting out, if we introduced a two percent marketing

Edible bouquets from Flowers by Fruit

franchisees a range of different business opportunities which make entry into the system more accessible. Home appliance rental franchise, Mr Rental, has recently launched a lower cost kiosk model as part of its strategy to improve market penetration in regional areas. General manager Alan Payne says the upfront costs of the new model are about 50 percent less than Tier 1 Mr Rental stores, which are part of the standard business model whereby the territories have access to at least 3,000 customers, costing $85,000 which includes training for two people. The franchise also offers a Tier 2 outlet which is a scaled down version of Tier 1 and can be in the form of a smaller roadside shopfront or warehouse with between 700 and 2,500 customers within their territory, depending on its size and location. Tier 2 models cost $42,500, including training for one. The new kiosk model is cheaper still and has no warehouse attached to the site. “[With the kiosk model] we’re going out to regional centres and approaching local business people generally, and offering them a lower cost model to come onboard and that includes a kiosk-style set

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Business Services made convenient National Opportunities made clear

MBE (Mail Boxes Etc.) Business Service Centres are a global company with over 1350 locations internationally and 36 centres Australia wide. They offer SMEâ&#x20AC;&#x2122;s and home offices a large selection of professional business services which have been conveniently consolidated at the one location. If you are looking for a new business challenge with a constantly growing customer base, then joining â&#x20AC;&#x2DC;Australiaâ&#x20AC;&#x2122;s Leading Business Centre Franchise Groupâ&#x20AC;&#x2122; is probably for you.

Take Control of Your Life with an MBE Franchise! Everyday, MBE lends a helping hand to Australiaâ&#x20AC;&#x2122;s 1.5 million businesses; t Design, printing & copying (digital & offset) t Wide format printing & banners t Private mailboxes & forwarding t Virtual office services t 24 hour copying & private mail box access t Overnight courier & freight t Pack & ship services t National & international courier & freight

The MBE Franchise Takes Advantage of a New Era Technology plays a huge part in our every day lives, connecting individuals and businesses like never before; this has been a major contributor to Australia shifting to a service based economy. An MBE franchise is ideally positioned to capitalise on both these trends with a business model that combines state-of-the-art technology and services provided to Australiaâ&#x20AC;&#x2122;s ever expanding businesses and home offices.

Established Globally for 30 Years t 1BSU PG B HMPCBM GSBODIJTF HSPVQ t "DDSFEJUFE GJOBODF QSPHSBN BWBJMBCMF t .VMUJ BXBSE XJOOJOH JOUFSOBUJPOBM GSBODIJTF t $MFBO QSPGFTTJPOBM XPSLJOH FOWJSPONFOU t /PO GPPE GSBODIJTF o OP XBTUF OP NFTT OP QFSJTIBCMFT t 'JWF EBZT QFS XFFL QSPGFTTJPOBM CVTJOFTT IPVST t /P FYQFSJFODF SFRVJSFE t 'VMM USBJOJOH QSPWJEFE POHPJOH TVQQPSU t 1SFGFSSFE TVQQMJFS QSPHSBNT t 4USBUFHJD TJUF TFMFDUJPO QSPDFTT

Franchise Opportunities Available Nationally QLD: Chermside, Sunshine Coast, Springwood, Underwood, North Lakes NSW: Northern Beaches, Hornsby, Bankstown, Strathfield, Campbelltown, Castle Hill, Wollogong, Newcastle SA: "EFMBJEF #%$ /PSUI 8FTU 6OMFZ 1BSLTJEF /PSXPPE 1BZOFIBN &EXBSETUPXO $MPWFMMZ 1BSL WA: West Perth, Osborne Park, Subiaco VIC: South Melbourne, Docklands, Southbank

Who We Are Looking For! We provide franchisees the ability to adapt their stores services so they can best utilise their existing skills. t %FEJDBUFE BOE EJTDJQMJOFE CVTJOFTT PQFSBUPST t .PUJWBUFE QBTTJPOBUF QSFQBSFE UP HP UIF FYUSB NJMF GPS their clients.

To find out more about this opportunity go to www.mbebusinessfranchise.com.au For a confidential discussion contact Andrew Dalton our National Franchise Development Manager on; phone: 1800 556 245 email: andrew.dalton@mbe.com.au

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Financial incentives|Issues

up, lower franchise fees, they don’t need to train as many people, all those sorts of things. So it still maintains our standard and our image, but it’s a lower cost entry for them,” says Payne. He says the new kiosk model is a solution for the limited number of territories available for Tier 1 stores, and can help existing regional franchisees to get greater penetration in their area. “You might have a guy in a metropolitan area with a Tier 1 store and that’s going well ... but with the new model, franchisees can take that kiosk unit to a shopping centre at a much lower cost but then get the penetration, so it’s a win win for everyone. It’s not just the franchisor getting more turnover and royalties. The franchisee can very quickly get to break-even on that additional site and generate more business”. The new kiosk model is suitable not only for new franchisees wanting a piece of the appliance rental market, but also

EXPANDING FROM THE INSIDE OUT Franchise systems can expand their network and also ensure the reliability of their franchisees by incentivising multi-unit ownership, says Kevin Bugeja, managing director at Franchise Selection. “Many [franchisors] are saying they can’t ﬁnd franchisees. But if they’re looking after their existing franchisees they should be able to still keep growing within their internal system, by offering incentives to their existing franchisees. And I think that has a spin-off effect, because the rest of the market sees it as a positive if your franchisees own more than one store.” He uses homewares franchise, Matchbox, as a prime example. “They actually give a reduction of about 20 percent. They charge $40,000 for a new store and $35,000 for a second one, so it’s not a major incentive, it’s a small discount that they give on the franchise fee as an acknowledgement for franchisees buying a second store.” Out of the 26 Matchbox stores, 17 are franchised: one franchisee has ﬁve outlets, one has three and two have two. “I’m impressed with their ability to grow in a tough economy,” Bugeja says. “If they

hadn’t been running their business as they have been and had they not been as profitable, their growth would have been almost non-existent.” Bugeja warns franchisees not to be lured by franchise systems offering long term discounts or reduced royalty fees, arguing that a one-off discount on the franchise fee should be appealing enough. Any more than that and it could be a sign that the franchise is in distress. “Most incentives are designed to get more units into the franchise. If their model is a sound model, there’s really no need to have to continue discounting. If they’re needing to do that to survive, then they probably need to go back and look at their model. “If they’re discounting the upfront franchise fee, they’re giving themselves the opportunity to increase brand awareness by opening another outlet, they’re giving themselves the opportunity to increase buying power for the rest of the group, and they’re increasing their royalty income to the group by bringing on another outlet. So there’s no real disadvantage other than the fact that the upfront fee is either waived or reduced or financed so they can get those other benefits into their franchise model.”

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To ﬁnd out more about becoming a LUXAFLEX® Gallery dealer contact Mark Futeran on 02 9638 8000 or email: mark.futeran@hunterdouglas.com.au www.luxaﬂex.com.au © Copyright 2011 Hunter Douglas Limited [ABN 98 009 675 709] ® Registered Trade Marks of Hunter Douglas Limited. C9871_06.2011

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Issues|Financial incentives

Tina Towers from Begin Bright think s a reduced franchise fee could make expansion easier

e program helps keen employees

Bakers Delight’s Fresh Franchise become franchisees

business growth specialists

70| FRANCHISING NOV/DEC 2011

for established franchisees wanting to expand without too heavy an investment. “For under $100,000 franchisees can add another unit to their franchise operation that utilises existing logistics, making it an easy investment and a quick contribution to their business. “One of our Adelaide franchisees has already started with their main warehouse and store in Edwardstown, a retail showroom display in Arndale and kiosk shops to be opened in the three remaining territories, all using the same warehouse, which is a much more efﬁcient operation logistically.” Rather than offering a cheaper business model, baking franchise Bakers Delight has two programs in place to encourage existing employees or promising young people to join the system as a franchisee, offering ﬁnancial assistance along the way. The Fresh Franchisee WWW.FRANCHISE.NET.AU

program is an internal program targeting young, talented, highly energetic employees within the network, who have aspirations to be franchisees but might not have the training requirements or start-up capital in order to do so. The Manage to Own program is essentially the same thing, however it is open to external applicants as well. “With the Fresh Franchisee program and the Manage to Own, once the candidate has successfully completed the training, there are a number of ways that we approach the ﬁnancial situation,” said Gabby Kelly, group development manager. “With the Fresh Franchisee, they’re working for a franchisee who is a multi-site operator, and their interest might be to work with that Fresh Franchisee to take on a lease of their business, or they might consider vendor ﬁnancing them into a position to buy if they can’t raise the capital or need that initial assistance.”

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Financial incentives|Issues

franchise, Home appliance rental Mr Rental

The franchise provides financial assistance in a number of ways, including supporting working capital, vendor financing or structured bonus schemes. “Obviously these young ones can’t get finance from a bank and that’s when the franchisee or the franchisor might consider supporting them financially into the business. “The goal is that they get into the business with that

Mr Rental’s Alan Pay

company-owned bakery before leasing and potentially purchasing their own Bakers Delight outlet. The length of both programs is generally between six and 12 months. Kelly says both programs help young people to get their foot in the door of business ownership, recognising that there’s more to creating a successful business than just sufﬁcient start-up capital. She adds that both programs are popular, but the Fresh Franchisee program, over

Obviously these young ones can’t get finance from a bank and that’s when the franchisee or the franchisor might consider supporting them financially into the business initial kick start. They can’t get bank finance because they don’t meet the criteria but perhaps six or 12 months down the track under vendor finance... they’re then in a position to go to the bank and look at changing over to get their own personal loan,” Kelly explains. On the job training is extensive for both the Fresh Franchisee and Manage to Own programs, with applicants for the latter receiving five months of training, followed by six months experience managing a

the last ﬁnancial year, has experienced growth of 50 percent. “I think a lot of people want the security of having their own business and being in a position where they can control their own destiny and they don’t want the fact that they’re young or may not have the start-up capital to be a hindrance or a road block. So when they see opportunities and programs like this, which are quite rare out in the market, I think a lot of them fully embrace it – grab the opportunity and run with it.” F WWW.FRANCHISE.NET.AU

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Finance|Issues

FFranchisees often need a helping hand when it c o comes to getting started iin n ttheir h business, but times are still tough and the b a banking sector remains c cautious in its lending. So S o where does this leave tthe he keen investor looking for a hand up?

THE PATH TO

FRANCHISEE SUCCESS ustralia recovered quicker than most countries in response to the crippling Global Financial Crisis (GFC). Banks and lenders immediately tightened their purse strings and made it more difficult for small business to obtain funding. However, more than two years on and small business in this country is still fighting the effects of the GFC, says MPR finance principal Russell Sharp.

“For those looking for the great Australian dream of owning their own business, things became very tough over the past two years. This hurt the expansion plans of a lot of businesses, especially the franchise sector that historically enjoyed high growth rates.” Sharp believes it did have its positives, however. “While the growth strategies of franchisors aren’t what they were between 1995 and 2007, the GFC did force them

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to delve into their own businesses to ensure that they are doing everything they can to support new franchisees on their journey. “It is important that franchisors understand the journey that their franchisees must take to become successful and then use this information to show lenders what a franchisee’s likely start-up journey will be. “This is immensely helpful in the process of developing sound lender relationships, which can

NOV/DEC 2011 FRANCHISING | 75

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Finance|Issues

ultimately lead to a ﬁnance package being made available for franchisees to access funding.” Most franchisors are now working to establish relationships with and be accredited with banks and lenders, says Sharp. He believes they are setting aside the time and the resources to understand the ﬁnance process, to meet their obligations and to ultimately

performing franchisees.” Of course, says Sharp, one size doesn’t fit all. There are always variables. Demographics, the size of the business and the time of year a franchise is opening can all have an impact on the cash flow of the business. “When a franchisor, franchisee and the lender understand the cash flow of the start-up franchise, only then

When a franchisor, franchisee and the lender understands the cash flow of the start-up franchise, only then does it give them the best possible chance to succeed support their new franchisees. “It is also important that franchisors encourage their franchisees to have up-to-date financial statements as well as cash flows and to provide regular information on store performance to the franchisor. “They can then assess the franchisees’ business and provide any mentoring if required to preserve the performance and value of the business. One of the key criteria the bank looks at is how a franchisor manages and detects under-

does it give them the best possible chance to succeed,” Sharp explains. When submitting a loan application for start-up franchisees, some of the key areas the bank will research are: • When does the business start meeting its monthly expenses and interest? • When does the business have the ability to start making principal repayments off the borrowings? • When does the business

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start to meet bank minimum lending guidelines of interest cover and debt service and; • When will the business provide a return on investment of 25 to 30 percent? “The answers to these questions will determine the working capital injection required by the franchisee and if it is financially viable. “Being able to present the above to the bank with proven results from other franchisees does make the finance process easier. “To achieve growth, franchisors need to ensure their financial systems and processes are sound and that they have the necessary relationships with the banks and lenders. “Franchisees need to be financially ready to begin their business. “When all these elements are addressed, you create a win/win/win situation for the lender, franchisor and franchisee as they embark on their franchisee journey.” F MPR Finance helps franchisors

provide ﬁnancial alternatives for franchisees.

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How to|Technology

What happens when Tesco’s electronic distribution format or Adidas’ Virtual Wall come to Australia? Robert Graham, group managing director of DC Strategy, considers the opportunities and threats for retailers and franchise systems

raditional methods of distributing and selling products are changing rapidly. E-commerce channels have developed from small add-ons in distribution models, to often be the sole or primary distribution route as they now offer rapid and low cost channels to market with enormous reach to customers and niche segments. So the global marketplace now combines affordable and portable customerbased technology, such as iPhones, iPads and laptops with easy to develop online channels giving unprecedented transportability of business ideas and new options for market entry by new players or even by existing players looking for a new angle. However the online concept is continuing to evolve as electronic displays and digital content now combine with smartphone technology. Let’s look at the Australian supermarket sector as a case study. Supermarkets are traditionally large footprint physical stores, often being the anchor tenants for 78| FRANCHISING NOV/DEC 2011

many suburban shopping centres. Around these anchor tenants are clusters of specialist retailers, many of them franchise branded stores. The supermarkets have evolved their techniques to attract shoppers to the store, with traditional marketing techniques around product range, price

The Financial Review article of September 10, 2011 looked at Coles and Woolworths phone apps that communicate specials to customers, categorise products to replicate the in-store experience and serve as customer loyalty tools. Let’s now go a step further and look overseas to see what could

Provided the success factors of consumer convenience, speed of delivery and consumer adoption of the channel and technology are replicated then there are huge opportunities and threats for players in the Australian market specials and bundling. In recent years the supermarkets have extended their reach by online channels, where customers can shop online and never have to set foot in the store. With advances in smartphone technology and development of specialist phone apps, we are now seeing greater customer adoption of online supermarket shopping.

WWW.FRANCHISE.NET.AU

be the next evolution in online distribution for supermarkets and retail stores:

Case study Large UK supermarket chain Tesco sought to enter the market in South Korea. The major barrier to success was the strength of incumbent supermarket chains, so Tesco had

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How to|Technology

to come up with something new. Tesco’s play was to use a new form of electronic display for its supermarket-based products and to place those displays in high foot trafﬁc areas, recognising that local consumers were time poor, electronically savvy and high users of public transport. The supermarket placed large electronic display screens (entire walls of them) along the walls of subway rail stations. This provided a captive market to people travelling on the rail system. The displays were a visual representation of the traditional supermarket shelving so while customers were not able to touch and feel products they were able to see them displayed electronically in the same manner. In addition, price tags and barcodes were displayed below each product and customers could use a special app on their iPhone or SmartPhone to scan the barcodes and purchase the goods. So consumers no longer needed to go to the supermarket to do their shopping; they could simply

scan and buy as they were running to or from the train. The model was so successful that in a short period of time Tesco achieved the number two market share position in its category.

In Australia What if the Tesco model came to Australia? More particularly, it’s not if, it’s when. Provided the success factors of consumer

method is likely to attract a large number of consumers from all generations. Even Australia’s grey nomads and baby boomers have smartphones these days. As such this means the likelihood of fewer consumers using traditional supermarket stores is a likely outcome unless the stores themselves take on a new destination or experiential style of customer offer. Following this to its logical

How do these channels ﬁt with a traditional franchise model? How can they be harnessed to beneﬁt both franchisees and franchisors? convenience, speed of delivery and consumer adoption of the channel and technology are replicated then there are huge opportunities and threats for players in the Australian market. It is conceivable that such a model may be adopted in the supermarket or similar retail spaces in the next few years. Putting aside the potential fade factors, the mere convenience of the distribution channel and

conclusion, if fewer people are using the local supermarket then the supermarket owners no longer need large premises and footprints and in some cases may not even need the location. With a shrinking physical supermarket presence, what does this mean for other tenants in the shopping centres or retail precincts that traditionally cluster around the anchor tenants such as supermarkets?

CASE STUDY: ADIDAS VIRTUAL WALL Adidas, in conjunction with Intel, has developed an electronic wall to simulate display of its product range in-store. Here shoppers can visit a small footprint store and browse and buy. The wall displays the complete product range so even if a particular item is not in stock a customer can order it for delivery. This display format is more than just a good looking wall. It is interactive, quickly changable, takes up little room and gives a funky edge to the goods displayed. More importantly, nothing is ever unavailable so customers get full range selection and retailers capture more sales. These examples of technology and their placement open some interesting issues and considerations in markets such as Australia and in sectors such as retail and franchising. How would Australian retailers use a Virtual wall display like that from Adidas? 80| FRANCHISING NOV/DEC 2011

There are certain risk or threat issues to consider. What is the value in having a store in that shopping centre or precinct? What will happen to rents (theoretically rents should be lower if there is less foot trafﬁc in the centre due to lack of the key anchor tenant)? If a franchisee signs a long term lease what risks arise if a key anchor tenant reduces its format or abandons a site?

How should lease documentation be drafted to anticipate these possibilities and protect franchisees? In terms of opportunities, this style of distribution opens up new ways for all sorts of retailers to promote and sell their products. Conceivably these scanand-buy formats like Tesco can and will come in all shapes and sizes and inevitably will be placed in a variety of destinations accessible to consumers. This will be an exciting new channel for retailers as it takes electronic channels from the online space to physical points of presence but through technology and digital content.

Franchise opportunity?

Cost aside, this display format is probably more adaptable than the scan-and-buy model for Australian retailers as it ﬁts in the existing store. It can bring new foot trafﬁc to the store, it can increase sales per visit and due to the novelty factor could also help maintain or even raise margins. The Virtual wall could be used across an array of products, even services. WWW.FRANCHISE.NET.AU

So, how would franchises use this form of technology and distribution? The pace of new channel development including online channels and other electronic channels means franchisors need to be constantly planning for these new opportunities and threats. How do these channels ﬁt with a traditional franchise model? How can they be

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Technology|How to

CONNECT WITH THE FUTURE To view the Korean Tesco supermarket experience use your smartphone to access the QR code, left, or check out the video online at http://youtu.be/nJVoYsBym88

harnessed to benefit both franchisees and franchisors? How do you take protective steps to defend against possible intrusion or new competitive forces? A variety of strategic, operational and legal issues need to be considered in this new environment. For franchisors that typically construct their franchise model and legal documentation with a long term view, this can now become dangerous. If a franchise model is not flexible enough or quick enough to adapt to such changes then the customer proposition and distribution model can lose pace with market circumstance and prevent it from meeting customer needs and competing aggressively with new competitors. Franchisors need to think about constantly reviewing the market developments and how they apply to the franchise model and documentation. It’s important they stay tapped in to market information and interpret these developments for their business. Potential franchisees, particularly those considering stores and leases in retail precincts, need to consider: • How your local shopping centre or retail precinct may evolve. • Who are the anchor tenants and major drawcards to attract high foot traffic to your area? • What is the nature of their business and what if they

changed the way they did business, or even left? • How are you planning to attract customers to your store and how can these new digital formats be used to your advantage? • How will you set up your lease? • Would shorter renewal periods reduce risk (ie 3+3+3 years instead of 5+5)? • Are you locked in to CPI rent increases or can you seek rent linked to foot-traffic? • What obligations does the landlord have to promote your centre and attract customers? Larger landlords like Westfield still tend to hold the bargaining power and may do for some time yet, but as a business owner or franchisor there are now new circumstances emerging that require consideration and possible changes to approach and documentation. For fitouts, is your fitout flexible enough to adapt to Virtual wall opportunities and is the availability and price point commercially acceptable? These changes will come in some format and across many industries and the businesses that anticipate and pre-position for the threats and opportunities will be the growth businesses of the next wave. Those that don’t do this will almost certainly place revenue at risk and possibly survival of their business. F WWW.FRANCHISE.NET.AU

NOV/DEC 2011 FRANCHISING | 81

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Due diligence|How to

If you are considering buying a franchise, there are several things to be aware of before you sign on the dotted line or hand over your hard-earned cash, writes Dr Michael Schaper

BEWARE

THE WARNING SIGNS R esearch by Grifﬁth University in 2009 found that 49 percent of franchisees relied heavily on their gut feeling when deciding to go into franchising. This type of decision-making can make a potential franchisee an easy target for unscrupulous operators. If you’re thinking of becoming a franchisee, then doing thorough research about the franchise you are considering buying will help you make an

informed decision. Doing your homework will minimise the chances of you making a poor investment. Following the tips below will help you identify warning signs before making that all important decision to buy a franchise.

pre-entry education course. Grifﬁth University offers a free online education program for prospective franchisees. The program, funded by the

Do a pre-entry course Before you even begin looking at the different franchised businesses that are on offer, you should get a better understanding of how franchising works by completing a WWW.FRANCHISE.NET.AU

Often prospective franchisees choose not to seek advice as they think it’s too costly...but the value of obtaining advice is immeasurable NOV/DEC 2011 FRANCHISING | 83

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How to|Due diligence

Australian Competition and Consumer Commission (ACCC), is designed to educate potential franchisees about their rights under the Franchising Code of Conduct (the Code) and a range of other issues such as royalties, marketing funds and resolving disputes. For more information, visit www.franchise.edu.au/ pre-entry-franchise-education.

Get advice Your franchise agreement is a contract between you and your franchisor. Once you sign the agreement, you will be legally bound to its terms and conditions so it is important that you read the agreement carefully and ensure you understand the legal effect of what you are agreeing to.

A lawyer should help you to identify warning signs in the franchise agreement, including terms that unfairly favour the franchisor – such as the right to terminate the agreement even if you haven’t breached it The Code requires you to sign a written statement stating that you have received, read and had a reasonable opportunity to understand the Code and the disclosure document (which the franchisor must provide to you). It is essential that you read these documents. Don’t just sign the statement because you ‘don’t have time’ to read them. As part of the franchise purchase process you will also need to sign a statement that you have sought independent legal, business and accounting advice, or that you have been told that you should seek such advice and have decided not to. It is important that you do seek this advice from experienced practitioners so that you understand your contractual and ﬁnancial obligations. A lawyer should help you to identify warning signs in the franchise agreement, including terms that unfairly favour the franchisor – such as the right to terminate the agreement even if you haven’t breached it. 84| FRANCHISING NOV/DEC 2011

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An accountant should help you work out whether the business is ﬁnancially viable. For example, will you be able to recoup your investment within the ﬁve or 10 year term of the agreement (in case it’s not renewed)? Often prospective franchisees choose not to seek advice as they think it’s too costly. But to put the cost of advice in context, weigh it against the fee which you are going to pay to enter the agreement. In some cases this fee can be half a million dollars. The value of obtaining advice – especially if it prevents you from entering into a bad agreement – is immeasurable.

Speak to existing franchisees To get an insight into how the franchise system works and the relationship that the franchisees have with their franchisor it is wise to speak to existing franchisees within the network. The disclosure document must include a list of current franchisees and their contact details and you should try to speak to as many franchisees as possible. You should also take this opportunity to verify any representations the franchisor has made to you to date. If you receive negative feedback from existing franchisees, you must ask yourself: would I be happy to be in that position?

Speak to previous franchisees The disclosure document must also include contact details of some former franchisees and it is crucial to speak to these previous franchisees and ﬁnd out why they left. If the store or territory you’re buying is not a new one, make sure you talk to the previous owner of that territory or outlet about the business and their relationship with the franchisor. You should ask previous franchisees questions similar to those you asked the existing franchisees. When combined with the information you receive from existing franchisees, this should give you a clear picture of how the franchise system and franchisor operate.

Look out for scams! An important thing to avoid, and potentially the most ﬁnancially devastating, is an outright scam. Franchise scams usually promise a risk-free investment with immediate high returns. Warning signs of scam franchise opportunities include: • claims you can make large amounts of money quickly and with little effort—i.e. ‘get rich quick’ schemes • the franchisor is reluctant to give you the contact details of other franchisees, or only wants you to speak to certain franchisees • the franchisor is reluctant to provide any written >> continues on page 86

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How to|Due diligence

information, and is unwilling to confirm verbal statements in writing • a requirement that payment be made up front before any information is released • inconsistent financial information about the business’s profitability. It is strongly recommended that you seriously consider turning away from a particular business opportunity if you see any of these warning signs. If you decide to ignore them and buy the franchise, it may later amount to a bad business decision for which there is no remedy. Remember, if

QUESTIONS TO ASK FRANCHISEES: • • • • •

Has the franchisor stuck to its contractual obligations? Are they are satisﬁed with the level of training and support provided? Are they are earning what the franchisor said they would earn? Do they have reliable suppliers? Would they consider purchasing an additional outlet?

a business opportunity looks too good to be true, it probably is. In reality, only a minority of business opportunities available in the marketplace are scams. Provided you do your research beforehand you should not be caught by a scam. F

You should try to speak to as many franchisees as possible. You should also take this opportunity to verify any representations the franchisor has made to you to date

p 1300 552 883

f 02 4284 6099

Dr Michael Schaper is a deputy chairman of the ACCC. The ACCC is responsible for promoting compliance with the Franchising Code and the Competition and Consumer Act. The ACCC has several franchising publications containing useful information for prospective franchisees, including a Franchisee Manual and a DVD about the Franchising Code. These are available online at www.accc.gov. au/franchising or by calling the ACCC’s Small Business Helpline on 1300 302 021.

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Working capital|How to

When you invest in a franchise, your business is going to need the right amount of working capital. Tim Kilham explains why

orking capital is the money needed to fund the day-to-day operations of your business. All franchise businesses, indeed all businesses, have working capital and a working capital cycle. Angela Feery-Richards, the franchisor of Simply Helping, which provides respite and personal care services, says that one of the most fundamental requirements of her franchisees is to look after their working capital. She says “If they are not looking

after their de debtors deb btors and creditors they are not looking ki after their business.” Steve Rowarth, the finance and administration manager at Hotondo Homes runs financial management courses for his franchisees several times a year, with a particular focus on working capital management. He says that franchisees are welcome to attend the course more than once and many do. He believes control of working capital is a critical element of successful financial management.

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• • • •

major components The ma Th majo jor co comp mp po of w working capital orking g ccap apit i al aare: re Cash Debtors [accounts receivable] Stock [inventory] Creditors [accounts payable]

Working capital requirements Many people purchasing a franchise business fail to take into account the cash required to fund working capital, and indeed many people owning an existing franchise business do

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How to|Working capital

not understand working capital needs. For example, let’s assume that your business has the following working capital: • Debtors of $40,000 • Stock of $70,000 • Creditors of $25,000

suppliers and creditors also forms part of the working capital cycle. The working capital cycle can be expressed in terms of days. For example, if it takes 50 days from the time you buy stock and put it on the shelves until it is sold, if you sell on credit and your

Over the years I have seen many franchisees go into business without heeding their working capital requirements or understanding their working capital cycle, and their business suffered as a result Your working capital requirement is therefore $85,000 [$40,000 + $70,000 - $25,000]. This is the amount you need, over and above the outlay for franchise fees, ﬁxed assets and other items when acquiring a franchise.

The cycle The working capital cycle starts with cash. Cash is used to purchase stock to make sales. The stock is then sold, either for cash or on credit. When cash is received for the sale, that money is used to purchase more stock and so the cycle starts again. Of course, in many cases you will not pay cash for the stock you buy, but will purchase it on credit. The money owed to

debtors take 45 days on average to pay you, and if you pay your creditors 30 days after they have supplied you with stock, then your working capital cycle is now 65 days.

In other words, for every dollar of cash you invest in the business, it takes 65 days before that dollar is returned again to generate more sales. And until it is returned, you need to fund the business. Allan Tulloch is an independent consultant with vast franchise experience. He says “Over the years I have seen many franchisees go into business without heeding their working capital requirements or understanding their working capital cycle, and their business suffered as a result.”

Growth demands more funding Until now your business has required $85,000 of working capital. Let’s assume that because

WORKING CAPITAL CYCLE The average number of days between buying stock and paying for it ..................................................................... 50 days The average number of days it takes your debtors to pay you after making a sale .................................... 45 days 95 days Less: The average number of days you take to pay your suppliers after they supply you with stock .......................... 30 days Your working capital cycle

.............................................................................. 65

days

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healthy prof its! Healthy fast food phenomenon SumoSalad is now recruiting & weâ&#x20AC;&#x2122;re looking for energetic & passionate franchisees to join the team. If youâ&#x20AC;&#x2122;re hungry for success & have what it takes to dish up our delicious food, then we want YOU! Great franchising opportunities are available right now! Contact Graham on 0418 870 920

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How to|Working capital

of a very effective advertising campaign by your franchisor you are able to double the sales of your business. What effect do you think this will have on your working capital? Take a moment to think about this. You might be surprised. If you double your sales both your debtors and creditors are likely to double. While your stock is unlikely to double, for the purposes of this example we will assume that it does. Your working capital requirement is now: • Debtors of $80,000 • Stock of $140,000 • Creditors of $50,000 The total working capital is now $170,000. In the short run, you need to borrow a further $85,000 to fund your business expansion. Many franchisees are surprised when higher sales are not converted into improved cash flow. In the long run the extra sales will translate into improved cash flow [as long as the business is profitable] but in the short term, extra funding is essential.

How much do you need? There is no particular level of working capital that is correct for all businesses. The right level of working capital depends on

92| FRANCHISING NOV/DEC 2011

the industry you are in and the particular circumstances of your business. For example, negative working capital usually implies liquidity problems. However, if you are a retail food franchisee and you sell your product or service for cash, you will have no debtors. If you then also do not hold much stock, you might have – for good reason – negative

on by the skin of their teeth and sometimes get into a downward spiral that becomes a selffulﬁlling prophecy. So managing working capital is critical.” Let’s consider some of the different components of working capital, starting with debtors. Your business should not make a sale on credit unless you are satisﬁed that the debtor will

Many franchisees go into business leveraged to the hilt. Even if they are not highly leveraged, it is often difficult to get fresh funding to finance expansion or an unexpected hiccup in the business working capital. Each business has to find the right level for its working capital.

Managing working capital Tulloch points out that many franchisees go into business leveraged to the hilt. Even if they are not highly leveraged, it is often difﬁcult to get fresh funding to ﬁnance expansion or an unexpected hiccup in the business. He says “When this happens, franchisees cut costs, get

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be able to pay you the money. This requires having adequate credit control procedures in place to check credit worthiness before the sale is made. It is always a good idea if you are dealing with a company to get personal guarantees from directors, because in the event of a company getting into ﬁnancial difﬁculties the directors are more likely to ensure that the debt is repaid if they are personally liable for that debt. Once the sale is made, you need to have procedures in

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How to|Working capital

place to ensure that the debt is collected, preferably within the credit terms that you have laid down. These procedures include promptly and regularly following up your debtors and stepping up your collection efforts as soon as a debt becomes overdue. Feery-Richards says that when her franchisees communicate regularly with their debtors and understand their payment processes this can lead to much improved debt collection. In some cases, getting an invoice in a day earlier or making a call a day earlier can result in payment being received a week, or even a month earlier if it is processed in an earlier payment cycle. Bad debts are expensive. For example if you make a sale of $100, your gross proﬁt margin is one third and the customer fails to pay you, you have to make further sales of $200 just to recover the cost of the stock for which you have not been paid.

THE COST OF BAD DEBTS Sale price ............................................................................................... $100 Gross proﬁt .......................................................................................... $ 33 Cost of goods ..................................................................................... $ 67 If you are not paid for the goods, to recover the cost you need to make further sales of $200, as shown below. Further sales ....................................................................................... $200 Cost of goods for this sale ................................................... ($133) Cost of goods relating to the bad debt ........................ ($67) Net result................................................................................................ $ 0

Total sales required to return to a neutral position are therefore $300. Do everything you can to avoid bad debts.

Stock Managing the level of stock is an important part of business for many franchisees. The costs of excessive stock include tying up cash which could

Bad debts are expensive. For example if you make a sale of $100, your gross proﬁt margin is one third and the customer fails to pay you, you have to make further sales of $200 just to recover the cost of the stock for which you have not been paid

be used for other purposes, and the danger of obsolescence and deterioration of stock. On the other hand the cost of carrying too little stock is mainly the cost of missing a sale, and history shows if you lose a sale you are likely to lose not only that sale, but the customer forever. Methods of controlling stock range from sophisticated computer systems to unsophisticated manual systems.

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Become a and join Australiaâ&#x20AC;&#x2122;s Number #1 I.T. Support franchise! Business is all about relationships. Supergeek franchisees care about providing dependable support to their extensive client base, creating a reliable income stream for themselves with our highly developed, easy to operate and fun business model. The company is driven and focused to provide a solid stream of convenient support solutions to home computer users and the SME sector. To ensure sustainable and fast paced business growth, our new franchise owners are supplied with a comprehensive start-up and support package. Including active help in setting up business, on the job training at commencement and practical guidance from their own completely independent and experienced business coach. A Supergeek Franchise offers low start up costs and challenging opportunities for open-minded, dynamic and enthusiastic franchisees to the mobile IT and computer maintenance industry.

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How to|Working capital

Whichever system works, proper control of stock may be critical to managing your working capital.

Creditors It makes sense to pay your suppliers (your creditors) as and when their invoices become due but not before. Some franchisees pay their suppliers as soon as the cash becomes available. This is not a good use of your funds â&#x20AC;&#x201C; the funds could be better used by being invested and earning interest or, possibly, buying more stock. You should, however, try to pay your suppliers on their agreed terms. You expect your customers (your debtors) to pay you within your credit terms so you should try to do the same with your suppliers. Rowarth points out how

recent weather conditions in Australia have impacted franchisees in the building industry. After years of ďŹ ne weather, heavy rains around the country have resulted in builders not being able to complete a stage and claim payment. Notwithstanding this, suppliers naturally require payment for work they have done. Rowarth

of earning 30 percent on those funds over a year. It would be hard to ďŹ nd a better investment.

Conclusion As a business owner, you need to understand what working capital is, what the working capital cycle is and what the risks associated with working capital are. It should be apparent that every business

You should try to pay your suppliers on their agreed terms. You expect your customers to pay you within your credit terms so you should try to do the same with your suppliers says that â&#x20AC;&#x153;In these times it is particularly necessary for franchisees to micro manage their working capital â&#x20AC;&#x201C; and it also emphasises the need for franchisees to have a good relationship with their bank manager.â&#x20AC;? If your suppliers offer you discounts for early settlement, then you should try to take advantage of those discounts. If, for example, a supplier offers a discount of 2.5 percent for paying on 30 day terms, and you take advantage of that discount each month, that is the equivalent

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needs to actively manage its working capital. Your cash, the lifeblood of your business, is tied up in your working capital. If you actively manage your working capital and cash ďŹ&#x201A;ow you will be able to make more informed decisions, know when you are likely to experience cash surpluses or cash shortages and plan ahead with more conďŹ dence. F Tim Kilham is a director at Lanyon Partners Chartered Accountants and specialises in franchising. Contact: timk@lanyonpartners.com.au or 03 9861 6100

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Training|How to

Web access is so easy and widespread that putting training online makes sense for a franchise system. And it helps the franchisee too

LINES OF COMMUNICATION

n the highly competitive Australian franchise marketplace, often the deciding factor for potential franchisees, after system affordability and suitability, is the manner in which the franchisor provides initial and ongoing training. Traditionally, franchise organisations offer new franchises a one to four week on-site, face-to-face and on-the-job training program. Depending on distances required to travel and living away from home expenses, this initial training cost can represent a major chunk of the franchise fee. MindAtlas director Adam Wiser says that in the highly systemised franchise industry, training is essential, however there are more cost-effective and time efﬁcient options available. “By their very nature, franchises are systemised businesses and therefore consistency is key, from the way franchisees present themselves, their staff and their workplace, to the way they run every facet of the business. In an industry that’s so systemised, if training doesn’t follow suit then the system may not achieve the desired results.” MindAtlas offers eLearning solutions, designed speciﬁcally to deliver measurable results to the franchise industry. The company’s franchise clients include brand names such as Clark Rubber, La Porchetta, Hairhouse Warehouse and Tyrepower. It’s possible to combine eLearning with traditional training methods to provide a blended approach to training, as Wiser explains. “We recognise that eLearning can’t replicate

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How to|Training

everything, but by assisting our client through a blended offering where a combination of training methods are delivered, we can ensure that all competencies

In an industry that’s so systemised, if training doesn’t follow suit then the system may not achieve the desired results

Natalie Brennan

within the training area are able to be demonstrated and applied in their job role, and that the results are measurable. “For example a trainee may get 10 out of 10 online, but they need to be able to demonstrate that competency, so part of the module would involve the trainee completing a practical demonstration of the competency in a real, on-the-job environment.”

Serving up online training Online learning is now an essential tool for both franchisee and franchisor, as highlighted by Natalie Brennan, national service and support manager, at FoodCo, the franchisor for Mufﬁn Break, Dreamy Donuts and Jamaica Blue. For both partners in a franchise relationship, franchisee and franchisor, convenience and

consistency are the overwhelming benefits to adopting e-learning as an integral part of the business. If you consider the day to day demands of a franchisee in a retail food environment, fitting in traditional training (either for the franchisee or their staff) can get overlooked. So providing a learning facility that can be accessed at a time that suits the individual releases the pressure. And for the franchisor, employing online communication for training improves efficiency, maintains consistency across the network and is easier to manage. Says Brennan, “Instead of a million bits of paper, we can come online and it will all be there. Everything from banking, scheduling to cash sheets. It’s about being self-reliant. We’ve found it’s better and there’s more consistency.” To achieve a nearly paperless world the FoodCo group uses an online system called World Manager and this provides

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Training|How to

WHY CHOOSE E-LEARNING? • Training can take place anywhere, at any time (staff can even access training via their mobile phones or iPads) • Users can learn at their own pace • Training costs are lower (no trainers, travel, materials or venues to pay for) • Material is easily updatable and instantaneously deployed network-wide • Training progress and reporting is easily handled via a Learning Management System. MindAtlas the network of stores and management team with a way to communicate across the country.

How does it work in practice? When a franchisee starts up in the FoodCo business, training is about learning immediate skills and business aptitude, proﬁt and loss, cashﬂow and recruitment. The new franchisee has up to one week training in a store, then spends about 10 days in their own

store with a ﬁeld trainer on hand to guide them through the initial challenges of business ownership. The intranet becomes a signiﬁcant tool in keeping up to date with skills and information as the business grows. Franchisees can access the World Manager from any web tool, ensuring all franchisees can stay well informed even if they don’t maintain their own web address, which, Brennan says, does happen. Once they have read a training session or

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communication they just tick a box; management teams monitor this and can follow up with a phone call to those franchisees who haven’t seen an essential communication. Some courses are compulsory to maintain minimum standards, otherwise franchisees are in default of their agreement. The training elements are set up for speciﬁc roles and these are reﬂected in the program access levels. When a new member of staff joins a franchise, they have access to the appropriate information online. Some

It’s a direct link to all staff and helps maintain the minimum standard interactive elements replace an induction booklet for staff, and the franchisee can maintain a record of in-store training. For instance, competitions are run regularly to ensure staff are fully

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Training|How to

up to date with developments in the coffee side of the business. Brennan believes it’s a great tool for working in a food retail environment that employs a lot of Gen Y staff because it acts as an easier and funkier notice board. “Franchisees now use it for rosters, messages and do all their reports online and can use it to check if staff haven’t checked the roster.” Each brand has specialised information, whether that’s regarding product launches, promotions or in-store processes and performance. “Before this we wanted to launch products and found staff wouldn’t know about

it. The biggest advantage now is direct access to franchisees’ staff. When we launch or communicate now we go to this 4,000 strong membership who can log in when they like. We’re ﬁnding we’re communicating more.” Communication travels across the network too, not just from head ofﬁce outwards. The program also includes a forum function for franchisees. “It’s like their own Facebook and staff have their own too. We don’t have to intervene so much, they sort out their own problems,” Brennan explains. What’s good is the extensive reach of the support

TRADITIONAL TRAINING After a franchisee has been in business for six months they attend four days of external training that focuses on business components, accounting, recruiting, merchandise, leadership and specialisation. There is no charge for this training. “We train about 80 stores and each franchise can send two people. Once the franchisee is back, they will send their manager.” Field consultants can also run courses to help with speciﬁc issues.

WHAT CAN AN ONLINE SYSTEM DO? • Update price lists, compliance, food safety legislation • Inform about product launches and promotions • Provide communication on staff management issues • Provide a forum for franchisee conversation and mentoring • Help with staff induction • Act as a tool for ﬁnancial and management tasks

network that’s achieved by online communication. “It stops franchisees feeling isolated,” she adds. Moving so much communication online does not, however, replace the phone, insists Brennan. Franchisees still call the support team for help. World Manager

What’s good is the extensive reach of the support network that’s achieved by online communication doesn’t replace physical trainers either but it allows for collation and organisation of material online. It stops endless emails too. Right now the training is being mapped to accreditation, so franchisees and staff can do relevant level certiﬁcates of small business and hospitality. There are higher level modules for franchisees and the company can keep adding to them. So is it worth the investment and time to get installed? “It’s a direct link to all staff and it helps maintain the minimum standards,” says Brennan, who goes on to cite another indication of its efﬁcacy: coffee sales have increased over the three years of its implementation. F

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How to|Expand Your Brand

EXPANDING YOUR

After 23 years with McDonald’s, Merrill Pereyra has written a book about strategies to grow a business. In this edited extract from Expand Your Brand, he shares his tips for being the best you can be for yourself and your team

SUCCESS

‘m being whimsical here but in all truth I learned early on that my ﬁrst responsibility is to myself. I have a responsibility to my body, mind and spirit to be at my optimum. Everything else comes second. I learned that a healthy body really does support a sharper mind and a happier disposition. I never liked the concept of

104| FRANCHISING NOV/DEC 2011

getting the right ‘balance’. If you’ve worked for yourself for long enough you’ll know that the balance tips weekly and sometimes daily. Perhaps it’s semantics, but a word that works better for me is harmony. I could do various things in my business life, family life and personal life that invariably would look different each week and change

ratio – but as long as they played some sort of harmonious chord, I knew I was on the right track. In short, I did my best to follow a regime and I remained ﬂexible enough to keep the pressure of ‘having to do it’ at bay. Expanding and growing a business is a stressful process. It takes an extra concerted effort to

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A new way to connect with your customers RedCat’s new mobile phone application allows hospitality and franchise outlets to have their own branded iPhone application as well as working as a web application on other mobile devices. It also offers the ultimate in convenient ordering, allowing customers to prepay and pre-order food at their desired time directly from the application. Purchases can be paid for using points, pre-paid gift cards or credit card. Orders will be sent direct to the Point of Sale at the store and will print out automatically, at the correct time, without the need for any interaction by the staff. The application can also be conﬁgured to be used as a self ordering kiosk at store level. Not only will it streamline the ordering process, it will allow you to take advantage of the dramatic increase in popularity of coupons. Research shows that globally, mobile coupon redemptions will exceed $6 billion by 2014*. Hospitality outlets can also use the application to deliver targeted and relevant advertising offers directly to their members which can be redeemed and tracked seamlessly through the RedCat Point of Sale system. * Jupiter Research

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Targeted marketing sent directly to your members. Relevant. Immediate. Redeemable at POS.

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Save favourites, pay using points, vouchers or credit cards and send orders to the store.

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How to|Expand Your Brand

By keeping my core business values in the front of my mind I was able to get motivated. By keeping my goals and my values aligned I was able to stay motivated. When I worked hard and played hard I found I was able to spend much more quality time with my family.

16 top tips for staff motivation Keeping staff motivated and keeping staff retention high is always a challenge. I was against locking staff into contracts and believe there are far better ways to keep your team motivated and stimulated. Here are some of them: 1. Build mutual trust and respect. Without your team you are nothing and without you your team are often ﬂoundering aimlessly. 2. Build understanding. Getting your team to see things from different perspectives helps build mature working relationships. Teaching them

Merrill Pereyra

Abstract rhetoric and unrealistic goals will alienate members of your team and actually de-motivate them keep a healthy mind and body to complete the task with your sanity in good working order, not to mention your heart and liver. I made personal ﬁtness a hobby. I also used this time to reﬂect on all that I do have and have achieved as well as time to refashion my goals and life-path.

to see difference as interesting rather than wrong often removes volatile right or wrong scenarios. 3. Be interested in all your staff and learn their names, no matter how many! 4. If you have an established brand ensure that your staff

SOME KEY POINTS TO BUSINESS SUCCESS If you skimp on training at the start you will pay in the end so consider recruiting pretrained staff for the initial start-up phase. You don’t need elaborate or sophisticated training tools – get creative and keep it simple. Training is something you do with people, not to people; training is not a one-way relationship, it is a relationship in which both parties share responsibility. Training is not a one off process but an ongoing process so continuous learning should be woven into the everyday fabric of your business if you want to achieve long lasting results. Your team is made up of individuals. Treat them that way! 106| FRANCHISING NOV/DEC 2011

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knows that they have been selected because you believe they can make a valuable contribution. Never give the attitude that they should be lucky to work for you because of your brand power or prestige. Build motivation and foresight. Your team needs to feel that their efforts are seen and rewarded and most importantly that there is a purpose. Set goals or rewards that mean something to them. Find out what motivates them individually. Abstract rhetoric and unrealistic goals will alienate members of your team and actually de-motivate them. Take time to train: make it matter. For example, I used to run a class for staff who were 15 to 16 years old and showed them the path they could take to get to be managing directors in the company or transfer those skills to another company. They might not aspire to be the MD of McDonald’s but they might aspire to be the MD of a cool skateboard fashion range. I used to use real life examples of people like Charlie Bell who started out as a 15-year-old crew person and then went on to be the global CEO of McDonald’s or Guy Russo who also started as a crew member and then went on to run McDonald’s Australia and China. Focus on harnessing natural talents and learning new skillsets. We all want to be seen for who we are and the gifts we bring. We also need to keep on learning for our self-value to continue to grow. Either provide or initiate training programs that will appeal to your team, especially your younger employees. Support your staff in their personal and professional development, especially when >> continues on page 109

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Expand Your Brand|How to

>> continued from page 106

they get discouraged with personal, political or global events and impacts. 9. Young employees have little relationship to the future. Help bridge the gap between impulse and instant gratification to wise and delayed gratification without sounding like a nagging parent. Teach them the concept of the bigger picture. 10. Build your training around recognition and reward. Sometimes in smaller, poorer countries where cash-flow was critical we would ensure that rewards were never slashed. You can get creative with low cost rewards. However, make it something relevant and appropriate to the age and experience of your team. 11. Have informal regular check-in sessions. Perhaps a buddy system will achieve this at very low cost. 12. Ask your employees for feedback – what works and what doesn’t and then publicly acknowledge them for any changes that are implemented, based on their suggestions. 13. Make the work environment fun and diverse – implement a 12-month social plan as well as business and marketing plans. 14. Where possible have a day each couple of months when leaders, senior management and management work on the floor. 15. Look at a benefits scheme – what perks can you offer your staff? It could be a gym membership discount. 16. We gave many of the staff the opportunity to train overseas. This was a huge

ABOUT YOU • Make healthier choices for your body – it’s the machine that needs daily servicing. Most people spend much more money on their car! • Get interested in the science of health, read health magazines and stay inspired and focused within your new hobby • If you have time, take the stairs • A healthier you leads to a healthier business • Illness always costs much more than you think • Cultivate discipline, willpower, resilience and stamina bonus and motivational incentive. Many of the employees had never left their hometown. When looking at time off, respect other culture’s traditions around births, deaths, weddings and other key events. F

Expand Your Brand - how to supersize any brand anywhere in the world, by Merrill Pereyra. All proﬁts are going to the Family Room at the Colonial War Memorial Hospital in Suva, To purchase the book visit www. expandyourbrand.com.au WWW.FRANCHISE.NET.AU

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Paying tax|Advice

There are solutions to help businesses struggling to meet their tax obligations

What happens if…

I have difﬁculty paying my business tax

urchasing a franchise can be a wellcalculated investment, one that returns attractive ongoing income and may result in a nice lump sum to bank or invest again when the business is sold. To run a successful business requires constant attention to finances, regulations and tax concerns. As business owners, franchisees will benefit by keeping their finances in order so there are no unpleasant surprises when it comes to the tax return. Tax payments can be an overlooked aspect of trading for first time business owners, and more than one start-up operation will have struggled to meet its early tax obligations. But payment struggles aren’t restricted to novice business owners. No-one can predict all the challenges and the downturn of business that franchisees will face in the lifetime of a franchise agreement. It may be that personal events have an impact on the business; or it could be the tough business conditions of the marketplace that mean a change of plan. The Australian Tax Office (ATO) is cognisant of the fact that small businesses can experience shortterm financial difficulties because of difficult trading times or unexpected events, whether that’s a health

Where businesses don’t address their tax debts, we may take firmer or legal recovery action issue, a fire or a natural disaster. The ATO offers help to viable businesses having trouble meeting their tax payment obligations due to such short-term difficulties. So what help can the ATO provide? The ATO has a well established framework to support businesses in meeting their tax payment obligations and offers a range of practical assistance. Two specific forms of assistance are available: flexible payment 110| FRANCHISING NOV/DEC 2011

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arrangements that align with cash ﬂow and the remission of general interest charge (GIC) where appropriate.

Help on hand There are occasions when the ATO will offer payment arrangements for activity statement debts free of GIC for up to 12 months. These arrangements are aimed at helping small businesses that have a good history of meeting their tax lodgement and payment obligations but are experiencing short-term financial difficulties. So what sort of financial gain is achieved with the GIC free payment? An ATO spokesperson says “the benefit is that the interest component of the debt does not accrue over the life of the payment arrangement. The general interest charge for the December 2011 quarter is 11.86 percent.” Who is eligible? Franchisees whose business has an annual turnover of less than $2 million could be eligible for a GIC-free payment arrangement. But other factors must be taken into account, and the ATO insists that all the following points are met for eligibility: • A franchisee with a recent activity statement debt of $50,000 or less, which has been outstanding for no longer than 12 months • A business with a good payment and lodgement compliance history, including no more than one payment arrangement default within the last 12 months • No outstanding activity statement lodgements • A business unable to obtain short-term finance through normal business channels • A business able to demonstrate ongoing viability • And one that agrees to a sustainable direct debit payment arrangement that will allow the debt to be paid within 12 months. What happens if the business is young, with no tax history? Says the ATO spokesperson,

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Paying tax|Advice

agreement with the ATO is made, and it ends on the due date of the ﬁnal instalment. If a business defaults on the arrangement the GIC-free period will end on the date of default. The business owner is required to meet all ongoing tax payment and lodgment obligations. The repercussions for not tackling a tax problem head on could include further ﬁnancial pain. “Contacting the ATO early gives businesses more opportunity

The ATO can offer a helping hand

“Our decisions are based on a consideration of individual circumstances.”

How does it work? The business owner will not have to pay GIC on the activity statement debt for a maximum of 12 months from the day on which they enter into the arrangement with the ATO. The GIC-free period begins the day the

“Also, where businesses don’t address their tax debts, we may take ﬁrmer or legal recovery action.” F

How does a business apply? Registered users can access the ATO through the Business Portal. Submissions can also be made by phone on 131142 between 8.00am and 6.00pm, Monday to Friday.

Contacting the ATO early gives businesses more opportunity to address their tax debts before they escalate and become unmanageable to address their tax debts before they escalate and become unmanageable. This improves their prospects for ongoing viability,” says the ATO spokesperson.

For further information check out www.ato.gov.au/debt or contact the ATO. A fact sheet is also available at www.ato.gov.au/ﬁrmeraction.

Lawyers for LAWYERS FOR Franchisors FRANCHISORS

- Do you sell goods to your franchisees on credit or terms? - Do you lend money to your franchisees and take security? - Do you use invoice discounting or debt factoring? If so, your franchise is likely to be susceptible to the new Personal Property Securities Act.

Visit www.mk.com.au/pps2012.pdf for more information.

News laws will apply from early 2012.

Alternatively, contact our franchise experts on:

The new laws also influence lending, discounting, debt factoring and a myriad of other issues that will affect your franchise.

Victoria New South Wales Queensland Tasmania

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@mklawyers

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Advice LEGIT | LEGALESE MADE EASY

When disclosure is not all it seems

W ESTHER GUTNICK Esther Gutnick is an associate, franchising team, Mason Sier & Turnbull Lawyers

hen purchasing a franchised business, there is a level of due diligence that should be conducted over and above the usual examination of the business and its records: the analysis of the franchisor and the franchise system as a whole. Properly completed disclosure documents, that are compliant with the Franchising Code of Conduct, contain much informative, relevant and useful data about the franchisor. However, franchisees must keep in mind that disclosure documents may not have been completed properly or may provide only the bare minimum of information required under the Code. These documents are usually only updated annually and as a result, some of the data may be outdated. Franchisors often forget or neglect to review their disclosure documents to update obsolete information. All too often, franchisees review, accept and rely on the information provided in the disclosure document to make a decision about the franchised business without making further enquiries. If any of the information in the disclosure document later proves to be outdated, untrue, incorrect or missing, franchisees may query whether they would have purchased the business had they been aware of the information or the true position. By this stage, the franchisee may already have incurred losses. Some areas which prospective franchisees should seek to investigate include:

The people behind the franchisor Potential franchisees must look beyond the franchise’s disclosure documents when completing their due diligence

Franchisees can ask their professional advisors to undertake searches of the Australian Securities and Investments Commission database to conﬁrm the ownership and ofﬁceholders in the franchisor company. If there are any doubts or concerns, it is possible to conduct

additional searches which provide further information in relation to individual directors or shareholders, including their credit history and asset holdings. Bankruptcy searches can also be done.

Litigation Any information given in the disclosure document relating to proceedings or judgments can be conﬁrmed. Franchisees should instruct their lawyer to conduct searches of reported and unreported cases to check whether the franchisor has omitted mention of any litigation.

Intellectual property Franchisees’ advisors can conduct trademark searches to conﬁrm the status of any trademarks and logos which the franchisor claims to own or use, including registration details and whether any other party has lodged a claim in opposition to the use of any particular trademark. This could ultimately affect the franchisor’s rights to use a trademark or logo and consequently impact on the value of the franchisee’s individual business and the franchisor’s brand as a whole.

Key events At item 6.4 of the disclosure document, the franchisor must provide certain information relating to key events in the franchise network in the last three financial years. Key events include franchisee sales, terminations and franchises that have ceased to operate. To confirm this information and obtain further details, franchisees should talk to as many past and present franchisees of the network as possible. Contact details of current and former franchisees should be contained in the disclosure document. Franchisees must bear in mind that the opinions of each franchisee interviewed will be subjective and one-sided, but they will also be the best, and only, first-hand account of experiences in dealing with the franchisor and the franchise system.

General information Using technology, franchisees can instantly access a wealth of information. Internet searches can reveal relevant news articles, industry reports or discussion forums which may provide a different viewpoint. But remember that not everything that is written can be believed. It is only with the beneﬁt of complete information that a franchisee can make an informed, wellconsidered decision about a franchisor, and when a franchisee enters into a franchise with full knowledge and eyes wide open, they will be best prepared for and protected against whatever may come. F WWW.FRANCHISE.NET.AU

NOV/DEC 2011 FRANCHISING | 115

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Opinion THE SKETCH | TRENDS AND DEVELOPMENTS

A vision of the future

ANDREW TERRY Professor of Business Regulation at the University of Sydney and consultant to DC Strategy

he website of The Canadian Association notes that “Mission, vision and values are supposed to be the North Star of strategic planning, the beacon by which organisations set their strategic compasses and then align their everyday priority settings.” For the uninitiated, the Mission Statement is a statement of the fundamental purpose of the enterprise. The Vision Statement outlines what the enterprise wants to be and is a source of inspiration providing clear decision making criteria. The Values Statement provides the tools for ‘walking the talk’. What particularly resonated with me was the acknowledgement that the prospect of attending a visioning session is not always greeted with enthusiasm by the conscripts: “Held captive in a windowless room, hallucinating slowly from too much coffee. We’ve wordsmithed with a warring group of colleagues well beyond the point of caring. The result is a mission statement that looked much like our last one – and like everybody else’s. Or else we’ve crafted a vision so lofty, outrageous, or abstract that seeds of doubt are planted before we leave the room.” We’ve all been there. In this respect at least, academia and reality are not worlds apart. The Canadian Association nevertheless advises perserverance as the results are worth it. Sadly my university experiences with

Without a clear vision and a strategy to implement it, a franchisor, and the unfortunate franchisees, may survive but are on a relatively aimless journey brainstorming have never produced anything quite as exciting as Google’s “Don’t be evil.” Or as honest as Galacticomm’s “To do really cool things in the ﬁeld of computer communications and make a buck at it.”

Clear-sighted While there may be scope for some cynicism in relation to the expression of the enterprise’s vision there should be none in relation to its existence. Without a clear vision an enterprise, a government or an individual has no real point of reference. Things will be done – but they will be done because they have been done in the past and pretty much in the way they have been done in the past. There will be changes and developments and even innovations but without a clear big picture they will not be part of a concerted strategy. 117| FRANCHISING NOV/DEC 2011

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True innovation can’t happen without an appropriate vision or mission statement

An enterprise’s vision is as important in franchising as it is in any other business endeavour. Possibly more important given that the vast majority of our successful franchise systems did not emerge fully formed but evolved from the vision of an entrepreneur in identifying and exploiting a market niche and developing a proven business system around the concept which could be rolled out through a franchised network. Not surprisingly it is the vision of the franchisor which has the highest proﬁle. Without a clear vision and a strategy to implement it, a franchisor, and the unfortunate franchisees, may survive but are on a relatively aimless journey and are always vulnerable to the competition of a visionary franchisor with a clear idea of what the goals are and how to achieve them.

Making it real But franchisees should also have a clear vision in operating their franchised businesses. A number of factors impact on a franchisee’s success but probably more important than the site or the territory or the demographics is a clear vision of the particular franchisee. The recent PwC 2011 Franchise Sector Indicator Report notes that currently only 11 percent of all franchise units are owned and operated by multi-site franchisees and that franchisors believe that a further 15 percent of their franchisees have the potential to become multi-unit franchisees. There are a number of factors at play here but perhaps the single most signiﬁcant issue is the vision of the franchisee. Those franchisees with the vision to be multi-unit franchisees will be much more likely to formulate the appropriate steps required to achieve this. The future is going to happen, but those who have a clear vision of this future and of their role in it are much more likely to do what it takes to succeed. F

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Opinion ASSOCIATION | FRANCHISE COUNCIL OF AUSTRALIA

STEVE WRIGHT Executive director Franchise Council of Australia

Getting the balance right

A voluntary retail leasing code could address franchisee concerns

Does retail need a leasing code?

he Franchise Council of Australia is watching with interest as the Western Australian Government moves ahead with a review of retail tenancy regulations, focused particularly on the disclosure imbalance that sees many franchisees forced to provide a lot of economic data to landlords but who are not the recipients of reciprocal disclosure about rents. This information disclosure imbalance is an historical anomaly and it is time it was removed. In the franchising sector the FCA goes to great lengths to ensure franchisees have all the information they need to make sound commercial judgments. When they enter into a lease, particularly in shopping centres, they often do so in the face of long, complicated legal documents forcing them to disclose store turnover, when they get no such disclosure about current rents. At present the information imbalance distorts the market, and places tenants at a substantial disadvantage in lease negotiations. About one in three franchise systems are involved in retailing, with many franchisors and franchisees occupying tenancies in major shopping centres. On March 31, 2008, after conducting a detailed inquiry, the Productivity Commission delivered its report to the Federal Government concerning the market for retail leases in

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Australia. The Productivity Commission recommended that a code of conduct be drafted to provide minimum, industry-wide standards in matters such as: • transparency in dealings between landlords and tenants • rent increases and disturbances • end of term arrangements • lease terms • dispute resolution procedures The nature of these problems has been well articulated in submissions to the inquiry, and is summarised in the Consultation Regulatory Impact Statement. It is worth reﬂecting on some key points in the context of the franchising relationship: 1. The information imbalance is not an accident, nor a natural incident of the operation of the free market. It occurs because landlords require tenants to disclose turnover as part of the lease, and without there being a reciprocal obligation on landlords to disclose other information concerning rental, outgoings and other matters. 2. Landlords still frequently require the turnover information even where rent is not set by reference to the turnover information. 3. Landlords often make it difﬁcult for tenants to obtain market information. Some tactics include deliberately delaying the lodgment

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ASSOCIATION | FRANCHISE COUNCIL OF AUSTRALIA

of lease information in states where leases are registered, and using various techniques to inflate the rental figure, including rebates, rent free periods and incentives. 4. Technology makes it very easy these days for landlords to collate and share information. In a franchise network tenants are particularly disadvantaged. Landlords can develop an understanding of the franchise model from one location and leverage that information across their property portfolio. When it comes to end of term lease negotiations the landlords knows how far they can push the rental. The franchisee has little or no bargaining power; if the tenancy ends the franchisee loses everything. The FCA strongly supports the Productivity Commission recommendations, and in consultation with other industry participants has taken the lead in implementing the recommendations. This has led to the FCA commissioning the first draft of a Retail Leasing Code of Conduct (the Code) and it is now seeking endorsement by industry bodies and other stakeholders. The Code is intended to take effect as a voluntary code pursuant to the Competition and Consumer Act 2010, with parties subscribing to the Code and thereby agreeing to be bound by it. It is therefore

The information imbalance distorts the market, and places tenants at a substantial disadvantage in lease negotiations important that the Code obtains broad support from Australian retailers, as it will then have sufﬁcient momentum to enable the FCA and others to persuade landlords to become signatories. The Code has been developed based on the guidelines for industry codes, which were developed by the Federal Government, with input from the ACCC. The conduct of the proprietors of major shopping centres is a major concern. The FCA still hears far too many stories which fair-minded people would regard as unacceptable. Part of the problem is the substantial information imbalance and inequality of bargaining power between landlords and tenants. The FCA is concerned this information imbalance and inequality of bargaining power is distorting the free and fair operation of the market to the detriment of franchisors and franchisees in particular. This voluntary code for landlords, tenants and representative organisations has been compiled to address member concerns over the extreme 120| FRANCHISING NOV/DEC 2011

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behaviour that occurs far too frequently within the franchising sector. Some member concerns include: • Excessive and unjustified rental increases in major shopping centres • Unreasonable behaviour in relation to end-ofterm arrangements for sitting tenants • Unreasonable and costly requirements in relation to shop fit-out and signage • The substantial information imbalance between landlords and tenants • Abuse of market power where landlords offer contracts on a take it or leave it basis. The market mostly operates fairly, but there have been enough instances of inappropriate circumstances that something needed to be done. Looking back to WA, its Government’s Commercial Tenancy (Retail Shops) Agreements Amendment Bill 2011 is currently being debated by parliament. The FCA supports any initiative that will improve the efficient operation of the market. Of the alternatives proposed by the Government in its consultation paper, the FCA believes the first option of extending valuer access to be the most appealing. The FCA does not support maintaining the status quo, and does not wish to see disagreement as to the method of resolving the problem stand in the way of reform. The FCA notes the background paper comments regarding a previously proposed requirement for landlords to maintain a register of leases for each shopping centre. The FCA supports this option, and indeed considers it to be a superior solution to any of the options outlined in the Consultation Paper. The FCA is unsure why there was not broader support for this proposal, and would welcome a decision to revisit the issue. In this context we would happily survey our members, so that the Government had detailed information from a representative sample of tenants. As a method of levelling the balance of information availability, the FCA would support the banning of turnover-based rental and information collection by landlords. However the FCA considers the options in the Consultation Paper to be a better solution. These are important aspects that the FCA believes warrant attention in addition to the issue of access to information. F *The Franchise Council of Australia (FCA) is the peak industry body for the $128 billion Australian franchise sector, representing franchisees, franchisors and service providers in the sector. About one in three franchise systems are involved in retail, with many franchisors and franchisees occupying tenancies in major shopping centres.

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Opinion PEOPLE | LEADERSHIP

Why we need to face our fears

GREG NATHAN Psychologist, managing director of the Franchise Relationships Institute, public speaker and author of Proﬁtable Partnerships

ome years back I took my niece to the Brisbane Show. She, being a kid, wanted to go on all the adrenalin inducing rides. I, being an adult, wanted to play it safe and watch. Despite being older, wiser and in charge, I soon somehow ended up zooming and spinning upside down through space. While most of the experience is a blur, I do remember a moment of clarity when she interrupted my screaming with the following advice, yelled with a mixture of authority, concern and sadistic glee, “Uncle Greg, face your fear!” Face my fear? She was absolutely right! What exactly was I screaming about? The irony of a primary school student telling a qualiﬁed psychologist to face his fear was not lost on either of us and she still teases me about the incident to this day.

Risk assessment Fear is a physical and mental experience where we believe our safety is at risk. The mind reacts accordingly, telling the body to “get the hell out of there” or “get ready to defend yourself”, which is why our heart starts beating fast and we tense up. As the blood moves from our brain to our muscles our thinking switches from being logical and strategic, to being emotional and tactical. We focus on what could go wrong, often exaggerating this to what WILL go wrong. We can also become defensive and emotional. This largely happens unconsciously as a fight/flight reflex. All we know is we feel uneasy and stressed. Everyone experiences fear in daily life to a greater or lessor extent, depending on their

When big decisions are to be made, such as buying a business, a mild amount of fear or caution is useful personality, what’s happening in their work or home environment, and the types of decisions they need to make. The truth is, except for extreme conditions where our physical safety is indeed at risk (like ﬂying through the air upside down), too much fear is counter-productive and causes our imagination to run amuck. This is why it is sometimes referred to as “False Expectations Appearing Real”. When big decisions are to be made, such as buying a business, or making an investment, a mild amount of fear or caution is useful. We deﬁnitely should not allow ourselves to be seduced into a false sense of safety by the sweet talkings of a kind and reassuring salesperson. 122| FRANCHISING NOV/DEC 2011

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Too much fear can be counter-productive

However too much fear or caution can lead us to overstate the risks and procrastinate. There is no way we are going to succeed in life, especially in business, if we avoid taking some risks. The key is to weigh these risks up by asking ourselves the question, “what realistically is the worst thing that could go wrong, and if it did, could I manage this?” By thinking clearly and objectively we can also set up a plan B, should things not turn out the way we would like.

Take action Here are some other tips to help you control the fear factor and make good business decisions: • If you are experiencing physical symptoms, slow down your breathing, focus your attention on something in the immediate environment and give yourself a little pep talk. I say to myself “Settle down Greg, it’s all okay. You can work this out.” • Write your fears down on a sheet of paper and then challenge them with an alternative explanation, as though they belonged to a friend. For example the fear, “This customer hasn’t rung back, he doesn’t like me” could be challenged with, “Just because he hasn’t rung yet, doesn’t mean he won’t. And who says he doesn’t like you? Maybe he’s just busy.” • The most useful way to deal with a fear is to take some sort of action. In the above example, pick up the phone and call the customer. It’s not that hard. Just do something! • Talk your fears through with a trusted colleague or friend. Talking helps to give things perspective and the emotional support can be useful in helping you summon the courage to take action. • Ask yourself the question, “If I had no fear, what would I do?” This will help you to get more objectivity around your thinking. Finally, as my wise niece says, just face your fear. Fears are like bullies - they feed on doubt. When you confront them they usually go away. F

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Coffee Checklist

Coffee

Take a break from your research and test your skills with our word search.

WORD A D SEARCH U E D

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D E S E I here E O Y Heading

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Look for:

DISCOUNT

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WORTH BIOLSLS IINODUSTRY IN AUSTRALIA IS NS OF DOLLAR S The latest technology in the weight loss industry is now available in Australia. With a proven history in delivering tangible results, this new technology is set to modernize the weight loss industry in Australia. Join us early days to secure a territory in your state capital city and reap major rewards We set you up with: â&#x153;&#x201C; Equipment â&#x153;&#x201C; Training â&#x153;&#x201C; Stationery templates â&#x153;&#x201C; Your ďŹ rst 100 clients

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Checklist TO DO LIST | HELP GUIDE

20 things to check before you invest Before you purchase your franchise you need to tick off all the must-do items. Check the following:

1. Are you conﬁdent in the franchisor? 2. Have you seen a disclosure document?

11. What are the franchisee and franchisor obligations? 12. What training is available and who pays for it?

3. Have you evaluated the ﬁnancial returns?

13. Who owns the intellectual property and what is licensed to the franchisee?

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

14. What marketing will the franchisor implement?

5. Have you worked out your operating costs?

15. Who pays for the marketing? 16. What is the dispute resolution process?

6. Do you know the term of the agreement?

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

7. Is the business operating from ﬁxed or mobile premises? 8. Are you working within a territory? If so, is the area exclusive? 9. Are you restricted in your product purchase?

18. Can you assign the franchised business? 19. How can the franchisor or franchisee terminate the Franchise Agreement? 20. What restrictions are there on the franchisee and guarantor operating a similar business?

10. Are you required to reach a minimum performance level?

[with thanks to Mason Sier Turnbull]

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WE WANT TO THANK ALL THE READERS IN 2011 FOR THEIR SUPPORT. LOOK FORWARD TO MORE COMPETITIONS IN 2012 AND SUBSCRIBE TO FRANCHISING TODAY! Entries close 9th Jan 2012. Winner will be notified via telephone, email and announced in the Mar/Apr 2012 issue of Franchising. For full terms and conditions of this promotion please visit www.franchise.net.au/go/iphone4S

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TO BOOK YOUR STAND CONTACT US ON 03 9261 4500 OR VISIT WWW.FRANCHISINGEXPO.COM.AU

2012 | SYDNEY | PERTH | BRISBANE | MELBOURNE MARCH 23-25

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A-Z listings Searching for a particular franchise?

Online directory

Use this showcase of franchise systems to ﬁnd out some key details about the business opportunities o ppor uni ies av available, ailable, al all iin n al alphabetical hab beti a order or rd derr fo for or ea easy asy ref referencing ferren nciing g

www.franchise.net.au w ww w w.ffra an nchiisee.n neet.au To be part of the A-Z listings, please contact David Strong: email - david.strong@reedbusiness.com.au phone - 02 9422 2905; mobile - 0411 366 656

Website: VIC: NSW: QLD:

www.7elevenfranchise.com.au Peter O’Hara or Michael McNamara on (03) 9550 0602 Shayne Howarth or Mark Moran on (02) 9798 0711 Brett Reading (07) 3511 7733

Phone: 1800 816 618 Fax: 07 5456 2874 Contact: Glenn McMahon Email: sales@amazingclean.com.au Website: www.amazingclean.com.au

Start up costs from: approx $250,000 + GST

Start up cost: $144,000+gst

PROFILE: 7-Eleven is a global success story with over 40,000 stores world wide. This year 7-Eleven will grow by over 200 stores, providing great opportunities for motivated, energetic and hardworking Franchisees to join this successful brand. As a 7-Eleven Franchisee you will enjoy the position of market leader in convenience retailing, backed by one of Australia’s most comprehensive support systems which provides a complete turn-key set up and no rental payments*. To learn more visit our website or contact one of our Franchise Development Managers. Proudly awarded Franchisor of the Year 2008 & 2009, by the Franchise Council of Australia. * expenses incorporated in the 7-Eleven charge

PROFILE: Amazing Clean developed the Ultrasonic Blind Cleaning & Repairs industry 15 years ago, and with over 70 franchises in Australia and NZ, is recognised by major blind manufacturers and retailers, as the only professional group that can clean and repair all types of internal & external blinds.In fact we are the only franchise in the World that do what we do. In 2005 we introduced Curtain cleaning, recognising that there was a need for such a professional service, this has doubled the franchisees proﬁts and to maximise proﬁts even further, we added 3 other services, Upholstery, Leather and Mattress Cleaning.

Phone: 1300 769 967 Fax: 1300 883 989 Contact: Luis Nevares Email: info@austvending.com Website: www.austvending.com

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

Start up costs from: $34,990 + GST

Start up costs from: $43,500 + GST PROFILE: FCA EMERGING FRANCHISOR OF THE YEAR 2011

PROFILE Specialising in establishing new vending machine rounds including locations, first fill of stock, delivery, training and product supply. The company operates nationally in Australia and New Zealand. Exclusive importation rights and over 14 years in the market makes them the leaders in the industry. Austvending provides you with a reliable cash flow business with below average workload. Markup on stock from 300% to 700%. Austvending gives you the opportunity to have a business and enjoy your desired lifestyle at the same time!

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Looking for a franchise with on-going repeat business, large territories and access to an existing client base to get you started? ATS are Australia-wide specialists in Electrical Testing and Tagging in accordance with AS/NZS 3760:2010. Providing expert technical, admin, business and sales support, access to our National client base and comprehensive on and off-site training, ATS are committed to helping its franchisees grow proﬁtable and successful businesses. No prior electrical experience is required - just a passion for safety and a commitment to growing your business. With low entry fees and minimal franchisee administration, an ATS franchise may just be the opportunity for you.

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A-Z listings Phone: 07 33731760 Fax: 07 3373 1770 Contact: James Taylor Email: jamest@batteryworld.com.au Web: www.batteryworld.com.au/franchising Start up costs from: To open up a new store will cost in the vicinity of $200,000 to $250,000+GST PROFILE: Love retailing? Like helping people? Battery World Franchisees are uniquely placed to be useful to almost everyone. Battery World stores carry batteries for everything from mobile phones and lap tops to vehicles and boats. With over 78 stores throughout Australia we are the largest and most comprehensive battery retail franchise network and the only network focused solely on the battery category. If you want to invest your time and money in a powerful franchise, Battery World offers a unique opportunity to tap into an ever-growing market. A select number of franchises are currently available throughout Australia for motivated individuals with strong communication skills and a background in customer service. Australia’s leading battery retailer Battery World is offering qualiﬁed individuals a unique retail opportunity with a great growth potential. For further information about Battery World visit www.batteryworld.com.au/franchising .

Contact: Nick Prohasky Email: Nick.Prohasky@unilever.com Website: www.benandjerry.com.au Start up costs from: $300,000 to $450,000

PROFILE: Ben & Jerry’s scoop shops have been serving peace, love and ice cream around the world since 1978. Our signature chunks and swirls are loved by Ben & Jerry’s fan-atics all over the world. We are now in Australia and looking for partners to join our herd. Our current stores are situated in premium locations and are some of the highest turnover stores globally. If you value: • A true multinational brand • Market leadership • Advertising investment and support • Operational support • Great margins and a super premium offering • Potential for solid ROI and earnings We want to talk to you about joining our very limited store rollout in Australia.

Phone: +61 418 500 721 Contact: Andrew on 1800 634 227 Email: andrew@briantracyanz.com Website: www.briantracyanz.com

Phone: 07 32577682 Contact: James Email: partners@theburritobar.com.au Website: www.theburritobar.com.au

Start up costs: Investment is $44950 or $89950

Start up costs from: $380,000 to $450,000

PROFILE: As a Licencee, you are welcomed to an exclusive team of business advisors based around the world. You will be well trained in the area of business development, corporate training and coaching. You are then able to grow a substantial and proﬁtable business through purchasing programs from the Brian Tracy International suite on a wholesale basis . The key areas of focus are professional development, sales and leadership development, and these programs are provided on a fee for service or government funded basis. They are delivered primarily in fast-moving interactive workshops or in coaching sessions.

PROFILE: If you put a $16 Billion dollar industry together with a massive demand for fast casual dining and Australians search for amazing new ﬂavors then you have The Burrito Bar. Straight from the streets of Mexico and San Francisco The Burrito Bar brings the excitement color and street ﬂavors to your door.

Brian Tracy International is recognised as one of the world’s premier training and development companies.

• High volume business Turn Overs currently in excess of $1 million dollars • Easy to Run system with on line training and in store business support • SEX appeal. The burrito Bar is the latest kid on the Block We want Partners who are: • Passionate ,Crazy , innovative leaders • Have a passion to succeed.

Phone: 1300 094 764 Contact: Tony Melhem Email: franchise@cococubano.com Website: www.cococubano.com

Phone: 1300 Cafe2U (1300 223 328) Fax: (02) 9451 3168 Contact: Alan Biddle - General Manager Sales Email: franchises@cafe2u.com.au Website: www.cafe2u.com.au

Start up costs from: $295 - $550K

Start up costs from: $127,700 + GST

PROFILE: A Cafe2U mobile café franchise allows people to enter the lucrative coffee market without the hassles of landlords, staff or rent. As market leader, Cafe2U have a proven system with a network of over 160 franchises in Australia and the UK. Cafe2U has resources and expertise unparalleled by any other mobile coffee system. A unique offering from Cafe2U is the “Acceleration Package”. This is proven to fast-track each new franchise at least 3 months. Using a personalised programme that combines classroom training and business mentoring, success is guaranteed from day one. This means higher proﬁts sooner.

PROFILE: Coco Cubano has been inspired by the romance and rustic charm of Cuba as well as the friendly, sophisticated style of the European cafe?:bar experience. We have blended these inspirations to bring a unique, multi¬location cafe?:bar destination to Australia. Coco Cubano offers customers delicious handpicked espresso coffee, tasty tapas, decadent chocolate drinks and delicious meals at all peak trading times from morning to night. With a strong business model and a management team with years of experience in franchising, business and hospitality, Coco Cubano is a strong coffee franchise offering. Limited AAA grade sites available.

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A-Z listings Clayton

Phone: (03) 9543 1611 Contact: Scott Giannuzzi Email: scottg@cfmvic.com.au Sunshine Phone: (03) 8312 1600 Contact: Jim Carpoussis Email: jimc@cfmvic.com.au Website: www.cfmvic.com.au PROFILE: Commercial Food Machinery is a leading supplier of commercial catering equipment to franchise groups in the hospitality industry. As a one-stop-shop, CFM supplies & imports a vast array of products including: • cooking equipment • refrigeration • front display cabinets • stainless steel • counterline appliances • bakery equipment • cutlery • table top accessories CFM prides itself in supplying the world’s leading brands and also offer tailored custom made solutions for all needs. Come into our Clayton & Sunshine showrooms to view our huge line of equipment for your business. At CFM, we have vast franchise expertise and ensure that customers receive unsurpassed pre and after sales service. In the years that have passed, we have developed a clear understanding of franchise needs and apply our extensive product knowledge for the efﬁcient design of cooking, preparation, and front display areas.

Phone: 02 8353 5203 or 1300 657 339 Fax: 02 9326 0144 Contact: Holly Boal Email: hollyb@contourshq.net.au Website: www.contoursfranchise.net.au Start up costs from: approx $100,000 to $150,000

PROFILE: Contours is an international female focused ﬁtness group with around 140 franchise locations across Australia. With an Australian based support team, we offer full training, marketing and business support. Contours allows you to run your own business whilst maintaining a work/life balance.

Melbourne: 03 8102 9200 Sydney: 02 8220 8700 Email: growth@dcstrategy.com Website: www.dcstrategy.com PROFILE: DC Strategy is Australia’s leading business growth specialist with a proven track record of developing successful franchise networks and brands in Australia and internationally. DC Strategy’s specialist consultants assist business owners and franchisors with: • Growth strategy • Franchise system development • International expansion • Performance and proﬁt improvement DCS Lawyers is a specialist corporate and commercial law ﬁrm with a proven track record of providing top level legal advice, matched by a commitment to delivering practical advice that supports the growth of your business. Our areas of expertise include: • Franchise law – franchisor and franchisee • Trademarks and intellectual property law • Disclosure documents and franchise agreements • Property and leasing transactions DC Strategy. Business growth specialists

JOIN THE AWARD WINNING TEAM Donaldson Walsh FCA Supplier of the Year in 2009 and 2010 Corporate INTL’s 2010 Franchising Law Firm of the Year in Australia. Our national and international experience and expertise has provided countless clients with practical solutions to the complex issues faced throughout their franchise system’s lifecycle. For straight-talking, forward-thinking support at every stage of the franchising process, our award-winning team is at your service.

Address: GPO Box 1521 Sydney NSW 2001 Phone: (AUS) 1800 643 303 (NZ) 0800 880 046 (HK) + 852 2834 5832 Email: franchiseinquiry@dymocks.com.au Website: www.dymocks.com.au

Phone: Fax: Contact: Email: Website:

Start up costs from: $400,000

Start up costs from: $24,500

PROFILE: Dymocks stores are run and owned by individuals who have a genuine interest in books and are passionate about providing the very best in customer service. The Dymocks franchise system offers: • 130 years of bookselling experience which means that all aspects of our operation have been tested in a real commercial environment; • the opportunity to use Dymocks good name and a reputation for excellence in bookselling; • the beneﬁt of large-scale advertising which no small business could individually afford; • a proven set of operating systems; • training and guidance; • access to group buying arrangements; • and experienced advisory staff to help your business grow. Looking to expand: Australia Wide, Hong Kong and New Zealand.

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Phone: +618 8410 2555 Fax: +618 8410 2322 Contact: Christopher Bruce Email: cbruce@dwlaw.com.au Website: www.donaldsonwalsh.com.au

(02) 9838 7575 (02) 9838 0011 Tony Alevras franchise@eurekamultimedia.com.au www.eurekamultimedia.com.au

PROFILE: Eureka Multimedia Pty Limited is the nation’s leading award winning developer and supplier of high quality and affordable multimedia educational software titles. Eureka has over 100 software titles covering a diverse range of categories with many based directly on Australian school curricula, especially in the areas of literacy and numeracy. Eureka commenced franchising to ensure a better representation of its diverse product range and to deliver a higher standard of service to customers. Eureka believes its innovative approach to software development and high quality production, combined with a motivated franchise team, will provide a valuable resource to enhance children’s learning experiences Australia-wide.

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A-Z listings Phone: 1300 767 325 Fax: 02 9750 3074 Contact: Tania Katsanis Email: tania@ﬂowersbyfruit.com Website: www.ﬂowersbyfruit.com

Phone: 1300 FASTWAY Website: www.fastway.com.au Start up costs from: $25,000 + GST PROFILE: Whether you crave a better lifestyle, control over your income or a more rewarding career, a Fastway Courier Franchise can help you take control of your future. As a market leader in nationwide courier services, our multi-award winning franchisees enjoy:

PROFILE: Flowers by Fruit is the perfect alternative to a bunch of ﬂowers. A multi award winning Australian owned business, Flowers by Fruit creates the freshest edible fresh fruit and chocolate fruit arrangements for any occasion. Passionate about quality and service we make all gifts fresh to order and deliver using our own refrigerated vehicles. We’re committed to “Delivering Happiness” to everyone, every time. There are two franchise models available. As an Edible Gift Guru (EGG) you’d dedicate your time to developing sales in your own exclusive area or own a Creation Centre and be responsible for creating and delivering these delicious products. If either sounds like you, we’d love to have a chat.

• Low start up costs • Guaranteed income packages* • A well known and trusted brand • No weekend work • Unparalleled business support and training • Exclusive territories • A perpetual franchise agreement with no ongoing fees So, if you’re ready for a positive change we’d love to hear from you. Call 1300 FASTWAY or visit us at www.fastway.com.au *Conditions apply

Phone: 1300 798 501 Fax: 1300 798 502 Website: www.franchiselegal.com.au Contacts: Melbourne: Ilya Furman Email: ilya.furman@franchiselegal.com.au Sydney: Heath Adams Email: heath.adams@franchiselegal.com.au

PROFILE: Franchise Legal is a commercial law ﬁrm which practices exclusively in franchising. Our lawyers offer extensive legal and commercial experience in the industry, having worked with many leading franchise systems in Australia and internationally. We act for both franchisors and franchisees in all matters affecting their business.

Level 5, 530 Collins Street, Melbourne, Victoria 3000, Australia. Phone: 1300 FRANCHISE Fax: 03 8640 0688 Contact: Kevin Bugeja Email: kevin@franchiseselection.com.au Website: www.franchiseselection.com.au

PROFILE: Franchise Selection is the leading franchisee recruitment company in Australia that assists potential franchisees through the interview and selection process. We offer potential franchisees a wide selection of franchises covering all industries including retail, food, automotive, telecommunications, construction and even service franchises. We pride ourselves in being leaders in our industry and our approach is not to sell franchises but to educate and assist buyers in ﬁnding the right business opportunity for them and to assist franchisors in selecting the very best franchisees.

Phone: 02 8845 0100 Fax: 02 8845 0199 Contact: Domenico Lopresti Email: dom@gelatissimo.com.au Website: www.gelatissimo.com.au

Phone: 1300 372 624 Contact: Franchise Selection Email: franchise@franckprovost.com.au

Start up costs from: $300,000

PROFILE: Trusted by 10 Million Guests in 30 Countries every Year Franck Provost Paris is the leading Hair Salon in France, and there are now more than 650 Salons around the world. The creator, Franck Provost has achieved an exceptional 30-year career. He was once nominated “World Champion Hairdresser” and is the hairstylist to many French and International celebrities such as late Lady Diana, Sharon Stone or Juliette Binoche, as well as prestigious events like the Cannes Film Festival. He opened his ﬁrst salon in Paris in 1976 with a vision of accessible luxury and glamour. Since then, he has developed a hairdressing empire, Provalliance, that is now #1 in Europe and #2 in the world. Two Franck Provost salons have already opened in Sydney and the franchise is now available Australia-wide!

PROFILE: Australia’s largest gelato franchise with over 20 years of product development and customer satisfaction. Gelatissimo presents a unique concept supported by a brand that embodies style and sophistication creating the feel for all things Italian…The tradition, the romance, the people and store aesthetics. Apart from creating a retailing point of difference, we have a strong and stable performance record. The average Gelatissimo store turnover is $755,000 with comparative store growth of +7.19% over the past 2 years. In a volatile and difficult retailing environment, these results are enviable and reflect a strong focus on brand and local store marketing. In addition, unlike many franchise systems at Gelatissimo we charge a flat royalty fee instead of a percentage of sales, so when your business grows you reap the rewards!

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A-Z listings Phone: +61 1300 552 883 Fax: +61 242 846 099 Contact: Vince Monardo Email: sales@globalcoffee.com.au Website: www.globalcoffee.com.au

Phone: 1300 CAR WASH Fax: 03 9923 6490 Contact: Sanam Ali Email: sanam@geowash.com.au Website: www.geowash.com.au Start up costs from: Roaming Van Model approx $44,000 + GST Shopping Centre Model approx $150,000 + GST

PROFILE: Geowash’s unique concept is revolutionizing the car wash industry in 35 countries around the world. Geowash is now Franchising Australia Wide. Geowash is 100% Ecological and consumes an average of less than 2 litres of water per car wash. Geowash’s unique business model of taking Car Wash to the customers, not just to the home or business but also the car parks of Australia where the customers can have their cars washed whilst in their “idle” time while parked at their work, shopping centre, school, railway station, beach etc. Proﬁt from this unique concept today.

PROFILE: Here at Global Coffee Solutions we live and breathe coffee and as our name states, we have a coffee solution for any situation! Whether you’re after a coffee machine and award winning coffee for your home, ofﬁce, club, restaurant, cafe or the same machine used by McDonalds, 7 Eleven and Hungry Jacks, capable of producing over 100 cappuccinos an hour we have the solution to suit your needs... Our premium quality equipment is reinforced by our company philosophy of providing service and support to an unprecedented standard, offering 24 hour national coverage for all our equipment.

Phone: (02) 9846 0374 Contact: Jenny Colla Website: www.gloriajeanscoffees.com.au

Phone: 0407 646 179 Contact: Nicholas Bernhardt Email: info@greenbizcheck.com Website: www.greenbizcheck.com Start up costs from: $38,500 inclusive

PROFILE: Gloria Jeans Coffees is an Australian-owned brand that is loved and respected around the world. With over 996 stores in more than 39 countries, we’re the world’s fastest growing franchise, serving millions of customers every week. But there’s more to our brand than these impressive statistics. There’s a culture of collaboration, for starters. There’s the family-style support network. There’s the drive to source and serve the best product around, providing our customers with the ultimate coffee experience. Because at heart, what our franchise partners share is a belief that better coffee makes a better world. If that interests you, we’d love to hear from you.

PROFILE: GreenBizCheck provides fast, affordable, world-leading annual green business sustainability programs scrutinized by universities, environmental agencies, governments and major corporations that maximize an organization’s green credentials with a 100% money back guarantee. GreenBizCheck now needs you and your expertise to become Australia and New Zealand’s most recognised environmental standard. You will be supported by a dedicated and passionate management team in building this exciting low cost franchise.

Phone: 1300 002 504 Fax: 073 823 2407 Contact: Craig McClymont Email: info@groutperfect.net.au Website: www.groutperfect.net.au

Phone: 02 9452 8888 Fax: 02 9452 8899 Contact: QLD: Elvio DiZane 0411 868 202 SA/NT: Rhys Goldsworthy 8352 1622 NSW/VIC/TAS: Kelvin Bartholomeusz 9452 8888 Email: chad@hsw.com.au Website: www.hsw.com.au

Start up costs from: $25,995.00

Start up costs from: $600,000+

PROFILE: The Grout Perfect Business Opportunity Become a Tile and Grout Restoration Specialist • No franchising fees • No contracts to sign • No royalties to pay • No population caps • No limit on lacations Turn a $77 bottle of grout colour sealer into $1000 proﬁt in one day Be your own true boss……Your Name……Your Business.

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PROFILE: Howards Storage World is a specialist retailer of innovative storage solutions for the home, office and garage. The range of stylish and functional storage systems include racks, shelving and wardrobes. There are now over 60 Howards Storage World stores around Australia. The Howards Storage World franchise operation is tightly structured and provides franchisees with a high level of support including: initial five-week training program, on-going training and support with our team of regional managers, merchandisers, marketing team and buyers. This is coupled with our scheduled franchisee meetings, high-profile site selection, national group buying power as well as access to a strategic monthly marketing campaign which includes our annual catalogue.

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A-Z listings Phone: (03) 8631 7710 Fax: (03) 8631 7799 Contact: Carly Parkinson Email: carly@hudsonscoffee.com.au Website: www.hudsonscoffee.com.au

Phone: 1800 465 786 Fax: 02 9987 0004 Contact: Anthony Davis Email: anthony@inkontherun.com.au Website: www.inkontherun.com.au

Start up costs from: $250,000-$350,000

Start up costs from: $44,000

PROFILE: At Hudsons Coffee, we believe that behind every great coffee is a great person with a real passion for real coffee, just like us! We place great importance on franchise selection, as matching the right franchisee to the right site is imperative. This has resulted in a dynamic, satisﬁed team of franchisees that share like-minded business goals, and are a great support network for one another. The franchise is expanding in Australia with sites selected in a range of areas including central business districts, hospitals and regional areas.

PROFILE: lnk on the Run is Australia’s premium mobile supply and reﬁll service catering to the growing market of lnks, laser and copier toner cartridges to both homes and businesses. More and more we hear of consumers frustrations with the costs associated to run the printer at work and/or home. lnk on the Run offers not only competitive pricing on branded product but a green and more cost effective alternative of reﬁlling. Opportunities are available throughout Australia with no technical expertise required as full training and standing systems ensure you will have the foundations for a successful business.

Phone: 131 546 Contact: Theunis Terblanche Email: franchise@jimsbuildingmaintenance.com.au Website: www.jimsbuildingmaintenance.net

Phone: 07 3878 5677 Fax: 07 3878 5066 Contact: Ben Stoltz, Managing Director Email: ben@janiking.com.au Website: www.janiking.com.au Start-up costs from $15,000 ex GST

Start up costs from: $28,000 to $40,000 Depending on the Region and Territory PROFILE: In a ﬁeld full of mostly fast food franchises and fast moving consumer goods, Jani-King Commercial Cleaning offers a refreshing and welcome investment opportunity. More than 850 active Jani-King Franchisees are operating across Australia and New Zealand, supported by a network of Regional Ofﬁces in most capital cities. The attraction of a Jani-King Franchise is its low entry fee – with opportunities starting from $15,000 ex GST – and global, professional presence. All Jani-King Franchisees receive extensive, ongoing training and are supported by a Regional Manager, Operations Manager and Administration Team that takes care of the paper work for them, so they can get about the business of cleaning-up. It’s what makes Jani-King Commercial Cleaning “the King of Clean!”

PROFILE: The Jim’s Group consists of about 32 different divisions with more than 3,200 Franchisees. Joining Jim’s is the best decision you can ever make if you are looking for a Lifestyle business where you prefer to work at your own time and pace. Having the Jim’s logo displayed on your vehicle or trailer is almost like having a Grandpa’s comforting hands behind you as you are enjoying the support of a very well-known Australian owned brand. Franchise opportunities exist in all states.

Phone: 0044 (0) 1494 778989 Fax: 0044 (0) 1494 770729 Contact: Gill Thomas, MD Email: headofﬁce@jojingles.co.uk Website: www.jojingles.com and www.jojinglesperth.com.au Start up costs: Price on Application for Business Partners Sub-franchise units in Australia from c. $15,000 AUS PROFILE The UK’s leading provider of music, singing and movement classes for babies and pre-school age children is now looking to expand in Australia and New Zealand. Classes started in 1991 and the franchise was established in 1995. We now have over 90 franchisees operating throughout the UK and Ireland and launched our ﬁrst pilot operation in Perth, Western Australia in Otober 2010. Currently more than 25,000 children enjoy our fun and interactive introduction to music and we provide sessions in many Nurseries and Early Years Settings. We are recognised as an established and ethical franchise providing a great opportunity for individuals with an interest in working with children and running their own business.

Phone: (AUS) 02 9527 5444 Fax: (AUS) 02 9527 5144 Contact: Chiree Craig Email: chiree@justcuts.com Website: www.justcuts.com Start up costs from: $160,000 to $240,000 PROFILE: Don’t just buy yourself a Job! Discover how you can easily run a “Genuine Business System”. Did You Know? Most of our Just Cuts™ Franchise Owners are not Hairdressers. Plus, the average Franchise Owner goes on to own multiple stores. Why? Because proven systems, support and training means your hairdressers become the technicians and easily run the business for you. At Just Cuts™ Franchise Owners have been free to grow to own multiple sites. Just Cuts™ do over 65,000 Style Cuts™ cuts a week! Just Cuts™ offer a no booking, no request quality Style Cuts™ cut and at an affordable price. Contact us today to ﬁnd out how. Join the largest Hairdressing Franchise in the Southern Hemisphere.”

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A-Z listings Phone: 1300 737 978 Fax: 03 9005 2991 Contact: Mr. Brijesh Purohit Email: franchise@keentoclean.com.au Website: www.keentoclean.com.au

Phone: 02 8372 0918 Contact: Daniel Hochberg Email: danielh@kingofknives.com.au Website: www.kingofknives.com.au Start up costs from: $250,000 (Approx)

Start up costs from: $25,700 + GST

PROFILE: Keen to Clean is an innovative, professional and committed market leader in all forms of cleaning, both residential and commercial. We offer a truly unique path for a franchise owner to grow with the system and the opportunity to expand their franchise operations. Keen to Clean has enjoyed strong growth in Melbourne through franchise sales over the past few years, in the coming years Keen to Clean wish to expand the franchise operation throughout Australia. With many franchise offers there is a franchise to suit anyone, whether you are the type of person who could take on a master franchise or simply buy and operate a general franchise we have something to suit you.

PROFILE: With over 65 stores and 24 years of retail experience, Australia’s premier retailer of knives, kitchenware, outdoor and leisure tools has developed a category leading brand. Training: Our comprehensive training ensures that franchisees are experts in their field. It’s YOUR business: Franchisees choose their own stock, ensuring they are in control of their business. Product and Pricing: Franchisees benefit from our exceptional buying power as well as exclusive high margin house brands. Customer Service: Uniquely, stores have a “demonstration table” which allows customers to trial products before they buy Marketing: 92% brand recognition achieved through in-store promotional material, catalogues, on-line and magazine and newspaper advertising Communication: Franchise meetings, store visits from support office and our much anticipated National Conference ensure you are a part of a team.

Phone: 1300 565 597 Contact: Holly Beck Email: franchise@lollypotz.com.au

Phone: 02 9899 9655 Fax: 02 9899 9455 Contact: Joe Sultana Email: Jsultana@lifetimedistributors.com.au Website: www.lifetimedistributors.com.au

Start up costs: Initial Franchise Fees - CBD locations from $50,000 - Regional Cities from $30,000 - Regional Towns from $25,000

Start up costs from: $20,000

PROFILE: • Lifetime Distributors is the largest display marketing book company in Australasia. • Provides the convenience of shopping in the workplace to thousands of people. • Founded in 1990. • Has a proven business structure of Master Franchisees and Franchisees. • Franchises offer fantastic growth potential with high levels of repeat business and impressive earnings ability. • Sells over 4 millions products each year. • Full initial and on-going training is provided to franchisees. • A major supporter of many charities across Australia. • Cost of franchise varies by location. • Stock on consignment. • No hidden fees or charges. • Service 40,000+ businesses

PROFILE: Lollypotz franchise owners make and deliver beautiful chocolate bouquets in their large exclusive territory. They even make money if a customer from within their territory orders a bouquet anywhere else in Australia. Lollypotz has a very well developed system and website to support you. The system was developed by Louise Curtis, who is the owner of Lollypotz and who was recently awarded the ACT Telstra Businesswomens Awards in Both the Yellow™ Business Owner and Nokia Business Innovation categories. You will receive excellent training, induction and ongoing support. (Franchise owners in regional towns and cities can choose whether to operate from a home ofﬁce or take the traditional shopfront if they prefer)

Phone: 02 9638 8000 Fax: 02 9638 8832 Contact: Mark Futeran Email: mark.futeran@hunterdouglas.com.au Website: www.luxaﬂex.com.au

PROFILE: The LUXAFLEX® Window Fashions brand is the market leader in the premium window coverings category in Australia. The LUXAFLEX® Gallery program is the top tier licensee network with over 75 Galleries nationwide with over 30 areas still available in all states, regional & metropolitan areas. The Gallery showrooms provide residential consumers a quality experience with specialised service along with access to large full size operating blinds, shutters and awnings, which has been a key success factor for the program. Providing a fully supported program including customised training, marketing, advertising, web, business support and resources, it is the most comprehensive program in the industry.

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Phone: 03 9794 2617 Fax: 03 9794 2540 Contact: Jane Garber and Michele Laks-Belzycki Email: jane.garber@mk.com.au OR michele.laks-belzycki@mk.com.au Website: www.mk.com.au PROFILE Building on over 105 years, M+K has a long and enviable record in building, supporting and protecting franchise businesses. M+K franchise team offers ﬁxed fees for most matters and turnaround time guarantee and provides direct access to all lawyers. M+K franchise team are experts in: • Franchise documents preparation • Franchise system development • Brand and other IP protection • Competition + Consumer Act (CCA) compliance • Distribution, agency + other trade agreements • Business + trade structuring • Leasing and licensing agreements

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A-Z listings Phone: +613 8540 0200 Fax: +613 8540 0202 Contact: John Sier Email: john.sier@mst.com.au Website: www.mst.com.au

Phone: 02 9437 3233 Fax: 02 8088 0773 Contact: Rhett Thurston Email: andrew.dalton@mbe.com.au Website: www.mbe.com.au Start up costs from: $150,000 - $250,000

PROFILE: Mason Sier Turnbull is widely recognised as one of Australia’s leading franchising law firms. We advise franchisors, franchisees and suppliers to the franchising sector on all aspects of franchising. We also act for new and emerging franchise systems and a multitude of business entrepreneurs who have invested in franchise businesses. Our relationships with reputable and professional franchise consulting and accounting firms allow us to confidently refer our clients to specialists for advice and services that are traditionally outside what law firms can offer.

PROFILE: The concept of MBE Business Service Centres (Mail Boxes Etc.) in Australia started in 1992, with a primary focus to make business easier for small businesses across the country. After much hard work and perseverance, our network has become the largest franchised chain of business service centres, not only in Australia, with nearly 40 locations, but worldwide, with 1300 internationally in 30 countries. In achieving all of this we have helped people pursue their dreams – dreams of becoming master on one’s own life path by starting their own business. We understand having your own business can be overwhelming endeavour if you only have yourself to rely on. As a franchisee in the MBE network, you are never alone in business. Our experienced team of support personnel at our Corporate Ofﬁces and in the ﬁeld can help you make the most of your time and investment. You can feel the comfort in knowing that you’re starting your business for yourself, but never by yourself.

Phone: (02) 9542 2000 Fax: (02) 9542 2100 Contact: Drew Arthur Email: sales@micronet.com.au Website: www.micronet.com.au

Phone: 1300 790 898 or 0438 245 555 Contact: Gwendoline Email: info@mobilefatloss.com.au Website: www.mobilefatloss.com.au

PROFILE: Micronet Systems is a leading provider of business software solutions to growing franchise groups. Since the introduction of our first generation product in 1983, over 2000 companies have implemented the Micronet software in a diverse range of industries. Our tailored franchise solution assists franchise groups to grow, manage and improve their business processes while removing the everyday burden to IT. The Micronet franchise solution is specifically configured to suit the unique business processes and industry requirements of today’s franchise operations. Delivering greater business control and improved profitability, the Micronet solution gives franchise groups greater market differentiation and competitive advantage.

Start up costs from: $29,000 with a $5,000 rebate for 1st 100 clients, so a total of $24,000 PROFILE: Mobile Fat Loss is the first of it’s kind in Australia. Income potential $5,000$15,000/week. Ultrasonic Fat Cavitation is the worlds first true weight loss machine - IT WORKS!! Clients can stay in the comfort of their home and you will go to them. We provide you with everything you need to get you started and your first 100 clients!! Why not buy multiple licences and secure a financial future. This is new & we have allocated a certain number of licences to each state in Australia. Don’t miss this opportunity.

Phone: 0411 649 594 Fax: 07 3622 2800 Contact: Andrew Roberts Email: andrew.roberts@mrrental.com.au Website: www.mrrental.com.au

Phone: (08) 9277 8666 Fax: (08) 9277 9666 Contact: Geoff Elias Email: gelias@muzzbuzz.com.au Website: www.muzzbuzz.com.au

Start up costs from: $100,000

Start up costs from: $299,000

PROFILE: Experience the Magic of Recurring Revenue with a Mr Rental home appliance rental franchise. Mr Rental is an international franchise group which has grown to nearly 90 outlets throughout Australia and New Zealand. Mr Rental awarded 2010 FCA Franchisor of the Year Winner is a 5 day a week business that provides a tried and successful business model. Other Mr Rental accolades include National Winner in the FCA MYOB Excellence in Franchising Awards – 2009 Excellence in Marketing, 2008 Emerging Franchise System of the Year and Westpac NZ Franchise Awards - 2009 Media Campaign of the Year, 2008 Retail Franchise System of the Year not to mention ranking 4th in the top 10, 10 THOUSAND FEET National Franchise Survey for Franchisee Satisfaction.

PROFILE: Being a Muzz Buzz franchisee means you are a member of an established franchise that is currently enjoying unprecedented growth in the Drive Thru Coffee sector. A member of the FCA and ranked at number 6 nationally by www.topfranchise.com.au franchisee satisfaction survey. By becoming a Muzz Buzz Drive Thru Coffee franchisee you are joining a franchise that is vastly different from other coffee franchises. Drive Thru is the fastest growing sector in the retail coffee industry and Muzz Buzz is number 1 in Drive Thru Coffee. We are actively seeking franchise business partners for SA, VIC and QLD.

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A-Z listings Phone: 03 9385 0777 Fax: 03 9384 0888 Email: reception@nandos.com.au Website: www.franchisenandos.com.au

PROFILE: Nando’s is a proven business model operating successfully in Australia since 1990, now with over 270 restaurants nationally and strong expansion plans. Enjoy the benefits of being part of a highly successful and recognised International brand operating in over 30 countries. Nando’s franchisees are supported with comprehensive training, ongoing development and enjoy an unsurpassed level of support with a dedicated local marketing and business development manager and expert advice in marketing, finance and operations. Nando’s is accredited with numerous financial institutions with 50 – 70% credit available and is proud member of the Franchising Council of Australia. Opportunities exist for new franchisees to join the Nando’s team with sites available around Australia in both metro and regional areas. For more information contact us on 03 985 0777, email reception@nandos.com.au or visit us online at www.franchisenandos.com.au

Phone: 1800 NANOTEK (626 683) Fax: 02 8572 9457 Contact: Kevin Bugeja Email: franchises@nanotek.co Website: www.nanotek.co Start up costs from: $47,000 (exc GST) + car lease PROFILE: Imagine being able to wash a car anywhere! ..being able to offer your clients the highest quality service at their home or even where they work? This is Nanotek – your own mobile car wash, the freedom to be your own boss, choose your own hours and build your business to match your goals. Nanotek is a multi-award winning international franchise operation featuring exclusive liquid polymer nano-technology that encapsulates, lifts and removes dirt without scratching– it also leaves a protective coating that lasts up to 6 weeks. The entire process is eco-friendly and totally waterless which means a Nanotek treatment can be done anywhere – in a car park, on the street or even on the showroom ﬂoor!

Phone: 02 9362 0123 Fax: 02 9362 0124 Contact: NKA Marketing & Advertising Email: info@NKAunleashed.com Website: www.NKAunleashed.com

Phone: 1800 776 747 Fax: 1800 194 525 Contact: Darryl Morris Email: info@mynﬁb.com.au Website: mynﬁb.com.au PROFILE: PROFILE: NFIB meets the Australian demand for a dedicated online provider of insurance cover for franchisees, franchisors and franchised businesses. Our service is fully automated, compliant and provides you with full documentation. Put simply, NFIB is the fastest, most affordable way to get the most appropriate level of cover you need to protect your business.

Unleash Your Brand Potential with Sydney’s Innovative Marketing & Advertising Agency. The research-founded agency have created methodologies to achieve: • Emotional Engagement with the target audience • Enchanting customer relationships with your brand • Relevance through campaign connections NKA work with Franchisors aiming to evolve their brand, Franchisees aiming to increase their proﬁts & Entrepreneurs interested in franchising their concept. Faced with a Marketing Problem or Opportunity? Talk to NKA on 02 9362 0123 or visit www.NKAunleashed.com

Phone: 07 5532 7071 Fax: 07 5532 5351 Contact: Graeme Diamond Email: franchising@outbackjacks.com.au Website: www.outbackjacks.com.au

Phone: 1300 667 067 Fax: 1300 667 101 Contact: Clinton Capuzzi Email: sales@ordermate.com.au Website: www.ordermate.com.au

Start up costs from: $300,000 depending on ﬁt out cost, contribution and location PROFILE: OrderMate is the complete multisite franchise POS solution. OrderMate was established in 2001 to service the food and beverage POS market. Its success relies upon its uniqueness from the competition which is often generic and off the shelf. Easy to use front of house interface, whilst still giving you the powerful backend reporting to drive your business. OrderMate gives you the tools to track and manage the KPIs of your franchisees in real time. We have a proven track record of delivering a return on investment within 12 months. Our nationwide network enables us to rollout, service and support large scale projects.

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PROFILE: Outback Jacks Bar & Grill is an exciting fully licensed, family style restaurant franchise, specialising in casual dining and premium quality steaks. With the largest range of steaks on a menu anywhere in the world our concept provides wide market appeal. Our ﬁrst store opened only 4 years ago with proven systems Outback Jacks has rapidly expanded to 24 stores in prime location throughout Australia. We believe in hands-on, motivated franchisees with a true desire to grow the brand through exceptional business habits and a passion for great food and customer service.

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A-Z listings Contact: Brett Jeffrey Email: AU-Pizzahut.Franchising@yum.com Website: www.pizzahut.com.au/franchise

Phone: 1800 245 447 Fax: (07) 3217 8900 Contact: Dean Atkins Email: joinourteam@poolwerx.com Website: www.poolwerx.com

Start up costs from: $250,000 - $350,000

Start up costs from: $93,950 plus van

PROFILE: Pizza Hut is the leading global pizza franchise, with over 12,000 restaurants throughout the world and is part of the quick service restaurant giant, Yum! Restaurants International. Franchising with Pizza Hut gives you the ﬁnancial control of owning your own business combined with the support of a historically successful global company. With exciting new store opportunities available throughout Melbourne/Regional Victoria, Perth/Western Australia, Regional New South Wales, and South East/Regional Queensland there has never been a better time to join.

PROFILE: Twice named Australian Franchisor of the Year (‘Services’ and ‘Outright’ categories), PoolWerx has a strong history of innovation both in franchising and its own business sector – the swimming pool and spa aftermarket – in which it is also multi-awarded. PoolWerx is especially well known for its creation of the world’s ﬁrst structured ‘Career Path in Franchising’ enabling franchisees the opportunity to grow within a single marketing area or develop a million dollar business with multiple vehicles, retail stores and marketing areas.

Phone: 1300 4 RED ROCK (1300 473 376) Fax: 07 3390 2977 Contact: John Jolly Email: admin@redrocknoodlebar.com.au Website: www.redrocknoodlebar.com.au

Phone: 1300 4 REDCAT (1300 4 733228) Email: info@redcat.com.au

PROFILE: RedCat is an Australian company, with an Australian development team, and have a history of leveraging our flexibility and integration capabilities to partner with clients to implement and develop unique solutions. We have been a leader in hospitality point of sale and accounting software since 1992, and can supply integrated software and hardware solutions for Point of Sale and Accounting that can manage sales, staff, stock and payroll through to accounts, GST, customer loyalty, and Web Based multi-Site reporting solutions to provide the complete business management system. In particular, for the needs of franchised groups, we have developed an extremely flexible centralised management capability that permits multiple levels of control and reporting capabilities, from total head office management, through to localised management and web based consolidated reporting tools and a web based, (and mobile phone based), ordering system which is totally integrated into the Point of sale system.

PROFILE:

Start up costs from: $180,000

PROFILE: Red Rock Noodle Bar is one of the healthiest food franchises around in this growing fast food industry. We deliver this by offering an exciting range of Asian 97% Fat Free tastes that appeal to all. Fresh Ingredients handpicked by our customers and “wokked” up right in front of your eyes. Currently 12 stores all over Brisbane as we expand this healthy option throughout Queensland and Northern NSW.

Phone: 1800 685 386 Fax: 1800 685 396 Contact: Strachan Taylor Email: Strachan@refundsdirect.com.au Website: www.refundsdirect.com.au

Phone: 1800 066 112 Fax: (02) 9889 8900 Contact: David Green Email: sales@rpvending.com.au Website: www.rpvending.com.au

Start up costs from: $19,000

Start up costs from: $9,000

Refunds Direct is a loans referral business, not brokers. We provide a red carpet referral service for borrowers - matching customers to the right lenders fast and easily. Our model creates a competitive environment where customers deal direct with up to 3 lenders. With great service, real bargaining power, customers access exceptional deals and large refunds. Our franchisees get a powerful and very proﬁtable business network. A simple business, with low start up costs, overheads and operating costs, earnings potential is high as you share in the commission paid by lenders. Supported by an expert franchisor with over 30 years’ ﬁnance industry experience, training, coaching, compliance, own web landing page, licencing and CRM systems. You do not require detailed product knowledge, there is minimal paperwork as this is a referral business. Your focus is on lead generation and network development.

PROFILE: RP Vending Systems was established in February 1995 and is a national operation specialising in vending machine systems. We provide a unique business opportunity throughout Australia. Our extensive range of drink, snacks, coffee and fresh food vending machines are manufactured in Sydney, Melbourne, Europe and Asia. RP Vending Systems has a comprehensive range of vending equipment, but more importantly provide a complete business start- up system which includes; ﬁnding sites for your machines, ongoing training & support and access to the RP buyer network. This buyer network includes; Cadbury, Coca-Cola, Smiths etc. Full warranties and backup support are available Australia wide.

We are actively seeking franchise business partners across Australia.

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A-Z listings Phone: 07 5455 3822 Fax: 07 5455 3616 Contact: Gary Shearer Email: gary@safetyquip.com.au Website: www.safetyquip.com.au

Phone: 1300 SIGNWAVE (1300 744 692) Fax: 03 9642 3800 Contact: Helen Spencer Email: helen.spencer@signwave.com.au Website: www.signwave.com.au

Start up costs from: $180,000

Start up costs from: $210,000

PROFILE: Workplace safety is a growth industry. Each year Australian businesses spend over $2billion in the prevention of accidents and injuries in the workplace. SafetyQuip is a B2B distributor of workplace health and safety products and services. We offer a career in safety services. No safety industry experience is required. Full training is provided through our staff of professional educators. SafetyQuip franchisees have continued to enjoy solid growth during the global ﬁnancial crises. As a result SafetyQuip was recently named a BRW Fast Franchise 2010.

PROFILE: SIGNWAVE® is part of the successful FASTSIGNS® sign and graphics franchise system. FASTSIGNS® is a pioneer and recognised industry leader with more than 525 franchised units in six countries. Currently, there are 20 SIGNWAVE® businesses operating throughout the country in New South Wales, Victoria, Queensland and Western Australia. The sign business is a multi billion dollar industry that primarily caters to the business customer. Companies small & large will always have the need to sell, inform and direct their customers and employees. In many cases, vivid, targeted and directed signs and graphics are the perfect solution.

Mobile: 0439 803 078 Fax: (08) 8121 1835 Contact: Vicki Prout Email: vicki@skidsaustralia.com.au Website: www.skidsaustralia.com.au FCA Member Outlets: 1 franchisee (Victoria)

Phone: 1800 049 743 Fax: 1800 884 431 Contact: James Scurr Email: jscurr@silverchef.com.au Website: www.silverchef.com.au

PROFILE: Silver Chef has been helping businesses to fund their equipment needs for over two decades. Silver Chef’s Rent. Try. Buy.® Solution offers a simple 12 month term so that you have the ﬂexibility to: • Purchase the equipment and enjoy a 75% rental rebate • Return equipment if you don’t need it anymore • Keep renting and we will continue to reduce the purchase price • Upgrade if you decide your franchise has outgrown the original equipment And if you are part of an accredited franchise, you will enjoy even greater beneﬁts such as reduced rental bonds, rental discounts and pre-approval for all franchisees. Silver Chef Limited is a public company listed on the Australian Stock Exchange.

PROFILE: Rewarding Business - Make a difference. Award winning Safe Kids In Daily Supervision (sKids) was founded in 1996; with continuous expansion accredited to a fun, learning and caring based program we now offer services to over 70 primary school based sites in New Zealand. Now in Australia, using the foundations of the program’s success and our passion for providing fun, structured and safe Out of School Hours Care (OSHC), we are building on our efforts and services offering Master Franchises and local franchisee opportunities in every state. If you are looking to work with children, make a difference and own a business that is both ﬁnancially and emotionally rewarding then talk to the award winning team at sKids. For more information contact Vicki Prout on 0439 803 078 or vicki@skidsaustralia.com.au

Phone: 1800 762 766 Fax: (02) 9837 9199 Contact: Nick Hudson Email: nicholas.hudson@snapon.com Website: www.snapontools.com.au

Phone: 07 3331 1400 / 0435 841 811 Contact: Catherine McGill Email: cmcgill@snapﬁtness.com.au Website: www.snapﬁtness.com.au Start up costs from: $450k - 550k inc. equipment

Start up costs from: $30,000 (conditions apply)

PROFILE: In today’s uncertain economy, professionals and small investors from all walks of life are saying “enough!” and partnering with Snap Fitness, the fastest-growing franchisor of compact, state-of-the art, 24/7 fitness centers in the world. Discover the freedom, flexibility and fulfillment that comes with owning the leading alternative to traditional “big box” health clubs; and a value-driven concept that’s right for the times. Easy to own *Affordable Investment *Financing Investments available Easy to manage *complete Turnkey operation

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Easy to market *Ready to go - proven sales and marketing support

PROFILE: Snap-on Tools have a heritage spanning over 90 years and is a brand that deﬁnes quality. The range of more than 19,000 products are the choice of professional technicians, from NASA to the automotive technician. With more than 4,700 franchisees around the world, 160 of them in Australia/New Zealand, the franchise programme has been developed over decades. The Australian franchise has been selected three times by Smart Investor magazine and latterly named as the Best Value Franchise in Australia. Franchisees have protected territories and operate from amazing custom built mobile stores that take the tools right to the customer’s workplace. Extensive training and ongoing support is provided and no previous mechanical experience is required.

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A-Z listings Phone: 03 9428 1088 Fax: 03 9428 7055 Contact: Tony Maddock – services Adam Kernahan - lawyer Email: info@solutionsfranchising.com.au Website: www.solutionsfranchising.com.au

Phone: 0427 401 169 Fax: 03 9888 6327 Contact: Alistair Browne Email: alistairb@snooze.com.au Website: www.snooze.com.au Start up costs from: $450,000

PROFILE: Snooze is Australia’s premiere bedding retailer, and has been recognised numerous times by the franchising industry as being one of Australia’s Top 10 franchise businesses. Snooze is also Australia’s longest operating franchise business, so joining the Snooze family means you’re becoming part of one of Australia’s most successful retail businesses, with more than 30 years of experience. Snooze provides each of its new franchisees with thorough initial and ongoing training and support across all business areas to ensure each franchise is successful and continues to grow. Snooze is always on the lookout for enthusiastic individuals to join the team, so get in touch now for your information pack!

PROFILE: Solutions Franchising is providing the industry with the best value professional services available. We will help you with; • Franchisee recruitment • Training programs • System development and maintenance • Strategic planning • Full legal services • Australia’s easiest CRM coming soon We operate all over Australia and have associates in India, Indonesia and Pakistan.

Phone: (03) 9371 2601 Fax: (03) 9371 2627 Contact: John Kapnias Email: john@vha.com.au Website: vha.com.au

Phone: (NSW/ACT) 02 9250 5000, (VIC/TAS) 03 9287 9555, (WA/SA) 08 9430 2877, (QLD/NT) 07 3877 7333 Email: franchdev@caltex.com.au Website: www.caltex.com.au

Start up costs from: $75,000

PROFILE: A Southern Cross franchise is a clean, simple one-man business. Security - Enjoy the security of regular, on-going bookings from our longestablished client base. Independence - As an independent owner-driver working as part of a team, you don’t need to be on the road every day. The level of your commitment is flexible. Simplicity - All your bookings are provided, so you’re cash-flow positive from day one. Melbourne Only - Join our 40 car fleet. Franchises available in selected Melbourne Metro areas.

PROFILE: You may not be aware that Caltex Australia operates one of the largest convenience retail networks across the nation with company and franchised stores operating predominantly under the ‘Caltex Star Mart’ brand. In fact, our world class business model, merchandising and ﬁeld support has made Caltex the No 1 convenience retailer in the marketplace. We are actively seeking high calibre franchisees who have a passion for retail and a burning desire to be successful in convenience retailing. As a Caltex franchisee, you will be associated with an iconic brand, so if you have the passion, commitment, ambition and drive for results, then this may be the perfect opportunity for you. For more information about a Caltex franchise, please visit www.caltex.com.au and register your interest by clicking on ‘Franchising at Caltex’.

Find out more at: vha.com.au/franchise enquiries

Phone: Toll Free Australia 1800 630 355 NZ 0800 444 618 Fax: 07 3852 4081 Contact: Franchise Administrator Email: ssa@subway.com Website: www.subway.com

Phone: 1300 769 967 Fax: 1300 883 989 Contact: Luis Nevares Email: info@staycleanhands.com Website: www.staycleanhands.com Franchises from: $80,000 + GST PROFILE: Stayclean Hands is a franchise system that specializes in the business to business supply of hand sanitizing solutions through service contracts in clearly deﬁned areas. Service contracts provide a guaranteed monthly income to franchisees and the franchise system offers attractive returns on investment every year. The battery-operated dispensers offer the latest in environmental design and touch-free technology, measuring the exact amount of solution into the hands of each user. With a modern look and silver ﬁnish, they are an essential component to every healthconscious business owner. Franchisees are supported through marketing activities, lead generation, centralised invoicing and all systems and processes; however, it is their responsibility to sign service contracts in their exclusive areas. Franchisees must be extroverted operators who are comfortable delivering presentations and increasing clientele in their territory or be able to hire a dedicated salesperson.

Start up costs: Varies by site PROFILE: For an unprecedented 17 times in 23 years, the SUBWAY® Restaurant chain has been ranked the No.1 Franchise Opportunity for 2010 by Entrepreneur Magazine in its annual “Franchise 500” rankings*. The SUBWAY Restaurant chain is the world’s largest submarine sandwich franchise**, offering business owners simple operations, ongoing ﬁeld support and deﬁned marketing structure, along with providing customers with a variety of freshly made menu options. For over 40 years, the SUBWAY® brand has been helping individuals build their own, independently operated business – run by people just like you! From step one, throughout the entire franchise process, the SUBWAY® system provides training and guidance that aids in the operation of each restaurant. *The SUBWAY® franchise was ranked the number-one global franchise among franchises with worldwide operations in the 2010 Franchise 500® issue of Entrepreneur® magazine, based on research and analysis of those franchises having worldwide operations.. ** Numbers are subject to change. Please refer to www.subway.com for latest restaurant and country counts.

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A-Z listings Phone: 02 9569 7866 Fax: 02 9569 7811 Contact: Graham Streeter, General Manager Business Development Email: graham@sumosalad.com Website: www.sumosalad.com Start up costs from: $$350,000 plus GST PROFILE: SumoSalad has enjoyed phenomenal success and growth since its inception in 2003 and has built a strong, trusted and recognised brand in the food retail industry with loyal customers following the brands continual expansion into key sites throughout Australia and abroad. With obesity now a global epidemic, such an overwhelming positive response from customers, industry bodies and franchisees is no surprise. SumoSalad is now providing healthy eating to over 145,000 people each week in many of the best sites across the country, mainly positioned in central CBD and strong performing suburban shopping centre locations. Due to increased visibility, awareness and convenience, our brand has grown in strength and more importantly popularity and proﬁts. The media are continually pushing consumers towards leading a healthier lifestyle and SumoSalad is pioneering this change in the Fast Food industry.

Phone: 13 GEEK (13 4335) Fax: 07 3386 0124 Contact: Mick Davey Email: franchise@supergeek.com.au Website: www.supergeek.com.au Start up costs from: $35,000 PROFILE: Business is all about relationships. SuperGeek franchisees care about providing dependable support to their extensive client base, creating a reliable income stream for themselves with our highly developed, easy to operate and fun business model. The company is driven and focused to provide a solid stream of convenient support solutions to home computer users and the SME sector. To ensure a sustainable and fast paced business growth, our new franchise owners are supplied with a comprehensive start-up and support package. Including active help in setting up business, on the job training at commencement and practical guidance from their own completely independent and experienced business coach. A SuperGeek franchise offers low start up cost and challenging opportunities for open-minded, dynamic and enthusiastic franchisees to the mobile IT and computer maintenance industry. Looking for an exciting and rewarding future? Then call 13GEEK today!

Phone: (03) 8699 2555 Fax: (03 8699 2550 Contact: TeleChoice Reception Email: franchise@telechoice.com.au Website: www.telechoice.com.au

Phone: 02 9898 8666 Fax: 02 9898 3089 Contact: Bonny Email: enquiries@swimart.com.au Website: www.swimartfranchise.com.au

Start up costs from: $99,000 Start up costs from: $180,000 PROFILE With growth of more than 35% in the past four years, there’s never been a better time to own a Swimart Pool & Spa Services franchisee. Swimart Pool & Spa Services have 64 retail stores across Australia and New Zealand, providing an extensive range of pool and spa products. Franchisees also operate their own ﬂeet of service vehicles, led by highly-trained and experienced technicians, to deliver customers quality, convenient pool maintenance. With 30 years of experience, Swimart Pool & Spa Services is a power brand providing all the training, Marketing and brand support you need to help drive a successful business.

PROFILE: There has never been a better time to become your own boss. TeleChoice is a great choice for you if you are looking for a business in a dynamic industry. With over 150 stores nationally and a massive support base, you’ll always feel part of a great team. To start your own business and take control of your life, call TeleChoice today or visit www.telechoice.com.au.

Phone: 1300 438 783 Fax: (02) 9907 2647 Contact: Julie Finch-Scally Email: Julie@dusterdollies.com.au Website: www.duterdollies.com.au

National: 1300 139 557 Phone: (03) 9729 9534 Fax: (03) 9729 9512 Contact: Lia Barnes Email: lia@thefranchiseshop.com.au Website: thefranchiseshop.com.au

Start up costs from: $22,500 PROFILE: The Duster Dollies is a booking agency for domestic cleaning. Started in 1993 it is now a franchised organisation with agencies across Australia. Run from home the business is administrative and organisational. Sub-contractors are used to do the cleaning, and pay an Agency Fee for each hour of work. All the cleaners are trained and the jobs quoted. Our service has helped The Duster Dollies win awards. The Duster Dollies Cleaning Agency is a Monday to Friday business suitable for either a couple or a single operator. Find out more about The Duster Dollies and become part of our family oriented organisation.

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PROFILE: The Franchise Shop is a leading franchising consultancy specialising in servicing the franchising industry throughout Australia and New Zealand. Principals, Grant and Richard Garraway have more than 30 years experience between them in developing businesses into franchises, conducting feasibility studies, recruiting franchise owners, territory planning and site ﬁnding. At The Franchise Shop our aim is to grow your business. Are you thinking of developing your business? A free initial consultation will provide you with an honest and accurate assessment. Looking to buy a franchise? We offer a range of documents which are designed to help you make an informed decision.

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A-Z listings Phone: 1800 220 039 Fax: 07 5522 0051 Contact: Peter Darnell Email: sales@touchupguys.com.au Website: http://www.touchupguys.com.au Start up costs from: $85,250 + approved vehicle PROFILE: With over 130 van operations across Australia and New Zealand and over 20 years experience, the Touch Up Guys are the market leader in the mobile automotive paint and bumper repair industry. This Aussie-made mobile automotive franchise carries out repairs to bumpers, plastics, paintwork, vinyl upholstery, alloy wheels and much more. Servicing commercial, corporate and consumer markets, our franchisees are equipped with a state of the art mobile workshop, providing a convenient and cost effective alternative to traditional bodyshops. If you are looking for proven business model with low entry cost and low overheads and would enjoy working outdoors with your hands, then Touch Up Guys may well be the perfect career move for you. No prior experience is necessary as full technical and business skills training are provided.

Phone: (02) 8667 3104 Fax: (02) 8667 3200 Contact: Steven Clare Email: info@thinkfranchise.com.au Website: www.thinkfranchise.com.au

PROFILE: ‘Think FRANCHISE Specialist Franchise & IP Advisers’ is a law firm that offers its clients more than other firms. Executive Director of ‘think’ Steven Clare is a Lawyer with Master of Laws qualifications (with Honours) and has spent time in the franchise business sector itself as General Counsel and COO for a major Australian franchise operation (APL). Which reported in 2008 a combined franchisee entertainment revenue of up to $130 million AUD. ‘Think FRANCHISE’ acts for both franchisors and franchisees. If you are a franchisor or prospective franchisor, ‘think’ can develop your business into a franchise system, providing you with legal and other strategic advice. The firm is a leader in providing cost effective solutions that are relevant to their client’s needs. Visit: www.thinkfranchise.com.au for more information.

Phone: 03 9612 7297 Fax: 03 9629 4035 Contact: Robert Toth Email: robert.toth@wisemah.com.au Website: www.wisewouldmahony.com.au

Phone: 1300 139 913 Fax: 1300 133 338 Contact: Darren Farrell Email: dfarrell@trusonic.com.au Website: www.trusonic.com.au

Proﬁle: Trusonic is a full service music provider and audio marketing specialist. Trusonic’s digital music library contains more than 3 million tracks in all styles including Top 40, modern jazz, instrumentals and more. Their proprietary media player (the MBOX) receives music updates daily via the internet. With Trusonic you can: • Generate extra revenue and create branding with custom ads and IDs • Eliminate PPCA fees with their directly licensed music library • Play music and messages through your phone system • Control the music (and ads) at all sites from the one online interface To get Trusonic music working for you, call Darren Farrell on 1300 139 913.

PROFILE: Wisewould Mahony is a leading commercial law ﬁrm with a 150 year history in Victoria with clients in Australia and worldwide. 25 Years of Industry Knowledge Member Franchise Council of Australia (FCA) International Franchise Lawyers Association (IFLA) Franchise Association of New Zealand (FANZ) Accredited Business Law Employment Specialists Fixed Fee Services to Franchisors & Franchisees based on scope of services Services provided: • Legal and consulting advice to Franchisors & Franchisees • Code compliance requirements • Dispute resolution – mediation – Solutions & Strategies • Sale/Purchase of Franchise Systems • Master Franchising • Employment Law & Workplace Relations Specialist Call or email for a complimentary brochure for Franchisors & Franchisees

Phone: 0414 669 101 Fax: 02 9771 9570 Contact: Stephen Spitz Email: stephen.spitz@xpressodelight.com.au Website: www.xpressodelight.com.au

Phone: 1300 yogabugs Contact: Rob Connelly Email: rob@yogabugs.com.au Website: www.yogabugs.com.au

Start up costs from: $69,400 + GST

Start up costs from: $20,000

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

PROFILE YogaBugs is imaginative, interactive and fun for children aged 2 to 12 years, postures, breathing and relaxation techniques are woven together into fun stories and games. Being non-competitive & fully inclusive, children are always the heroes of their YogaBugs adventures. Breathing improves concentration and energy levels & promotes healthy sleeping patterns. Postures strengthen the core stabilising muscles & assists in reducing childhood obesity. Relaxation aids in better memory retention, whilst calming symptoms of anxiety and nervousness. A YogaBugs Franchise gives you exclusive rights to a Territory, start from $20,000 and can be run from a home based ofﬁce.

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INCORPORATING FCA NEWS

Companies in this issue 10 THOUSAND FEET APPLIANCE TAGGING SERVICES AUSSIE MOBILE GROOMING

123* 22* 35

AUSTVENDING

34*

BATTERY WORLD

93*

BEN & JERRY’S

13*

BRIAN TRACY

45*

CAFE2U

39*

CALTEX

58*

COCO CUBANO

COMMERCIAL FOOD

121

CONTOURS

29*

DC STRATEGY DIVERSIFIED EXHIBITIONS

70,71* 127*

DONALDSON WALSH LAWYERS 94* EUREKA FRANCHISE

51*

FASTWAY COURIERS

143*

FLOWERS BY FRUIT

36*

FRANCHISE LEGAL

FRANCHISE SELECTION FRANCK PROVOST

72-73* 65*

GELATISSIMO

114*

GEOWASH

111*

GLOBAL COFFEE

HUDSONS COFFEE

35*

INK ON THE RUN

FRANCHISE COUNCIL OF AUSTRALIA

* indicates FCA member

RED ROCK NOODLE BAR REDCAT

107* 105

63*

REFUNDS DIRECT

JIM’S BUILDING

97*

RP VENDING

JOJINGLES

113

SAFE CLEAN

KEEN TO CLEAN

108*

SAFETYQUIP

100-101*

KING OF KNIVES

15*

SIGNWAVE

LIFETIME DISTRIBUTORS

43*

SNAP FITNESS

LOLLYPOTZ

33*

SILVER CHEF

88*

LUXAFLEX

SKIDS AUSTRALIA

96*

JANI-KING

MACPHERSON & KELLEY

112*

MADDOCK SOLUTIONS

MASON SIER TURNBULL

27*

25*

SNAP ON

SNOOZE

85*

SOUTHERN CROSS CHAUFFEURS 92

MBE BUSINESS SERVICE CENTRES 68

SUBWAY

57*

MESSAGECOM

SUMO SALAD

91*

MICRONET

14*

SUPERGEEK.COM.AU

95*

MOBILE FAT LOSS

125

SWIMWART

74*

MORTGAGE HOUSE

118

TELECHOICE

MR RENTAL

21*

THE BURRITO BAR

MUZZ BUZZ

81*

THE DUSTER DOLLIES

NANDOS

144*

THE FRANCHISE SHOP

52-53* 17* 109* 46-47, 48*

NANOTEK BY ECOWASH

98*

THINK FRANCHISE

NATIONAL FRANCHISE INSURANCE BROKERS

TOUCH UP GUYS

102

124

VC SOLUTIONS

116

NKA

WENDY’S

115*

GLORIA JEAN’S COFFEES

76*

OUTBACK JACK’S BAR & GRILL 19*

WISEWOULD MAHONEY

64*

GREENBIZCHECK

32*

PIZZA HUT

XPRESSO DELIGHT

82*

HOWARDS STORAGE WORLD

11*

RBI

142| FRANCHISING NOV/DEC 2011

20 103, 126*

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YOGABUGS AUSTRALIA

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Take control of your future The world’s largest Courier Franchise organisation, Fastway, now has a number of exciting opportunities to join our award winning team! Low start up costs

Exclusive territories

Guaranteed income package*

No weekend work

Perpetual Franchise Agreement

Unparraleled business support & training

Recognised brand

Easy to operate - no experience required

Award winning system for over 25 years

Enjoy the freedom of working for yourself

To ﬁnd out more contact us:

p. 1300 FASTWAY w. fastway.com.au *Conditions apply. Fastway Couriers (Australia), ABN 38 057 389 769. This business is independently owned.

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