Franchising July_August 2015 by Cirrus Media

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FRANCHISING

Franchising YOUR ESSENTIAL GUIDE TO BUYING A FRANCHISE | WWW.FRANCHISEBUSINESS.COM.AU JUL/AUG 2015 VOL.28/NO.4

JUL/AUG 2015

JAPANESE

Rice bars come to town AUS $6.95|NZ $7.95

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

WWW.FRANCHISEBUSINESS.COM.AU

TURNING FRANCHISE FUNDING

CAPED CRUSADERS

REVIVAL OF FORTUNE

p.52

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Can you access the finance you need?

Spot the superhero franchisors

What happened at Pie Face, and what’s next?

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CONTENTS

12 A REVIVAL OF FORTUNE COV E R STORY

101

What happened at Pie Face, and what’s next?

THE BRAVE NEW WORLD OF WORK How does a franchise fit into the new world of work?

68 TYRE RETAILING: REPORT

How is the tyre industry travelling? Check the latest survey results

74 GROWING AND GROWING

The burgeoning childcare market and its business potential

20 THE ECONOMY,

FRANCHISING AND THE FUTURE

The consumer index, property prices and business trends

WHY EMOTIONS HELP YOU WIN IN BUSINESS Emotionally-savvy franchisees will be able to better manage the franchise relationship

28 THE DIFFERENCE BETWEEN A FRANCHISE AND A LICENSE

Essential differences highlighted in an infographic

30 5 NIFTY TIPS

Check out your franchise smarts

JAPANESE CUISINE WITH A TWIST

32 TWO’S COMPANY

Make the most of a franchise and go into business with a partner

36 WILL YOUR FRANCHISOR BE A SUPERHERO?

Find out how your franchisor can help you in times of trouble

REGULARS

40 LEASING LEGALS

What you need to know about leasing and the franchise agreement

5 6 120 122 124 128 130 142

WELCOME

INSIGHTS

HOW TO WORK OUT YOUR BUDGET

LEGALESE

Tips to ensure you don’t over-commit yourself with your finances

THE SKETCH

LEADERSHIP

CAN YOU GET FUNDING FOR A FRANCHISE?

GLOSSARY

Critical advice on why banks can reject a funding application

CHECKLIST ADVERTISERS INDEX

56 GREEN ALERT

The increasing role of healthy eating in our fast food arena JUL/AUG 2015 | 3 | WWW.FRANCHISEBUSINESS.COM.AU

WHAT BRINGS US BACK TO SERVICE STATIONS? A recent report highlights what consumers appreciate in a service station

84 BUY A FRANCHISE

The Franchising & Business Opportunities Expos will be in Brisbane and Melbourne

95 A MASTER FRANCHISEE AT 22

What drives Sam Waller to grow his business with Stepz Fitness?

98 A FRESH TAKE ON TRADITION Milestones celebrated at established cafe chain Shingle Inn

105 BOUTIQUE BEANS

A passion for coffee has led to a new franchise brand. Good Bean Espresso

108 WHAT MAD MEX DID NEXT

A fresh look and menu innovation at the casual dining Mexican chain

113 7 MISTAKES TO AVOID

Learn from other franchisees' mistakes

116 THINK GLOBAL, THINK LOCAL

Is it a good idea to buy from an international franchisor?

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( WELCOME )

e all love good news, but bad news makes the headlines as Kevin Waite can attest. As managing director of the embattled Pie Face chain, and now CEO, Waite saw firsthand how bad news spreads. What we don’t always hear about is the phoenix story – how a company can rise from the ashes.

And that’s the story we want to tell – how leadership, strategy and a commitment to franchisees can turn a beleaguered business into a firm with a future. You can read about how Kevin Waite and chairman Andrew Thomson are approaching this in our special feature on page 12. A franchise buyer investigating the options available needs to take into account the franchise history, the background of the franchisor team and the vision for the business as well as the products, the training on offer, the marketing and of course the financial return. It is important to ensure the right preparation is undertaken to get the best chance of firstly securing funding for your franchise purchase, and secondly, to manage the ongoing financials in the business. In this edition Andrew Graham looks at how to put together a budget, and NAB’s Simon Ovenden explains why sometimes funding isn’t forthcoming from the banks. There are some useful pointers here for getting that initial loan. Once you’re in the business of your choice, will your franchisor help out if you’re in

EDITOR Sarah Stowe P: 02 8484 0900 sarah.stowe@cirrusmedia.com.au JOURNALIST Nathan Stanogias P: 02 8484 0740 nathan.stanogias@cirrusmedia.com.au ART DIRECTOR Justine Dunn P: 02 8484 0757 designer2@cirrusmedia.com.au GENERAL MANAGER Marion Day P: 02 8484 0754 marion.day@cirrusmedia.com.au

SARAH STOWE EDITOR

need? Bill Lockett looks at the myriad ways a franchisor can provide support. If you want to get a heads up and find out some of the ways franchisees can slip up, turn to our lawyer’s view on common mistakes – and how to avoid them. There are plenty of opportunities to choose from – our supplement with this issue, The Profiler, highlights just a handful of the businesses looking to expand their franchise network – and with two expos dedicated to franchising and business opportunities coming up, plenty of ways to source them. If you are attending the Brisbane or Melbourne Franchising & Business Opportunities Expo, come and say hello to the Franchising team. You can check out our preview feature on page 84.

Leadership, strategy and a commitment to franchisees can turn a beleagured firm into a firm with a future

And don’t forget to regularly check franchise opportunities for sale, expert advice and the latest news on our website, it's an online one-stop-shop for all your franchise needs. Visit www.franchisebusiness.com.au.

NATIONAL SALES AND MARKETING MANAGER David Strong P: 02 8484 0905 david.strong@cirrusmedia.com.au ACCOUNT MANAGER Kate Robinson P: 0422 225 283 kate.robinson@cirrusmedia.com.au BUSINESS DEVELOPMENT MANAGER Jesse Hopwood P: 02 8007 3113 jesse.hopwood@cirrusmedia.com.au CLIENT SUCCESS MANAGER Joanne Garcia P: 02 8484 0731 joanne.garcia@cirrusmedia.com.au

PRODUCTION CO-ORDINATOR Tracy Engle P: 02 8484 0707 tracy.engle@cirrusmedia.com.au For subscription enquiries call customer service: 1300 360 126 ISSN: 1321-408X

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ALL FRANCHISING MATERIAL IS COPYRIGHT. REPRODUCTION IN WHOLE OR IN PART IS NOT ALLOWED WITHOUT WRITTEN PERMISSION FROM THE EDITOR. OPINIONS EXPRESSED IN FRANCHISING ARE NOT NECESSARILY THOSE OF FRANCHISING OR CIRRUS MEDIA. © COPYRIGHT CIRRUS MEDIA, 2014

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INSIGHTS

6 TIPS Before you go ahead with your business venture, it’s important to consider these pointers: 1. Be smart about your location.

Cafe2U to add 100 franchises in four years

2. Find the right staff.

3. Pursue your passion.

4. Embrace growth.

5. Replicate (already) successful operations. 6. Don’t lose confidence in down times treat them as learning experiences.

TOP 10 BRANDS ONLINE Have you visited our website www.franchisebusiness.com.au? Here are the 20 brands most popular now in brand searches with our online audience - and it’s food, glorious food with a couple of notable exceptions. Caltex once again heads the list - for more on what consumers want from a service station, find out what the latest report has to say on page 81. And you can check out our healthy food feature on page 56 to read more about two of the brands below. 1. Caltex 2. Pizza Hut 3. Boost Juice 4. Nandos 5. Sumo Salad 6. Jamaica Blue 7. Dominos 8. Muffin Break 9. Top Juice 10. Kumon

Australian mobile coffee franchise Cafe2U aims to significantly increase its homegrown network of franchisees. The business has more than 160 franchisees across the country, with another 90 franchisees overseas. General manager John Stanton said “Locally we want to add another 100 franchises in four years, and internationally we are seeking opportunities in countries that lend themselves to the Cafe2U business model. “We never set out to be the largest, but our focus on quality has led to us finding ourselves as the market leader,” Stanton said. The latest move is the introduction of food to its trademark fleet of red Mercedes-Benz vans. “The goal now is to take our food range from convenient, grab-and-go food to a more upmarket offering that will satisfy consumer demands." The original Cafe2U concept has developed from being a novel business idea to a serious business undertaking that attracts franchisees looking to run multiple vehicles rather than just one van. “I focused on moving away from the ‘buy yourself a job’ type of franchise partner to prospects that were really looking at the business aspect and were determined to maximise the potential of a Cafe2U franchise.”

The coffee brand was bought by Retail Food Group last year and as part of the acquisition gains scale from synergies with other brands in the group. “We are looking to improve franchisee ROI by providing an improved product range, increasing their profit margin on products by leveraging the power of RFG purchasing arrangements, and constantly reviewing our equipment and vehicle layout as we look to gain every possible advantage. We are also thinking outside the square on new event opportunities and marketing strategies.” But as Cafe2U grows, Stanton believes so too should the company’s contribution to the community. “We have a long history of supporting charities, fundraising events, and those in need. We want to continue to do this long into the future.” Stanton admits that Australians possess an exceptionally high coffee IQ. "Even a powerhouse like Starbucks struggled in its initial foray into Australia because the perception was that it wasn't great coffee. Whether mobile or fixed location, the coffee consumer in this country is very discerning. “Our multiple award-winning blend has stood the test of time and rivals any main street, fixed location brew,” he said.

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CMY

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23/06/2015

9:54 pm

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INSIGHTS

Is McDonald’s avoiding tax?

CEO OF HELLOWORLD RESIGNS Helloworld CEO Elizabeth Gaines has resigned after 15 months in the travel franchise’s top job. Gaines joined the company in 2008, was appointed to CFO to CEO in April 2014 following the depature of former boss Rob Gurney, who resigned after 18 months at Helloworld. The travel franchise said the board will now begin a search process to replace Gaines to “lead Helloworld through the next phase of growth”. Gaines will continue her role as CEO during the term of the six month notice period.

BURGERFUEL SEEKS FURTHER EXPANSION

Fast food franchise giant McDonald’s has been accused of avoiding a half a billion dollar tax bill in Australia. A global group of unions has released a report suggesting Australians have been shortchanged by the burger business which has used legal loopholes to reduce its taxable income. However, a spokesman from McDonald’s said “We have always been committed to paying our fair share of tax in Australia. In

fact, over the past five years, McDonald’s has paid in excess of $500m in tax,” SMH reports. According to a case study in the report, Golden Dodges: How McDonald’s Avoids Paying its Fair Share of Tax, between 2009 and 2013 in McDonald’s Australia there was “an unusually high level” of intercompany payments. The authors allege that the five percent royalty from stores is at odds with the “significantly larger” service fees the Australian business pays to a Singapore subsidiary.

Despite the burger market being saturated by many a food franchise, BurgerFuel’s chief executive Josef Roberts said that the company will be opening more New Zealand (and international) restaurants. Roberts said that in the 12 months to late March BurgerFuel opened 17 new restaurants, which takes the total to 72 (40 were established in New Zealand). “The New Zealand business continues to perform well despite heavy competition in what is fast becoming an overcrowded market of food offerings, not just in burgers but in food generally,” Roberts said. Australia has been in BurgerFuel’s sights for expansion with five franchise businesses opening here, taking the total to seven in the country.

FRANCHISING ONLINE

The business needs to earn enough to pay down its debts. Your business loan should be zero by the end of the franchise agreement or lease term, which are generally the same Simon Ovenden, NAB

At www.franchisebusiness.com.au, our one-stop-shop website, we feature new articles every day that range from industry news to expert advice and insights. Our story on A Current Affair’s Michel’s Patisserie segment caught everyone’s interest and was our top story in June. In our social media channels, the advice article for franchisors, 'How to say no to a franchisee transfer’, was a top performer on our Facebook page. We’re dedicated to creating content that our readership enjoys, and there’s no better place to get your franchising fix than www.franchisebusiness.com.au.

JUL/AUG 2015 | 8 | WWW.FRANCHISEBUSINESS.COM.AU

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A proven, established and profitable business model Global leader in tools and franchising

Great office views

Extensive training and support

Mobile showroom

Give customers personal service, premium products and finance solutions Be your own boss A market leader for mechanics

BE IN BUSINESS WITH THE BEST SNAP-ON TOOLS IS ONE OF THE LARGEST AND MOST SUCCESSFUL FRANCHISES IN THE WORLD AND HAS BEEN OPERATING IN AUSTRALIA SINCE 1988. Snap-on Tools invites you to take our online Discovery Tour to find out if weâ&#x20AC;&#x2122;re the right business for you. Visit www.snapontools.com.au/franchise

To learn more phone LES COPPIN - 0419 609 794 Franchise Recruitment Manager Franchise Advert_275x205_0615.indd 1

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INSIGHTS SUMO AND VINNIES SumoSalad is teaming up with Vinnies this winter to give back to the homeless of our community. In a blog post on the SumoSalad website, the healthy fast food franchise has outlined the seriousness of homelessness and the societal misconceptions that are tied to it. The SumoSalad team recently attended training session for the Vinnies NSW Night Patrol, which is a service that offers meals to people experiencing homelessness around Sydney’s CBD. “What struck us was that the people coming to visit the night patrol more often than not don’t come for the food; they come for the sense of community and the ability to have a connection with people. For some, this may be the only chance they get to talk to someone all day,” via the SumoSalad blog post. In this piece – and as an extension of their joint initia-

tive with Vinnies – SumoSalad put together a list of dos and don’ts for when one approaches a homeless person: for them things such as “Hi, how is your day going?” are far better than “Here’s some money, don’t spend it on drugs or alcohol”.

both attractive value for shareholders and certainty of transaction completion,”

Australian listed Burson Group, which owns the Burson Auto Parts brand, has agreed to buy Metcash’s automotive division: Autobarn, Autopro, ABS, and Midas Brands are part of the collective. Ian Morrice Metcash CEO said that while Metcash’s automotive division has historically performed well, it’s in the best business interest of both parties to go ahead with the deal. “Through discussions with Burson, it became clear that the parties could reach an agreement which represented

DISCOUNT DRUGS EXPANDS Discount Drugs stores plans to expand its franchise numbers, with a goal to open about 16 more stores in the next 12 months.

METCASH TO SELL AUTO BRANDS Grocery wholesaler Metcash is set to sell its automotive decision for $275 million.

PHARMACY ACTION

BLING ONLINE Jewellery chain Pandora is embracing the digital world and launching an e-commerce store in Australia. The business, part-corporate and part-franchised, has appointed a digital media agency to help drive the new initiative focused on innovation and data-led performance marketing. According to Ragtrader, the Australian market accounted for 6.7 percent of the $2.3bn revenue in 2014. Sales rose in the fourth quarter by 20.4 percent to $63.9m. Pandora has more than 90 outlets in Australia.

“We have 136 retail outlets now and aim to open another 14 to 16 stores in the next 12 months. NSW is our fastest growing state and over the next 18 to 24 months, we will have 50 stores in NSW,” executive general manager Douglas KuskopfDallas said. Despite numerous plans to innovate and expand the business Kuskopf-Dallas said that ongoing costs won’t be passed onto store owners. The fact that the brand is backed by pharmaceutical giant Sigma Pharmaceuticals allows investment areas into retail outlets, which doesn’t sting franchisees. “The extra costs will not be passed onto store owners. DDS is conscious of the margin and profit pressures stores are under from PBS reform, so the brand is making the investment into extra advertising and programs,” KuskopfDallas said. TERRY WHITE ADDS CHEMPLUS

We have to deliver some certainty and a reasonable prediction of of prices for franchisees. Because of the supply chain, we can adapt very quickly to changing market conditions Barry Barber, Top Juice

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Terry White Chemists has acquired South Australian pharmacy network Chemplus in a bid to future proof its member pharmacies. TWC Group Investments, the parent entity that owns the Terry White business, will purchase all shares in Chemplus for $2.6 million with a transaction date set for July 31. TWC chairman Terry White said the merger was a significant step in the evolution of the industry and enabled the group to capitalise quickly on existing growth opportunities in the pharmaceutical market place.

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GLOBAL

TREAT

YOURSELF

TO SUCCESS!

BRAND LOCAL OPPORTUNITIES FOR OVER 69 YEARS BASKIN-ROBBINS™ HAS BEEN CREATING IRRESISTIBLE TREATS TO MAKE YOU SMILE AND FEEL GOOD INSIDE AND OUT. WE’VE PERFECTED THE COMBINATION OF DELICIOUS TREATS AND A FUN ATMOSPHERE.

Baskin-Robbins™ is looking for people with drive, creativity and passion. We believe that people are the most important ingredient in a successful business. Ideal key qualities for prospective Franchisees include: • The ability to make people smile • Excited to be a part of a team and the Baskin-Robbins™ system • Ambition to succeed and grow your business • Outstanding guest service focus • Passion for the Baskin-Robbins™ brand We’re confident that once you get to know our product you’ll be in love with Baskin-Robbins™, just like we are.

For further information, please contact Michael Payne on 0417 077 633 or michael@palmoasisventures.com or visit www.baskinrobbins.com.au

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EO Kevin Waite and chairman Andrew Thomson outline the steps taken to get the niche brand back on track, regain the trust of franchisees, and re-establish relationships with landlords and suppliers.

Waite was “flabbergasted” at the amount of attention paid to the decline of the Pie Face chain, he recently told a franchise forum run jointly by the Franchise Advisory Centre and Griffith University’s AsiaPacific Centre for Franchising Excellence. The franchise-experienced executive joined the brand from Brumby’s at Retail Food Group, and had already notched up more than a decade’s experience in Australia and South Africa leading franchise groups. Two weeks after the new managing director drew up his chair at the pie business, the company was unable to pay its employees’ superannuation.

WHEN IT ALL GOES WRONG The business was haemorrhaging money (more than $40 million had been raised and effectively washed down the drain) and had

made no profits in 10 years, had no franchise experience across the management team, was in arrears with every landlord, and had inherited 28 franchisee-failed outlets. “This was a very painful experience,” he said. It was a baptism of fire too for the new chairman, former Liberal MP Andrew Thomson. The morning after the first board meeting, Macquarie called in the receivers. Thomson told co-founder and CEO Wayne Homschek this was not a situation that could be traded out of – then he quit. As Waite describes it, there was “a severe trust deficit in every area of the business. Trust has to be built on integrity and competence. Trust always affects two outcomes, speed and costs. Distrust is very expensive.”

Thomson was back in the chairman’s seat before the year was out and on the very last day of 2014 the Deed of Company Arrangement (DOCA) was signed. At that point, Homschek was fired as CEO and in January, still regarded as a liability for the brand, he resigned from the board. Waite took on the CEO role. The low point for him was constant press coverage, suppliers cutting off support for back office systems, the factory running at 30 percent capacity, and concern among international licensees about what was happening to the brand. “We needed to convince everyone we have to start things in a new way,” he says.

So how did the company deal with what proved to be a toxic culture and militant shareholders: franchisees, suppliers, landlords?

“When you take on a turnover, you have to be utterly resolved to fix it,” says Thomson. “You have to take steps with no hesitation. We had to raise capital and stabilise the business. A steady board is key. Management can’t get on with the job if they are worried about the board.

Drastic steps were called for. The top level of management was removed from the business and the job losses went further.

“We were so toxic, no-one would try and take us over, it was quite helpful in one way,” he reveals.

“A lot of innocent people lost their jobs a month before Christmas. I had always promised myself I wouldn’t ever do this, but I had to,” says Waite.

Franchisees were called into a meeting and told there was a fresh new approach.

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“This is the first time I’ve done this, I’ve

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A REVIVAL OF

FORTUNE What really happened at Pie Face, and more importantly, how is the brand getting back on track?

never been in a business so publically humiliated,” Thomson admits. “But when I met the franchisees I felt so sorry, some had invested their life savings into it. Having taken it on, I have to save them,” he says.

STARTING AGAIN Waite's approach was warts and all with franchisees. His solution to resolving many of the problems they had with the franchisor was transparency. “If you’ve got kick-backs, tell them,” he says. “Then the mystery goes away. I told them, if you don’t think I should be making money from this, tell me. It cleared it up.” His priority was to bring in a highly experienced franchise team. Then he took actions to ease the load for struggling franchisees: key product costs were reduced. Each department had to introduce a bottom-up budget. “We would go through every store, line by line, every week. Too often CEOs and MDs have a budget and say “off you go, make it work”. We handed accountability to the business development managers. “Every aspect was driven by consumer research findings. And the good news was that consumers acknowledged the quality

of the product.” This meant there was no need to enter price wars, says Waite. Changes have been made to the menu to diversify the offer however, to include sandwiches and salads. That’s a big step for a niche pie business. Thomson explains, “the good operators have a personal rapport with customers and have developed a coffee business for local office workers. It’s a bit much to expect them to buy a pie every day, but if you offer a good quality sandwich you might get [them to buy] three lunches.”. The coffee offer is being modernised, pies are popular and a steady sale, it’s a good offer now the company is financially solid, says Thomson. Even the changing demographics aren’t a cause for concern. “As Australian demographics change, people are not moving away from pies,” Thomson insists. “I had misgivings but the more I ate the pies… it’s qualitatively different from Four and Twenty pies.” It is, perhaps surprisingly, the product of a French baker from Brittany. Product extension is taking place at a wholesale level too. The factory can make non-branded pastry for third parties and JUL/AUG 2015 | 13 | WWW.FRANCHISEBUSINESS.COM.AU

that helps utilise the kitchen facility. “We can snap freeze and export the pastry. That reduces the capital expenditure of new licensees who just add the filling. We can make some money and they can save a bit.” This prudent approach will be extended to the finished pies, once the business gets the relevant export licence for meat products. One single point of sale system has been introduced across the network, and the company decided to foot the bill for this. Waite says, “I couldn’t burden franchisees with more costs and we needed the information to run the business. We had to think, what can we do differently now to maximise our facility and bring processes in-house.” With a manufacturing facility, baking bread and rolls made sense, as did employing an in-house butcher. “We were going to third party suppliers, now we can go direct to the manufacturers.”

MORE BUSINESS OPPORTUNITIES Signs that Pie Face is emerging from the gloom include new wholesale accounts with businesses like Jetstar. “Strategic alliances add value to most licensees, it’s more than just retail.”

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1 -THE PIE FACE CAFE CONCEPT 2 - KEVIN WAITE

Now the business is able to pay its bills and honour commitments to suppliers. “We’ve built ourselves back up. The balance of power is starting to shift back to us, the customer,” says Waite. There are now just 10 company owned stores, and they are making money. Seven of these will be franchised. Pie Face plans to open eight more outlets this year; four are already in progress. New generation stores will roll out domestically and internationally with vastly reduced costs. “We’re in the business of getting franchisees into stores and running them successfully,” says Waite. Key to this is achieving better terms out of banks, and reduced costs for design and fit-out. The good news is that franchisee sentiment has become more positive and enquiries for the stores are increasing.

BUILDING AN OVERSEAS BUSINESS There are still roadblocks though. In the US a lawsuit over the closure of the eight Manhattan shops is underway, with high profile investor and Las Vegas-based casino owner Steve Wynn wanting to get back his funds. “The burden is on us to refinance our brand and then we’ll make an arrangement for him to exit,” says Waite. Despite the closures, a plan of attack for the US is underway: a broker has been appointed and marketing is expected to start from July, this time focused on an entirely different expansion plan.

“Pie Face will fit better in the mid-West rather than with a flashy presence in New York. We could get 200 stores in ‘tornado alley’,” says Thomson. The UK and Europe will be the following initiatives, with the process to find the right partner expected to take up to 18 months. Thomson believes this arena is a more natural habitat for the pie brand than the more challenging Asian marketplace, although two stores are set for an October/ November opening in Tokyo. “Someone wanted to open 1000 stores in China but there isn’t even a word for pie in Mandarin,” he says. He believes continuing with overseas expansion will pay dividends. “Preparing the market for signing up master partners, if done over two years, gives us a higher chance of getting the right partner. “We have to convince people experienced in QSR of our value, and that could take two years. It’s a bruised brand.” In New Zealand three stores are open, seven will open their doors this year.

700 stores in 10 years overseas and this will be by far the biggest operation,” says Waite. This will also allow the business to embrace opportunities to export product. “The great news is that turnover is up three percent year to date on budget and the prior year. We’ve been very conservative with our budgets.” Waite was also pleased to reveal a successful capital raising initiative that gives the business surplus funds and positions the company for the next five years. One requirement from the investors is to extend the brand beyond the city into regional areas.

PIE FACE TODAY Three business entities were put into Deeds of Company Arrangement: two are now out of this – Pie Face Franchising and Pie Face Holdings. “We are meeting our DOCA obligations. The DOCA was good for us. It gave us the opportunity to confess, it was open and public,” says Waite.

There are outlets open in Singapore, Malaysia, the Philippines, and United Arab Emirates. A central kitchen facility that is fundamental to the model is under construction in Thailand and South Korea. Sites have been secured in Japan; Indonesia is in the pipeline.

“We should be profitable by the end of the calendar year. We’re looking to make increases over the next three calendar years. The growth path should steadily build.

“Australia will always be the head office. But should all go according to plan, there will be

“All of us collectively have moved on, it’s a new team. And customers are returning.”

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“We can meet our debts and grow the business. Pay our way, on time and in full.

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hombre: means dude

www.hombremexican.com.au

Now franchising near you

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The brave new world

OF WORK

ow does a franchise fit into the new world of work? What in fact does the world of work look like? According to the latest report from Deloitte, Global Human Capital Trends 2015, organisations need to “navigate a new world of work”, with the distinctions between life and work fast disappearing.

Thanks to networking tools like LinkedIn, Facebook and job site Glassdoor, information is at our fingertips and the traditional employer/employee relationship has been altered with the balance of power shifting to employees who are more like partners. Millennials in particular expect responsibility, a path to leadership, greater flexibility and purpose. Sounds a little like franchising. So how do the top 10 trends in work dovetail with the franchising concept? We’ve been a bit cheeky and looked at it from our perspective. JUL/AUG 2015 | 16 | WWW.FRANCHISEBUSINESS.COM.AU

TOP 10 WORK TRENDS 1. LEADERSHIP Good leadership can be hard to find with accelerated leadership models important for firms. Franchisees can tap into the inspired leadership of the franchisor, but it’s important to take care to do due diligence on the franchisor and find a great leader to follow. But franchisees can also take steps to become great leaders themselves – both within their own businesses and across the franchise network through mentoring and advisory roles.

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2. CULTURE AND ENGAGEMENT There is a “looming crisis in engagement and retention” in the corporate world so the focus on culture is key. The good news is that franchisees are naturally engaged in developing their own business opportunity. Investing in a franchise network with the right cultural fit is paramount and franchise chains are increasingly focused on developing this aspect of their businesses. 3. LEARNING AND DEVELOPMENT Skills gaps are a significant challenge for organisations, indicates the report. Franchising is dependent on the sharing of knowledge and best practice, and training is an integral part of both setting up and building a franchise. Franchisees can pick up technical and business skills to add to their armoury. Check the training on offer for franchisees – and for employees. 4. WORKFORCE ON DEMAND A creative approach to employment is reflected in the increase of hourly and contract work. That might be great news for employers, but it decreases job security. Building up their own business through a franchise model gives the franchise buyer more power to determine their future. 5. PERFORMANCE MANAGEMENT Innovative performance solutions are being sought by organisations wanting to replace traditional measures.

Some franchisors benchmark their franchisees, some don’t. At the end of the day, profitability of a franchise is an excellent sign that things are going well. For individuals who want to succeed for themselves, not the boss, investing in a franchise allows them to create their own goals and measurements.

of franchise brands who already harness the power of social media to great effect. Franchisees can expand their horizons by turning to social media to boost and diversify staffing levels.

6. REINVENTING HR

Increasing complexity of the work, and work overload, is forcing firms to simplify their systems.

Driving innovation is now an important part of HR. There will be guidelines for how to recruit and manage employees in a franchise, but buying into a franchise business gives someone the opportunity to take the initiative and employ ground breaking HR ideas, or just do the job better.

9. SIMPLIFYING WORK

When it comes to systems, franchisors have got this one sussed. Every successful franchise operator has a great system behind them. Franchisees are buying into business models and methods of operation; the operations manual can be their best friend – so it’s wise to make sure it’s a good one.

7. TALENT ANALYTICS 10. COLLABORATE, DON’T COMPETE The corporate world is slow to implement talent analytics capabilities. Hmm, maybe a franchisee won’t be going headlong into analytics capabilities – although maybe the franchisor has the ability – but their closeness to staff and access to their own data (if they pick a franchise that is forging ahead with data and technology) will allow them to spot opportunities for great employees that will help them build their business. 8. HR DATA AND SOCIAL MEDIA Employers are increasingly using thirdparty data from social media platforms to boost their HR strategies. Now that’s a great tip, and there are plenty JUL/AUG 2015 | 18 | WWW.FRANCHISEBUSINESS.COM.AU

How do employees fit in with the increasingly automated workplace? The skills needed to succeed are changing. Forward thinking franchisors have already established first class communication and reporting systems and business tools that allow their network of franchisees to operate successfully. Collaborating with technology, not fighting it, is the approach to take. A franchise that can provide all this for its franchisees, and is investing in research and development so they don’t have to, is worth a look. Of course, buying a franchise business isn’t for everyone. But it does fit with the trends for empowerment, leadership and engagement. Perhaps it’s the future for many.

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THE ECONOMY, FRANCHISING AND THE FUTURE

ou want to invest in a franchised business but like to get the hard facts before committing yourself. You’ve come to the right place. There are some useful statistics from recent reports that illustrate the direction of this business sector and key markets.

And overall it’s good news. There has been steady revenue growth, with an annualised growth of 2.6 percent predicted for franchisors over the next five years.

smaller cities to expand their networks.

Let’s take a look at the wider economy before drilling down into the franchising sector.

According to IbisWorld’s Franchising in Australia 2015 report:

ECONOMIC BACKDROP A recent report released by accounting firm PwC indicates that 10 geographic regions are producing 20 percent of the national income. Not surprisingly, these include our major cities and mining areas in the west of the country. In order: Melbourne, Sydney, Ashburton (WA), East Pilbara (WA), Perth, Brisbane, Pyrmont-Ultimo, Macquarie Park-Marsfield, Adelaide. (Sydney has some particular challenges: the availability and cost of retail locations and a strong housing market, up 16.4 percent in the year to May [RP Data-Rismark])

WHAT ARE SOME OF THE DRIVERS IN FRANCHISING? ✱ Real household disposable income ✱ Consumer sentiment index ✱ Cash rate ✱ Average weekly hours worked The report suggests service-based franchises will benefit from increases to Australians’ incomes, particularly those businesses which provide a service for cash-rich, time-poor consumers.

The downside of this statistic on concentrated growth is that more than one third of the country is in recession, the report reveals.

“Modest growth in the consumer sentiment index over the five years through 2019-20 is projected to support consumer demand for a range of franchised products and services provided by the industry. Despite this, actual spending may be hindered by an anticipated rise in interest rates, which will increase debt payments and reduce the discretionary spending power of consumers.”

That opens up questions around public and private investment in infrastructure, and how franchising chains will grow their networks. Increasingly franchisors are looking to regions and

According to the ANZ bank, a slower household spend is going to be the new norm, with the current annual two percent increase half that of pre-GFC glory days.

JUL/AUG 2015 | 20 | WWW.FRANCHISEBUSINESS.COM.AU

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KEY ABS STATS FIRST QUARTER OF 2015

SPOTLIGHT ON COMMUNITY CARE What’s changing? Regulatory reform introduced through the National Disability Insurance Scheme and the Consumer Directed Care legislation for aged care that comes into effect in July 2015 will transform the community arena. That’s according to Deloitte Access Economics partner for health and social policy, Lynne Pezzullo. “Disability and aged care services will be transformed, giving customers greater control of services delivered. The total number of home care packages in 2013 was 66,000 and will increase to around 100,000 by 2017 – an increase of 51.5 percent,” Pezzullo says.

GDP + 0.9%

Wages + 2.3%

Inflation rate + 1.3%

Consumer price index + 0.2% 0.0

0.5

1.0

1.5

2.0

2.5

The Australian Bureau of Statistics says consumer prices are showing the slowest annual pace since the second quarter of 2012, due in part to declining transport costs, the price of communication, and apparel costs.

And Australians are paying down their debt faster, the bank’s economic unit observes. Looking ahead the revenue growth drivers are expected to be health, nutrition and well-being services, aged-care services, couriers and food retail. While food retailing is one of the major strengths of the sector it

JUL/AUG 2015 | 21 | WWW.FRANCHISEBUSINESS.COM.AU

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SPOTLIGHT ON DIGITAL

SPOTLIGHT ON FINANCIAL SERVICES

Australia’s digital economy is $79bn, already well beyond the 2011 estimate for the 2016 figure of $70bn. And it’s set to grow to a value of $139bn by 2020, which equates to 7.3 percent of GDP.

Advice is fundamental to Australia’s fi nancial services future suggests Phil Hardy at Deloitte. “But its future will be dependent on stakeholders adopting more customer-centric business processes.”

There are 450,000 information and communication technology specialists employed across the country (four percent of total employment), and 2.5 million employees in the sector.

There are nine levers that contribute to this: advisor matchmaking, customer-led models, holistic advice, selfservice, digital enabled service, social advice, psychology infused advice, innovative and agile, community trust.

The burgeoning growth has had an impact on productivity and business efficiencies and will continue to transform the business landscape.

ADMIN AND SUPPORT SERVICES [travel agencies, cleaning, gardening services] Real household disposable income, more women in the workplace, consumer sentiment.

SPOTLIGHT ON RETAIL

PERSONAL SERVICES Credit injections by the Reserve Bank have boosted retail turnover this year, reports Deloitte. The housing bubble in Sydney and Melbourne has also helped; both cities remain above the national average in retail sales growth and likely to continue so this year – but looking beyond is a different matter as the economy looks to offset the drop in mining investments. Within the sector, retailers of household goods and clothing have been the winners so far this year. Consumers have responded positively to the Budget and confidence is at its highest since early 2014.

[IT, auto repairs, pet services] Technology advances, out-sourcing trends, low start-up costs, high level of pet ownership. OTHER PRODUCTS AND SERVICES [education, financial services, construction, real estate] Real household disposable income, consumer sentiment, pricing, leisure time. Working patterns, with more part-time work affecting leisure time, also have an effect.

is increasingly competitive; in contrast, emerging niche markets such as beauty services are in a position to grow significantly. What will help the businesses achieve profitability will be better market share, expansion of the range of products or services – or diversification of the offer, and a reduction in business costs.

WHAT AFFECTS GROWTH IN THE INDUSTRY CATEGORIES? HEALTH AND COMMUNITY SERVICES Government funding pressures, ownership restrictions, reduced non-core expenditure such as cleaning, maintenance, food and linen in aged-care facilities, and market potential. RETAIL TRADE Fluctuations in disposable income and consumer sentiment, retail spending patterns, interest rate changes, higher wages, penalty rates.

MARKET SHARE This is a diverse sector with a number of large and well-established organisations (39.8 percent, according to the Franchising Australia 2014 report). As the report indicated, 27.1 percent of systems are medium-sized and 33.1 percent of franchised businesses are small-scale with up to just 20 units. There is a medium level of competition over the past five years, a trend that is continuing.

WHO ARE THE FRANCHISEES? Mature age individuals and couples used to be the typical franchisee – often buying a business when they had tired of being employees. Not now. On the one hand corporate executives with a redundancy package have bought into the franchise sector while at the other end of the spectrum. Generation Y has been fundamental to the growth of franchising outlets in Australia, staking their parents’ capital on being their own boss with the support and training of a franchise behind them.

HOSPITALITY Healthy eating trends, introduction of new franchisors, wages and penalty rates.

SOURCES: ANZ/ASIA-PACIFIC CENTRE FOR FRANCHISING EXCELLENCE/AUSTRALIAN BUREAU OF STATISTICS/DELOITTE/IBISWORLD/PWC/ RP DATA-RISMARK.

JUL/AUG 2015 | 22 | WWW.FRANCHISEBUSINESS.COM.AU

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Want to be in the drivers seat? …err easy chair? Do you want to really take control? The Leather Doctor franchise is Australia’s largest mobile leather care company and part of a larger group that specialise in mobile furniture repair. Leather Doctors have been the respected name in mobile leather repair for around 20 years. Established throughout Australia and now overseas we have a proven system mostly servicing the furniture market which is a huge, $7Billion p.a. (IBISWorld’s Furniture

• 50 Franchisees in Australia, 5 in Dubai • 20 year history • Contracts with Australia’s leading furniture retailers • Proven system ensure success Give us a call and we can help you take the drivers seat in your future… or in our case the easy chair.

Retailing market research 2012)

The Leather Doctor offers a proven system that ensures success. We have a national customer base of major furniture retailers and manufacturers as well as a well recognised brand within the private market. This is backed up by the fact that our growth has continued each year despite economic conditions.

1300 453 284 Email: info@theleatherdoctor.net.au

www.myleatherdoctor.com.au

FP Franchising Mag.indd 1

National Marketing Manager: Dean Reid - 0438 844 238

27/07/12 5:21 PM

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Why

EMOTIONS

HELP YOU

WIN IN BUSINESS

re you in touch with your emotions? It could pay off if you are, writes Nathan Stanogias. Your ability to detect emotions will help you earn more money in the workplace, and will help strengthen relationships with colleagues and field managers, too.

This insight comes from a 2014 study conducted by Gerhard Blickle, a psychologist at Germany’s University of Bonn. The more you’re in touch with your colleague’s emotions and your own emotions the better you will find yourself navigating the workplace. In Professor Blickle’s paper, 142 people

were asked to listen to recordings and look at pictures to decipher emotion. Participants were then asked to place what they heard and saw into three categories: happy, sad or angry.

some companies since the 1990s: L’Oreal started using emotional intelligence when hiring its salespeople, which led to a net revenue increase of about $2.5 million over the year.

The average success rate was 77 percent while really good recognisers identified 90 percent of emotion. Poor recognisers of emotion identified at 60 percent.

In a recent Franchise Relationships Institute (FRI) conference, results were released from a survey of 463 franchisees that looked at the effectiveness of field managers, finding 24 percent of comments made by 270 respondents want their field managers to take more interest in their concerns.

To consolidate the results of the study, researchers approached participants’ colleagues to ask how politically in-touch they were – if they appeared sincere and adept at forming relationships at work. This helped characteristics.

link

statistics

So, the case for shedding light on the importance of emotional intellect is gaining increasing traction in the corporate world, and has been a quiet method for JUL/AUG 2015 | 25 | WWW.FRANCHISEBUSINESS.COM.AU

Additionally, out of 265 comments 21 percent want more physical and emotional engagement from their field manager.

THE FIELD MANAGER, FRANCHISEE RELATIONSHIP Hairhouse Warehouse field manager Susan Skermer says that listening to franchisees

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is crucial when communicating with them. It’s this action that ensures a healthy relationship between field manager and franchisee is existent. But she outlines that there’s a level of importance in not getting too chummy or emotionally in-touch with franchisees. “The role of a field manager is to make sure that they are always a brand protector. The important thing to remember is that as a franchisee they own their business, so this respect must always be taken into consideration. “It’s important to not get too friendly with franchisees in the role of a field manager as sometimes this can lead to emotional decisions being undertaken. Always maintain professionalism and make business decisions based on fact. “I always make sure that I listen, often what a franchisee may be saying about something is not the actual issue, from this conversation you can often tell what part of the journey a franchisee is on. It is important that you treat them with respect and work with them as partners. They are all on different stages of their journey and situations we need to manage with this in mind,” Skermer said. While the role of the field manager in the franchising model is to mediate between franchisor and franchisee, Skermer made it clear that a field manager’s sole goal should be concerned with protecting the franchisor’s brand. “The concern for the franchisor is that the brand is protected at all times. The role of the field manager is to make sure that we are helping franchisees to see the importance of working with the brand for their profitability and success.” Caring for your colleagues is considerably important for Skermer and making sure everyone is on the same page is what leads to a healthy rapport. “The importance here is that you have a team and that everyone can connect a community of people you can go to who may have had a similar problem that can guide you in a way that you may not have thought of. Sometimes you just need that person to talk to and listen to you, other times you need solutions. Communication with a capital C. “You need to make sure that you sit back,

observe and listen to ascertain how they are feeling before you go in with lots of advice and solutions. Knowing how a franchisee feels will give you better results because you are able to work through the emotion with them and bring it back to facts based solutions.”

especially field managers. So with business operations constantly evolving the shift often requires field managers to adapt on the fly. Their job is a pivotal part of the business’s success because they’re always juggling between the franchisee and the franchisor.

But things can go wrong in this process, even if the field manager is doing everything in their power. Skermer shared a testy time with Franchising that she encountered in one of her former roles before joining Hairhouse Warehouse.

“A franchise field manager is no exception to that. In fact, they are often dealing with a unique trust system that can wreak havoc on those who do not have the right training, support and resources. Ideally, to keep a positive mindset they need to have all the building blocks of confidence ticked off,” Miles said.

“I had a franchisee who was incredibly angry at head office over a series of things, I walked into the store 15 minutes early for my appointment and was greeting by a Stanley knife wielding angry franchisee, who quickly told me to get out of her store. I left and then when I came back I calmly discussed her anger. “The question ‘tell me about what is going on for you?’ is a good one as she got the chance to talk about everything, I got the chance to make a list of her problems, solve a couple of them with quick wins, this earned her trust and she soon started to allow me into the business as she could see how I was adding value each time,” Skermer says.

FIELD MANAGERS CAN ENHANCE THE FRANCHISE BUSINESS Field managers have the capacity to either enhance or damage the franchise operation they work. For Asia-Pacific Centre for Franchising Excellence at Griffith University general manager Kerry Miles, the way in which we think about how hard working franchisees yield returns should be applied to field managers, too. Passion and selflessness is a must. In other words, a self-serving field manager is only toxic to the brand. “Just as the industry has been putting more resources into educating their potential and new franchisees, it could be said that the same level of due diligence is required for the staff who they entrust with their most important relationship of all – their field managers. Franchise field managers need to be embedded in their company’s culture, be part of the team, and carry out their role in an ethical and transparent way,” Miles says. An ever-transforming business world requires that everyone is on their toes, JUL/AUG 2015 | 26 | WWW.FRANCHISEBUSINESS.COM.AU

Marketing tutor at Griffith University Anthony Grace has been researching the issue of trust in franchising relationships and says that while there is a legal contract signed by franchisee and franchisor, there’s a psychological one mapped out, too.

A GOOD FRANCHISE RELATIONSHIP IS BUILT ON TRUST “An important trait of a trustworthy field manager is their commitment to showing genuine care for the franchisees. This display of kindness and support is an essential contributor to building trust, as well as facilitating a friendly and positive relationship. Although there is a legal contract signed by both the franchisee and the franchisor, there is also a psychological contract. “A franchising consultant suggested the psychological contract is ‘more important than the legal contract because it is what drives behaviour’. Therefore, the franchisee, the field managers, and the franchisor are inextricably linked to one another – commercially, legally, and psychologically,” Grace says. What is the best way to reduce disputes and achieve success for both parties? Well, according to Grace, sound emotional awareness is at the root of it all. “Emotional awareness is an important factor in any relationship. Having a conscious awareness of how you communicate, the tone of your voice, as well as your emotional state, can by influential in dictating the direction of the relationship. Research shows that franchisees reacted favourably to being recognised by their franchisor for performing well. They enjoyed receiving a ‘pat on the back’ from their franchisor when they did a good job.”

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HAVE YOU CONSIDERED A

FINANCE FRANCHISE? Do you aspire to run your own business?

Do you understand what makes small business tick?

Do you have a desire to help your clients grow their own business?

Do you want to benefit from being part of a nationally recognised brand with proven lending products and systems?

Do you want to build your business in an exclusive marketing territory?

If this sounds like you then you should be First Class Capitalâ&#x20AC;&#x2122;s next Franchise Partner.

First Class Capital is one of Australiaâ&#x20AC;&#x2122;s most innovative lenders, specialising in the delivery of trade finance and working capital solutions to small business. We are now offering franchise opportunities nationally for savvy business professionals who want to build their own successful franchise in the lucrative trade finance sector.

Become part of the successful First Class Capital team Today. Start your journey by calling us on 1800 307 903

or visiting www.firstclasscapital.com.au

Having a background in finance is not required, as we provide comprehensive training, state of the art online systems, regular regional and national advertising campaigns, as well as on-going mentoring and support. This ensures that you have all the tools you need to build your own successful business.

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NIFTY

5TIPS H

ow are your franchise smarts? Check out these points before you commit to a business opportunity.

As a potential franchisee, you might feel super confident and believe that you’re ready to go. But before you do anything - sign on the dotted line or make a verbal agreement - take note of these five tips. 1.

BE SMART ABOUT YOUR LOCATION

Some franchisors grant you the freedom of geographical choice so depending on the size of the business you plan to join, you might be able to choose where you locate your franchise. Either way - whether you can choose or not - you should do extensive research on the area. Knowing things such as traffic levels, busy and quiet times and the general demographic of the area is very important to gauging what you’re in for. 2.

FIND THE RIGHT STAFF

You don’t want to be working alongside people who merely go through the motions, lack passion and have no vision for the future. Have a screening (or a vetting) process when you put together a team - don’t just hire anybody.

FOLLOW AND REPLICATE SUCCESS

Liase with your field manager and build a strong relationship with your franchisor because it’s crucial to ensure these relationships are healthy. Take note of your franchisor’s past successes and look to build on it. Never get complacent, too. 4.

PURSUE YOUR PASSION

There’s absolutely no point getting involved in a franchise that provides services you won’t be able to deliver year on year. Make sure you’re equally as passionate about the nature of the services as you are with the franchise and its model. This is arguably the most valid, significant point to heed. 5.

EMBRACE GROWTH

Don’t be scared of business growth, or of change. These two things tend to go hand in hand, so remember to remain locked in to what you have to do and relish the opportunity to grow with the business.

JUL/AUG 2015 | 30 | WWW.FRANCHISEBUSINESS.COM.AU

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Domino's is not just Australia and New Zealand's leading pizza brand â&#x20AC;&#x201C; it's also one of the world's most advanced digital retailers. So if you're looking for a franchise that delivers on your goals you can't go past Domino's.

Undisputed leaders in online ordering. Australia and NZ's first and most advanced mobile ordering apps.

Australia and NZ's only pizza creation app and only real-time pizza tracker.

Innovative digital marketing with millions of customers assessable via email and social media.

SUCCESS? State of the art digital store management tools in the hands of every franchisee.

Ongoing training and support for franchisees and their teams.

A proven and trusted brand that's passionate about pizza and people.

Call 1300 131 888 or visit: dominos.com.au/franchising

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TWO’S COMPANY

JOHN DI NATALE John Di Natale is managing director of Axis Advisory, a boutique consultancy helping franchisors and franchisees grow more exciting, more profitable and more rewarding businesses.

ill you be buying a franchise business on your own or sharing the process with a friend or spouse? Here are seven reasons why it pays to make the most of business opportunities with a partner.

Why should you go into business with a partner? It’s more fun, I think you would agree, to do most things in life with somebody else. In business, as in life, there are some real benefits to having a partner along on the journey with you. Yes, I understand there are potential downsides too, but that’s a topic for another day. The focus here is on the positives that stem from having a business partner along for the ride. Your business partner may contribute capital to help your financial position, they may have a great network of contacts to help your business grow, and they may have skills in areas that are not your JUL/AUG 2015 | 32 | WWW.FRANCHISEBUSINESS.COM.AU

strengths to balance out the team. Each and all of these can be compelling motivators to bring a partner on board. So let’s look at seven ways that working with someone else will make your journey to owning and building a better franchise business easier…

1. TWO HEADS ARE BETTER THAN ONE One of the challenges of starting and running your own business is that you are now responsible for all the major decisions. You’ve heard the saying “it’s lonely at the top”? Well, it can be even lonelier when you’re just starting out. Having someone to

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brainstorm with, share the thought process with and use as a sounding board is a real plus. Equally important, they can tell you when your ideas are not so great and help keep you on track.

2. A PARTNERSHIP IS EASY TO SET UP As far as business structures go, a partnership is not particularly complex from a legal or administrative perspective. This means your initial costs in setting up the arrangement are minimal and you won’t have to spend as much money on compliance and taxation related matters as you would do with a company and trust structures.

3. THEY KNOW THINGS YOU DON’T You have to wear a lot of hats in business these days. Whether your franchise is in food, is a mobile operation or provides professional services you need to be across your business plan, your vision, your team, your products, your finances, your reporting, your tax, your marketing, your safety… I’m sure you can add a few more to the list. It’s rare for anyone to know everything needed to succeed in all of these areas of business. You might know a lot about the technicalities of your products, but not much about marketing. Your business partner on the other hand, may know quite a bit about marketing, and finances. Complementary skill sets are one of the key benefits of a partnership. Your franchise partner can fill the gaps in your knowledge and that takes some of the pressure off.

4. THEY LIKE DOING THE THINGS YOU DON’T I love the sales process. I love meeting people; I love speaking in front of an audience. My business partner has a virtual meltdown at the thought of any of these things but likes developing systems, writing processes, looking after administration. I’m almost comatose just writing about those things. So you see, we have different preferences for the things we like to do and the things we believe we are good at. Good partnerships work to each partner’s strengths, and work together on any remaining gaps. Utilising your passion and skills in the areas you enjoy not only leads to you being happier, but in my experience, it leads to a much more engaging and successful business.

5. THEY SHARE THE BURDEN Business is not always fun. There are times when things don’t go according to plan, and things just simply fail. Having someone to share that with, and who can pick you up off the floor occasionally is a good thing. And of course, you can reciprocate when they need picking up. When you operate in a partnership, you can actually take a day off, maybe a weekend; maybe even take a holiday knowing that your business is being looked after by someone who has a genuine interest in making sure it succeeds! This alleviates one of the most common complaints from small business owners who feel trapped by their business: “I opened my café for the lifestyle, but now I’m chained to this coffee machine!”

6. YOU CAN LEVERAGE YOUR RESOURCES BETTER In most small businesses, the scarcest resources are money and time. In some respects, a partnership reduces the risk JUL/AUG 2015 | 34 | WWW.FRANCHISEBUSINESS.COM.AU

on each of the individuals involved when you need to go and find capital for your business. Instead of investing a million dollars, you might only need to invest half a million. This enables you to gear your finance at a much lower level and reduce the risk to your assets should things not go the way you plan. Partnerships can be more effective from a taxation perspective as well. Having two people with their various companies, trusts and other structures (as a side note, get some good advice on how to structure your business) means that you can distribute income and minimise your tax commitments.

7. THEY KEEP YOU SANE! Finally, I recommend getting a partner with a sense of humour! Having someone around to make sure you don’t take yourself or some of the things in your business too seriously is just as important as getting everything done – sometimes even more so!

2014-04-23T11:39:51+10:00

ificial flavour s art

FR0514_000_GEL

a rtif

l icia l c o

taste the

SWEET REWARDS of becoming a Gelatissimo franchisee To change your lifestyle through investing in a business that is fun, flexible and rewarding contact Karen at Gelatissimo on (02) 8845 0100 or email franchise@gelatissimo.com.au.

gelatissimo.com.au

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BILL LOCKETT Bill Lockett is a consultant at Franchise Systems Group. Bill Lockett has a strong retail background and joined Franchise Systems Group (FSG) after 40 years international experience in senior management positions with major retailers including David Jones and Selfridges.

he current economy is being described as difficult for many businesses including franchised companies. Yet there are still a large number of companies that are doing well at both franchisor and franchisee level. So will your franchisor help you when times are tough?

If you are looking to buy a franchise, there are certain factors which you should look for in a franchisor to find out if they are likely to help you in a tough time. PROFITABILITY Many prospective franchisee fall in love with a concept, believing that it is the new big trend. However it is essential to ascertain whether the business will offer long term sustainable profitability and generate a sufficient return on your investment. TRAINING The franchisor should be able to demonstrate that they have the right training programs to make you successful. SYSTEMS The business is easy to operate with all the back office systems in place, so that you can focus on your core business rather than be buried in administrative detail. JUL/AUG 2015 | 36 | WWW.FRANCHISEBUSINESS.COM.AU

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Will your franchisor be a

SUPERHERO?

JUL/AUG 2015 | 37 | WWW.FRANCHISEBUSINESS.COM.AU

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MARKETING The franchisor should have the marketing programs to firstly launch a new franchise and secondly to provide an ongoing local area marketing program for individual franchisees. SUPPORT Who will be offering you support on a day to day basis? Does the franchisor have field managers who visit you regularly or are you reliant on phone calls to head office? The key factor when deciding on buying a franchise is you. ✱ Will you commit to the business and give it your full focus? ✱ Will you follow the system and give the best possible customer service? ✱ Will you develop a business plan, ensure that you have sufficient working capital in the business and control your expenses? The enlightened franchisors do their best to ensure their franchisees are satisfied

Transparency, honesty and loyalty are essential requirements in a good franchise system with their business and are profitable. This satisfaction is important as the system needs franchisees to concentrate on the running of their business rather than complaining to fellow franchisees and the franchisor. The future recruitment of new franchisees depends on the success of their current franchisees. Each new prospective franchisee is provided with a list of current franchisees and is encouraged to call any of them to gain feedback on how the franchise works for them. If a number of responses were negative

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about the business, then the franchise buyer is going to look elsewhere. This will have a big impact on the franchise system’s ability to both grow new units and attract quality candidates as franchisees. This will also impact on the ability of a franchisee to resell their franchised business in the future. This is important, because the franchise opportunity should be an attractive one and easy to sell for a good price. After all, this is one of the attractions of buying a franchise in the first place. In addition, it is important to the growth of the overall business that both the fran-

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chisor and all the franchisees should be working to a common goal. This can only be achieved by excellent communication within the network by getting the message across to not just the franchise team at head office but also franchisees on the front line. It is important for the franchisor and his team to listen to what the franchisees have to say as this can inject many ideas and changes that can be beneficial to the whole system. Franchisees also like to see a consistent message and to know that other franchisees are following the system to ensure uniformity across the network. The franchisor must exude passion for the brand, otherwise it will be difficult for franchisees to follow that passion. Transparency, honesty and loyalty are essential requirements in a good franchise system. Franchisees are referred to as business partners and this partnership must be respected. The support structure is critical and starts with a supportive mindset. Franchisors

often have to act as coaches and cops. They need to have the ability to understand when which aspect is required. Treating the franchisees as individuals will go a long way to getting the right results. The backup network in the business should be established to allow the franchisees to get on with their core business and enjoy their work. Franchisors should continually share their vision for where the business is heading. Franchisees will follow if they know the direction of the business and will happily follow the leader who makes this clear.

CAN I GET A ROYALTY REDUCTION?

same time as controlling expenditure in a sensible way.

When the going gets tough, it is a natural tendency for franchisees to look to their franchisor for assistance. They may expect financial assistance, such as a reduction in royalties.

It is in the interest of the franchisor to make this happen, so, as a franchisee, actively seek their involvement to assist you in the process.

However this is never the major factor in a downturn. The franchisee and the franchisor should be looking for ways in which the business can increase the top line sales and margins within the business, at the

As a franchisor, the benefits of this assistance will pay dividends in ensuring franchisees are the best ambassadors for future franchisees and will enjoy a long tenure in the system.

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ROBERT TOTH Robert Toth is franchise partner at Marsh & Maher. Robert is an accredited business law specialist, a member of the International Franchise Lawyers Association (IFLA), and a member of the Australian Institute of Company Directors.

ouâ&#x20AC;&#x2122;ve found the franchise and spotted the perfect location - now youâ&#x20AC;&#x2122;re ready to sign the agreement, and the premises lease. There are some important considerations about leasing to be aware of when you are poised to buy a franchise.

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Ideally the franchise term will start and end on the same date as the lease agreement. This is often not the case particularly with shopping centre leases

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Inherently the value of a business is tied to the term of its lease that is called security of tenure. There are often issues that arise in franchising, depending on who holds the lease. In many cases the franchisor will hold the head lease and then grants a license to occupy to the franchisee. In many other franchise models the lease is negotiated directly with the franchisee as head tenant, subject to the lease and site being approved by the franchisor. Ideally the franchise term will start and end on the same date as the lease agreement. This is often not the case particularly with shopping centre leases. From a franchisee’s perspective, having your lawyer review the lease is as important therefore as reviewing the terms of the franchise agreement. You need to ensure there are no conflicting terms between the lease and the franchise agreement. A key issue where the terms

do not align is that a franchisee may be left with a franchise business with no premises from which to operate or the franchise term ends with no premises to operate from. Both of these scenarios are not only uncomfortable but can involve a franchisee in unnecessary financial exposure and stress. Most franchise agreements which involve the lease of premises will be caught by the Retail Leases Act legislation subject to specific state and territory legislation.

WHO SHOULD HOLD THE LEASE? In many cases it is the shopping centre that will determine who will hold the lease, as many do not want to deal with individual franchisees. Where a franchisee enters into a lease with a third party and is obtaining funding to acquire a business there can be priority conflict issues between the franchisee’s bank, who may wish to take a mortgage over the lease and franchisee’s

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assets in priority, to the rights of the franchisor if the franchisee defaults. This does not occur were the franchisor holds the lease. By holding the lease the franchisor is however primarily liable if the franchisee abandons the business and or is in default. If the franchisor is also the landlord then the lease and franchise agreement should be aligned. There can however, be conflict between the provisions of the franchise agreement giving the franchisor the right to approve a purchaser and the landlord’s right to refuse an assignment under the Retail Leases Act which need to be considered. Where the franchisor leases the premises as head tenant and sub-leases to the franchisee there is no contractual relationship between the landlord and the sublease (franchisee). The franchisor passes on all leasing costs and obligations to the franchisee. This can create problems for a franchisee if the franchisor

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gets into financial difficulty and fails to pay the rent as head tenant to the landlord. The franchisee in that case has acted properly paying its rent and outgoings however if the franchisor has failed to remit those to the landlord, the landlord can terminate the head lease and therefore the sublease. The franchiseeâ&#x20AC;&#x2122;s business is therefore exposed to huge risk. The franchisor as head tenant may not question many of the costs imposed by the landlord or shopping centre and simply pass them on to the franchisee without question for payment. Where the franchisee leases the premises directly from a third party then is often the issue that the terms do not coincide between the franchise and lease term. Issues also arise in relation to a franchisee who might exercise its option under the franchise agreement when there is no option under the lease.

OTHER ISSUES TO CONSIDER Each state and territory has its own retail leasing laws, while these are similar in many respects there are differences, the key one being how retail premises are defined. In Victoria the definition of a retail premises is very broad covering unspecified goods and services provided by retail from premises. In NSW the Retail Leases Act 1994, definition includes all premises in retail shopping centres as well as all business not in retail shopping centres which are of a type of business specified in the schedule, which are primarily selling goods not services. WHAT ARE THE RISKS OF RELOCATION AND REDEVELOPMENT? A franchisee who is a subtenant

or licensee may be at the control of the landlord in relation to the relocation/redevelopment of a shopping centre which may be costly and disruptive to the franchiseeâ&#x20AC;&#x2122;s business. There is also a risk that the head lease may contain a demolition cause which the franchisee may not be aware. The retail leases legislation gives some protection to tenants by requiring landlords to pay compensation however the cost and inconvenience usually far outweighs by the compensation offered and or negotiated. The obligations to make good the premises at the end of the lease should be carefully reviewed. This can be a costly exercise for the franchisee as the obligations may be passed onto them under the sub-lease or license agreement. Franchisees should not only review any lease agreements they are holding as a sublessee or a licensee but also ensure that they have a list of the possible outgoings so that they are aware of all the fixed operating costs and can properly budget for those costs in their cash flow projections. Often the base rent is one indicator however there can be contribution to outgoings, ownerâ&#x20AC;&#x2122;s corporation fees and contributions to advertising and marketing campaigns. There may also be shopping centre rules, the obligations of which are passed onto the franchisee, which may impact on the franchise business for example in respect to signage, playing music and lighting which may be contrary to the intended business activities. Franchising, like retail leasing, is highly regulated. Ensure you obtain expert legal advice in respect to not only the obligations under the franchise, but also under any lease or licence arrangement.

JUL/AUG 2015 | 44 | WWW.FRANCHISEBUSINESS.COM.AU

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HOW TO WORK OUT YOUR

BUDGET

ANDREW GRAHAM Andrew is the national head of business solutions for RSM Bird Cameron. With more than 20 yearsâ&#x20AC;&#x2122; experience, Andrew has a record of strategy development and managing growth to deliver substantial improvements to business.

hile the prospect of buying a franchise can be exciting, it is important not to get too carried away in the early stages and commit to spending more money than you can afford. Potential franchisees must take a careful look at their finances to ensure that they do not overcommit.

Like any other business, being undercapitalised and having excess debt can be disastrous for a franchise. At the same time, it is not always advisable to put too much of your own money into a franchise so itâ&#x20AC;&#x2122;s important to get the right balance. There are two key

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activities you should undertake before deciding how much you can afford to fund your business purchase. 1. Develop a statement of net worth by listing your assets and liabilities. 2. Talk to an expert who can

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Costs can include legal fees, the initial franchise fee, bank fees and ongoing fees as well as working capital. It is also important to consider the tax implications

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give you an idea of how the numbers add up: what your chosen franchise will cost to setup and run; when you can expect to turn a profit, including determining your breakeven costs; and how much you can expect in turnover. At this stage a return on investment analysis should be undertaken so that you can make an informed decision on whether the return is acceptable compared to other investments. Determining the most appropriate mix of debt and equity to buy a franchise is largely based on an owner’s personal financial circumstances and their appetite for risk. If we assume your lender requires a 20 percent deposit, the total amount you can borrow could be limited accordingly. If your appetite for risk is higher, then you may wish to borrow more. Some banks will lend up to 80 percent of the value of your home, for example. For the 20 percent of franchises that are accredited with Australian banks, you may be able to borrow more using the franchise itself as security. Regardless of how much you borrow, it is important to remember that it may be some time before the franchise begins turning a profit, which means you may not be earning any money for the first few months of operating. It is vital to take this into considera-

tion to ensure you can cover your living expenses in the meantime. If you have another source of income then the need to minimise risk may not be so great. If the franchise is your only source of income, then it is advisable to preserve as much of your net worth as possible. Once you know how much you are prepared to invest and borrow to secure a franchise, the next step is to understand the complete costs of the franchise including “get in”, royalty and advertising, operating cost structure and “get out”.

WHAT COSTS WILL YOU NEED TO FINANCE? Costs can include legal fees, the initial franchise fee, bank fees and ongoing fees as well as working capital. It is also important to consider the tax implications of the purchase and how best to structure various components of the acquisition such as plant and equipment, fit-out etc. Elements that can affect the cost of the franchise include the type of industry, whether premises and equipment are required, whether additional staff are required and so on. Mobile, personal services and home-based franchises tend to be the most affordable, while retail and food franchises are more expensive.

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A well-established, successful franchise will charge higher fees but this is likely to be offset by the potential revenue. At any rate you need to look for value for money and ascertain the support level from the franchisor in terms of in field support, marketing and sales support and general business advice. A general rule of thumb is that the business should provide earnings before interest and tax (EBIT) in the vicinity of 25-30 per cent of the purchase price. EBIT is calculated after providing a nominal salary for you as the owner. This can be flexible depending on the type of business and potential for growth.

DO YOUR OWN RESEARCH A word of warning: do your own financial analysis or get a trusted financial advisor to do so rather than relying on the figures presented by the current owner or franchisor. While those figures may not be incorrect, they may be based on best-case scenario data. While it is important to purchase a franchise that you are passionate about, if the numbers do not stack up then you should be prepared to walk away. Do your own due diligence and talk to a wide cross section of franchisees in different locations to get a better feel for any issues you need to beware or potential areas of concern.

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give your career some kick. Oporto Franchise Opportunity. This is your chance to really live spicy. Oporto is a 100% Aussie-owned network with over 140 great locations within Australia and New Zealand. We open an average of 15 new stores every year and weâ&#x20AC;&#x2122;re looking for enthusiastic, self-motivated people to run them. If that sounds like you, we want to hear from you. Youâ&#x20AC;&#x2122;ll find all the details on how to apply at: www.oporto.com.au/franchising

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imon Ovenden, national manager, franchise banking at NAB, gives Franchising an insight into the reasons why a bank may reject a funding application for buyers looking to invest in franchise business opportunities.

To start with, it’s important to understand that a banker will, as part of their assessment of your application, refer to the four C’s of credit to help guide their credit approval process, Ovenden explains. The four Cs are: ✱ Capacity ✱ Cashflow ✱ Collateral ✱ Character

1. CAPACITY You don’t have the equity required to support your loan. “You will need equity behind you to get funding and mostly for Australian householders this is equity will be wrapped up in your home and it is possible to use this equity to support a business loan. The ideal situation though would be where the applicant has the majority of their equity in cash as this reduces the debt burden on the business. “Some franchise brands (mostly those large and long term brands) have bank accreditations where the bank is reasonably comfortable with the risk profile of the particular brand and may not require fully supported (usually by using your home or other property) loans and rely more on the going concern value of the business.” A good rule of thumb for buyers of franchise businesses is to aim for at least 50 percent of the total investment (including all hard and soft costs) in equity. “For example, if you need $500,000 to open for business, you should have $250,000 to put up: that could be $100,000 in cash, and $150,000 in equity,” Ovenden says. In terms of the calculation of the amount of equity in your home, a bank would ordinarily use the difference between 80 percent of the market value of the property and the amount of debt already outstanding. So a million dollar property with an JUL/AUG 2015 | 53 | WWW.FRANCHISEBUSINESS.COM.AU

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outstanding loan of $500,000 would equate to clear equity of $300,000 (80 percent of $1m minus $500,000) he explains.

2. CASHFLOW Your business doesnâ&#x20AC;&#x2122;t generate enough net cashflow to sustain the business costs and pay off its debt. â&#x20AC;&#x153;The business needs to earn enough on its own two feet to pay down its debts. Your business loan should be zero by the end of the franchise agreement or lease term, which are generally the same,â&#x20AC;? says Ovenden. From whatâ&#x20AC;&#x2122;s left after operating costs, your cashflow generally pays: â&#x153;ą your salary â&#x153;ą the ATO â&#x153;ą your business debts â&#x20AC;&#x153;A lot of people get pretty excited about their business but over time may find that they canâ&#x20AC;&#x2122;t afford to pay their debts. It is very important to ensure that your lifestyle doesnâ&#x20AC;&#x2122;t outpace your income. We quite often see extracurricular activity

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bleeds cash from a business and can really strangle it. “It is also very important to pay down your business debts before the end of your lease or franchise agreement term,” says Ovenden. “The last thing you need is to get to the end of your lease and find you can’t come to terms with the landlord, lose the tenancy and then have residual business debt to pay down without any income. “

3. COLLATERAL You don’t have sufficient assets to pay off the bank if the business cannot repay its debts. “This is about pledging additional assets if required by the bank to secure a loan. The bank will always assess its primary exit (the loan paid off) from income generated by the business to comfortably pay the loan commitments,” says Ovenden. “But if that doesn’t happen the bank would call on its secondary exit (any assets or arrangements where a charge is registered to support a loan).

“This is really unpalatable for a whole lot of reasons and is generally expensive to realise, costly on a few fronts not least the human impact of loss of assets (sometimes the family home). It’s a situation that no-one really wants to experience, and bankers never want to go down this path but sometimes they have to.”

4. CHARACTER The bank lacks trust in you. “This is one of the most important aspects of any business dealings,” highlights Ovenden. “Banks want open and honest disclosure. You can’t start a relationship with half-truths.” Financial institutions will do background credit checks, and it’s really hard to hide poor credit, he says. “If we see problems come up that we don’t know about, we would often assume that the applicant is being dishonest.” Although poor credit history can be a challenge for a bank, articulating the story behind it can help, Ovenden suggests.

“Tell the bank if you’ve fixed the problem and paid back what you owe. Provide some context and rationale for the situation and what you did to correct it. “It may still be difficult to obtain credit, but if you can eyeball the banker and explain the human element to it, well, it’s far better to be upfront and honest. There is also no better contact to have in your hour of need than a banker with whom you have a great, open and honest relationship.”

ACTION PLAN Understand the four Cs, and getting your business loan can be a much smoother process. Ovenden’s tip is to ease the banker’s life. “Be organised, don’t take a shoebox of paperwork to the bank. Keep your paperwork neat and succinct, look professional and make sure you can clearly articulate what you want and how you propose to pay any loans back to the bank,” he suggests .

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“H

ealthy fast-food options are expected to remain a priority for consumers.” That’s the view of Stephen Gargano, the author of a report, the Fast Food Services in Australia, from analytics firm IbisWorld.

There was exceptional growth from 2009 to 2014, and the trend for healthier food choices such as juice and salad bars and sushi outlets is expected to continue. And while this is an increasingly popular segment of the market, (accounting for 12.9 percent of fast food products and services) Gargano believes it will become more challenging to enter as a new, independent brand. That’s great news for franchise brands which already have a foothold in this intensely competitive forum. Sumo Salad’s Luke Baylis agrees. “Our awareness has grown exponentially in the 12 years. Salad used to be considered rabbit food. Even the tax department has now changed its view on whether it’s a meal, or a side. “It’s about changing lifestyles, sustainable good food.”

SUMO SALAD There has been a shift in the mainstream, with consumers today likely to mix up their eating habits, enjoying healthy food choices alongside burgers and pizzas during a week, he says. “We’re not appealing to health care fanatics. It’s about good healthy affordable meals. “We believe the brand provides the differentials, a lot of people subscribe to the brand values. “McDonald’s can make a salad but it isn’t credible. In a market of commoditisation this is the one thing people have a true belief in, see we are making a positive change and that resonates with them.” Advertising and the retail experience itself are the two strongest methods of getting across the brand values, says Baylis. JUL/AUG 2015 | 56 | WWW.FRANCHISEBUSINESS.COM.AU

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“It’s about making sure the consumer understands what our offer is, what we stand for. We have to deliver a good, consistent experience time and time again.”

1 -THE MLC STORE 2-SALAD IS A MEAL, NO LONGER A SIDE DISH

For franchisees who are leveraging the knowledge and expertise on board at SumoSalad, bringing energy and local community engagement is their part of the franchise equation. In every business there are costs that get passed on to the consumer, says Baylis, “but we are very diligently trying to manage costs to provide a value offer to the customer. We know there is a price ceiling and we try to maximise the profits. “Most brands take small increments to make sure they preserve franchisee returns on investment.” Rents are another challenging part of the equation, and Baylis believes the competition in the market is getting stronger, with some landlords not as diligent as they might be in the mix of brands placed together. “So brands like us need to be leaders and innovators. “Landlords are putting more and more conflicting brands together but are not bringing in an increase in footfall to match the environment,” he says. Baylis sees that food courts have lost some of their appeal but adds that good landlords are diligent about retailers making returns by enhancing the environment. Part of the limitation comes from the single day part trading – with a focus heavily on lunchtime traffic. Occupancy costs don’t match the footfall, Baylis says. So brands such as SumoSalad are turning to other casual dining and shopping arenas where landlords have a more realistic approach to rents: smaller centres, fresh food areas for instance. “We’re looking at a range of these, education, health and transport. We have adapated our model to a multi-day trade, partly redesigning the business to have appeal outside of food courts.” The Green Label store, which gives consumers reasons to visit from morning till night, is typical of the revised profile and Baylis promises there will be many more of these outlets.

Other innovations include cold-pressed juice, innovative health products that have mass market acceptance, healthy alternatives. Product development is about giving consumers a reason to come back and try something new, increasing their weekly visits.

being customer centric. If Sumo is their first choice, we’ve done our job," says Baylis. Some stores will spearhead launches in the US, South America and Singapore, but “our focus is domestic".

“We’re the largest healthy food business in Australia, and the largest salad chain in the world.

"We’re not in a rush, we’re very focused on the domestic market and prefer to have a much better penetration and better performance.

“We’re working on our concept so the customer has best experience. It’s all about

“We’ve built critical mass in Australia, brand recognition, and core business.”

JUL/AUG 2015 | 58 | WWW.FRANCHISEBUSINESS.COM.AU

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A black rice range too offers more fibre, and a carbohydrate high in antioxidants. Innovation is important. Individual businesses are the main competition explains Kate McMahon. “They are often really good at what they do,” she admits. While both the brands require great operators who are happy marketing healthy food, Wasabi Warriors’ profile of recycled packaging, organic and locally sourced product gives it a distinct personality. “It’s quite a dedicated brand, and it takes a passionate, dedicated person to carry the brand message,” says McMahon. The latest outlet in the Jetstar area at Brisbane airport is a more directional store, focusing on a Japanese tapas menu, serving alcohol and moving more into the restaurant space. SUSHI IS ON THE MENU

Pop-up stores are another variant on the model which can be adjusted to suit the franchisee and the landlord. And the influence of the sushi chain is spreading; another brand in the portfolio, the Kick Juice chain, now has a better future linked with Go Sushi. Pairing the two brands together with one franchisee allows for a year-round sustainable business. “There is a drop off in sushi in the colder months, so we introduce hot items such as gyozas and dumplings. There’s the opportunity to have two businesses in one location, with team members working across both.”

GO SUSHI/WASABI WARRIORS The healthy eating style of the Japanese is going well for two brands in particular. Kate McMahon, marketing at Pacific Retail which runs both Wasabi Warrior and Go Sushi, says “We’re opening a Wasabi Warriors in Brisbane airport, and an extra Go Sushi store in Melbourne. “Is it mainstream? I think it depends where you are. Go Sushi has more regional distribution so it’s a new concept. In Shepparton all the locals love it. Some areas not quite clued up yet.” However, McMahon explains the youngest consumers adopt the Japanese food

quite easily. “Kids don’t think of it as a foreign cuisine, it’s just a western food.” Kids’ meal deals, and mums and bubs offers, are promoting a healthier eating habit, she says. The height of the display and the menu boards works in favour of the business, at the right eye level for children. Go Sushi has adopted the bright colours and childish tags popular with the smallest customers to boost the product. The menu is simple and focused on tuna, cucumber and avocado, with brown rice on offer for children with more adventurous palates. JUL/AUG 2015 | 60 | WWW.FRANCHISEBUSINESS.COM.AU

The brands have presence overseas, with the Philippines and Japan both developing outlets and New Zealand in the company’s sights. “We’re continuing to grow but not getting carried away. People can get caught up in hype. We’re focused on giving our customer fresh, nutritious food, having fun and product innovation. “Our goal successful.”

make

franchisees

Another arm of the umbrella Pacific Retail business has purchased the Sushi Ginza wholesale brand; on the one hand this allows for the company to negotiate the supermarket arena, on the other hand for the franchised brands it brings experience in Japanese cuisine from the general manager.

FR0115_000_WAT2

2014-12-04T10:57:23+11:00

TAKE YOUR PICK! 2 business opportunities from Swimart. Work for yourself and be part of the Swimart success story.

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2015-06-29T18:15:21+10:00

RAW ENERGY “The market is nowhere near as niche as it was in 1998 when we started,” says Matthew Hope, managing director of Raw Energy, a café business from the Sunshine Coast.

1 - ON THE MENU AT RAW ENERGY 2- GEOFF CAMPBELL, FOUNDER, WITH MATTHEW HOPE

“The challenge is to keep reinventing the brand for healthy purposes, reinventing menu options.” He says customers now ask, are you a raw food café? “We’re not too niche, we’ve been careful about that.” While not catering for fitness fanatics, core customers are ‘Lorna Jane shoppers’ says Hope: “they buy their clothes there, they are fit, or they want to be fit, and want to make a healthy move.” The brand has a distinct profile he says, which builds on the community focus.

works the till. We use down time in the café to do prep, and smarter rostering helps too.

“The Sunshine Coast is more aware of our brand and we have a particular vibe; people like the music, the posters on the wall.

“We can help control costs of goods through group buying, portion control and wastage. We order daily to control freshness and not order to much to keep wastage to a minimum.”

“A massive part of what we do is community-based.”

Ingredients are freshly made.

Wages are a big challenge for all retailers but while weekend penalty rates force some food businesses to close on Sundays and public holidays, Raw Energy has found a way to minimise the impact.

“The quality of our food has to keep them coming back. People feel better going out of our stores than they do coming in.”

“We control labour costs through multiskilling. The barista also makes juices and

sourced

locally

and

The business has opted to expand with a master franchise model and the first master has been appointed in New South Wales. As part of the role, the WollonJUL/AUG 2015 | 62 | WWW.FRANCHISEBUSINESS.COM.AU

gong franchisee has established a local supply chain that will help incoming franchisees to manage costs and keep the fresh food profile. “The speed of rolling out the model and having people with a vested interest in the brand, selling franchises, is important.” Over the next 12 months further expansion will see the brand launch into Victoria and Western Australia. Each master franchisee will be opening three to four franchises, predominantly in metro and busy regional areas, though each prospective location will be dealt with individually. “I feel landlords are better than five years ago. I think now they are more reasonable and more realistic. Franchisees can’t

TP0115_007

2014-12-11T10:14:34+11:00

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1 - DISPLAY IS KEY FOR TOP JUICE 2- BARRY BARBER

control these costs, they are fixed, so we make sure it’s right upfront.”

TOP JUICE

The company has steered clear of shopping centres and developed a business built on strip mall or stores with outdoor seating which is not tied into the lease.

According to Top Juice general manager Barry Barber, this is really becoming a movement driven by a number of factors including healthy lifestyle and diet, community and tv programs about cooking and lifestyle.

The heavy reliance on food preparation limits somewhat the company’s ability to shrink the store footprint and introduce tighter models so there has been a focus on a simplification to the menus to ensure consistency and maximum return on space.

“Over the last few years better food has become more accessible for more people. Five star dining has given way to casual dining, and it’s getting better value.

Typically a breakfast and lunch offering, the Raw Energy menu has been broadened for a night trade at the newest store opening in July in the centre of Brisbane. On offer will be organic wines too. This is a concept that may be rolled out in metro areas if it proves successful. “It’s massively important to innovate. Health changes very quickly, our menu selection is driven by what customers want, and what they see in the media.” As an example, the acai breakfast bowls have proved really popular, says Hope, an initiative that was “ahead of the game”. A no chips, no soft drinks policy is helping educate young palates about healthy eating too with the kids’ component of the menu including tasty options that they can still play with, dipping fruit into yogurt for instance.

“Healthy fast food is really a mass interpretation of the demand for better food,” he says. In some respects landlords have responded by improving the mix of outlets and investing more in food, he adds, with some centres veering towards segmented food offers so quick service restaurants are grouped together, and customers looking for a dining experience can find what they want at a different location. Traditional QSR outlets have adopted healthy options to project the message either through marketing or products, and as new ideas emerge, the healthy eating chains have to re-assess their credentials. “You have to stand up and stake your claim in this environment,” says Barber.

ently can be quite a challenge. You have to have the supply chain. “We’re fortunate that our competitive advantage is a central kitchen and supply model. We have a very good handle on the produce that flows through our business.” Internally the talk is focused on three aspects, summed up in the acronym GAP: generous displays, abundant servings and premium produce. Marketing is geared to support franchisees; there’s no levy drawn, and the focus is on assisting franchisees to achieve their local marketing in their communities, whether that’s through marketing campaigns or cross-branding opportunities. Cost of goods is a big factor for franchisees, particularly when there is a focus on fresh and seasonal produce. “You want trusted suppliers for premium produce which are not necessarily the cheapest. "We are doing a lot of work with farmers and that helps us have a consistent supply and stabilise prices. We have to deliver some certainty and a reasonable prediction of prices for franchisees.” The company is big on innovation and the company has evolved its offer though kept its core principles. There is flexibility to vary the range and offer, says Barber.

What is critical in his eyes is authenticity. “Customers are demanding fresh, natural and local food. And delivering it consistJUL/AUG 2015 | 64 | WWW.FRANCHISEBUSINESS.COM.AU

“Because of the supply chain we can adapt very quickly to changing market demands.”

FR0715_000_DRE

2015-06-24T10:10:32+10:00

Dream Doors Franchise takes Australia by Storm Dream Doors is an international brand specialising in kitchen, bathroom and laundry facelifts. By simply replacing the doors, drawer fronts and bench tops we save customers $1,000‘s. The brand was founded fifteen years ago in the UK and has a history of success and brand recognition. Launched in Australia eighteen months ago Dream Doors has quickly grown to a network of fifteen franchises. And, with it’s unique facelift concept, occupies a niche in the home improvements sector enabling Franchisees to enjoy a less competitive kitchen, bathroom and laundry market. There are still excellent Franchise territories available nationwide and we are seeking Marketers, Business Innovators, Go-Getters and Entrepreneurs who are focused on building themselves a secure future and to further develop the brand. As initial full training and genuine ongoing management support is provided, a related industry background is not a pre-requisite to successfully operating a Dream Doors Franchise.

Call now to secure your very own Dream Doors Franchise or to find out more... History of success:

What does it cost:

• 50 Franchises in the UK • 15 Franchises in Australia • 08 Franchises in New Zealand • Franchises sold in Australia - 4 x Brisbane - 5 x Sydney - 2 x Melbourne - 1 x Adelaide - 2 x Perth - 1 x Newcastle

• Fantastic Territory Franchise areas with initial costs • From $75,000 + GST + operating costs

Contact details: Australian Master Franchisor Cam Hadlow (General Manager) Dream Doors Australia Pty Ltd cam@dreamdoors.com.au Phone: 1800 373263 or 04 57575727

FR0715_000_REF_LEFT

2015-06-29T09:43:35+10:00

Advertorial

Fact File The Australian construction industry is comprised of three main sectors: New Homes, Commercial Construction and Residential Renovations. The New Home and Commercial sectors have evolved from being tradebased operations to being building companies run by managers and employing construction teams to run the projects. The renovation market is still highly fragmented and trade-based, like the other segments were in previous decades. This means there is a gap in the market for new business models which will deliver signiﬁcantly better customer and business outcomes.

37% 32% Residential Renovations (consented and unconsented additions and alterations)

(including apartments)

Commercial, industrial and other non-residential

31%

There’s a signiﬁcant gap in the renovation segment of the Australian building industry

Australians typically spend over $30 billion each year on renovations*. Refresh Renovations is providing an opportunity for you to gain a foothold in this huge market. We’re looking for business-oriented franchisees that can manage and grow a successful renovation building company. You don’t need to be a builder to join Refresh. The building skills are roles within the business, running the projects not running the company.

New Residential Homes

NT $0.3 billion

Qld $6 billion

WA $3.3 billion SA $2.1 billion

Refresh is well established in New Zealand and won Deloitte Fast 50 Award as one of the fastest growing companies in NZ. Now the model is proven we are establishing the business in Australia.

NSW & ACT $10.1 billion Vic $7.5 billion

The size of Australia’s renovation market

Refresh has engineered its business model and systems and processes to create a business platform which delivers a signiﬁcant long-term competitive advantage.

Tas $0.7 billion

Australian Fast Food Market $6,200,000,000

Other industry sectors have long understood the beneﬁts of creating scale business models and consumer propositions. For example the fast food market used to be dominated by individual owner operators. McDonalds did not become a global company based on burger frying skills. It did it by becoming a fast-food company with excellent branding, marketing and customer service underpinned with strong processes and systems. You don’t need to be a short order cook to run a successful burger franchise in the same way you don’t need to be a builder to run a Refresh franchise.

Australian Renovation Market $30,000,000,000

Large, established players dominate in most other sized industries For more information / enquiries visit:

www.refreshfranchiseopportunities.com

FR0715_000_REF_RIGH

2015-06-29T09:44:48+10:00

Your chance to be part of a multi-award winning franchise

www.refreshrenovations.com.au

FR0715_068

2015-06-30T10:48:52+10:00

TYRE RETAILING:

HOW IS THE

INDUSTRY

TRAVELLING?

o long as vehicles are on our roads tyres will be too. That must mean that business for tyre retailers will always be good, right? Well, it’s a little more complex than that, writes Nathan Stanogias.

People are carpooling like crazy nowadays to reduce fuel and maintenance costs, and people are buying much smaller cars as well. The funny thing about smaller cars is that they do these two things very well: they use less juice and wear down your tyres at a much slower rate than regular vehicles.

to drive his car for two weeks a month – that’s two weeks that it’s off the road, not using fuel and not diminishing tread.

So, John Doe, the guy who carpools with his colleague every second week only has

Sure, that’s a hypothetical arrangement, but it gives us some perspective.

JUL/AUG 2015 | 68 | WWW.FRANCHISEBUSINESS.COM.AU

That’s bad news for tyre retailers because two cars aren’t on the road for the whole month: they’re both only on the road for two weeks of the month.

FR0715_069

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IBISWorld senior industry analyst Andrei Ivanov is the author of the latest tyre retailing report that looks deep into the industry’s success.

‘What does car sharing actually mean?’ It means that people are still driving the same amount of kilometres they’re just sharing the vehicle.

He told me that the industry isn’t intimidated by carpooling, and doesn’t see it posing any threat to their business operations.

“People are trying to save on fuel and on depreciation on their cars too, and you also have consumers who have bought smaller cars.

“It’s interesting to think about car sharing. You have to ask yourself the question

“If you’re using your own car or if you’re JUL/AUG 2015 | 69 | WWW.FRANCHISEBUSINESS.COM.AU

using somebody else’s car, from the point of view of the industry, it’s not that different. Tyres are still being used,” Ivanov says. As people are buying smaller cars and carpooling in them – according to the tyre industry – it has little to no effect on their business. While this might be true, the numbers tell a different story.

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TOP THREE BUSINESSES HOLDING MARKET SHARE SOURCE: IBISWORLD TYRE RETAILING AUSTRALIA MAY 2015

Ivanov said that the global financial crisis (GFC) left some economic bruises on the tyre retailing industry, which may have led to several other key factors coming together to create an avalanche of consumer changes: carpooling, small car purchasing and so on. “At IBISWorld we think the major reasons for the decline in the industry is because pretty much since the GFC several key elements came together and resulted in consumers driving less kilometres,” Ivanov says. The tyre retailing industry makes about $4.6 billion in revenue with an annualised growth of 2.1 percent from 2010-15. But from 2015-20 growth is projected to decline to 1.3 percent. According to IBISWorld statistics there are 2,115 tyre retailer businesses accumulatively making $160.8 million in profit. If you compare that figure to, say, the childcare services sector’s $495 million profit you can see the contrast in industry growth. One’s booming – the other is more or less static.

A CONSUMER SHIFT Ivanov spoke about how people are turning to cheaper tyre alternatives as living expenses continue to rise. “Revenue is effectively the price of the tyre multiplied by the number of tyres the industry sells, so it is unlikely people are going to be willing to fork out a lot more money for tyres, and at the same time we are seeing that people are driving less because congestion on the roads is increasing and population density within the major cities is increasing, and cars are getting smaller so people are needing less and less tyres. “So there’s been a higher amount of cheaper tyres coming from china. A tyre purchase for most typical consumers is an immediate expense other than a long term decision,” Ivanov says. So is tyre retailing something a potential franchisee wants to get in on? For Ivanov it depends on what market your franchise business is targeting. “I would recommend [potential franchisees] to look at the product line-up that you would be required to stock – whether they’re looking into Goodyear or Bridgestone – they are the JUL/AUG 2015 | 70 | WWW.FRANCHISEBUSINESS.COM.AU

franchise and they will provide you with the stock, so effectively the ones who decide which market you’re going to be servicing.

HOW DO RETAILERS COMPETE? There’s another thing to consider if you’re keen to enter the tyre selling game, and it’s this: you need to be able to differentiate yourself from your competitors. After all, what’s the difference between a Bridgestone highway terrain and a Goodyear highway terrain? But despite slow industry growth Ivanov said that most of the major tyre retailers haven’t lost their market share. “We actually haven’t seen any of the major players lose any of their market share either, so some of the major retailers such as Tyre Power, or Goodyear who runs the Beaurepairs franchise, they still maintain quite a substantial haul on the marketshare. “Your main differentiation point is to convince the consumer that it’s not the same homogenised product that in fact one tyre does differ from the other. You have to educate the consumer on things like wear and tear,” Ivanov says.

FR0716_000_YUM

2015-06-18T15:14:57+10:00

FR0715_000_RFG1

2015-06-29T15:06:31+10:00

OPEN AN AMAZING FRANCHISE TODAY FINANCE ASSISTANCE NOW AVAILABLE!

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2015-06-29T15:18:46+10:00

WE’LL ALSO PROVIDE YOU WITH • Expert training in Retail Food Group’s World Class Training Academy; • Ongoing support and development opportunities; • National and local area marketing campaigns to drive customer visitation; • Product training and business excellence programs; • Strong supply scale and leverage through Retail Food Group’s ‘Strength in Brands’ philosophy.

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FR0715_074

2015-06-30T10:53:04+10:00

GROWING and

GROWING

JUL/AUG 2015 | 74 | WWW.FRANCHISEBUSINESS.COM.AU

FR0715_075

2015-06-30T10:53:04+10:00

ustraliaâ&#x20AC;&#x2122;s childcare industry is increasing exponentially by the year. Growth is projected to generate $9 billion in revenue for 2014-15 and an overall $495 million in profit, according to IBISWorld statistics. The multi-billion dollar growth is at a rate of 9.2 percent per year. writes Nathan Stanogias.

The rise of enrolments suggests that the widepsread industry confidence could result in the creation of more small business opportunities. This is great news for anyone considering investing in the childcare sector. Hereâ&#x20AC;&#x2122;s a breakdown of the enrolments nationwide:

JUL/AUG 2015 | 75 | WWW.FRANCHISEBUSINESS.COM.AU

FR0715_076

Evidence shows that good quality, affordable childcare services are like gold dust in many parts of the country. Australia is ripe for franchisees who have good people and leadership skills

2015-06-30T10:53:04+10:00

So, by IBISWorld figures, it’s estimated that nearly 1.5 million children aged 12 and under are expected to attend some form of childcare service. Government assistances such as the Child Care Rebate (CCR) and the Child Care Benefit (CCB) have contributed to industry growth over the past five years, while it has done well to improve parental confidence in investing in childcare services. With more financial assistance and relief comes more trust in the process and this sees enrolment numbers rise. But some professionals in the industry disagree with the significance of government assistance. Director of international operations at Sherpa Kids, Dawn Engelbrecht, spoke about how families aren’t always easily finding the right childcare services for their needs, while government facilities and services are continuing to minimise the autonomy of small businesses providing childcare services.

“Research shows that many families across Australia continue to struggle to arrange the right sort of care at the right price. Plus schools struggle to cater for their community and in some instance, government departments continually throw red tape to qualified providers that stop OSCH clubs opening but we are tied down in tenders, lazy interviews, overzealous compliance that reflects non tangible services which should be tangible service. We are not desks and chairs,” Engelbrecht says. Additional to government assistance, the rise in female labour participation has generated the high demand for childcare services, as households are requiring dual incomes to sustain the cost of living. Now parents – or a single parent – can’t afford to be stay-at-homers. Engelbrecht believes that childcare is a people’s industry whose success heavily relies on the personalities they employ. “Childcare is a people industry; hence personality is as import-

JUL/AUG 2015 | 76 | WWW.FRANCHISEBUSINESS.COM.AU

ant as business acumen. Our most successful partners not only have the drive and entrepreneurial spirit required to build a formidable franchise network, they also care about helping others achieve success.

THE POWER OF LOCAL FRANCHISEES “While there are many regulations that we have to abide by and that is clearly of paramount importance,” Engelbrecht says. Every small business has their own success story: some unique, some common. For the success of Sherpa Kids, employing locals plays a pivotal role. Engelbrecht also talks about the necessity to employ experienced, knowledgeable people (like former or current teachers) because they’re not only professionally equipped to run the business smoothly, but they’re also naturally good at working with children. “Choosing local people as franchisees is part of our success story. We have demonstrated that locals – often current or

FR0715_000_SNOOZE

2015-06-23T14:13:05+10:00

JOIN THE

DREAM TEAM

Vendor finance now available* *Available to approved applicants.

We are looking for dynamic people who love dealing with others and are passionate about retailing. The Snooze brand has a strong history of over 30 years in retailing and has built a very solid franchise system. We provide franchise partners with a stable platform to start their business and offer support across the entire business including: • Marketing and Promotional Support • Product Development and Buying Power • Proven operating system that includes comprehensive product and sales training • Business Management support from our on the ground field team • Assistance in site selection and property negotiations • Business finance available to approved applicants

For more details visit snooze.com.au or email franchising@snooze.com.au or call the Support Centre on (03) 9830 4166

It’s amazing what a little snooze can do. snooze.com.au

445880_Snooze Franchisee Press Ad [205x275].indd 1

11/06/15 9:29 AM

FR0715_078

2015-06-30T10:53:04+10:00

ex-teachers or educators – take an interest in the business that is larger than the balance sheet. “We are, after all, working with children and families. Local franchisees are best placed to engage with local stakeholders, from the school principal to the fresh fruit merchant. Local franchisees empower the brand at a local level, where their customers live. They develop trust, which grows market share. Engelbrecht notes that the widespread demand for childcare services in Australia has also inspired entrepreneurial types to consider entering the industry, and it’s these candidates that will find success as childcare franchisees. “Evidence shows that good quality, affordable childcare services are like gold dust in many parts of the country, hence the childcare market in Australia is ripe with opportunity for franchisees who have good people management and leadership skills, strong business acumen and entrepreneurial flair,” Engelbrecht says. Despite most industries catering for working parents – i.e. flexible start and finish times have evolved over the years – parents are still in a frantic, stressed rush to cater for their children in a reasonably priced space. Price isn’t the sole concern for parents, though. There is also the fact that, say in an out-of-schoolhours-care (OSHC) arena, principals and administrators are reluctant to implement childcare service strategies. “Thousands of Australian parents are frantic for more outside school hours care (OSHC). More parents are employed, more parents are working longer hours, and city transport issues make the school-to work, work-toschool transition a stressful daily gamble.

“Where extended families exist, grandparents are often too far away to help with the care. Volunteer managed OSHC committees are quitting in the face of new regulatory reforms that increase quality expectations but also increase administrative burdens. And despite the pressure for places, many school principals are reluctant to open up facilities to faceless OSHC providers,” Engelbrecht says.

CHILDCARE BUSINESS OPPORTUNITIES Commercial providers that are entering the market are typically chain-store models. And as chains typically expand – usually into hundreds of services – local focus is neglected and school communities are uneasy about high staff turnover and their children’s care becoming a commodity. Engelbrecht outlines data she’s compiled in her position as director of international operations and her findings are interesting. “Commonwealth reports show 100,000 more children in OSHC between 2004 and 2013 (from 225,000 to nearly 335,000). More than two-thirds of that growth (66,950) occurred after September 2010 and demand continues to outstrip supply in most areas. There is also ‘silent’ demand as parents cannot work when they cannot get appropriate care,” Engelbrecht says. Neither the old small business model nor the big business model is flawless: it is not the answer to children’s childcare in Australia, perhaps even globally, too. Engelbrecht is very much in favour of the franchising model. For her it is the only way to foster strong business operations going forward for the childcare industry. “Franchising, the Sherpa Kids way, puts a tested business model to the task of filling

JUL/AUG 2015 | 78 | WWW.FRANCHISEBUSINESS.COM.AU

local and regional needs in a way that the sector can understand and support. This approach of independent local ownership, backed by strong central quality control and guidance, explains Sherpa Kids rapid early growth and high expectations for the future,” Engelbrecht says. Debbie Pham, managing director of franchise chain Kids Korner, believes that the growth of the childcare centre has been hyped by the media, and this has contributed to the industry experiencing exponential growth. “There is hype of childcare in the news and the need for a secure business that is considered as a stable and profitable business,” Pham says. Pham says that the government could assist a little more with guidelines and standards: clear legislation, concise regulations and a high-standard benchmark are key in this sector. “Assisting businesses with legislation and regulations that promotes high standards but without the additional cost to the small business owners,” Pham says. Pham is confident that businesses in the childcare sector have a bright future. But it’s a tougher market for individual centres which will have to be careful with their compliance, understanding of costs and have a stringent, sound review strategy in place to remain competitive. That’s where a franchised business has the edge. “There are many compliance and hidden costs when setting up a childcare service, with the wrong advice this could be costly. This will result in smaller businesses having to update and review their business processes to keep in line with the high standards of the franchise centres,” Pham says.

FR0315_000_JUS_r

2015-02-20T16:24:20+11:00

IN - H O M E, S OCI AL & LI FES TYLE S UPPORT

Are you ready to own a dynamic business providing services in a high growth industry that revolves around rewarding work? Just Better Care is one of Australiaâ&#x20AC;&#x2122;s largest franchised in-home, social and lifestyle support providers with 31 franchise territories located around the country and now recognised as a provider of choice with the Federal Government after our successful application for Aged Care Package funding. We are now looking to build on this success and expand our franchise network with opportunities currently available in NSW, QLD, TAS, VIC and SA. We are seeking dedicated people with a passion for business and a desire to provide the very best in-home, social and lifestyle support services to our aged, disability, hospital to home, respite, basic and complex care customers and to the community at large.

Visit our website to learn more about franchising with Just Better Care and view a list of sites current available at: www.justbettercare.com/franchise-me

or contact Paul Stearn, our Franchise Manager, on: (02) 9934 9929

Untitled-49 1

19/02/2015 11:36 am

FR0715_000_HOME

2015-06-22T15:30:19+10:00

Home Sorted! Franchise

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What services does Home Sorted! Offer?

What qualities are we looking for in franchisees?

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Why do our Clients love Home Sorted!?

What does a Home Sorted! Franchise offer me?

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2015-06-29T18:23:15+10:00

WHAT IS IT THAT REALLY BRINGS US BACK TO SERVICE STATIONS?

f I were to ask you what brings you back to a service station I would expect you to answer with the following response: “The fuel prices.” I wouldn’t contest that, nor would anyone, writes Nathan Stanogias. In fact, I’d agree and reflect on what my own preferences might be: a nifty fuel price would certainly bring me back to a particular service station.

But then I think about the other things that bring me back to an establishment – the quality of its customer service pops into mind and even the general way the place makes me feel will leave an impression.

According to a recent Canstar Blue survey, about 30 percent of respondents said that they are driven to return to a particular service station if it appeared clean, welcoming and aesthetically pleasing.

A dull employee behind the counter will make me reconsider my return just as much as high fuel prices and a dingy establishment will, too.

Essentially, the way a service station looks – perhaps its colour schemes, over all cleanliness and general vibe – is what attracts most people to return.

And a new report stands contrary to common criteria, highlighting that a customer's return to a service station isn’t as influenced by the establishment’s effect on the hip-pocket as we all might think.

But industry professionals claim that the idea that price woos customers is a misconception.

JUL/AUG 2015 | 81 | WWW.FRANCHISEBUSINESS.COM.AU

Head of Canstar Blue, Megan Doyle, says

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there is a perception that fuel prices don’t vary much between different service stations, so consumers indeed consider other factors when determining where to fill-up. “For some motorists, the bottom line is the only thing that matters. But others are clearly looking for more when they pull-in for fuel, and they’re more likely to return if they have a good experience. “That includes having helpful, pleasant staff – which isn’t always something you would associate with servos,” Doyle says. Another interesting result of the survey emerges when you dig deeper, beyond why people champion a service station’s aesthetic: now you can get coffees, more snacks, more drinks and even a wide range of groceries at some outlets. You could basically do your weekly shop at a service station, which is what Doyle claims as one of the defining factors of a successful service station. “In recent years the big chains have

You could do our weekly shop at a service station which is one of the defining factors of a successful service station focussed their attention on improving their overall package. They’re no longer just competing over the cost of fuel; they’re competing to offer the best facilities, the best snacks and groceries, and the best coffee. “Would you rather pull into a modernlooking, clean station with lots of others things to buy, or drive further down the road to an old, dingy-looking servo? There’s a reason why the big chains invest so heavily in the appearance of their stations. Image is hugely important,” Doyle says.

A large part of this shift is because of supermarket giants have alliances with various service stations now: promotions, discount vouchers and specialty products are increasing customer loyalty and have revolutionised what it means to fill up your car today. “It’s fascinating to see the evolution of service stations into more than just a place where you stop to fill-up your car - they’re convenience stores, coffee shops and for some people, a last-minute gift shop." Doyle says “Supermarket loyalty schemes

BUILDING, EQUIPPING AND MAINTAINING YOUR BUSINESS

Smarter Products and Service to keep your BUSINESS MOVING

CONSTRUCTION, SUPPLY & SERVICE | FREECALL 1300 720 622 | PO BOX 137, ZILLMERE QLD 4034 JUL/AUG 2015 | 82 | WWW.FRANCHISEBUSINESS.COM.AU

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and discount vouchers also promote service station loyalty, and encourage us to buy other items for sale at that outlet. Consumers are generally happy to go along with such offers if they think it will save them a few dollars at the bowser." Doyle explains how United Fuel has more or less nailed the adaptation to a transforming service station environment, and encourages its customers to give feedback (positive or negative), which helps the brand constructively move forward. Doyle highlights that customers find difficulty in complimenting a service station on their fuel prices or quality, which may be due to the fact that it’s hard to see any positives come out spending money on an increasingly pricey necessity. But thanks to the revolutionised revamped service station culture, it offers consumers the opportunity to compliment them on their customer service, their product range and their establishment. “It takes a lot for motorists to compliment

a service station on the price of fuel, but that’s exactly what United customers do. They also report friendly, helpful staff and good facilities. Most people are convinced United ticks all the boxes.

JUL/AUG 2015 | 83 | WWW.FRANCHISEBUSINESS.COM.AU

“This is the fifth year in a row that United has stood out from the crowd with regards to fuel price and overall satisfaction. Congratulations to United on another outstanding result,” Doyle says.

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BUY A FRANCHISE A

re you excited by the prospect of opening your own franchise outlet and making your mark in the local community while building a business? Before you commit to a franchise agreement, take time out to find out more about the opportunities available, the commitments required and the lifestyle of a franchisee.

Thereâ&#x20AC;&#x2122;s an easy way to do this and meet the people involved in the franchising community. In July and August there are two Franchising & Business Opportunities Expos, one each in Brisbane and Melbourne.

of different industries, giving the visitor a taste for the breadth of the franchise sector.

BUYING A FRANCHISE BUSINESS

A visit to an expo gives you the chance to dip your toe into the franchising pool without having to dive in head first.

Among the businesses exhibiting will be names you are familiar with as well as brands as yet unknown to you, offering business opportunities in industry sectors you might not have considered.

Each exhibition will have a diverse range of franchised, licensed and other small business opportunities across a number

Whether you are looking for something specific in an area close to home, or are open to the best opportunities on offer â&#x20AC;&#x201C;

JUL/AUG 2015 | 84 | WWW.FRANCHISEBUSINESS.COM.AU

FR0215_000_INDIAN

2015-02-02T11:17:24+11:00

LATEST NEWS! Welcome to our news panel. Our new restaurant in Munno Para, South Australia is now open and going gangbusters. Great also to see continued support across SE Queensland with new restaurants open at Waterford West and Morningside. Our loyalty program continues to grow with over 3,500 customers now enjoying special discounts and the great taste of Indian Brothers.

New Opportunities... Want to open your own Indian Brothers Restaurant? Call now, we have existing sites in SE Queensland and new sites interstate. If you have relatives down south who are looking to start their own business, let them know about this great opportunity.

Not all food franchises are the same. The Indian Brothers system has been built from the ground up to comply with the Franchising Code of Conduct in Australia. Complying with the code is mandatory and provides protection for both the franchisor and franchisee. Thereâ&#x20AC;&#x2122;s safety in a system!

Is your food franchise compliant? If you are thinking about buying a franchise, speak to the team at Indian brothers. As members of the Franchising Council of Australia we have a reliable system you can trust.

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perhaps even a regional location – there will be something to pique your interest at the expos. As a visitor you will be able to compare and research a diverse range of franchise opportunities with investment levels from under $10,000 to more than $500,000. Food franchises are always a popular element of any expo – and popular with our online audience at www.franchisebusiness.com.au too. At the Brisbane show, for instance, there will be coffee and casual dining opportunities from brands like Kamikaze Coffee, Xpresso Mobile Cafe and La Porchetta, alongside ice cream favourite Movenpick, and pizza brands Crust Gourmet Pizza, Wood Fired Pizza Trailer and New York Slice. The sector’s largest food franchisor, Retail Food Group, will be represented too. Chicken stalwart Lenard’s will be showcasing its business offer as well. But there is so much more to franchising than the food court heroes. Want to work in retail, but not food? Dodo Connect is a supplier of phone and broadband products with shopping centre presence; Luxaflex is a well-known window dressing retailer; Wild Cards & Gifts is now owned by UK newsagency giant WH Smith and is continuing to franchise. In the business sector Mail Boxes Etc services the business community with printing, mailboxes, packaging and shipping while the EmbroidMe business, part of the United Franchise Group, also deals with business customers wanting an embroidery, screen printing service. Minuteman Press will cater for any printing project through its retail outlets. And for something a little different, the mechanically minded can buy into a mobile tool retailer, Snap-on Tools. If working within the community, being out and about, is more your style, then keep reading. Just want to be on the road? Take a look at Little Green Truck, the local truck hire business. Or perhaps an environmental twist appeals? Geowash hand car wash and café has been trading for 15 years and has ventured overseas with its detailing business.

Whether you have an existing technical skill you can apply to a business opportunity with home services businesses such as Absolut Pool Fencing, Jim’s Test & Tag, Mend A Bath or VIP Home Services, or want to leverage your career talents to date through well-known franchise brands like Aussie Home Loans or newer companies such as IT educational franchise ScopeIT, there are skilled opportunities showcased at these events. Something a little different? How about the G-Force Simulators? This draws a great crowd at the expos with everyone keen to try out the virtual reality race car driving. Do you have a passion for the beauty industry? A team from Endota Spa will be on hand at the expo to explain just what running a franchise in this chain entails.

WHEN AND WHERE BRISBANE Saturday 18 - Sunday 19 July 2015 10am to 5pm daily Brisbane Convention & Exhibition Centre, corner of Merivale and Glenelg Street, South Bank, Brisbane

MELBOURNE Friday 21 - Sunday 23 August 2015 10am to 5pm daily Melbourne Convention and Exhibition Centre, 2 Clarendon Street (opp Crown Casino), South Wharf, Melbourne

SEEK ADVICE There’s so much more to an expo than the myriad business opportunities. Everyone searching for a franchise business will need to understand just what’s involved in legal and financial terms, and there’s no better place to start than the daily seminar program. A line-up of franchising experts – franchisors, advisors and consultants – will bring clarity to some of the key issues in the world of franchising. There’s always time after a session to chat with the presenter to gain further insight into the topics that concern you. A cross-section of franchisees from a number of franchised brands will participate in a daily forum that gives the audience a taste of what a franchise journey is like. These Franchise Council of Australia Franchise Success Seminar Panels are a great opportunity to ask the tough questions and hear about the good things and the challenging moments in a franchise relationship, from a franchisee’s point of view.

GET TICKETS Tickets to the event can be booked online – remember the seminars are all free, but there is a cost to register to the expo. Visit www.franchisingexpo.com.au to fi nd out more about the event and to register for your ticket.

ian Competition & Consumer Commission which promotes compliance with the Franchising Code of Conduct, and from the Fair Work Ombudsman. Anyone serious about researching a franchise investment will make the most of a day at an expo. Planning before you get to the venue is key. You can check out some of the expert advice on www.franchisebusiness.com.au that we’ve published to help franchise buyers get closer to their dreams of owning their own business.

Just show up at the seminar theatre to hear from the franchisees, franchise experts or to listen to franchisors talk for 20 minutes about their business opportunities in the soapbox sessions.

Compile a hit list of key franchises and a series of pertinent questions to pose to each of the relevant franchisor teams – that makes comparisons so much easier afterwards.

Professional bodies will have a presence at the expos and there will be information on hand at the Franchise Council of Australia stand, from the Austral-

Remember to take a break and reflect on what you have seen before you reach the point of being overwhelmed by information and opportunities.

JUL/AUG 2015 | 86 | WWW.FRANCHISEBUSINESS.COM.AU

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AT THE EXPOS You will be able to see exhibitors such as:

FROM MOBILE TO RETAIL AT THE EXPO

AUSSIE HOME LOANS What’s at the heart of Aussie? An aligned culture of collaboration, support, achievement and success sharing, says Laura Leckie, recruitment manager, NSW and QLD. In this industry market and regulatory conditions and compliance are continual challenges. Aussie is just entering year two of a three year growth plan and intends to grow year on year to increase market share. The cost of starting a franchise will depend on the location and size of the Aussie store. The franchise fee is $45,000, which includes three spots on qualification courses and $5,000 towards shop design. “You’ll also need to factor in fit-out costs and working capital. As such, we recommend that you have $150,000 - $200,000 available to invest in starting your franchise store with Aussie,” says Leckie. “We do also have mobile broking opportunities for those looking for a much lower start-up investment. “This has been an excellent year for the QLD team, which his seen us grow our business and increase our market share. We’re looking forward to more of the same in FY16.” COFFEE WITH JAMES Keeping up with the rapid growth in the mobile coffee revolution will continue to be a challenge for the business, with more clients expecting quality coffee delivered to them whenever, and wherever, they want it. The franchisor’s role is to business coach and direct franchisees to reach the goals they want to achieve in their businesses. An effective social media marketing campaign has been a big success, with a high percentage increase in franchisees’ turnover. This year the franchise will recruit new franchisees throughout South East Queensland and add two regional master franchisees in the Gold Coast and Far North Queensland.

Franchise buyers will need $125,455 plus GST to invest in a Coffee with James business. ENDOTA There are 90 Endota Spa outlets across Australia and in the next two years that’s expected to reach 120. This year sees the relaunch of Endota spa Organics (which will have a marketing print and broadcast campaign to support it) and the launch next year of the brand’s first cosmetics range, Endota spa Colour. National planning manager Jonathan Nelson says, “Each location will have its particular challenges and each lease its own merits. Generally speaking, we advise franchisees to budget for entry costs, not allowing for any lease incentives, of $350,000 to $450,000. JUL/AUG 2015 | 88 | WWW.FRANCHISEBUSINESS.COM.AU

“We were delighted to open the first of our new concept Endota spas at Westfield Garden City in Brisbane this year. This features a strong retail space at the front of the premises to welcome and interact with clients who may not have an appointment. The concept is aimed at enhancing our retail offering to support or efforts in new product development. “Our relationship is a flat one between business partners with shared responsibilities of success and the nurturing of the Endota spa brand. Our franchisees will most likely join the brand as a mark of passion before commerce.” GEOWASH The Geowash carwash concept has a track record over almost 16 years and has expanded to more than 35 countries.

FR0114_000_ATS

2013-11-28T16:00:44+11:00

Australia’s premier 7HVW DQG 7DJ IUDQFKLVH KDV RSSRUWXQLWLHV IRU SDVVLRQDWH IUDQFKLVHHV $XVWUDOLD ZLGH

<RXU $SSOLDQFH 7DJJLQJ 6HUYLFHV franchise ticks all the right boxes …. 

Low entry costs

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Report preparation, invoicing, debt collection handled for you!

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Full training provided – no electrical experience required

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For further information visit

appliancetaggingservices.com.au or contact Steve Wren 0401 655 655 steve@ats.com.au

FR0715_090

2015-06-30T11:47:38+10:00

TEACHING IT SKILLS AT SCOPE IT

“Our first store opened in 2013 and since then we have grown steadily, with 25 operational stores in four states by the end of 2015. We expect to double this number within the next two years. Our goal is to dominate the hand car wash and detailing industry,” says franchisor Sanam Ali.

goals they want to achieve in their businesses so the focus is on building an infrastructure to boost the growth of franchisees’ businesses with high level franchisees mentoring new franchisees.

A Geowash fixed site model with a combined café and car wash business is an investment from about $335,000 plus GST, and this is a turnkey business.

Lenard’s is refurbishing the store network over the next 36 months to achieve greater customer service opportunities as well a modernised, more aesthetically pleasing store environment.

“We will negotiate the site lease, design the site, apply for all the relevant car wash and cafe/food permits, build the complete business on site and provide every item required to commence operating the business. “This includes advertising through social media, assisting with staff interviews, training, and onsite support. Ongoing operational assistance, operation manuals and regular visits from our management team build a path to franchisee success,” she says.

LENARDS

On offer is a turnkey store solution with an investment of $350,000 to $450,000 depending on the site (updated investment amounts are currently being costed to be available in the coming months). “We have recently launched 14 new Ready to Cook product lines into our North and Central Queensland stores with huge success,” sales Danny Messenger, national franchise development manager. “We are set to launch the Ready to cook range to the rest of the network in the first quarter of FY15/16.”

JAMES HOME SERVICES The business is building franchisees in the Brisbane region and needs franchisees in interior house cleaning, lawn and garden care, window and exterior house cleaning, mobile car cleaning, mobile pet grooming and hydrobath and ironing and laundry. Investments range from $36,400 for lawn and garden care to $48,500 for an ironing and laundry franchise (add in GST). The franchisor role is to inspire, business coach and direct franchisees to reach the

The company focuses on generating profitable businesses with franchisees in a collaborative manner, using Regional Advisory Councils and National Advisory Councils as the channels. There are challenges, of course; the changing retail face and the way consumers shop, for instance. “We have analysed these and have systems to adapt to the changes,” explains Messenger. “Lenard’s has been in the fresh food market for over 27 years and will continue to adapt to suit the changing market demands for years to come.” JUL/AUG 2015 | 90 | WWW.FRANCHISEBUSINESS.COM.AU

RFG Started in 1989 as the owner and manager of around 50 Donut King and bb’s Café stores, RFG now has 11 franchise systems, boasting in excess of 2,400 outlets. Expansion will come across its traditional franchise systems, Michel’s Patisserie, Brumby’s Bakery and Donut King by opening new EVO stores focused on enhanced customer experience and reinvigorated product offerings. RFG will also grow its QSR division (Crust Gourmet Pizza and Pizza Capers) in key regions. The past year has seen the acquisition of Gloria Jean’s Coffees, Café2U and Di Bella Coffee taking the business to new heights. RFG believes in open and transparent communication between the franchisor and its franchisees. Each major brand system is its own franchisor and operates as a ‘silo’ with dedicated resources working exclusively for the brand but also with shared resources and the capacity to tap into the collective knowledge and experience of the group. RFG offers franchise options to suit people from all walks of life, with a mobile coffee van starting at $49,000, to a full service bakery at $480,000. As Australia’s largest multi-food franchisor, RFG can also offer approved applicants various levels of financial support. SCOPE IT ScopeIT plans to have a presence in every capital city in Australia by the end of 2016. General manager Tracy Richardson believe this is a realistic target; there are franchisees in NSW from Wollongong to Newcastle, a franchisee in the Melbourne metropolitan area and a Sunshine Coast franchisee lined up. Investment in a ScopeIT franchise is between $50,000 and $75,000 depending on the location and size of the territory, including about $25,000 in equipment requirements. “After spending 2014 building our product and business model we were ready to launch at the start of 2015. In this short time, we have secured a partnership with the Australian Primary Principals Association (APPA) and have commenced courses in two schools with a further six confirmed for this year. We are also talking to many more schools who are reviewing the program for a 2016 implementation. We are ahead of projections in terms of market penetration and franchise recruitment.”

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SPECIALIST FRANCHISE ADVICE FRANCHISE, LICENSING AND RETAIL GROUP ROBERT TOTH & MARIANNE MARCHESI The new Franchising Code of Conduct commenced 1st January 2015 and the ACCC has indicated they are actively monitoring compliance in the industry! Minimise your risk and ensure your compliance to avoid fines and penalties. Email or contact Robert or Marianne for a complementary guide for Franchisors. “What you need to know and do” We are advising a number of recognised local and overseas Franchisors and updating their suit of franchise documents to be 2015 code compliant for a fixed fee. We provide advice in relation to: 1. International Franchisors and assist overseas companies to establish business in Australia 2. Master Franchising Rights 3. Dispute Resolution - Solution and Strategies 4. Franchisee Advice - Fixed Fee Reports 5. Sale or Purchase of Franchise Systems 6. IP/ Trademark Advice 7. Company Structure & Tax Advice 8. Employment Law We have a network of franchise consultants to assist our clients successfully establish their franchise system. Member: IFLA (International Franchise Lawyers Association) and US Commercial Service and FCA (Franchise Council of Australia) We oﬀer fixed fees based on the scope of work, so our clients can budget with certainty for their legal costs.

Contact: Robert Toth p: 03 9604 9410 e: rxt@marshmaher.com.au

Marianne Marchesi p: 03 9604 9413 e: mim@marshmaher.com.au

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Training and content along with mutually beneficial promotional strategies define the early relationship between franchise and franchisee in the early stages of our relationship, says Richardson. “It is definitely a team effort as we continue in launch phase.”

ON THE ROAD WITH SNAP-ON

SNAP ON This mobile tool retailer will be expanding its network of franchisees this year. Snap-on was awarded as one of the top 10 best rated franchises in Australia by topfranchise.com.au and provides support and extensive training to franchisees. Franchisee Rodney Brown says “Any question I had, the team at Snap-on head office were only a phone call away.” When a new franchisee joins Snap-on a franchise development manager will ride along to provide support on the practical aspects - such as customer relations, administration and sales.

kept secret in Australia.” WILD

Snap-on also has a dedicated training manager. THE ALTERNATIVE BOARD The Alternative Board is in 11 countries, has been operating for 25 years and launched in Sydney in December 2014. Doug Downer heads up the Australian business. “This first six months has seen us work with 30 privately held business owners offering them the support, systems and tools that have been developed by The Alternative Board internationally,” he says. “Our first franchisee has attended training in the US and the business territory launched in June and it our plan to have another five territories opened in the next 12 months and an additional five the year after.” A franchise investment is a $55,000 franchise fee and a turnkey cost of about $90,000. “The success of this franchise and what defines the relationship between the franchisor and the franchise partners is underpinned by the purpose of the Alternative Board, and that is to to assist business owners achieve their personal vision through the operation and development of their business. “The biggest challenge that we face over the next five years is letting business owners know the power of the services that we provide, we’re the best

Franchise business manager, Daniel McDonough, says “We intend to grow our market share organically by importing an exclusive range of gift and wrap lines across our stores which will not only give our stores a point of difference but will increase our franchisees’ profitability. We also will be increasing our market presence by almost doubling the number of Wild stores.” A franchise investment ranges from $250,000 to $350,000. A recent highlight has been the introduction of exclusive WH Smith product into stores and the pending opening of five new franchise stores in the next three months “No two stores are the same so we need to ensure we, as franchisors, listen to our franchisees and work collaboratively to ensure our brand continues to grow. We know that not all products will sell in all our stores, which is why we ensure our franchisees are given enough flexibility to have the right products for their individual customer market.” The growing number of stores selling cheap cards and cheap gifts remains a challenge for the business which offers a point of difference in premium cards, gift and wrap.

JUL/AUG 2015 | 92 | WWW.FRANCHISEBUSINESS.COM.AU

XPRESSO MOBILE Xpresso Mobile has passed its first milestone: 10 franchises were launched and next up is the first Victorian franchisee, to open in Ballarat. Says Jonathan Payne, “Our growth projection and infrastructure spend will allow us to double our number of franchisees from 20 to 40 by mid-2017.” There’s been a significant adjustment to the fit-out of the mobile café with additional refrigerated area allowing for display of food and drink items. Business plans including securing lender friendly alliances, currently under process with the Franchise Registry. Looking ahead, there’s the challenge of remaining the benchmark for technology and equipment in the mobile café space – and that requires continued R&D. Franchise buyers will need to invest $119,500 + GST. What is the marker for the franchise relationship? “For our business, it would certainly be a mutual friendship and genuine care of each every franchisee’s success,” says Payne. “Directors are only a phone call away for advice, tip and hints. Support, care and approachability would certainly underpin Xpresso Mobile Cafés relationship with its franchisees.”

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2015-02-09T09:09:21+11:00

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2015-06-29T18:28:45+10:00

A MASTER FRANCHISEE AT 22

am Waller of the Stepz Fitness Club tells Franchise Business his story: becoming a master franchisee, his career goals and why he chose the franchising model. At just 22 years old, and already with a wealth of experience under his belt, how did this all happen?

JUL/AUG 2015 | 95 | WWW.FRANCHISEBUSINESS.COM.AU

I have run my own Stepz Fitness Club for two years; however, I sold that to become the master franchisee for NSW as I want to help more people achieve what I have; and run a successful business in the health and fitness industry. Firstly, I do this

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because I am passionate about helping people feel better about themselves through living a healthy well-balanced lifestyle; and secondly, I love everything about being in business, from the day I left school I have run my own business and therefore it is something that I want to help others with.

Stepz Fitness has given me the ability to live out my dreams each day and I want to offer others the chance to do the same

WHAT ARE YOUR GOALS?

WHY THE FITNESS MARKET?

My primary goal in everything I do is to make a difference; firstly, to help Australia become healthier and fitter as a nation. I share a combined vision with Stepz Fitness to help 10 million people get fitter and healthier and we will not stop until this vision is fulfilled. Secondly, I want to help my franchisees achieve their business goals through giving them the tools and mentors they need to allow everyone in my network to achieve daily growth and reach their point of success.

Passion! I want nothing more than to help people live a better life through health and fitness. Something that a lot of people donâ&#x20AC;&#x2122;t know about me is, I lost 22 kilograms just after I finished school and this small change has given me an unrelenting passion for helping people achieve what I have achieved. HOW DID YOU GET FUNDING? I built my first business to a point where it had become

very successful, allowing me to leverage the profits I received from the sale of that business into my new opportunity. Before I signed as the master franchisee for Stepz Fitness in NSW, I was a director of Sam Waller Fitness which owned and operated Stepz Fitness St Lucia as well as an online platform and a personal training operation. This company reached its goals within the first year and thatâ&#x20AC;&#x2122;s when I found a drive to help others achieve this same result.

and Fiona Cumming bought my share in Sam Waller Fitness and continue to run a highly successful operation. Once again I would like to highlight the value of collaboration in business, I believe without their help I would not be where I am today and will forever be grateful for their contribution to, not only my business career, but my life as well.

My business partners Steve

I am a strong believer in collab-

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WHY DID YOU CHOOSE THE FRANCHISING MODEL?

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WHAT HAS THE FRANCHISOR TAUGHT YOU?

oration in business and it would be naive for me to think that I have everything I need to reach my big vision for the future. I have teamed up with a company which shares my vision enabling us to achieve our goals faster and on a bigger scale. Stepz Fitness in particular have created and refined their trademark systems and operations to reach a point where we can offer our franchisees everything they need to achieve success.

The franchisor started as my mentor in 2009 when I was a young personal trainer and since then we have fostered a relationship based on a respect and the combined vision we share for the industry. Both the directors of Stepz Fitness have a range of business experience which has led them to build it into the company it is today. The lessons I have learned from them regarding leasing of properties, marketing, client management and day-today business operations have been invaluable.

It is only once you join our team that you will realise the difference. Stepz Fitness has given me the ability to live out my dreams each day and I want to offer others a chance to do the same.

The one thing that stands out for me about the fanchisors is they are always looking to grow their company to reach what others would see an unimaginable height.

WHAT ARE YOUR TARGETS AS A MASTER FRANCHISEE? I am expected to garner around five franchisees a year.

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07 3352 6972 | www.bengadesigns.com.au JUL/AUG 2015 | 97 | WWW.FRANCHISEBUSINESS.COM.AU

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A fresh take on tradition

he Shingle Inn business began in Brisbane in 1936 and leverages its heritage as it expands around the country. It has just opened its 50th store, a milestone in itself – even more noteworthy in a year that the café franchise chain celebrates four decades of stewardship by the Bellchambers family. But it isn’t looking backwards. Owner and co-director Andrew Bellchambers talks about the tricks of balancing tradition with innovation in a franchise chain.

“We’ve always appreciated our customer helped form the heritage. We are keen to keep things fresh so do listen to feedback from franchisees and store owners. It’s a really delicate balance. Probably because when you’ve been running the brand for so long, you get personally invested in how things are done.” Bellchambers cites one example of how sticking to the old ways was misplaced. For a brand that echoes the traditions of afternoon tea, china crockery was an essential part of the profile. “For ages we fought against using a takeaway cup at all in the stores. We fought on every front. But because it was becoming increasingly common, there was really a point where you stop and listen

to the customers. This was something we were stubborn about, we were protecting the brand’s heritage. But it was practical and to continue ignoring it would only have aggravated customers.” However it’s important not to fall into the trap of too much innovation, he says. “We are constantly focused on innovation, not constant change. We’re open to ideas but don’t want instability when people feel a lot is changing every week.” It goes back to the process for generating ideas from the field, from franchisees and team members. Ideas are then taken to the national office for review by the management team, before returning to the field. “Franchisees like innovation but our job is to be a bit clever to balance implementation.” Innovation can range from products to systems and processes. “With gluten free on the menu we were quite ahead of the curve and that’s now become mainstream,” he says of one of the more successful initiatives. A paleo menu is being trialled at the moment. Part of the challenge is to identify what is effectively a flash in the pan, and what will prove to have staying power. Introducing technology to allow franchisees to access noticeboards, track rosters and costs through an online portal JUL/AUG 2015 | 98 | WWW.FRANCHISEBUSINESS.COM.AU

has been a success, and was embedded in the franchise network from day one, explains Bellchambers. How does Shingle Inn ensure incoming franchisees who have invested in the heritage of the brand are keen to embrace innovation? “We always talk about and instil in franchisees the value of our customers’ loyalty. That’s been built up over the years, and that’s what franchisees are buying into. We’ve spent years developing generational relationships. “We’re open to new ideas, not clinging to the past, but respecting the values is something franchisees need to value in the store,” says Bellchambers.

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Japanese

cuisine with a twist

estfield Sydney is an icon and benchmark for food courts, says Rice Workshop co-founder David Loh. And that’s why he chose the city centre site to launch in May the first interstate café in the Japanese food retail network.

“The first store outside Victoria is crucial. Westfield wanted us to be in the flagship store.”

gate and Westfield). Only the company owned Chinatown outlet is a strip shopping site.

Melbourne based Rice Workshop began as an idea to bring authentic Japanese food with a western twist to an Australian consumer at an affordable price.

All other sites are franchised – the Westfield Sydney outlet will become available as a franchise in due course.

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The aim is to take the concept to the heart of the suburbs, hubs of activity such as food courts in shopping centres. “My

partner

Japanese.

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1 - FOOD IS FRESHLY PREPARED

If the concept is acceptable to customers and the franchisee makes money, it works. If they don't make money it's bad for the brand.

We saw a niche market in Australia. The concept is Japanese food but westernised, its comfortable, not intimidating,” says Loh. An open kitchen format will allow customers to see the food is freshly prepared. On the menu are protein mainstays beef, chicken, salmon with salads and noodles, and dishes such as stewed beef and poached egg. There’s no sushi but there are seasonal dishes. “What we do we do well. Burger places keep it simple and do it well.” Rice Workshop will charge under $10 for most main dishes. So how does the business keep

down costs? Staying local when it comes to sourcing produce is an important part of brand strategy. And there’s little wastage, explains Loh. “The taste comes from the sauce, which we keep a secret.” The franchisor makes money from franchise fees, and from supplying the sauces. Cost of goods is about 30 percent, labour about 28 percent of costs, he says. The footprint of the stores keeps rents reasonable and ergonomic kitchens based on Japanese models allow for minimal staff to have all equipment within reach at all times for food preparation. The smallest store is 30 sq m, the largest 130sq m including

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seating. This doesn’t include kiosk models.

GETTING IT RIGHT FOR FRANCHISEES “The original theme is origami. There’s a lot of space to create visuals for our brand and it’s quite colourful. It was very black when we started, now it’s more youthful and more feminine.” This is in response to the customer profile, particularly in the suburban locations, where lunch time trade caters predominantly for female shoppers. But however good the designs and the ambience, if the stylish setting doesn’t turn into sales, the business collapses – that’s Loh’s view.

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“Our brand is quite young and we’ve expanded rapidly.” Loh is an accountant by trade and he first tried his hand in the hospitality arena running food outlets at university. Then he launched his own brand, a franchised bubble tea chain, Bubble Cup, which he has since sold to one of his franchisees. Tea evolved into food, he says. “I have a strong interest and passion for food.”

1 - A SECRET SAUCE IS KEY TO THE TASTE 2- DAVID LOH AND TOMAHIRO SUZUKI

Still running under Loh’s guidance is the dessert chain, Dessert Story, launched three years ago and focused on serving Taiwanese and Hong Kong desserts. There are already 12 outlets, mostly franchised, in Australia and the brand has expanded into China and Cambodia: there are two outlets in Cambodia, and five stores in three provinces of China. Dessert Story has been given cachet in Asia with its Australian tag. But now the focus is Rice Workshop, Loh says. “It’s very easy to say expand, but timing has to be right, and you have to have the right partner.” And why choose franchising as a method of expansion? “It’s a model where you can get a brand out quickly and it is not financially so restraining. If the concept is acceptable to customers and the franchisee makes money, it works. If they don’t make money it’s bad for the brand.”

Brand awareness has been developed through social media and in-stores, with a current campaign offering a trip to Japan as a prize. Australian tastes now have a strong Asian influence, so Japanese food is a very acceptable concept, Loh believes.

Franchisees are mostly owneroperators who don’t need to employ a chef because the food preparation is outsourced. Loh’s partner Tomahiro (Tom) Suzuki is a chef and responsible for operations and food, Loh is the entrepreneur and manages franchisees. JUL/AUG 2015 | 103 | WWW.FRANCHISEBUSINESS.COM.AU

For a turnkey operation, franchise buyers can expect an investment of $400,000 to $500,000 depending on size and location of store. “The aim is to look for organic growth, not open just for the sake of opening. That can be disastrous,” he says. ”We make sure everyone is being looked after, that is more prudent growth.”

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BOUTIQUE

BEANS

hat began as a project of passion to prove what good coffee should really taste like has turned into a flourishing business for Shane Hepburn, who has experienced 300 percent growth for his business in the first six months and is now launching a franchise model that values flexibility as well as quality control.

Good Bean Espresso has three cafes on the Sunshine Coast, one of which is franchised, and attention is now on the rest of Australia, with plans to double numbers in the next six months and shake up perceptions about good coffee. “As a coffee lover, it used to frustrate me that there was no tried and tested place where

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I could rely on getting a high quality espresso,” says Hepburn. “I quickly realised that it wasn’t just me, the market was thirsting for high quality coffee.” Hepburn cites predictions that the coffee and cafe industry will increase revenue by 2.4 percent in 2014-15, to $4.3 billion, and the popularity of espresso style

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coffee. “I saw there was a real opportunity for a café concept that could be replicated but wouldn’t sacrifice the quality or uniqueness of the coffee served.”

“We have invested a huge amount of resources into developing and accessing the latest and best in coffee knowledge and technology. We use specialised coffee machines that allow us to measure the exact amount of coffee used in each shot, down to the gram, and the exact temperature the coffee is made at. This means that we can guarantee a top quality coffee, every time.”

A BOUTIQUE CAFE CONCEPT

Good Bean Espresso expects to maintain its high standards throughout its stores by combining a boutique café attitude with the benefits of being a national franchise. “The difference with Good Bean Espresso is the flexibility our store owners have in sourcing their produce based on their local knowledge. While all stores will stock our most popular, high quality blends, to ensure consistency across the franchise, each café will also have their own repertoire of beans and food choices that have been chosen based around local tastes and the values of the owner. “For example, Good Bean Espresso owners in major cit-

COFFEE OPPORTUNITIES ies might choose to stock a particularly strong blend within their cafes, as that is valued by many metropolitan coffee drinkers.” Hepburn sources all the coffee beans, which gives him both control over the quality, and some profits. “We want to create a franchise with more flexibility, but that

has certain KPIs for the shop, coffee and milk.” His reasoning is that hospitality staff members are likely to be more engaged with the business, and therefore stay longer than the average five months, if there is a constantly changing coffee profile at the café – and they are encouraged to talk with each other about coffee quality.

Andrew Wood, the master franchisee for Good Bean Espresso Queensland, has spent the last seven months working alongside Hepburn developing every aspect of the business model. “Australia is undergoing a shift in what consumers want from their coffee shops, and Good Bean is the first franchise catering to this new market,”

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Every franchisee would be able to run their business and meet their financial goals without having to forgo their work life balance he says. “We want to take advantage of this, and are looking for franchisees across Brisbane and the rest of Australia to help us meet our aim of 15 stores across Queensland, and at least three interstate by the end of 2016.

The turnkey cost of a franchise in the chain starts at $125,000 for a kiosk, which includes eequipment and fitout. The initial franchise fee is $30,000 plus GST. Ongoing franchise fees are six percent, the marketing levy two percent.

Inevitably, franchisee training is focused on coffee. Because there is limited food service training required (food is outsourced and franchisees and staff just use a sandwich press) this can be done through local council courses, explains Hepburn.

“The Good Bean franchise is ideal for the experienced barista looking to start his own business, or for an investor looking for a safe and profitable business opportunity.”

There’s an emphasis on keeping costs low for franchisees: a 15sqm to 40sqm footprint for the store keeps rents down, there is minimal training, and lots of outsourcing.

“We wanted to ensure that each and every franchisee would be able to run their business, and meet their financial goals, without having to forgo their work life balance.”

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WHAT

MAD MEX DID NEXT

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o brand can remain exactly the same year after year and hope to stay ahead of the competition, particularly one that is operating as a fast food business. The franchise dining chain Mad Mex Fresh Mexican Grill serves 70,000 customers every week, predominantly health conscious customers aged 18 to 35, says chief operating officer and transitioning chief executive officer, Fabian Rebelo.

“There are so many choices today that unless you deliver, day in, day out, you’re failing.”

But what about the business that lies beneath the muted tones of the décor?

So things are moving at Mad Mex, and that means more than just a quick slick of paint for a new look.

“The brand has become more powerful as a franchise because of profitability, the supply chain and operations. We’ve started to become better at every slice of the pie.

Rather than focusing simply on freshening up the design, the task has been to ask ‘what does the brand mean?’. “Mad Mex represents inspired Mexican cuisine with a large serve of fresh attitude,” Rebelo says in response. This means delivering against increasing demand for healthy fast food. Mad Mex crafts bold flavours and authentic Mexican recipes from fresh produce and serves real food fast, he explains. “We have been trading for eight years and progressing the brand, it’s a constantly evolving process. We are having our second store brand refresh in two years when we launch our Pacific Fair store in Queensland later this year. It’s vital for the brand to keep moving forward, constant improvement.”

“Profitability is a function of better training, better support and better operations.” Over the last 12 months operations have improved significantly, he says. Now it takes just 60 seconds from ‘hello’ to a customised order appearing at the till. Some customer feedback and research has fed into the latest brand distillation at Mad Mex. “We’ve made constant incremental improvements to the system and food,” Rebelo explains. On the menu the beans and sauces have been enhanced; the new flavours reflect the desire to keep improving.

The goal, says Rebelo, is to be the world’s best. The casual dining Mexican restaurants will have a new look, adopted as franchisees renew their agreements. A team of designers and builders has brought alive the brand refresh which is designed to catapult the popular brand to a new level.

“The authenticity of product flavour is intact,” assures Rebelo. “This is really important to us.” The supply chain is both local and international; protein and produce sourced locally, sauces imported.

The brand as it will appear soon in version 3.0 is a distant cousin to the distressed, dark brown environment of Mad Mex stores when they launched. Stores which opened as version 2.0 took the look to a brighter more Baja inspired décor which was friendlier to both male and female customers, says Rebelo.

“We travel to Central America and Texas to develop our salsas and beans using authentic ingredients from these regions. Our company has a strong culture of ongoing improvement with our flavour profile and ingredient quality. All of our salsas and beans are cooked and sourced from these regions, delivering an honest and authentic flavour.”

With female customers accounting for half of the chain’s business, this was an important development. Now the Baja vision has been refined and relaxed, so version 3.0 sports dulled-down colour hues and more of a cantina feel to the fast dining space.

Rebelo has been COO for a year and is appreciative of the team that directs all aspects of the business. “We have a strong senior management team, with well-rounded experience domestically and internationally. There is a breadth of knowledge on board.

“It’s more urban and sophisticated,” says Rebelo.

“My task is to take it forward a whole bunch of levers. Every time you pull one

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MAD MEX AIMS TO BE WORLD CLASS

something wonderful happens. “The good thing is everyone wants things done earlier than expected, to make it happen yesterday. But there’s also an attitude that if something is not world class, we’ll look at it again tomorrow. It’s nice to be around these people.”

BUILDING THE FRANCHISE BRAND “I see my role with franchise and company owned stores as the same. The goal is to grow the individual asset value and grow the brand. You grow the brand by improving product, attracting customers and great people to the brand.” Head honcho and founder Clovis Young has been passionate about Mexican food since growing up in San Francisco and San Diego. The management team includes fellow American, company director Phillip Blanco, previously GM of Australian operations and the international development manager for Gloria Jean’s Coffees. Add to this Jordan Evangelista, general manager of operations, with experience in Domino’s France, Japan and Australia; marketer Alex Deacon, ex-Yum and Gloria Jean’s Coffees; Darren Silber, the former general manager of The Apparel Group and now Mad Mex chief financial officer; and Melissa Wharton, previously with Grill’d and Lindt. After working with Bob LaPointe of Lone Star fame for many years, economisttrained Rebelo built an Australian retail consultancy firm. Ten years on, with clients including franchise brands Bob Janes T-Mart and Nandos, he sold the business and was looking for a new project when approached by Clovis Young. “It’s been everything I expected, challenging and rewarding. A lot of great people are so sophisticated and competent, they make it look simple.”

BUILDING A STRONG FRANCHISE NETWORK

the outlets while the franchisee manages the other.

“We’re about sound, mature growth. Our system will always get the right amount of franchises to the right people. Selling a franchise is not where it ends. That’s not the final touch point for us, we don’t wave goodbye at that point.

“All franchisees work in stores. Everyone in head office will have worked in a store once every six months. We’re all really close to the product, it’s part of our success.”

“It’s the opposite for us, that’s the point you’re welcomed in. That’s the start of our relationship and journey together. This is where our training, development, coaching, marketing, operational and sales support kicks in and then dovetails into the path moving forward. “We are diligent through our financial approval process. We will not allow a new business partner to extend themselves beyond a prudent capacity. It’s vital their capital equation is sound and robust.” Rebelo explains the process includes interviews with the directors of the business and four-hour in-store trials. “From the initial sales enquiry, our process is very diligent all the way through to the final approval. We’re not focused on sales, we're looking for a culture fit and importantly the characteristics to ensure our new partners are successful. We’re very conscious of cultural fit and aptitude.” He is confident the system works: half of the franchisees in the network operate more than one store. To qualify for a second or third site, franchisees need to meet certain criteria: achieve high percentage pass rates in monthly mystery shopping reports, profitability and staff training and meet benchmarks in the quarterly audits. When franchisees take on a second store Mad Mex steps up to help the transition; it employs staff managers to take on one of

The company also appoints franchisees based on their passion, rather than their hospitality or business skill set. “We’re flexible on skills. Aptitude and attitude are everything,” explains Rebelo. Wallflowers just don’t make it in that environment; personality is a must. “People who are engaged, excited and passionate, that’s who we look for. This is a fast moving, vibrant, young franchise system, it’s Mexican, upbeat, it’s a fiesta.”

BUYING A FRANCHISE In five years Mad Mex will be in at least three different countries, developing a rural Australian footprint (the first in New South Wales is already signed, South Australia and Northern Territory will happen this year). Within the next three years there will be an increase to the store portfolio by 40 to 50 stores, through organic growth. “As we grow, we become more attractive to landlords and franchisees.” With an ambitious target in its sights, for everyone at Mad Mex going back to basics is important. The key to success is to not over-complicate processes and to remember the essential purpose of the business, suggests Rebelo. “We’re just selling burritos, don’t make a big deal of it. We’re here because there are stores and customers, that’s the only reason.”

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MISTAKES TO AVOID

JANE GARBER-ROSENZWEIG Jane is a partner at Gable Lawyers. The practice focuses on commercial law, franchising, distribution and licensing on a domestic and international basis, leasing, and the protection of intellectual property. Jane is also adjunct lecturer at the College of Law and a board member of Awards Victoria.

nvesting in any business opportunity, franchising or stand alone, is a daunting experience. However, when considering purchasing a franchise business, you should avoid making unnecessary mistakes and learn from others who have gone down the same path before.

I have acted as a franchise lawyer for many franchisees over the years and the following seem to be common mistakes made by potential franchise business owners: 1. NOT DOING ENOUGH DUE DILIGENCE Due diligence is an assessment process of the potential business opportunity. It is a way to verify the financial and other records of the business, its financial

viability and to discover all operational, financial or other current and potential problems. The importance of conducting thorough due diligence with the help of your financial and legal advisers is often not given the attention it deserves. 2. UNDERESTIMATING THE FINANCIAL COMMITMENT One of the biggest mistakes a franchise business buyer can make is underesti-

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mating how much money they will be investing over the period of their franchise agreement. This is where advice from a reputable accountant is vital. Keep in mind that whatever figure you think will represent your total financial commitment, you should add a minimum of 10 percent to it. You must never buy a business that you cannot afford, as it is a sure recipe for failure.

family members, yourself included, may not align with your lifestyle and your family’s expectations of your availability. Discuss any purchase not just with your spouse but also with your children and any other family members expected to be involved in the business. 5. NOT FOLLOWING THE SYSTEM

3. NOT SPEAKING WITH OTHER FRANCHISEES

You must never buy a business that you cannot afford, as it is a sure recipe for failure

Speaking with others that have been operating within the franchise system you are considering joining is crucial. Current and past franchisees will be your best source of information about the franchisor, their operational requirements and general issues arising on daily basis.

One of the benefits of buying a franchised business as opposed to a standalone operation is becoming part of an established brand and process of operations. Not following that process defeats the purpose of buying a franchise. If you are not someone who can follow the directions of others, and are unable to adhere to a system, then you may wish to reconsider your business options.

4. PICKING A BUSINESS THAT DOES NOT ALIGN WITH YOUR NEEDS

6. NOT HAVING AN EXIT STRATEGY

If you are used to working 9am to 5pm Monday to Friday and having weekends off, then buying a retail franchise store, which must be open for business seven days a week, initially only staffed with

Any person thinking of purchasing a business, regardless of whether it is franchised, must consider and put in place an exit strategy, a plan which deals with what happens in the future and the

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options of getting out of such business. It may be done by a way of selling the business, closing it or passing it on to a family member. Most franchise agreements deal with future sale of the business, as well as death, incapacity and general termination of the franchise agreement. Any exit strategy needs to incorporate the requirements of the franchisor. 7. NOT GETTING A LAWYER TO REVIEW YOUR DOCUMENTS A franchise agreement is a contract which will bind you for the duration specified. It may also restrict what you are able to do after terminating the agreement through a restraint clause. So before you sign on the dotted line, do yourself a favour and get the documents reviewed by a franchise lawyer, who can offer advice and guide you in your purchase. The main point to take away is to learn from the errors made by others in buying franchise businesses, and to try and avoid making the same mistakes.

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THINK GLOBAL,

ACT LOCAL

MARWAN KOJOK Marwan is a leading franchise lawyer. He practises primarily in the areas of corporate and commercial Law with expertise in franchising, licensing and intellectual property.

s it a good idea to buy a franchise from an international franchisor? Often reported as the most successful method of product and service distribution developed during the 20th century franchising is seeing such success on an international scale.

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2015-04-16T14:37:11+10:00

FR0715_118

108

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McDonald’s, Subway, Anytime Fitness and Snap-on Tools are only a handful of the brands that have achieved international success because of the methods for growth they adopted. Foreign-based franchisors are encountering a business climate in Australia that is open and accepting to new products and services and closing in on language and commercial barriers. There is a significant level of international business and legal sophistication in franchising and more and more international systems are reaching our shores. So for any prospective franchisee or master franchisee considering purchasing a foreign franchise business there are some general questions to consider. These would include:

Foreign-based franchisors are encountering a business climate in Australia that is open and accepting to new products and services, and more and more international systems are reaching our shores

✱ the competitive challenges they will face over the next five years ✱ expansion opportunities which may be available ✱ whether changes can be made to the system to adapt to the new market ✱ selecting a reasonable and successful partner in the franchisor ✱ who will supply the products or services ✱ whether the term of the agreement is long enough ✱ how will the remuneration be structured ✱ the scope of the territory and rights attaching to it ✱ the exit strategy The question of what agreement the franchisee or master franchisee should have with the foreign franchisor is the first challenge. There are generally a number of primary structures that franchise lawyers refer to when negotiating the purchase or sale of a foreign franchise business. All of which have advantages and disadvantages but have all proven to be successful structures in their own right in individual circumstances. To determine whether the particular business structure proposed would suit, a franchise buyer needs to understand the franchise business on the international level and seek appropriate legal advice.

WHAT’S THE BEST FORMAT FOR FRANCHISEES? The four primary structures foreign-based systems may use for franchising include:

franchises in Australia so that a franchisee in the US has essentially the same relationship with the franchisor as a franchisee in Sydney. This form of expansion provides ultimate control of its franchise network where the foreign franchisor will have a direct relationship with the franchisee. Advantages for the franchisee ✱ Direct contact with the foreign franchisor that has proven the concept elsewhere and has the proven experience for successful growth. ✱ Direct supply of products from the foreign franchisor or allowances made to source own supply in Australia. Disadvantages for the franchisee ✱ Difficult to ensure adequate training and on-going support and assistance ✱ Cultural barriers and greater difficulty in immediate franchisee sales ✱ The foreign franchisor may not be familiar with local customs and commercial practices ✱ Slow and limited expansion opportunities in Australia 2. AREA DEVELOPMENT In this structure the developer is awarded an area with the requirement that the area developer establish a specified number of units over a defined period of time. The area developer enters into a direct agreement with the foreign franchisor for an exclusive territory (which may include a portion of a country, all of a country or a number of countries) for the placement of a number of franchise units with a required development schedule. The area developer is paid a sales commission on the initial franchise fee paid by unit franchisees and a portion of the ongoing royalty stream so long as it provides such services. The area developer may or may not pay anything to the foreign franchisor for this right. This arrangement was adopted by Subway and continues to exist within its network. It allowed the brand to grow fast in each market due to the incentives of each of the brand ambassadors. Advantages for the franchisee

1. DIRECT FRANCHISING The foreign franchisor directly awards unit JUL/AUG 2015 | 118 | WWW.FRANCHISEBUSINESS.COM.AU

✱ Exclusive territory and minimal upfront cost

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✱ Franchise agreements are entered into directly with the foreign franchisor ✱ Minimal level of obligations to the local franchisees within the nominated territory ✱ The area developer generally would have a good understanding of the local market ✱ Unit franchise fees are generally fixed at the time of signing the area development agreement and cannot increase

✱ Generally difficult to terminate such agreements Disadvantages for the franchisee ✱ Translation of systems, procedures, products and intellectual property ✱ High upfront fee payable to the foreign franchisor ✱ Issues relating to training and on-going support

Disadvantages for the franchisee ✱ Limited revenue as a good proportion of upfront fees and royalties are paid to the foreign franchisor ✱ Limited communication and cultural barriers ✱ Lack of control over local franchisees ✱ Meeting minimum performance requirements that may be difficult to establish from the outset

4. JOINT VENTURE As the name suggests, this form of structure represents the two parties forming a company or partnership in Australia to operate the franchise network in Australia. The joint venture company is then licensed by the foreign franchisor to do one or more of the three previous structures. Advantages for the franchisee

3. MASTER FRANCHISE If a foreign franchise is expanding through a master arrangement, it means they’ve contracted with a person or business to provide services to franchisees in a specified territory (typically a major market or even one or more states). The master franchisee usually pays the franchise company a significant initial fee for the rights to develop the territory and then retains most or all the initial fees and royalty fees paid over time by the individual franchisees in the region. That master is usually responsible for recruiting the individual franchisees and providing all the training and support they need, both initially and on an ongoing basis. The foreign franchisor does not have any direct contractual relationship with local franchisees and has no direct legal obligations to them. In essence the master franchisee acts as the franchisor in the country or territory. Advantages for the franchisee ✱ Exclusive territory for marketing and franchise network expansion ✱ Can immediately increase international brand awareness and exposure ✱ The master franchisee should be generally familiar with local customs and commercial practices ✱ The ability to establish its own franchise agreement for the territory and have autonomy over sites and selection of franchisees ✱ The term of the agreement will run for a considerable period of time

✱ Having the best of both worlds with two companies sharing their resources ✱ Sharing of risks ✱ Possibility of access to government grants and subsidies ✱ Support and communication should be abundant Disadvantages for the franchisee ✱ Sharing of profits ✱ Issues of control, potential buy-out must be resolved ✱ Significant investment by both parties Other areas that franchise buyers should consider when negotiating with the franchisor include: ✱ the right to use the intellectual property ✱ access to systems and operations manuals ✱ the term of the agreement ✱ the payment conditions and the amounts payable for royalties and marketing ✱ obligations relating to the recruitment of franchisees ✱ servicing of franchisees and support ✱ minimum performance requirements ✱ the franchisees’ obligations ✱ the training requirements and who will be required to provide it ✱ which jurisdiction will govern the agreement ✱ exit plan Again, exercise caution when purchasing a business from a foreign franchisor as translation of systems, procedures, products or services can be crucial to the success of the business in Australia.

JUL/AUG 2015 | 119 | WWW.FRANCHISEBUSINESS.COM.AU

FR0715_120

120

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LEGALESE

How to avoid a BIG LEGAL BILL LOUISE WOLF Louise Wolf is senior associate in the corporate advisory and franchising team at MST Lawyers

hen you are ready to buy a franchise you will be watching all your costs and expenses. You will be wise to invest in due diligence and expert advice but there are a few tips of the trade that can help you avoid a big legal bill.

1. FIND THE RIGHT LAWYER Franchising is a unique area of law, and the law firm you engage to work on your franchising matters must be experienced in franchising law. Price is another important factor. Lawyers may charge by time or by fixed fee. Fixed fees can provide you with certainty and peace of mind throughout the process.

2. GET THE RIGHT ADVICE Not every franchise document needs to be reviewed. At a minimum, your lawyer should review the: ✱ Franchise Agreement ✱ Disclosure Document ✱ Sale of Business Agreement (if applicable) ✱ Lease of your premises (if applicable) ✱ Occupancy Licence Agreement (if applicable) In relation to the franchise agreement, you should seek advice about the important aspects. These include: 1. Payments, operating costs and unforeseen capital expenditure Fees are normally specified at the end of the agreement and in the disclosure document. However, some fees (or a franchisor’s ability to change fees) can be found hidden away within the agreement. 2. Term and renewal Any options to renew the agreement for further terms may have preconditions attached, such as the payment of renewal fees, refurbishment requirements or other terms that will require you to spend further money. Ideally the term of the lease of the premises should match the term of your franchise agreement. 3. Territory Your territory may be exclusive or non-exclusive. Even with exclusive territories, significant rights can be reserved by the franchisor and/or granted to others.

4. Minimum performance criteria You must understand the minimum performance criteria and the consequences of failing to meet such criteria. 5. Termination Understanding the grounds for termination is imperative, because franchisors generally have far more grounds to terminate than do franchisees. 6. Restraints Most agreements provide for a restraint period at the end of the term. This can limit your options after the end of the agreement.

3. GIVE THEM WHAT THEY NEED Reading all of the documents, considering the legal issues and providing the advice you need takes time. Make sure you provide your documents to your lawyer early to allow enough time for them to do this and respond to your lawyer’s queries as soon as you can.

4. NEGOTIATING AMENDMENTS An experienced franchising lawyer will highlight clauses that are contrary to the Code, onerous or unusual. Your lawyer can negotiate with the franchisor to amend these clauses, but this also takes time and can be costly. You may prefer to negotiate yourself after receiving your lawyer’s advice.

5. FURTHER ADVICE Also consider whether you need advice about: ✱ asset protection and personal guarantees ✱ corporate structuring ✱ tax ✱ employment law ✱ privacy law ✱ consumer law compliance If so, choose a law firm that can provide advice about all issues. This will streamline the process and is another way you can avoid a big legal bill.

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FR0715_000_ZOO

2015-06-29T17:12:54+10:00

FIRST IMPRESSIONS COUNT At 1800 ONHOLD we believe in creating the right first impression for your business. Did you know that 88% of callers would rather listen to information about your business than silence, chimes or the radio? As a full service consultancy we produce creative on-hold messages that turn ‘dead air time’ into a unique opportunity to promote your company’s services. Productions are flexible, we can change your message to suit whatever you wish to promote, anytime throughout the year. It’s easy. Our friendly customer service team take care of everything. • Script writing & reminders • Music licensing

• Audio production • Nationwide installation

On-hold messaging is one of the most powerful, influential and cost effective marketing tools available to business today. Call the team at 1800 ONHOLD and find out how you can get connected from as little as $15/week.

zbm.com.au

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TRENDS

THE GOOD, THE BAD AND THE UGLY ANDREW TERRY Professor of Business Regulation, The University of Sydney Business School

“G

ood franchising is very good. Good franchising is so much better than independent business operation but bad franchising is so much worse.” I used these words in my oral testimony to the Committee and the 1997 Fair Trading Report, which led to the introduction of the Franchising Code of Conduct, prefaced its chapter on franchising with the same statement.

These words enshrine a fundamental proposition that was not universally acknowledged in the early days – that although franchising is a proven model for delivering synergistic benefits to both franchisor and franchisee it is not a magic formula for business success. It is not a form of fairy dust which when liberally sprinkled over a bad business model converts it into a good business. This recognition, and the acceptance that although the franchising model is proven it can be applied appropriately or inappropriately, has to be the starting point for the prospective franchisee. As a franchising sector we are entitled to take both pride and comfort in the performance of the sector but we must also be able to distinguish between the good and bad systems and have the commitment to promote the former and eliminate, or at least discourage, the latter. The prospective franchisee must undertake informed due diligence to be satisfied that the franchisor is actually applying the franchising model and not simply trading off it. The next stage is of course more difficult. The duds and the lemons and the turkeys are not badged as such and recognising them is not always straightforward. Prospective franchisees can nevertheless take some comfort from the fact that Australia has the world’s most rigorous regulatory regime for franchising. The Code does not, and cannot, guarantee that those systems offering franchising opportunities will be successful at either a franchisor level or a franchisee level. But the Code – supported by strong laws of general application to all business activities including the prohibition of misleading conduct and of unconscionable conduct – discourages rogue franchisors from entering the franchise sector and it offers some prospect of relief from conduct in contravention of it. Discouraging rogue franchisors from entering the sector in itself provides a level of protection to pros-pective

franchisees. The introduction of the Code in 1998 led not only to a slowing in the number of franchisors entering the sector but an actual decline in system numbers. If some franchisors left the sector, and some prospective franchisors decided not to enter the sector, because they could not accept the burdens imposed by the Code to protect franchisees then the sector is much better off without them. The burdens imposed by the Code are not regarded as particularly onerous or inappropriate by the great majority of franchisors and the self– exclusion of those who are not prepared to commit to them is a good result. Franchisees are also protected by the real consequences to franchisors of non-compliance with the Code and the misleading/unconscionable conduct provisions particularly given active enforcement of the Code and the associated law by the ACCC. The introduction of the Code has undoubtedly raised standards in Australian franchising by discouraging the duds. Prospective franchisees can take great comfort from the fact that the really bad and ugly systems are much less likely to be gracing the sector but must realise that not every franchise system is really good either. Unfortunately the stereotypes are not always valid; those promoting the duds are today unlikely to be Brylcreamed, shiny-suited, white shoed, cigar smoking dudes. There is no universally reliable franchise bullshit detector. There are no easy answers. As this column has said repeatedly, the franchisee’s best protection from the franchise duds is informed due diligence for which the prior disclosure information is the starting point. It’s a rigorous exercise but it’s worth it. For George Katona business may be like sex –“when its good its very, very good; when it’s not so good it’s still good” – but a failed franchisee is unlikely to agree

JUL/AUG 2015 | 122 | WWW.FRANCHISEBUSINESS.COM.AU

FR0716_000_COF

2015-06-22T10:47:39+10:00

FR0715_124

120

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LEADERSHIP

KARLI FURMAGE is a trainer, coach and writer. Contact karli@goglobal. consulting

HOW TO GET THE TRUTH FROM OTHER FRANCHISEES BEFORE YOU BUY

very franchise buyer needs to research the business opportunity and that includes speaking to existing franchisees. Here are 10 tips for wading through the facts and finding the truth before you buy a franchise.

According to Andrew, a conversation was his dream killer. He had been investigating a food franchise for months and on a family holiday he popped in to the local outlet. He introduced himself to John the franchisee; John willingly sat down for a chat.

cess. Jenny followed Andrew up after his holiday.

John was well spoken and articulate. He shared his latest P&L and was forthcoming in his results and experiences. After about half an hour John lowered his voice, leaned into Andrew and said ‘that’s what the franchisor wants me to tell you, but you seem like a really nice bloke. I’ll tell you the truth’.

Luckily, Jenny was a cool cat. She listened intently to Andrew and without betraying any confidence was able to share relevant facts about John’s situation.

The horror story that followed made Andrew’s toes curl! He left the meeting with John shaken, disillusioned and resolved to drop his dream of owning a franchise immediately. Andrew was shocked at how his due diligence process had not uncovered the kind of information John had shared with him. Jenny was the recruiter for the franchisor and had been working with Andrew right through his due diligence pro-

Andrew told Jenny about his conversation with John. Andrew said he would be withdrawing his application and was horrified by what the franchisor had done.

There are always three truths: yours, mine and what actually happened. The truth can be a slippery little sucker. It’s open to interpretation, gets distorted by emotion and everyone has their own version of it. Andrew caught John’s emotions and stopped seeing the facts. So where is the truth?

ASK FRANCHISEES ABOUT THEIR BUSINESS When looking at a new business we all know its best

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to make a decision based on accurate, good quality information and facts. One of the best sources of information is existing franchisees. They can tell you the intimate details of what it means to own a franchise, what they are making, the hours they are working, what’s lived up to their expectations and their disappointments, the things they wished they had of known before signing on the dotted line. That information is GOLD! The ideal is to get as many facts as possible. Maybe in some instances they can back up what they are saying and will share P&L’s, supplier invoices, cash flow, detailed sales figures and rosters. More likely they won’t. That info is the heart beat of their business, so to hand it over to a stranger is difficult. Most often the kinds of conversations you have will be peppered with the emotions surrounding their personal experiences. How then do you cut through the perceptions, biases, opinions, interpretations and get to the facts?

10 WAYS TO FIND OUT THE TRUTH FROM A FRANCHISEE 1. Check yourself first. What biases are you bringing into a conversation? Do you really really want this, and it won’t matter what truths are put in front of you, you will spin it to a positive? Or the flip, you go into the conversation just looking for the negative? Maintain a neutral stance in the conversation. Keep your mind open. 2. Be clear on what you want to get out of the conversation. 'I just want to have a chat' is good on a Saturday afternoon

FR0515_000_HAIR

2015-04-16T14:38:45+10:00

Hairhouse Warehouse has a strong proven business model. By following it and working hard you will become successful. What more could you ask for? - Richard Maddison, Albury Franchisee

HAIRHOUSE WAREHOUSE is Australia’s leading hair & beauty brand, with plans to expand its network by 20% over the next 3 years, across the nation. We are looking for passionate people with a desire to strive for results and take control of their own destiny. Whilst hairdressing experience is not required, strong work ethic and drive is essential.

WHAT SETS US APART FROM THE REST? • A proven profitable turnkey operation

Franchisees are able to own their piece of one of

• Multiple revenue streams, including retail,

Australia’s largest retailer, and build their business

faster. So if you want to start achieving your goals,

hair salon, piercing and beauty services

• Extensive training and support from

now is the time to join, with Hairhouse Warehouse

offering attractive incentives to help you join.

a dedicated team of professionals

• Exclusive stockists of world leading brands

Locations are available in all states and territories

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and the most lucrative merchandising terms

CONTACT PETER FIASCO for a confidential discussion on 0451 370 060 hairhousefranchising.com.au

Franshise_Ad_RevisedDesign.indd 13

VISIT OUR WEBSITE

WATCH OUR VIDEO 13/04/15 5:15 PM

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LEADERSHIP

at the pub – not for finding out information you will base a life changing decision on! Respect their time and make the most of this opportunity. Prepare a list of questions. 3. Set up the conversation with a tone that encourages them to be forthcoming. Be open and frank. 'I’m hoping this conversation will give me some facts I can use to make an informed decision,' 'I understand some of the information I ask about is sensitive and I want to reassure you I will respect the confidentiality of anything you tell me.' 4. Ask them if they mind if you take notes. Tell them to let you know if there is anything they don’t want recorded. 5. Deception [or a dodging of the truth] is usually driven by fear. Franchisees are more likely to be candid if you can alleviate their fears. They may be concerned about what you will do with the information, for example. You can reassure them any information they share will be kept confidential, or share some sensitive information with them first to build trust. 6. Build rapport before you hit them with the big questions. Share relevant parts of your journey; ask them about their family, their hobbies, and what they did before becoming a franchisee. Warm up the conversation and establish trust and respect. 7. Ask good questions. Start with general open, ‘getting to know you’ questions and then make your questions specific. Good openers are 'What do you like /dislike most about being a franchisee, has it lived up to your expectations?'. More specific questions are 'How often do you have contact with the support office?', 'What do you spend each quarter on marketing', 'What does your field support person do each visit?'. 8. Ask for evidence - all they can say is no. 'Can I see your sales reports’, ‘Can you talk me through the P&L pro forma the franchisor uses’, ‘Do you have an

example of the benchmarking you use?’. 9. Be suspicious of anything that sounds like opinion. Ask them for clarity. 'How do you know that?', 'What facts do you base that on? Is that a rumour or has it been confirmed? Keep your tone light and conversational, you don’t want them to feel like they are being interrogated. 10. Watch their body language. Avoiding eye contact, putting their hands in front of their mouths, turning away from you, are all signs they may not be telling you the truth. What ever comes of these conversations, do what Andrew did and take your findings back to the franchisor. Find out their side. Andrew ended up speaking to eight more franchisees. He talked to landlord, suppliers, other business owners… his due diligence was impressive. Armed with facts he made the decision to go ahead with the franchise. He told me his ‘dream killing’ conversation with John was a blessing in disguise. It set off an emotional rollercoaster [that cast a shadow on his holiday], but it also made him take a big step back and look at everything critically. It brought all his thinking back to the facts, and he felt extremely confident in his decision by the end of his process. Andrew’s learning was that franchisees told him their truth. Your due diligence mission is to wade through the many versions of truth you will uncover. Back everything you can up with facts and make an informed decision.

JUL/AUG 2015 | 126 | WWW.FRANCHISEBUSINESS.COM.AU

Dodging the truth is usually driven by fear. Franchisees are more likely to be candid if you can alleviate their fears. Reassure them any information they share will be kept confidential

FR0715_000_NES2

2015-06-29T11:11:07+10:00

THE WORLD’S FINEST ICE CREAM THE SUPER PREMIUM ICE CREAM BRAND, MÖVENPICK, IS OFFERING LIMITED FRANCHISE OPPORTUNITIES IN AUSTRALIA. Locations include: Sydney, Melbourne, Brisbane, Perth, Canberra and Adelaide. First developed in Switzerland over 40 years ago, Mövenpick now has over 300 boutiques in more than 20 countries. If you are interested in joining our Franchise Network contact Dennis Koorey 0423 840 314 or email dennis.koorey@au.nestle.com More information on www.moevenpick-icecream.com

• Owned by World’s biggest food company, Nestle • Menu for all seasons • Be part of the growing dessert cafe trend • Great Lifestyle opportunity

MOV_FranchiseBusinessAdvert.indd 1

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GLOSSARY

DISCLOSURE DOCUMENT: this document provides information about a franchise system, the franchisor and the franchised business. It must be supplied to a prospective franchisee, in accordance with the Franchising Code of Conduct. DUE DILIGENCE: a thorough examination of the franchise business before purchase. FRANCHISE: a business model with four criteria – a franchise agreement, a trademark or symbol, payment of a fee, and a system or marketing plan. A franchise business falls under the jurisdiction of the Franchising Code of Conduct and franchisors have certain obligations to fulfil. FRANCHISE AGREEMENT: the business contract between the franchisor and franchisee. FRANCHISEE: an individual who runs the franchised business using the intellectual property of the franchisor. FRANCHISE FEE: this is an up-front cost paid to the franchisor and covers the use of the brand name and operating system required to operate the business. FRANCHISOR: grants permission to the franchisee to conduct business using its intellectual property; brand name, methods of operation and marketing. FRANCHISE TERM: this is the period granted for trading under the franchise agreement. Most franchise terms are on a renewable three or five year term but they can vary from one year to perpetuity. GREENFIELD new site.

SITE: a brand

LICENSE: the right to use intellectual property in business, such as sales rights in a territory, manufacturing technology or access to a trademark. A license is not the same as a franchise. LOCAL AREA MARKETING: [LAM] this is marketing the franchisee is responsible for conducting in the franchise territory or designated marketing area. MARKETING AND ADVERTISING LEVY: a regular flat or percentage based fee paid into a centralised advertising or marketing fund. MASTER FRANCHISEE: a franchisee who is responsible for a large territory, appointing other franchisees within the territory with direct agreements, and ensuring that the franchisor’s systems and methods are applied. MULTI-UNIT FRANCHISEE: a franchisee granted the rights to operate more than one franchise outlet. Not every franchise system allows for franchisees to be multiple operators. OPERATIONS MANUAL: the franchisee’s guide to operating the franchise business. The franchisor may produce several manuals for different areas of the business, and should regularly update the information. REGIONAL FRANCHISEE: similar to master franchisees, regional franchisees operate a large territory and appoints franchisees within the area. RENEWAL: once a franchise term nears its end, franchisees may or may not be given a right to renew their agreement for a further

term. This process is bound by the Franchising Code of Conduct and there is no automatic right of renewal. ROYALTY: fee paid by the franchisee to the franchisor for the ongoing use of the brand and systems, management and technical support. It may be a flat fee or a percentage of sales or profit. TERMINATION: the ending of the franchise contract between franchisee and franchisor, usually for breach of contract. Some franchise agreements allow the franchisor to terminate the agreement even if the franchisee has not breached the agreement. THE FRANCHISING CODE OF CONDUCT: a mandatory Code that governs franchising in Australia and is designed to guide the behaviour of franchisors and provide certain protections to franchisees. It is administered through the Australian Competition and Consumer Commission (ACCC). TOTAL INVESTMENT: the total amount of money a franchisee requires to set up in business. This includes the franchise fee, working capital and any equipment purchases required. TURNKEY FRANCHISE: a franchise package that includes all the equipment, information and systems required for a franchisee to open up the business and start trading. WORKING CAPITAL: the funds required by any business to pay its costs before it starts making a profit, and as ongoing cash flow to counter any dips in business activity.

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FR0715_000_FCA

2015-06-22T13:33:20+10:00

NATIONAL FRANCHISE CONVENTION 2015 11-13 OCTOBER GOLD COAST

growth expansion

NFC15 promises to build your knowledge on all things franchising to help ensure your business flourishes in any conditions. A must-attend for all franchise professionals in Australia, highlights of the event will include: • Inspirational keynote speakers sharing their expert knowledge and insights • Concurrent panel sessions featuring industry speakers and franchise case studies • Workshop sessions providing an in depth examination of the core issues and challenges facing franchisors today • Abundant networking opportunities and a bustling trade show Join hundreds of Australian franchisors for the franchising information and networking event of the year.

Early bird registrations are now open For more information and to register, call 1300 669 030 or visit franchise.org.au

For sponsorship and exhibition opportunities, call Angie Cooksey on 1300 669 030, email angie.cooksey@franchise.org.au or visit franchise.org.au

The FCA gratefully acknowledges the contribution of the following sponsors for NFC15

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CHECKLIST

THINGS TO CHECK BEFORE YOU INVEST BEFORE YOU PURCHASE YOUR FRANCHISE YOU NEED TO TICK OFF ALL THE MUST-DO ITEMS. CHECK THE FOLLOWING:

Are you confident in the franchisor?

What are the franchiseeÂ and franchisor obligations?

Have you seen a disclosure document?

What training is available and who pays for it?

Have you evaluated the financial returns?

Who owns the intellectual property andÂ what is licensed to the franchisee?

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

What marketing will the franchisor implement?

Have you worked out your operating costs?

Who pays for the marketing?

Do you know the term of the agreement?

What is the dispute resolution process?

Is the business operating from fixed or mobile premises?

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

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

Can you assign the franchised business?

Are you restricted in your product purchase?

How can the franchisor or franchisee terminate the Franchise Agreement?

Are you required to reach a minimum performance level?

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

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CHECKLIST

STEPS TO OPENING YOUR FRANCHISE WHAT ARE THE PRACTICAL STEPS YOU NEED TO TAKE TO SET UP YOUR FRANCHISE? HERE IS A CALENDAR GUIDELINE TO OPEN DAY:

✓

Book franchisee training

✓

Sign the lease or licence agreement

Research your market

✓

Lease vehicle

Conduct due diligence on your franchisor

✓ ✓

1-3 MONTHS AHEAD

✓ ✓ ✓

Speak to franchisees

✓

Read the disclosure document

✓

Research the location

✓

Do a business plan

✓

Get legal and accounting advice

✓

Organise finance and working capital

✓

Decide on and set up your business structure

1-4 WEEKS AHEAD

✓ ✓

Sign the franchise agreement Register your business (Business Name, ABN, GST etc )

✓

✓ ✓ ✓ ✓ ✓

Organise fit-out for your store or office Order and check the delivery of any stationery, uniform and vehicle wrap required Clarify what support the franchisor will provide for opening and the first few days of trading Check what insurance policies you need to protect your business Check any relevant regulations or local by-laws Understand your tax liabilities Purchase a telecoms package and organise installation Open a business bank account If you will be an employee, start the staff recruitment process Start planning your local area marketing strategy

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A-Z LISTINGS

Phone: 02 8913 6400 Fax: 02 8088 6637 Contact: Esha Oberoi esha@afea.com.au www.afea.com.au

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

Establishment costs: $90,000

Start up costs from: $47,000 + GST

PROFILE: Afea is a leading provider of staffing solutions for residential healthcare and in-home care services. We at Afea, care about those in need and provide a high quality service that is delivered by skilled personnel with compassion and responsiveness. We at Afea want to take our unique care experience to the doorsteps of all Australians. Our vision is to continuously search for ways to deliver quality healthcare services to our community, to build our people, to be socially responsible and to achieve all of this whilst being profitable. If you are interested in an Afea franchise opportunity, please call us on 8913 6400 and request an information pack.

Phone: 0417 077 633 Contact: Michael Payne michael@palmoasisventures.com www.baskinrobbins.com.au

PROFILE: Looking for a franchise with on-going repeat business, large territories and access to an existing client base to get you started? ATS are Australia-wide specialists in Electrical Testing and Tagging in accordance with AS/NZS 3760:2010. Providing expert technical, admin, business and sales support, access to our National client base and comprehensive on and off-site training, ATS are committed to helping its 45 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.

Phone: 0428 082 474 Fax: 07 3373 1770 Contact: Alex Forbes alex.forbes@batteryworld.com.au www.batteryworld.com.au/franchising Start up costs from: $150,000 + GST

Start up costs from: $190,000

PROFILE: At Baskin-Robbins, we love ice cream. Everything we do is for the fun, indulgence and enjoyment that ice cream provides to our beloved guests around the world in over 7,500 locations – with our 1,000 unique and much-loved ice cream flavours, frozen drinks and famous range of ice-cream cakes, there’s a delicious treat for everyone. Our world class training program will prepare you, our national marketing platforms and comprehensive Local Store Marketing programs will generate the brand awareness and our operations team are there to support and assist you. If you love to have fun & put a smile on people’s faces and are as passionate about ice cream and the Baskin-Robbins brand as we are, then we want to hear from you.

PROFILE: Join the leading battery retailer in Australia! Battery World is embarking on a new era of rapid expansion and provides franchisees the chance to be your own boss but have the security of a national market leader with 18 years of stable growth behind it. Count the number of batteries you rely on every day. Now, multiply it by 9,117,033* households. Whatever figure you come up with it’s a very compelling reason to join Battery World, the nationally established franchise that a growing number of Australians rely on for their everyday battery needs. Battery World stores carry a product range of over 8,000 batteries for everything from mobile phones and laptops to vehicles and boats. With 85 stores throughout Australia we are the largest and most comprehensive retail franchise network focused on the battery category. Franchises are currently available in NSW, VIC, WA, QLD, SA and TAS for motivated individuals with strong communication skills and a passion for retail. (*Source: Australian Bureau of Statistics, number of private dwellings in Australia 2011)

Phone: 02 9232 3511 Fax: 02 9223 4625 Contact: Marwan Kojok info@baybridge.com.au www.baybridge.com.au

Phone: 07 3352 6972 Fax: 07 3352 7962 Contact: Danny Sinclair danny@bengadesigns.com.au www.bengadesigns.com.au

PROFILE: Baybridge lawyers deliver a progressive and efficient approach to clients’ legal issues. Going beyond the traditional service offering, we act as legal representatives as well as trusted advisors on many initiatives, adding value at every step.

PROFILE: Benga Designs specialise in the design, manufacture and installation of custom made signage for retail shopfitting and national franchises, including but not limited to 3D illuminated signage, plastic fabrication, large format printed graphics and vehicle wraps.

As leaders in the field, Baybridge Lawyers are able to identify solutions and opportunities that are both practical and timely. From working alongside a diverse range of clients including listed companies, national and international franchisors, small and medium businesses, and private individuals, we have the perspective and experience to continually add value.

We also produce a large range of “point of sale” products such as banners, flags, A-frames and corporate stationery. Our success has been directly attributed to Benga’s refined project management skills. We pride ourselves on the attention given to upfront planning, communication and liaising with our clients and shopfitters. Benga Designs is a proud member of ASOFIA, ASGA, BAA, DIA and FCA.

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G L O B A L

Professional Coaching | Corporate Training

Phone: 1300 99 55 12 Contact: Paul Howie paul.howie@buyaustralianproperties.com.au www.buyaustralianproperties.com.au /welcome/

Phone: +61 418 500 721 Contact: Andrew Phillips ap@briantracyglobal.com www.briantracyglobal.com

Achieving Personal and Business Goals Faster

Start up costs from: $25,000 plus GST

Start up costs from: $49,950 + GST PROFILE: PROFILE: The name Brian Tracy is synonymous with personal and professional success. Our excellent reputation and highly-regarded programs are unrivalled and will give you brand credibility, prestige and trust in your business community. We are searching for high-calibre individuals who are self-motivated thinkers, looking for a business opportunity beyond the generic franchise. If you are an innovative leader with a knack for business and you want to build a solid financial future, take the next step and find out more about the prestigious Brian Tracy franchise opportunity.

Buy Australian Properties is the first professional, franchised Property Investment Company in Australia. We are leading the industry with safe, ethical and proven ways of investing in residential property with integrity. We supply quality approved, direct property investments, in brand new full turn key house and land packages, apartments, townhouses, units and row houses Australia wide. We have created a Unique 4 Step Client Engagement Process incorporating proven systems and procedures designed to produce outstanding results and highly satisfied clients every time we use them. Franchisees have the opportunity to operate a very unique, first of its kind property investment business in Australia. • great work-life balance • work from your home office • be part of a team of highly motivated and dedicated professionals • excellent company culture

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

PROFILE: Cashflow It specialises in equipment financing solutions for the franchise sector. Cashflow It can get you pre – approved so that you can find the best deal on the equipment you need from any supplier in Australia. Whether you are looking for just one piece of equipment, fitting out a brand new store or buying an existing business with established equipment, we have a funding solution that can help.

• no “hard sell” high pressure sales tactics ever • comprehensive initial and ongoing training • unlimited growth and earnings potential • vendor finance available • no real estate licence required • change your life in 12 weeks

Phone: +61 02 9207 8877 Contact: Rod Laycock rodl@civicms.com.au www.civicmanagedservices.com.au PROFILE: Civic Managed Services (CMS) is a professional service provider and experienced franchisor offering tailored solutions for small to medium sized businesses on a short or long term basis. CMS offers a full suite of business services, including Operations, IT Support, Online and Offline Marketing, Purchasing, Warehousing and Distribution, Finance and Management Reporting, Franchising and Strategic Management and Planning.

Choose terms from just 12 months up to 5 years. At the end of the term you can Continue Renting, Purchase Equipment, Rent To Own or Return Equipment.

CMS is ideally suited to provide infrastructure to businesses wishing to launch or expand their business, without the need to invest in costly staff recruitment. We have expertise and experience in a range of industries including retail, franchising, food, technology and education.

If you belong to a Cashflow It Accredited Franchise then you will enjoy additional products, benefits, and cost savings.

CMS could be the cost effective solution to provide you with an experienced team to grow your business.

Apply online today in less than 10 minutes.

Call us for an obligation free discussion.

Phone: 1300 720 622 Contact: Rian Bell supply@constructionsupplyservice.com.au

Phone: 1300 477 925 Contact: Susana Hands susana@createdbyhands.com.au www.createdbyhands.com.au Start up costs: $48,500

PROFILE: Construction Supply & Service (CSS) was established in 2003 with a view to providing a one stop solution for businesses in the QSR & restaurant industry. We can locate, design, build, equip and maintain your business. With 24 hour a day on call service techs we can make sure you are always operational. With over 500 builds completed we have the expertise to ensure that it is done right the first time. From custom one of a kind build and equipment supply through to franchisee stores we have the team and contacts to take care of all your needs.

PROFILE: Created By Hands creates custom made artwork from your precious memories. Using any image you have on your smart phone, tablet, or camera we transform it into a stunning and permanent piece of art. We also design a range of unique and exciting acrylic products for weddings or other special celebrations including 3D invitations, bomboniere and much more.

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Phone: 1300 131 888 Contact: Ashleigh Williams Franchise.recruitment@dominos.com.au www.dominosfranchise.com.au

Phone: 03 9923 3514 Contact: Ross Malcomson franchise@dodo.com www.dodo.com/franchise

Start up costs: $250,000 PROFILE: Dodo Connect is a fun, vibrant and energetic technology and home utilities driven business. Core to Dodo’s success has been the provision of extremely competitively priced products, along with superior customer service. A Dodo Connect franchise provides you with low-cost entry, a simple business format, a wide range of products and services (including: internet, home phone, mobile phone and mobile wireless broadband, electricity and gas, plus vehicle, home and contents insurance. Dodo is backed by an ASX listed powerhouse the M2 Group, in a dynamic and growing sector.

PROFILE: Looking for a new career path and want to be your own boss? Join the success of the Number One Pizza Company in Australia- Domino’s! Our objective is to ensure every franchisee in the network is successful by offering; • Proven Systems and procedures for single unit and multi-unit operators • Clear growth & development strategies • Un-Paralleled Support from a dedicated team • Comprehensive training programs • Constant innovation • Leading Marketing Strategies • Support through all stages of the store building process • Local franchise consultant to help with ongoing store operations Our stores generally cost between $300,000-$600,000 + GST we require you to have approximately 40% of the total investment in cash and/or available equity. Live your Dream and apply now.

Phone: 1800 373 263 04 57575727 Contact: Cam Hadlow cam@dreamdoors.com.au www.dreamdoors.com.au Start up costs from: $75,000 + GST + operating capital PROFILE: A DREAM OPPORTUNITY Do you dream of working for yourself and earning a stable income? Make it a reality with Dream Doors – one of Australia’s fastest growing franchises. You don’t need any previous experience. It’s easy and affordable to set up your own franchise, backed by comprehensive support and a proven business model with over 14 years of international success. BE YOUR OWN BOSS The unique Dream Doors ‘facelift’ concept makes it possible for Aussies to achieve a ‘new’ kitchen for a fraction of the usual cost, by replacing doors, drawer fronts and benchtops. The market response has been extremely positive, with some Dream Doors operators exceeding $400k gross profit in their first year. Call today and make your dream a reality.

Phone: 1300 FASTWAY Fax: 02 9264 4966 fastway.com.au Start up costs from: $25,000 PROFILE: Run your own rewarding business and take control of your future as a Fastway Courier Franchisee. As a market leader in nationwide courier services, our multi-award winning franchisees enjoy: t Guaranteed income package* t Low start up costs t No weekend work t Ongoing business support & training t Exclusive territories t Perpetual franchise agreement with no ongoing fees No prior business experience is needed, just a great attitude and an ability to talk to people. So, if you’re ready for a positive change, we’d love to hear from you. *Conditions apply

Phone: 1800 307 903 Fax: (02) 8079 6174 Contact: Alan Biddle alan.biddle@firstclasscapital.com.au www.firstclasscapital.com.au

Phone: 1800 PT for U (783 678) Contact: Scott Hunt franchise@fitnessenhancement.com www.fitnessenhancement.com

Start up costs: $40,000 + GST

Start up costs: From $29,000 including all equipment, training and advertising

PROFILE: First Class Capital is one of Australia’s most innovative lenders, specialising in the delivery of trade finance and working capital solutions to small business. First Class Capital is now offering franchise opportunities nationally for savvy business professionals wanting to build their own successful franchise in the lucrative trade finance sector. A background in finance is not necessary, as franchise partners receive comprehensive training, state of the art online systems, regular regional and national advertising campaigns, as well as on-going mentoring and support. This ensures that our franchise partners you have all the tools they need to build their own successful business.

PROFILE: A low cost fitness franchise where the average customer spends over $5,000 and many have spent over $30,000! Established in 1999, Fitness Enhancement is Australia’s third largest Personal Training company. You don’t have to be a Gym junkie to be an amazing Personal Trainer, we can get you qualified with your franchise purchase and teach you our award winning skills that have seen our clients lose up to 100kg. All you need is a passion for a fit and healthy life and helping others change their lives. Our Mobile and Studio franchises offer unlimited growth and expansion opportunities with unparalleled head office support. Personal Training qualifications are available through us for an extra $3,000.

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Phone: 02 8845 0100 Fax: 02 8845 0199 Contact: Karen Pollard franchise@gelatissimo.com.au www.gelatissimo.com.au

Phone: 07 5515 0119 Fax: 07 5500 3716 Contact: Geoff Biddle mail@groutpro.com.au www.groutpro.com.au

Start up costs from: $350,000

Start up costs from: $39,950 + GST & vehicle

PROFILE: Australia’s leading gelato franchise is looking for outstanding franchisees. Prior food experience is not necessary however franchisees must have passion for the system and brand, leadership skills, and enthusiasm for delivering quality products through excellent customer service. Multi award winning Gelatissimo provides full training and on-going support from dedicated operational, marketing and development teams enabling them to produce artisan gelato fresh in store using a simple and proven system.

Phone: 0451 370 060 Contact: Peter Fiasco franchising@hairhousewarehouse.com.au www.hairhousewarehouse.com.au/franchanising

PROFILE: Earn between $50 and $200 per hour and get a high return on investment in the booming Home Improvement Industry with LOW SETUP COSTS & little competition. GroutPro specialises in the after-market care of tiles and grout to homeowners and businesses. Offering a range of professional services from stain protection of new tile and grout installations to our flagship grout “colourseal” application which rejuvenates and re-colours old grout saving customers time and money without having to re-tile. Specialists use GroutPro’s own branded range of professional quality products including cleaners, sealers, tile Anti-Slip treatments and shower glass restoration and sealer coatings. This is a complete package to get you up and running in your own business fast. Call us today for more information.

Phone: 02 9224 0460 Fax: 02 9224 0469 Contact: Mark Buckland office@healthyhabits.com.au www.healthyhabits.com.au Start up costs from: $200,000 - $300,000

Start up costs from: $200,000 - $400,000

PROFILE: Hairhouse Warehouse is Australia’s leader in the hair and beauty industry, with over 140 stores across Australia. A belief in your ability to change your life and courage to do it is all you need. Our culture and business has developed from over 21 years of success and mastery. Hairhouse Warehouse is built on passion and creativity. t Extensive and ongoing training programs t A proven turnkey operation t A focus on world class service t Multiple revenue streams, including retail, salon, piercing and beauty services t Exclusive stockists of world leading brands with the most lucrative merchandise trading terms worldwide

PROFILE: Healthy Habits is a fast food retailer with a difference. You see we’re all about feeling good – about the food we eat, our lives and our bodies. Everything we do is centred around this approach, maximising the opportunity to bring healthier, feel good food choices to the communities we live in. Franchising with Healthy Habits provides you with the financial control of owning your own business, whilst being supported by proven systems and market leading innovation. So, if you’re energetic, ambitious and ready to learn, contact Healthy Habits today and let’s start a conversation.

Phone: 1300 30 11 77 Contact: Nina Rosace info@homesorted.com.au www.homesorted.com.au

Phone: 0427 208 462 Contact: Steve Potter franchising@indianbrothers.com.au www.indianbrothers.com.au

Start up costs: $19,990 - $22,990

Start up costs from: $160,000

PROFILE: Home Sorted! is the first (and only) Professional Home Organising Company to launch a Franchise Business within Australia. Our organising methods and systems are easily applicable to any household. Demand for our unique service is high and Home Sorted! is now looking for an extremely organised team of Franchisees to help expand our brand nationwide. Considering our line of work is organising, our business systems offer simple step-by-step processes for operating a successful business. Home Sorted! Franchisees run their own successful business in their own exclusive territory!

PROFILE: Indian Brothers restaurants began in 2002 with a simple philosophy – to bring the authentic taste of North India to Australia. Our first restaurant became a local institution in Queensland, offering tasty meals cooked to perfection. Using the freshest ingredients, traditional spices and only genuine Tandoor ovens enabled us to offer an Indian experience like few others. Today, Indian Brothers Restaurants provide opportunities for motivated individuals to own and operate their own Indian take away food business. Our unique system has been designed from the ground up to meet the increasing demand from time poor customers who are looking for instant, value for money, fresh and tasty food.

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Phone: 0418 600 919 Contact: Meredith Ham sales.au@inxpress.com inxpress.com inxpress.com.au/franchising

I N - H O M E , S O C I A L & L I F E S T Y L E S U P P O RT

Start up costs from: $49,000 +GST PROFILE: InXpress provides a revolutionary concept delivering customers with express freight advantages to gain a competitive edge in the marketplace. InXpress is an authorised sales partner for the world class courier company, DHL. Domestically, InXpress partners with companies such as Toll and TNT to offer a complete suite of courier and freight solutions, providing increased value and service, saving valuable time and money. Operating in 15 countries with over 250 franchisees globally, InXpress is now accepting applications to grow the Australian business. Benefits to franchisees include: t Low entry costs t Low risk t No inventory/warehousing

t Minimal employee base t High income potential t Ongoing training and support

Phone: 02 9934 9929 Fax: 02 9934 9900 Contact: Paul Stearn Paul.stearn@justbettercare.com www.justbettercare.com Start up costs: $130,000 + GST

PROFILE: Just Better Care is a dynamic business providing in home support services to the Aged, people with a Disability, Dementia, recovering at home from illness or medical procedure, domestic care, respite, and new mums. Founded by Trish Noakes in 2005 with franchising beginning in 2007 we quickly became recognised as a care provider of choice leading to us becoming one of the countries largest franchise care provider’s with 31 franchised areas. With a significant growth in our aging population over the coming years, Just Better Care is perfectly positioned to become the care provider people are talking about.

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

Phone: 02 9527 5444 0439 130 499 Contact: Luke Manning Luke@justcuts.com Justcuts.com

Phone: 1300 989 366 Contact: Drew Davies info@kubarz.com.au www.kubarz.com.au

Start up costs: $85,000 - $120,000 (Kiosk) $160,000 - $240,000 (Salon)

Start up costs from: $19,990 - $39,990 (ex GST) depending on territory size, location and equipment

PROFILE: Join the largest hairdressing network in the Southern Hemisphere! Just Cuts™ offers a fixed franchising fee, with flexible finance options and ongoing business coaching and support.

PROFILE: Kubarz is a one stop shop for functions, parties and events providing services such as catering, beverages, cocktails, bartenders, waiters, mobile bars, pop up bars, party hire equipment and much more!

Did you know that most Just Cuts™ Franchise Owners are not hairdressers and on average own 2.3 salons each! Why? Because proven systems, support and training means your Stylists become the technicians and easily run the business for you.

With everything included from training, operations manuals, equipment, marketing and more – all you have to bring is the right attitude as no experience is necessary!

Just Cuts™ are also excited to announce our NEW kiosk option! With only 49 sites available Australia wide, buy yourself a new lifestyle from $85,000!

With extensive ongoing head office support and territories already operating and secured now is the chance to get into this exciting and rewarding industry whilst enjoying a flexible lifestyle.

Just Cuts™ Franchisees have exclusive access to our professional retail range made in Europe; JUSTICE Professional™!

We have successfully been providing clients with our professional and stylish services for functions, parties and events for over 12 years and are looking for the right people to take advantage of our clients demand to take our service nationally.

Phone: 03 9822 1301 Contact: Bob McCarthy bmccarthy@lma.biz www.lma.biz/license

Phone: 1300 453 284 Fax: 07 5564 9045 Contact: Dean Reid marketing@mobileservices.net.au www.myleatherdoctor.com.au

Start up costs: $50,000 + working capital

PROFILE: You have an exciting opportunity to become a recognised leader of training and development in Australia. Leadership Management Australia (LMA) is a professional white collar B2B company in the $3.5 billion dollar training and development industry. Through building client relationships and changing people’s lives, you will have the opportunity to enjoy the freedom that owning your own business offers, while capitalising on high margins and building the future value of your business.

Start up costs: $55,000 (plus GST) PROFILE: The Leather Doctor is the leading international brand in Australia for mobile leather repairs. With over 60 franchisees in Australia and teams in New Zealand and Dubai, this is truly a turn-key business with proven success. No previous experience required. All training included. For a unique business opportunity with little competition, great income and amazing support, call today for an information pack.

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Phone: 0414 324 685 Contact: Sally Caldwell sally@lovepollo.com.au lovepollo.com.au Start up costs: $300,000 - $350,000

PROFILE: Gone are the days of dingy charcoal-stained diners and fatty fried chicken offers. Love Pollo is redefining the way Australia eats roast chicken. Love Pollo sets itself apart from the competition through a menu focused on offering premium healthy, free-range, roam free, chemical free, gluten free chicken, amazing salads, along with gluten free chips, pulled pollo (free range) burgers and wraps all in a contemporary environment that replaces the old stainless steel chairs and white tiles. Launching this concept was driven by a love of fresh, healthy produce for Sally & Chris Caldwell who are aiming to provide families with a quick, healthy, value for money take home meal.

Phone: 02 9638 8000 Contact: Mark Futeran mark.futeran@hunterdouglas.com.au www.luxaflex.com.au Start up costs: $30K (Luxaflex Showcase) $150K (Luxaflex Gallery) PROFILE: The LUXAFLEX® Window Fashions brand is one of the most widely known and respected window furnishing brands in Australia. Luxaflex was established as a brand of the worldwide market leading Hunter Douglas Group operating in Australia since 1953. Luxaflex Window Fashions are sold primarily through quality window furnishings stores nationwide. We offer an unrivalled partnership to meet specific business needs, through the LUXAFLEX® Window Fashions Gallery and LUXAFLEX® Window Fashions Showcase Alliance programs. The Alliance programs provide marketing support, business management support, product supply, training and support, as well as on the ground local sales support.

Phone: 1300 544 755 Contact: Jacqueline Fearnley info@legalvision.com.au https://legalvision.com.au/

PROFILE: LegalVision is Australia’s largest and fastest growing online law firm. Our specialist franchise lawyers are experts in drafting and reviewing all franchise documents, including franchise agreements, disclosure documents and commercial leases. We also regularly assist both franchisors and franchisees in relation to commercial disputes, employment law and intellectual property. Through our unique online model, we are able to offer fixed fees and a fast turnaround on high quality work to all our clients. Get in touch today for an obligation-free consultation and a fixed-fee quote!

Phone: 03 9604 9400 Fax: 03 9600 3313 Contact: Robert Toth rxt@marshmaher.com.au www.marshmaher.com.au

PROFILE: Robert Toth has moved and Marianne Marchesi has joined the Franchise Group! Well recognised and published franchise specialist with over 30 years industry knowledge now head of franchise group at Marsh & Maher. Providing advice to: 1. International Franchisors 2. Master Franchising 3. Dispute Resolutions – solutions and strategies 4. Franchisee Advice 5. Sale / Purchase Franchise systems 6. IP / Trademark Advice 7. Company Structure & Tax Advice Fixed fee to upgrade Franchise documents to be 2015 Code Compliant.

Phone: 03 9922 1452 Contact: Dennis Koorey Dennis.Koorey@au.nestle.com www.moevenpick-icecream.com

Phone: 1800 776 747 Fax: 1800 194 525 Contact Name: Brad Dixon info@mynfib.com.au Mynfib.com.au

Start up costs: $220,000 to $550,000 PROFILE: Our Philosophy Our business is driven by a continuing search for gastronomic perfection that dates back to the earliest history of the brand. Everything we do is built on the skill and imagination of the Mövenpick ‘Maîtres Glaciers’ – their passion for gastronomy, their quest for the best ingredients that nature can provide, and their commitment to Swiss standards of perfection. Armed with this unique advantage, it is our goal to give our consumers a degree of gourmet pleasure that has no equal in the world of ice cream. Mövenpick in the World Mövenpick Ice Cream is owned by the World’s biggest food company, Nestlé and sold in more than 40 countries worldwide through several thousand points of sale. Switzerland, UK and Russia are the three leading markets in terms of sales figures followed by Australia with 22 boutiques currently. Benefits of Mövenpick No ongoing royalties and franchise fees, ongoing training, ice cream is made in Switzerland, Marketing support, Lifestyle choice.

PROFILE: NFIB meets the Australian demand for a dedicated 24/7 online provider of insurance cover for franchisors and their franchisees. 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.

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Phone: 02 9822 5622 / 0423 052 456 Contact: Kate Bird franchise@packsend.com.au www.packsend.com.au

Phone: 02 8905 8401 Contact: Gary Glen Gary.glen@qsrh.com.au www.oporto.com.au From approx.: $500K

PROFILE: Created in 1986, Oporto was Australia’s first Portuguese-style chicken restaurant that was renowned for its unique and delicious chilli sauce. From tantalising the taste buds of local Bondi residents, Oporto now satisfies over 13 million people per year across 140 stores, and that number is forever growing. Oporto® has come a long way since 1986 however has maintained the heritage of high quality, great tasting, authentic fresh-grilled chicken and burgers. In a crowded fast food sector, Oporto® is fast becoming one of the major players in a new generation of fresh and casual dining offers. For enquiries on Franchising opportunities please visit our franchise enquiries page here.

Start up costs from: $160,000 - $170,000 + working capital (ex GST) PROFILE: Servicing one of the world’s fastest growing markets, PACK & SEND is an award winning, full service logistics operation servicing corporate and small business clients, as well as householders. Established for 20 years with over 100 Australian stores – along with international networks in New Zealand and the United Kingdom – there is no other franchise system like PACK & SEND! With cutting-edge technology and a thriving e-Commerce network, customers can simply send anything, anywhere through an array of sales channels. With the exponential growth of online purchasing, the parcel and freight industry is among the top to benefit. Our innovative approach and developed infrastructure creates a future-forward franchise platform with ‘no limits’ to success.

Phone: 07 3456 4255 Fax: 07 3456 4299 Contact: Phil Hill phil.hill@propertyclub.com.au www.propertyclub.com.au

Phone: 02 9930 3023 Contact: John Nero au-pizzahut.franchising@yum.com www.pizzahut.com.au/franchise Start up costs from: $290,000 - $330,000

PROFILE: Pizza Hut is the leading global pizza franchise, with over 14,000 restaurants throughout the world and is part of the quick service restaurant, 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, Northern Territory, South Australia and South East/Regional Queensland there has never been a better time to join.

Start up costs from: $98,000

PROFILE: Property Club was estalished in 1994 as The Investors Club, and has grown to become one of Australia’s most successful property investing organisations. By educating and assisting members to purchase carefully selected investment properties in Australia, Property Club has worked together with investors and property vendors with over 18,000 properties purchased to date. Success of the Club is evident through the 4,600+ members of our Property Millionaires Club. Property Club now offers an opportunity to join our existing 22 Franchisees. Full training, supported by a dedicated team of head office staff and property researchers will be provided to successful applicants.

Phone: 1300 4 REDCAT (1300 4 733 228) Fax: 03 9696 1553 info@redcat.com.au www.redcat.com.au

Phone: 02 8905 8401 Contact: Gary Glen Gary.Glen@qsrh.com.au www.redrooster.com.au From approx.: $600K

PROFILE: An Australian iconic brand, Red Rooster® provides Australians with fresh not frozen… roasted not fried… quality roast chicken every day of the year. Over the past 45 years Red Rooster has grown to become the largest Roast Chicken QSR operator in Australia with 360 stores nationally. Growth has been a result of the right people, dynamic product range, buying power, comprehensive marketing, strategic support and world class training. With one of Australia’s most recognised brand identities and a well-established franchise support network, Red Rooster offers exciting business opportunities. For enquiries on Franchising opportunities please visit our franchise enquiries page here.

PROFILE: RedCat provides end-to-end, point of sale, accounting and business management solutions that gives users total control of their business. RedCat supplies integrated software and hardware solutions that can manage sales, sta, stock, payroll, through to accounts, GST, customer loyalty, and web based multi-site reporting to provide a complete business management system that permits multiple levels of control and reporting. RedCat are also able to provide online ordering systems. Customers order and pay through a uniquely branded app, the order is then automatically integrated into the point of sale system.

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Phone: 02 8417 2668 Contact: Josh Franklin apsales@revelsystems.com

Phone: 1300 139 557 Contact: Jon Bridge jonb@traffic.net.nz www.refreshfranchiseopportunities.com

http://revelsystems.com.au Start up costs from: $1000

PROFILE: Professional design and build renovation service. Refresh provides one point of contact and a clear process for consumers to receive an outstanding renovation experience. Refresh delivers cost effective, low stress renovations to homeowners. Refresh undertakes all types of renovations, from kitchens and bathrooms, to loft conversions and extensive house renovations. You will leverage the existing trade skills in the market but provide an overarching process which maximises efficiencies and facilitates quality. You don’t need to be a builder to join Refresh. Our head office infrastructure and support will help you extract maximum value from your operations.

PROFILE: Get Amazing Control, Stop Money Leakage, Save Time and Increase Your Turnover. Upgrade Your Business With Revel iPad POS. Revel is a true business solution, developed from the ground up to be the world’s leading fully featured iPad POS. Available for single terminals to Enterprise and Global Franchises, Revel runs from an iPad connecting to the cloud with local back up, delivering incredible reliability that empowers you to access every single feature from anywhere with internet. Our features are designed to protect & increase your profit margins, automatically reduce mistakes, increase sales and improve efficiency.

Phone: 1800 762 766 Fax: 02 9837 9199 Contact: Les Coppin les.coppin@snapon.com www.snapontools.com.au

Phone: 07 5591 3242 Fax: 07 5591 9021 Contact: Michelle Connor michelle.connor@rfg.com.au www.rfg.com.au

Start up costs from: $40,000 PROFILE: Retail Food Groups (RFG) long term philosophy of ‘strength in brands’ is our point of difference – our franchisees enjoy the benefits of working with Australia’s largest multi-food franchisor every day, dealing with expert management teams, enjoying supply benefits from increased scale and gaining access to best in class initiatives. As the owner, developer and manager of the Donut King, Brumby’s Bakery, Michel’s Patisserie, bb’s Café, Esquires, Gloria Jean’s Coffees, It’s A Grind, The Coffee Guy, Café2U, Pizza Capers Gourmet Kitchen and Crust Gourmet Pizza Bar franchise systems RFG is one of Australia’s leading retail food franchise operators boasting in excess of 2,400 outlets across more than 40 countries. Our proven business models and support systems have been perfected over 25 years of operation, and we’ve built an experienced and highly skilled support network to ensure the success of our franchisees.

After more than 25 years in the Australian market, Snap-on continues to solidly perform, providing robust financial results for its network of over 170 franchisees. Extensive training and ongoing support is provided - no previous mechanical experience required. Snap-on offers an exclusive finance package to assist new franchisees.

Phone: 03 9830 4166 Fax: 03 9888 6327 franchising@snooze.com.au www.snooze.com.au/franchising

Phone: 08 8376 3016 Contact: George Karamalis info@st-louis.com.au www.st-louis.com.au

Start up costs from: $450,000

Start up costs from: $350,000

PROFILE: As one of Australia’s longest-running, successful and innovative franchised business, Snooze’s experience in the bedding industry is second to none. With 76 stores nationwide and a commitment to continued growth and development, Snooze offers great return on investment. Snoozes offers a personable, flexible business solution with expertise and support every step of the way, including: • Vendor finance assistance • NAB & ANZ accreditation • Sales and product training

PROFILE: Snap-on Tools Australia & NZ is a mobile franchise operation putting high quality tools and equipment into the hands of mechanics, engineers and technicians across the country. Snap-on Tools is a wholly owned subsidiary of Snap-on Inc., a developer and manufacturer of innovative and technologically advanced tools with an established network of solid franchise operations across the globe.

• Business management support • A national marketing program • IT services

PROFILE: St. Louis franchisees will find comfort in the support and guidance they receive once they become part of the St. Louis family and take the first steps into owning their own business. With full training and on-going assistance franchisees will learn the art to producing the highest quality, premium ice cream and dessert creations, and much more in store, using a simple, user-friendly model. We are looking for franchisees who are passionate about dessert, have a love for all things sweet and decadent, and who believe in never compromising on quality. Change your lifestyle. Invest in something that warms you from the inside out.

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FR0715_140

132

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A-Z LISTINGS

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

Phone: 02 9898 8608 Contact: Chris Fitzmaurice enquiries@swimart.com.au www.swimartfranchise.com.au Start up costs from: Retail - $175,000 - $250,000 Mobile - $85,000 - $90,000

Start up costs from: Varies by site PROFILE: Subway® is the world’s largest restaurant chain with more locations than any other chain. We offer business owners simple operations, ongoing field support and a defined marketing structure, along with providing customers with a variety of freshly made menu options.

PROFILE: Swimart operates in the pool and spa industry providing owners with all their pool and spa needs from filtration equipment and chemicals to pool cleaners, accessories, spare parts and leisure products. We also provide extensive, in home services, such as pool cleaning and maintenance.

For over 47 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.

Established in 1983, Swimart has over 70 retail stores and more than 250 service vehicles across both Australia & New Zealand and is a fully owned subsidiary of Waterco Ltd, a publicly listed Australian company with operations in over eight countries around the globe. We offer both retail and mobile franchises with set up costs starting from as little as $85,000. If you’re looking for either a retail or service business that delivers solid revenues with high margins and low fees, just ask Swimart!

Join the winning team with the #1 Franchise! Register your interest today.

Phone: +61 439 222 422 (AUS) +64 21 917 148 (NZ) Contact: Glenn Dobson glenn.dobson@tdda.com www.tdda.com PROFILE: The Drug Detection Agency (TDDA) is rapidly establishing itself as the largest and most dominant provider of workplace drug detection services in Australia & New Zealand, with a fast growing list of major corporate clients. With workplace drug screening becoming a necessity for most businesses for safety, legal and productivity reasons, the opportunities are endless to win contracts with Local, State and National businesses. You will also benefit from a comprehensive 100 day training program; Australasia wide business networks; State Office support and large-scale clients that need services in your area. TDDA wants highly motivated and business oriented individuals to join the team to share in the success of this proven business model. If you are seeking a next generation business opportunity with huge potential then contact us now to find out more.

Phone: 03 9008 5945 Fax: 03 9876 6612 Contact: Grant grant@thefranchiseshop.com.au thefranchiseshop.com.au

PROFILE: The Franchise Shop is the leading franchise consultancy offering both franchise development & recruitment services to the franchising industry throughout Australia and New Zealand. With more than 30 years experience 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, comprehensive and accurate assessment. Looking to buy a franchise? We offer an advice service and range of documents which are designed to help you make an informed decision.

Phone: 02 9723 1011 Fax: 02 9727 6771 Contact: Nick Avgerinos franchise@cheesecake.com.au www.cheesecake.com.au Start up costs from: $200,000 - $800,000

PROFILE: The Cheesecake Shop opened in 1991 and has developed into an Australian favourite with a massive network of almost 200 stores across Australasia. Our award winning system makes for one of the simplest businesses to operate. Our systems guide you on how many cakes you need to produce each week and how much of each ingredient to order. Our cakes are baked from easy to follow recipes. You don’t need to be a chef or a baker, its so easy! If you love to bake cakes for the kids then here is your chance to turn your passion into profit.

Phone: 1300 659 399 Fax: 07 3391 1344 Contact: Robert Rowe you@tuprojects.com www.tuprojects.com

PROFILE: Tú Projects, established in 2004, is one of Australia’s leading fit out organisations. We specialise in interior fit outs across the retail, hospitality, health and commercial industries. Whether it is a single venue fit out or a franchise chain rollout Tú Projects ensures communication and project management are at the forefront of the Tú experience. With offices in Brisbane, Sydney and Melbourne we operate nationally throughout Australia. With custom technology tailored to enhance the customer experience, Tú Projects walks alongside its clients to ensure they receive the best build experience possible. For a quote on your next franchise location call our head office on 1300 659 399.

JUL/AUG 2015 | 140 | WWW.FRANCHISEBUSINESS.COM.AU

FR0715_141

132

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A-Z LISTINGS

Phone: 13 26 13 Fax: 08 8220 4588 info@viphomeservices.com www.viphomeservices.com

Phone: 02 8338 0930 Contact: Daniel McDonough franchising@WHSmith.com.au www.wildcardsandgifts.com/franchising

Start up costs from: $25,000

Start up costs: $42,000 + GST plus $200,000 to $300,000 capital investment w/ recommended working capital of $80,000

PROFILE: V.I.P. was the first company to start franchising in home services in 1979. V.I.P. has over 1100 franchisees across Australia and New Zealand. V.I.P. has franchise opportunities available in: t ( BSEFO . BJOUFOBODF BOE -BXO . PXJOH t )PNF $ MFBOJOH t $ PNNFSDJBM $ MFBOJOH Over the last 35 years, V.I.P. has helped over 4,000 people just like you become successful business owners by providing: t *OJUJBM BOE POHPJOH USBJOJOH coaching and mentoring t "GGPSEBCMF GSBODIJTF PQUJPOT t /BU JPOBM BOE MPDBM NBSLFUJOH

Wisewould Mahony Lawyers Lawyers in love...... with Franchising

t " O FTUBCMJTIFE DMJFOU CBTF t " DDFTT UP B OFUXPSL PG GSBODIJTFFT t " O JOJUJBM TUBSU VQ LJU TP UIBU ZPV BSF ready to go

PROFILE: With 40+ stores across the nation, Wild Cards & Gifts is Australiaâ&#x20AC;&#x2122;s largest group of franchised card and gift retailers. The philosophy of Wild Cards & Gifts is simple - to make our stores #1 for profitability! We believe that the formula to having outstanding success comes from providing great support and having great relationship with our franchisees. We deliver high quality, high demand cards & gifts in a contemporary, well designed store whilst offering value for money to our customers in a fun and energetic environment. The card and gift market is highly competitive, worth in excess of $2b annually, and with the backing of UK giant WHSmith we have access to exclusive product not available in Australia through international suppliers creating our point of difference.

Phone: 03 9612 7297 Fax: 03 9629 4035 Contact: Melissa Strain melissa.strain@wisemah.com.au www.wisewouldmahony.com.au

Phone: 1300 655 559 Contact: Jonathan Payne joinus@xpresso.com.au www.xpresso.com.au www.facebook.com XpressoMobileCafe Start up costs: $119, 500 + GST including our FAST TRACK Program which guarantees your income!

PROFILE: Experienced Franchise Lawyers. Member Franchise Council of Australia (FCA), International Lawyers Association (IFLA), Franchise Association of New Zealand & US Commercial Services. FIXED COST FEES to Franchisors and Franchisees based on scope of works. No hourly rate surprises! Services provided: â&#x20AC;˘ Drafting & review of Franchise documents â&#x20AC;˘ Legal and consulting advice to Franchisors & Franchisees â&#x20AC;˘ Dispute resolution â&#x20AC;&#x201C; mediation â&#x20AC;&#x201C; strategies and solutions

â&#x20AC;˘ Code compliance requirements â&#x20AC;˘ Sale/Purchase of Franchise Systems & Business â&#x20AC;˘ Master Franchising â&#x20AC;˘ International Franchising

Call or email for a complimentary brochure for Franchisors and Franchisees.

PROFILE: Xpresso Mobile CafĂŠs operate in areas nationally where there are little to no fixed location cafĂŠ options for the workforce in commercial and light industrial precincts. We supply premium Di Bella Coffee products â&#x20AC;&#x201C; both hot and cold. FrappĂŠs, energy drinks, cold brew coffee products, bottles of water and food options such as gourmet cookies that are designed to compliment the enjoyment of an awesome espresso coffee. An Xpresso Mobile CafĂŠ is perfect for corporate and school/community events. Ask us about our unique school fundraising programs! We also stock Di Bella Coffee specialty capsules that fit the â&#x20AC;&#x2DC;Nespressoâ&#x20AC;&#x2122; pod machine. Both of these services are unique to Australia!

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

Phone: 1300 139 913 Fax: 07 5587 7223 info@zbm.com.au www.zbm.com.au

Start up costs from: $59,990 + GST

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 cafĂŠ 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: Zoo Business Media is a full service supplier of innovative music, video and voice messaging solutions to hundreds of franchised businesses around Australia. We provide the latest in digital, customisable in-house radio and branded, music video technology. We help you create the perfect ambience for your retail stores, gyms, restaurants or bars with the latest internet-delivered music and messaging services - inclusive of public performance fees. Contact us on 1300 139 313 and find out how we can make your franchised business sound great!

JUL/AUG 2015 | 141 | WWW.FRANCHISEBUSINESS.COM.AU

FR0715_142

142

2015-06-30T11:41:13+10:00

ADVERTISING INDEX

INCORPORATING FCA NEWS

* INDICATES FCA MEMBER

AFEA Home Nurseries Appliance Tagging Systems Baskin-Robbins Battery World Baybridge Lawyers Benga Designs Brian Tracy Bridgestone Buy Australian Properties Cashflow It Civic Managed Services Coffee Experience Construction, Supply & Service Created by Hands Dodo Services Dominos Dream Doors Fastway Couriers Ferguson Plarre First Class Capital Franchise Council of Australia Gelatissimo GroutPro Hairhouse Warehouse Healthy Habits Hombre Street Food Home Sorted Indian Brothers Inxpress Just Better Care Leadership Management

38 89* 11* 23* 54* 97* 41* 106* 87* 7* 19* 123 82 96 45* 31 65* 143* 104* 27* 129 35* 48* 125* 115 15 80 85* 63* 79 114

Leather & Vinyl Dr

Legal Vision

99*

Marsh & Maher

91*

Movenpick

127*

National Franchise Insurance Brokers

Oporto

51*

Pack & send

Pizza Hut

71*

Property Club

112

Redcat

94*

Red Rooster

43*

Refresh Renovations

66-67*

Revel

Retail Food Group

72-73

Snap-on

Snooze

77*

Specialised Events

117*

St Louis

Subway

33*

Swimart

61*

The Cheesecake Shop

93*

The Drug Detection Agency

144

The Franchise Shop

46-47*

Town & Country Pizza & Pasta

107*

Tu Projects

111

VIP

55*

Wild

100

Xpresso Delight

59*

Xpresso Mobile Cafe

83*

Zoo Business Media

121

JUL/AUG 2015 | 142 | WWW.FRANCHISEBUSINESS.COM.AU

FR0715_000_FAS

2015-06-23T12:01:31+10:00

FR0914_000_TADDA

2014-08-29T13:39:15+10:00

There’s a lot of money in drugs.

We’ll help you get it! Workplace and pre-employment drug testing is exploding as a business in every state in Australia. Be quick to secure one of our exclusive franchise territories. With the right motivation, a bit of hard work and our comprehensive 100-day training program, the financial rewards will follow. If you’re ready to jump on board as a Franchisee in our proven business model, we want to talk to you. Sooner rather than later. Email our Franchise Manager glenn.dobson@tdda.com

Take a video tour on our website