FR0515_001
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FRANCHISING
Franchising YOUR ESSENTIAL GUIDE TO BUYING A FRANCHISE | WWW.FRANCHISEBUSINESS.COM.AU MAY/JUN 2015 VOL.28/NO.3
MAY/JUN 2015
STATES OF
INDEPENDENCE: MEET THE AUSSIES DIVING INTO THE US MARKET
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
HOW MANY HOURS DOES A FRANCHISEE WORK?
10 REASONS WHY FRANCHISING MAY NOT BE FOR YOU
8 STEPS TO SECURING FUNDING
10 FINANCIAL TERMS YOU NEED TO KNOW
P.40
P.48
P.27
FR1114_000_PACK
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FR0515_003
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CONTENTS
12
COV E R STORY
THE HYPER CONNECTED CONSUMER The digital trends you need to know
48 8 STEPS TO FUNDING
Top tips to prepare you for that meeting with the bank
20 TIME TO IGNORE THE CLOCK 53 WORKING WITH A How many hours does a franchisee work?
22
INCOME GUARANTEES: THE GOOD AND THE BAD The pros and cons of investing in a business with an income guarantee
22 102
STATE OF INDEPENDENCE
27 10 FINANCIAL TERMS YOU
NEED TO KNOW
Before you sign up to your franchise, get a handle on the essential financial terms
30 TAKING A LEAP
Advice on how to predict sales turnover for a brand new franchise unit
REGULARS
5 6 120 124 126 128 130 142
36 CAN YOU MULTI-TASK?
Planning to run a second business? Check out what you need to consider
WELCOME INSIGHTS LEGALESE THE SKETCH LEADERSHIP GLOSSARY CHECKLIST ADVERTISERS INDEX
MASTER FRANCHISEE
What you need to know about working with a master franchisee
60 INVESTING IN THE FUTURE
Janine Allis and Clovis Young suggest how to spot a franchisor with vision
60 74 EARNING A CRUST
What’s happening in the bakery sector
81 THE BEANS AND THE BUSINESS
How to bring success to the competitive coffee marketplace
92 HELP WITH INSURANCE
Did you know your franchisor can assist with your insurance needs?
98 FIRED UP FRANCHISEE
Battery World franchisee shares his tale of expansion
108 FAMILY CULTURE
36 40 10 REASONS WHY
La Porchetta celebrates three decades serving up Italian cuisine
112 LIGHTBULB MOMENT FOR SPARKIES
Former electricians and best mates open a Snooze store
118
FRANCHISING MAY NOT BE FOR YOU
WHAT ARE RED ROOSTER AND SUMO SALAD UP TO?
Not everyone will suit a franchisee role as Donna Bennett investigates
Salad is the key for this latest fast food partnership
MAY/JUN 2015 | 3 | WWW.FRANCHISEBUSINESS.COM.AU
FR0115_000_ACE
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2014-12-03T14:10:04+11:00
Are YOU Looking For... •
Opportunity to create a successful business.
•
Competitive compensation package, including equity.
•
Insurance policies tailored to meet customers’ needs.
•
Innovative and rewarding incentives.
•
Technology and Process support.
•
On-going support opportunities for your business.
•
Access to marketing collateral.
If the answer is YES... Now you can become part of our future. While not a franchise, you have an opportunity of becoming a Corporate Authorised Representative (Principal Agent) of ACE Insurance Limited (ACE). Combined Insurance, a division of ACE Insurance Limited (ACE), has been providing Australians with peace of mind through our insurance products since 1960. As a Principal Agent you will be able to run and build your own operation and, while being authorised under the ACE’s Australian Financial Services Licence, advise on, distribute and sell Combined Insurance products underwritten by ACE. So, if you want to run your own business and build equity with strong support and minimal start-up up costs, then look no further. Contact Adam Brazda on: Phone: (07) 3839 4733 Mobile: 0418 487 412 Email: opportunity@combined.com.au Web: www.combined.com.au/partnerwithus
FR0515_005
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( WELCOME )
H
ow do you envisage your life five, 10 years from now? Big question I know, but hugely relevant when you put it in the context of searching for a business opportunity. Each one of us has our own goals, our own responsibilities and a set of skills we can employ. So what is it that interests you about investing in a franchise? Does running your own franchised business get you nearer to your dream? Will business ownership sit well with our commitments? Do you have the necessary attributes to make it work?
How you picture your life in the future can drive your actions today and tomorrow. There is plenty of due diligence involved to ensure that buying a franchise will put you in the picture, just where you want to be. Not everyone is a perfect franchisee match: if you recognise yourself in one of the 10 reasons why being a franchisee isn’t right for you (page 40), it’s worth considering other career and investment options now rather than pursuing a path that is likely to lead to dissatisfaction and mismatched goals.
you who are edging closer to investing in a business. Franchise buyers can face obstacles when it comes to accessing finance for the business purchase. Read about the eight steps to getting funding, key financial terms you’ll need to understand, and how to best develop sales predictions for brand new businesses. And you can discover what warning signs to watch for in a lease agreement.
There are other factors to consider before writing yourself in or out of the franchise picture and in this edition we look at the hours a franchisee works, whether or not you should run distinct and separate businesses alongside a franchise, finding a franchisor with vision, whether a master franchisee arrangement will suit you.
There are some brilliant success stories in the $144bn franchising sector, and Franchising magazine highlights a few in this issue: how a franchisee couple is powering in business and taking the PoolWerx brand to the US; the philosophy and talents behind the La Porchetta casual dining chain celebrating 30 years in business; why Red Rooster and Sumo Salad have found synergies; and the enthusiasm and ambition of franchisees in retail brands Snooze and Battery World.
We’ve got some practical tips for those of
Could it be you next?
EDITOR Sarah Stowe P: 02 8484 0900 sarah.stowe@cirrusmedia.com.au ART DIRECTOR Justine Dunn P: 02 8484 0757 designer2@cirrusmedia.com.au NATIONAL SALES AND MARKETING MANAGER David Strong P: 02 8484 0905 david.strong@cirrusmedia.com.au ACCOUNT MANAGERS Andrew Dalton P: (02) 8484 0958 andrew.dalton@cirrusmedia.com.au
SARAH STOWE EDITOR
Anthony Butler P: (02) 8484 0870 anthony.butler@cirrusmedia.com.au 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
CIRRUS MEDIA Tower 2, Level 3, 475 Victoria Ave, Chatswood, NSW 2067, Australia Locked Bag 4700 Chatswood Delivery Centre, NSW 2067, Australia P: 02 8484 0888 F: 02 8484 0633 ABN 80 132 719 861 www.cirrusmedia.com.au
MAY/JUN 2015 | 5 | WWW.FRANCHISEBUSINESS.COM.AU
There are some brilliant success stories in the $144bn franchising sector
Average Net Distribution Period ending Sep ‘14 - 6,581 PRINTED BY: BLUESTAR PRINT 83 DERBY STREET, SILVERWATER NSW 2128 P: 02 9748 3411
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
FR0515_006
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INSIGHTS
Financial support offer for new franchisees The multi-brand franchise business Retail Food Group is offering financial support for new franchise buyers as part of the biggest franchisee recruitment drive undertaken by the company. The director of franchise, Gary Alford, said the growth of RFG puts it in a good position to provide finance options to further expansion of its six major brands. “Our recent acquisitive growth has reinforced our ‘strength in brands’ philosophy and given us the stability, scope and leverage to offer unprecedented levels of support to new franchisees to facilitate our ambitious domestic growth targets. “By offering finance to people who may have the right attitude, outlook
and motivations, but just not the full capital, we are able to continue the growth of our business.” Financial assistance is an option for suitable applicants who sign up to open a brand new outlet in the following franchise systems: Brumby’s Bakery, Crust Gourmet Pizza, Donut King, Gloria Jean’s Coffeees, Michel’s Patisserie and Pizza Capers. There are more than 150 brand new locations available but the deadline for the new franchise offer expires on 31 May 2015. RFG is also offering incentives for its existing franchisees to become multiple operators with additional same-brand stores, or invest in a second brand.
franchise businesses priced at under $50,000. The least popular investment level is more than $500,000. FRANCHISE OPPORTUNITIES
THE FRANCHISE BUYER’S BUDGET Are potential franchisees eyeing up the budget businesses, or do they have a bigger spend? We take a look at the investment levels and sectors proving popular with our audience. Right now buyers have their sights set on franchises that cost between $300,000 and $500,000. Potential franchisees using w w w. f r a n c h i s e b u s i n e s s . com.au, who have indicated their spend, have revealed this to be the most popular price bracket. The $100,000 to $200,000 investment range is attracting attention too, followed by the real budget options,
Cleaning Concepts (the South East Melbourne Cleaning Pty Ltd), was the Victorian franchisor of a national professional cleaning franchise system and was taken to court by the Australian Competition and Consumer Commission.
The top 5 sectors: 1. Fast food 2. Coffee 3. Automotives 4. Building, construction, maintenance and safety 5. Advisory and professional services Home based opportunities also appealed to our audience in March, as did the sports and fitness category, and retail businesses.
DIRTY BUSINESS CLEANED UP A cleaning franchise now in liquidation has been fined $500,000 for contravening Australian Consumer Law. The business, formerly Coverall
The Court found (in October 2014) that Coverall Melbourne had engaged in unconscionable conduct, made false or misleading representations, and had contravened the Franchising Code of Conduct in its dealings with two prospective franchisees who subsequently signed up to the cleaning franchise. The Court declared that Coverall Melbourne had made false or misleading representations in regard to the income that the two franchise buyers would earn. The Court also found that Coverall Melbourne had contravened the Franchising Code by providing this false or misleading information to the two individuals
MAY/JUN 2015 | 6 | WWW.FRANCHISEBUSINESS.COM.AU
and by failing to notify one of the franchisees of the need to seek independent advice before entering into the franchise agreement. Coverall Melbourne was also found to have engaged in unconscionable conduct by failing to pay the franchisees for the work they had completed and continuing to demand payment for the initial franchising fee. Justice Murphy noted that Coverall Melbourne “gave scant regard to the requirement that franchisees should be fully informed and given the opportunity to be independently advised before committing to the purchase of a franchise business”. Orders were previously made against Coverall Melbourne’s former director, Brett Jones; these included a $30,000 penalty and an order disqualifying him from managing a corporation for two years.
FR0315_000_SNAP
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2015-02-13T15:42:39+11:00
GET MOVING WITH A SNAP-ON TOOLS FRANCHISE A proven, established and profitable business model
Global leader in tools and franchising
Great office views Mobile showroom
Extensive training and support Give customers personal service, premium products and finance solutions A market leader for mechanics
Be your own boss
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 join our online Discovery Tour to find out if we’re the right business for you. Check it out at snapontools.com.au/franchise
Call 1800 762 766 (AUS) Franchise Advert_275x205_0215.indd 1
0800 762 766 (NZ) 10/02/2015 1:53:44 PM
FR0515_008
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INSIGHTS
Ex-franchisees awarded $700,000 in damages into liquidation in January 2015. Justice White of the New South Wales Supreme Court found that both the franchisor company, and Cuneen, had knowingly misled Carazi in reference to the profitability of other franchises in the network and as to the suitability of the location of the franchise outlet in Castle Hill. Blake Palmer, partner and head of litigation at Baybridge Lawyers in Sydney said “This was an extreme example of misleading conduct on the part of the franchisor. Giaimo was shown data that purported to represent earnings at other franchises. Yet, that data contained numbers that were a fantasy.” A former franchisee in the Blow Dry Bar network was given misleading information before signing up to the franchise, and as a result is entitled to more than $700,000 in damages. That’s the ruling of the Supreme Court of New South Wales which has found in favour of Carazi, the trading business of John Giaimo, the Castle Hill former franchisee. However, Giaimo will have to take his claim to a trustee of bankruptcy to receive the financial damages: the founder and the sole director of Blow Dry Bar Franchising, Nathan Cuneen, went into voluntary bankruptcy and sold the business before it went
realised this was not a Westfield, not a central location. Perhaps he would have made a better decision.” 2. Accepting franchisor numbers “Franchisees should be cautious. They are spending large amounts of their own money. They shouldn’t just accept the franchisor’s numbers when they see them on a piece of paper. If there are several shops in a network, go and observe them yourself, try to form your own view about how well they are operating” advises Palmer. • Be wary too of potential income claims, warns the Australian Competition and Consumer Commission.
TWO LESSONS TO BE LEARNED Putting aside the franchisor’s misleading conduct there are relevant points any franchise buyer should consider. 1. Lack of knowledge about the location The franchisee was based in Queensland and purchasing a Sydney franchise. It was not apparent that he did any research beyond his communication with the franchisor and was not familiar with the location.
WWW WW W.YOUTUB UBE. E.CO CO OM/ M/FFRAN FRAN A CHISEAU U
Palmer says “Perhaps if he went on site and did his due diligence he would have
HOW CAN YOU SPOT A GOOD FRANCHISE? This is a question on the lips of everyone looking to buy a franchise: how can you identify a strong franchise system?
You must understand the obligations placed on you as a result of signing a franchise agreement, as it often involves very large financial commitment Jane Garber-Rosenzweig, Gable Lawyers
In this video we pose the million dollar question to Anthony Hamod, a Fastway Couriers regional franchisee, and a regular contributor to the FCA franchisee success panels at the Franchising & Business Opportunities Expos. So what is the advice he would give franchise buyers? It turns out that spotting a top franchise system isn’t just about the franchisor; a potential franchisee needs to consider a host of issues in the search for a first class franchise, Anthony suggests. You can view this snapshot video, along with a host of other interviews and advice, at www.youtube.com/user/ franchisingonline
MAY/JUN 2015 | 8 | WWW.FRANCHISEBUSINESS.COM.AU
FR1114_000_DOM
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Domino's is not just Australia and New Zealand's leading pizza brand – 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
FR0515_010
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INSIGHTS than $10,000 on their baby in the first year (source: babycentr). The growth forecast for this retail sector is 3.1 percent to 2017.
RETAIL ROUND UP
BABY PRODUCTS RETAILER ROLLS OUT FRANCHISE Babies and kids store Minimee has launched its franchise rollout program to the Australian market. Babies are big business, with Australians spending around $3bn a year on baby clothing and products (excluding food) according to IbisWorld. Minimee founders Meri Mardon and Vesna Crumblin opened their first store in Leichhardt, Sydney, in 2006. The business has grown into two huge Sydney stores in Camperdown and Crows Nest and an online shopping portal which ships across Australia.
VIP programs. There are onsite nursery consultants trained on all products and new baby safety developments. DC Strategy, which is assisting Minimee with its franchise expansion, highlights the growing market for children’s needs for everything from baby goods, apparel, food and personal care to after school care, parties, education and recreation. The total expenditure on baby products and services has increased by 14.5 percent over the past five years. Most parents spend on average more
There’s a new face at Red Rooster, as Chris Green takes up the role of CEO at Australia’s largest roast chicken restaurant chain. Green has spent 27 years working locally and internationally for McDonald’s, most recently as vice president, operations and franchising in Malaysia.
and plans to open a further store before the end of this financial year.
MCDONALD’S EXITS SYDNEY STORE McDonald’s has not renewed the lease on a central Sydney outlet as part of a strategic repositioning in the city. The 244 George Street outlet on the corner of Bridge Street has now closed, and the company’s focus is on redeveloping the flagship store at the Circular Quay Gateway centre.
Mexican food franchise chain Zambrero has big plans for the expansion of the brand in Western Australia this year, with 15 outlets scheduled for both metro and regional areas.
Josh Bannister, the director of development for McDonald’s Australia, said the company is on the lookout for new sites in upcoming retail developments around the city.
The parent company of franchise footwear chain The Athlete’s Foot, is adding the Vans and Timberland distributor to its portfolio.
McDonald’s expansion method is through building ownership rather than leasing, but this is not always viable in capital cities, he told SMH. The burger business expects to open 30 stores each year - right now there are 945 McDonald’s outlets nationally.
Health food franchise Raw Energy has opened two new cafés in the last two months
Sales at the flagship franchise store at Crows Nest have more than tripled since the first year of operation in 2008. Mardon said ‘”We have had constant enquiries from business owners and mothers who have wanted to set up a profitable baby business, but don’t want the risk of the unknown and the difficulty of breaking into the market.”
We didn’t compromise as we grew and our core values continue to underpin every aspect of the way we manage our business today
The retailer is one of the largest providers of baby brands in Australia, stocking more than 100 baby and child brands, such as BabyBjorn, Bugaboo, Phil and Teds, and Boori, to Mamas & Papas, Joolz, Storksak and Oeuf. The business offers in-store services including car seat fitting, demonstrations and package deals as well as
Sara Pantaleo, La Porchetta
MAY/JUN 2015 | 10 | WWW.FRANCHISEBUSINESS.COM.AU
FR0714_000_PALM
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2014-06-30T14:47:22+10:00
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
FR0515_012
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ARE YOU READY FOR THE
HYPERCONNECTED
CONSUMER? If you are representative of the average consumer, access to technology is vital to both your working day and your social life. And as a franchisee, engaging with your customers will be easier and more powerful if you mirror their behaviours.
secondary process when customers are investigating travelrelated purchases.
So what is happening right now around the globe in the digital world? Analysis firm Euromonitor has looked at the issues driving connections and creating today’s super-connected consumer.
“Two in three internet-connected consumers typically buy these types of gadgets online, with men especially prone to purchasing electronics and appliances through e-retail sites.”
BUYING ONLINE:
Mobile phones are leading the way and now consumers, who have swapped specialist music and photo devices for their mobiles, can ditch their credit cards, cash and keys.
DIGITAL RETAILING Euromonitor evaluated usage for product research across: ✱ consumer electronics/appliances ✱ travel-related purchases ✱ clothing and footwear ✱ leisure and entertainment ✱ healthy/beauty/personal care items ✱ household essentials
CHALLENGES: Digital theft, small screen size, cumbersome displays and slow website loading are key barriers for online shopping on a smartphone.
Computers are the most popular tool for researching products across the categories although bricks and mortar stores come a very close second for household essentials. Tablets are the least popular format for product and price comparison, and mobiles only edge out in-store research as the
Adopting technology at the check-out has been a trend for retailers globally but consumers in developed markets like Australia are far less likely to use in-store mobile payments. “Expanding access to in-store mobile payments will be critical to
MAY/JUN 2015 | 12 | WWW.FRANCHISEBUSINESS.COM.AU
FR0515_013
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H
ow much do you use technology on a daily basis? Viewing a weather app before you choose what to wear is one way of starting each day, and logging in to Facebook to catch up with news, friend activities and trends is a very common daily routine.
increasing adoption in these markets, but retailers and manufacturers should also strive to understand how and why the capabilities are thriving in emerging economies," the report suggests.
SOCIAL MEDIA ENGAGEMENT Most social media users choose a passive approach to brand interaction, simply following or liking a Facebook or Twitter feed.
PURCHASING BEHAVIOUR
Just one in three respondents have shared a social media post and even fewer shared a purchase, and so haven’t been rewarded by the brand with a thank you or a discount.
Showrooming, webrooming: what’s the difference? Showrooming is the process of going in-store to conduct product research and then purchasing items online. The lower prices e-retailers can offer are part of the appeal for the consumer. Webrooming is when consumers make online comparisons before shopping at bricks and mortar outlets. Information gathering online drives this consumer behaviour, with customers keen to see, test or try a product before purchasing. MAY/JUN 2015 | 13 | WWW.FRANCHISEBUSINESS.COM.AU
FR0515_014
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GLOBAL COMMUNICATION
DIGITAL FUTURE
SMARTPHONES AND TABLETS
“Although more and more data is shifting to the cloud, the true frontier of new consumer electronics is wearable tech devices.”
On the phone: Apple or Android?
Pick a tablet:
These are items such as glasses, clothing and bracelets that track information.
22% 32%
62%
WEARABLE TECHNOLOGY Interest from consumers however is not focused on the entertainment features of such technology.
67% CHOOSING THE RIGHT TOOL FOR THE JOB
The top five: GPS and navigation, health monitoring, camera, fitness tracking, weather reports
Smartphone: emails, monitoring home devices, location-based apps, tracking fitness and nutrition Tablet: movies Computers: financial product comparison
information,
monetary
transactions,
INTERNET SECURITY AND PRIVACY More than half of the respondents avoid public internet connections for security reasons. E-commerce and online personal information are also areas of concern. SOURCE: CONSUMERS IN THE DIGITAL WORLD, HYPERCONNECTIVITY AND TECHNOLOGY TRENDS [AN EXTRACT FROM THE HYPERCONNECTIVITY SURVEY 2014]; EUROMONITOR INTERNATIONAL SURVEYED 8,070 ONLINE CONSUMERS IN 17 COUNTRIES INCLUDING AUSTRALIA.
MAY/JUN 2015 | 14 | WWW.FRANCHISEBUSINESS.COM.AU
AF_FRXPRMAY13_RHP
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2013-04-04T10:04:41+11:00
UNHEARD Of Flexibility and Semi-Passive Income Introducing Xpresso Delights 1, 2 or 3 day a Week Business Solution At Xpresso Delight we are in the BOOMING Workplace Coffee Business
We put Coffee Machines like this…
Into Workplaces like this FREE
Then, all week long your coffee machines automatically make professional cappuccinos and lattes at a fraction of café prices. Once a week you drop by and give them a clean and service, stock them up and invoice for a whole week of coffees. WOW, now that’s what you call real semi-passive income.
This is me running my business
And so is this…
So is this…
Now you have flexible time to do the important things you need to do but still have a business and only work 1, 2 or maybe 3 days a week. What a typical franchisee’s calendar may look like below... Monday School Function
Tuesday
Wednesday
Thursday
Catch up with Friends
Friday Go Shopping
Join the Xpresso Delight Team now and experience real Business Flexibility
HURRY Limited Offer: Your COFFEE Machines come with Locations ready for you to earn almost immediate income. www.xpressodelight.com.au FCA Magazine RHP.indd 1
Like us on
Follow us on
Connect with us on
3/04/13 11:37 AM
FR0515_016
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W
ant to buy a franchise? Here are the 20 brands most popular with our online franchise audience over the last couple of months.
These franchise systems have attracted attention from visitors to www.franchisebusiness.com.au. Not only are franchise buyers downloading content about the brands themselves, they are making enquiries about the franchise system and specific business opportunities showcased on the website. Food in all its glory is without a doubt the most in demand category: from fast food to healthy eating, from casual dining to coffee. But there are mobile, logistics, education and retail opportunities attracting significant interest too.
TOP 20 1. Caltex 2. Boost Juice 3. Jamaica Blue 4. Pizza Hut 5. Muffi n Break 6. Nando’s 7. Michel’s Patisserie 8. Kumon 9. Grill’d 10. SumoSalad
11. Top Juice 12. Xpresso Delight 13. TSG 14. Mobile Skips 15. Mad Mex 16. InXpress 17. Dodo Connect 18. Domino’s 19. McDonald’s 20. IGA
Check out www.franchisebusiness.com.au to see more great brands our online audience is seeking.
MAY/JUN 2015 | 16 | WWW.FRANCHISEBUSINESS.COM.AU
FR1114_000_STLOUIS_
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2014-10-21T11:32:22+11:00
FR0515_018
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Dining out: REPORT
T
he restaurant industry is bouncing back. That’s according to IbisWorld industry analyst Stephen Gargano, who says “changing social trends have fuelled a recovery for the restaurant industry over the past five years, helping it to bounce back from a low point during the global financial crisis.”
In an update of IbisWorld’s Restaurants in Australia report, the industry (which doesn’t include takeaway food outlets) is expected to post annualised growth of 3.6 percent over the five years through 2014-15 -
including a rise of two percent during the current year - to total $11.7bn. Time-conscious consumers are using restaurants as a solution for their busier lifestyles. Con-
sumer demand for quality food and fine dining experiences has fuelled industry revenue growth over the past five years. “The industry’s performance has been lifted by the success of popular cooking TV shows, which have reconnected people with the pleasures of eating out”, says Gargano. The developing food culture, combined with increasing consumer health consciousness and a focus on quality, is expected to provide oppor-
MAY/JUN 2015 | 18 | WWW.FRANCHISEBUSINESS.COM.AU
tunities for the industry to grow further. Operators have sought to take advantage of consumers’ moves towards informal dining, with casual, healthier menus driving sales. However, competition is hotting up as fast food retailers in particular capitalise on these trends. In an effort to boost profit, the industry is also expected to focus on better-quality meals and ingredients, for which consumers are willing to pay a premium price.
FR0515_000_CIV
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FR0515_020
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2015-04-29T19:13:06+10:00
TIME TO IGNORE THE CLOCK
H
ow many hours does a franchisee work? The easy response to that question is ‘how long is a piece of string?’ but while there is no definite answer, there are some clues to the amount of time a franchisee will be dedicating to their business.
the local community, building up customer awareness.
Any new business operator needs to understand how their operation functions and to be the face of the business for
For a franchisee investing in the food retail arena, with its seven day a week trading and late nights, the initial period as a fran-
Working long hours when you’re a newbie franchisee is far from unusual. Rather, it’s expected that hard work and dedication is going to set up the business from the start. A franchisee in a full time operation, particularly in retail, is likely to be spending 60 hours a week working to establish themselves in the market.
MAY/JUN 2015 | 20 | WWW.FRANCHISEBUSINESS.COM.AU
chisee is going to be very demanding. Down the track there may be the opportunity to ease the hours in the business once systems are well established and the franchisee is confident in the team of managers or staff running the operation. But it does depend on the individual. Some franchisees like to maintain a strong grip on the business and, while they are working on the business, manage to keep a presence at the front-line. A couple going into business together may be able to share the load so although
FR0515_021
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the hours are long there is room for one of them to fit in time with children, alternating the school run, working on marketing or bookwork after hours.
about your business. It’s full time.”
LIFESTYLE
Because, even if you’re looking to take on a part time business with limited hours, perhaps working just school hours or trading early morning till mid afternoon, there will probably be after-hours work required to maintain or build the business.
Many franchisees turn to a business model that allows them to operate more flexible hours and the lifestyle element is crucial to their purchasing process. It’s worth checking with existing franchisees to find out if the reality matches what the franchisor is promoting.
As Andrew Wilcox, a franchisee with Finn Franchise Brokers, says, “Even if you are working in a part time business, you are spending the other hours and days thinking
Of course there are franchise investments, such as Anytime Fitness, which allow for franchisees to choose whether or not to work in the business full-time or maintain MAY/JUN 2015 | 21 | WWW.FRANCHISEBUSINESS.COM.AU
full-time jobs and watch over the operation of their club with occasional check-ups. THERE ARE THREE KEY CONSIDERATIONS: 1. How many hours are you prepared to put into your business? 2. Does the reality of the franchise model you’re interested in match these expectations? 3. Building the franchise is up to you: while not the only influencer, most often business success is directly related to the amount of effort and time invested in the business
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INCOME GUARANTEES:
the good and the bad
MAY/JUN 2015 | 22 | WWW.FRANCHISEBUSINESS.COM.AU
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id you know some franchisors offer a guaranteed income for brand new franchisees? Domini Stuart looks at what this involves and whether or not getting a financial security blanket in your own business is a good idea.
Steve McCarthy had done his research and decided Cafe2U was the right franchise for him. He was confident he could build a successful business but, as he had never worked for himself, his one concern was managing the transition from wages to the less predictable income of a business owner.
on a weekly basis over the first few weeks, profit guarantees tend to be assessed at the end of 12 months of trading or at the end of the financial year,” says Gehrke. “If the franchisee hasn’t achieved the targeted profit amount the franchisor will pay the difference – again, subject to certain conditions.”
“The fact that Café2U offered a guaranteed income for the first two weeks gave me more confidence to take the plunge,” he says. “The deal was that, as long as I was working full business hours, if my income for the day was less than $500 I’d get a cheque for the difference. In the end I only received three cheques because I made over $500 every other working day, but I really appreciated having that security.”
FREE TO FOCUS ON BUSINESS
Income guarantees are most common in the mobile service sector. They provide what is effectively working capital while the new franchisee builds up his or her business. “At their simplest, income guarantees are top-up payments made by the franchisor to a franchisee to an agreed level and with certain conditions,” says Jason Gehrke, director of the Franchise Advisory Centre. “In the mobile service sector, this equates sales turnover to income as the business operators usually have low overheads and are often selling only their labour.” Retail systems occasionally make a similar commitment, though this is usually based on a different model and referred to as a profit guarantee. “Rather than being calculated MAY/JUN 2015 | 23 | WWW.FRANCHISEBUSINESS.COM.AU
Cafe2U attached an income guarantee to its business launch phase five years ago. “We wanted to help our new franchise partners to focus on learning the business and connecting with customers rather than being obsessed by the cash register,” says general manager John Stanton. “Most new franchisees have financial commitments and this can have a significant impact on how they run their business. Our franchise partners know that, no matter what happens in the launch phase, we are underwriting them financially so those typical initial cash flow concerns are removed.” Hire A Hubby introduced an income guarantee of $100,000 for the first year of business in 2001. Since then, the quality of their applications has improved. “We need to attract people with the necessary hand skills ability as well as business nous,” says CEO Brendan Green. “It only takes most of our franchisees about six months to start generating more work than they can handle so it’s important that they have the capacity to add and manage staff to support their growing business. A lot of middle managers and white
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An income guarantee is not for the lazy. It's a safety net for franchisees who are taking advantage of all the support we provide and working hard during normal business hours to build their client base
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collar workers who fit this profile used to overlook our business because they didn’t think they could earn that kind of money as a handyman. The $100,000 a year income guarantee flags that very clearly.” Green learned quickly that the conditions of the income guarantee needed to be structured very carefully. “We had just introduced it when one young applicant told me it was a great idea, especially if you have Foxtel,” he says. “He was silly, but he did us a favour – we tightened up our franchise agreement to make it clear that an income guarantee is not for the lazy. It’s a safety net for franchisees who are taking advantage of all the support we provide and working hard during normal business hours to build their client base.” Some franchise applicants are concerned that the work will dry up at the end of the guarantee period. “At start-up new franchisees are offered work from areas surrounding the territory they own,” Green explains. “This helps to supplement their income while local area marketing initiatives are working to attract new customers. Over time, as recommendations and repeat business supplement the local area marketing, they establish a strong customer base
in their own territory. Many of our franchisees won’t need to take work outside their territory after about a year.” Other applicants are worried that an income guarantee is just a gimmick designed to persuade them to hand over their investment dollars. “To counter that, we also have a guaranteed buy-back,” says Green. “As long as you’re trading full time, following our marketing strategy and accepting all of the leads that come your way we guarantee to buy back the business in a certain period for an agreed amount. We’re confident we’re doing the best we can for all of our franchisees.”
PROS AND CONS For a committed franchisee, an income guarantee can relieve the pressure of paying the bills until the business is generating sufficient income. “This is particularly significant for low-investment service franchises where there may be less focus on business plans and cashflow forecasts,” says Gehrke. However, there’s a danger that it could create a false sense of security. “If franchisees are conditioned to receive top-up payments from the franchisor when sales are low they might not under-
MAY/JUN 2015 | 24 | WWW.FRANCHISEBUSINESS.COM.AU
stand just how financially selfreliant they need to become,” Gehrke continues. There’s also a risk that an income guarantee will not be set high enough to meet a franchisee’s needs “A person who is used to clearing a salary of $1,000 per week may not realise that the promised sales turnover of $1,000 a week will not have the same spending power,” says Gehrke. “Business expenses such as taxes could leave them with less cash for their mortgage repayments and other fixed living costs than they were expecting.” Gehrke is also concerned that some franchise applicants overlook where the top-up payments actually come from. “It’s very likely that the upfront franchise fee will be set to absorb the anticipated cost of income guarantee payments,” says Gehrke. “For example, the franchisor might add $6,000 to the fee which, presuming the franchisee is earning some income, could fund an income guarantee of $1,000 a week for a number of weeks. I call it a “capitalised form of working capital” – and you might be better off keeping the money and controlling it yourself. My recommendation is to make an assessment of any income guarantee part of the overall decision-making process, but not the deciding factor.”
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FR0713_000_OCH
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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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10 FINANCIAL TERMS YOU NEED TO KNOW
ANDREW GRAHAM Andrew is the national head of business solutions for RSM Bird Cameron. With more than 20 years’ experience, Andrew has a record of strategy development and managing growth to deliver substantial improvements to business.
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any people go into business because they are passionate about the products or services they can offer as part of that business. Often, franchisees have chosen to purchase a franchise because it is a lower-risk business option than a start-up. While most business owners have a trusted accountant to advise on the company finances, it pays to understand some key terms and what they mean for the success of your business.
Some of the most important and preventable causes of business failure are related to franchisees’ inability to understand and manage the business finances. Poor financial control including lack of records, poor debtor management, inadequate cash flow or high cash use are among the causes of failure. These could potentially be prevented if the franchisee had a clearer and more detailed understanding of some key financial terms.
10 ESSENTIAL FINANCIAL TERMS 1. GROSS PROFIT RATIO Gross profit divided by sales: measures the gross profit margin on each dollar of sales. Insufficient gross margin may not cover MAY/JUN 2015 | 27 | WWW.FRANCHISEBUSINESS.COM.AU
operating costs or produce an acceptable level of profit. 2. CURRENT RATIO Current assets divided by current liabilities: measures the ability of the business to meet its short term liabilities as they fall due from its current assets and as such is a measure of liquidity. The higher the ratio, the more likely the business will be able to meet its current liabilities out of current assets. 3. DEBTOR DAYS Debtors divided by sales multiplied by days in the period: the number of days’
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worth of sales represented in the trade debtors’ balance. This is also called the average collection period for receivables and is a measure of how efficient management is in controlling customer credit. 4. RETURN ON INVESTMENT Net profit after tax divided by net assets: Measures the after-tax return on assets employed in the business and as such is a definitive measure of performance reflecting how much the business has earned on funds invested. 5. DEBT TO EQUITY RATIO Total liabilities divided by net assets: measures the business’ total debt (shortand long-term) versus shareholders’ funds available and is useful in assessing the long term sustainability of the business.
cash available in the business to be taken as drawings or dividends at the end of the period. If the owner wishes to increase their equity in the business and the working capital then this would be funded out of free cash flow, therefore reducing the amount available to be taken as drawings or dividends. 8. INVENTORY DAYS Inventory divided by COGS multiplied by 365: shows the average number of days that inventory is held before it is sold. Stock sitting on the shelf is unavailable cash until it is converted to a sale. 9. INTEREST COVER EBIT [earnings before interest and tax] divided by interest: measures the ability of the business to cover interest commitments during a temporary downturn.
6. CREDITOR DAYS 10. SALES GROWTH Creditors divided by cost of goods sold (COGS) multiplied by days in the period: creditors are a useful source of finance. By delaying or extending the payment of creditors, the company is effectively using the creditor to fund working capital requirements.
Percentage of current year sales compared to prior years: Measures the ability of the business to achieve a satisfactory growth rate in sales. Sales growth must exceed any increases to the business operating cost structure otherwise profitability will be eroded.
7. FREE CASH FLOW BONUS TERMS: Profit after tax minus the movement in net debt: shows the increase or decrease of free
EBITDA: earnings before interest, taxes, MAY/JUN 2015 | 28 | WWW.FRANCHISEBUSINESS.COM.AU
depreciation and amortisation working capital position: ability to meet debts as they fall due asset turnover: refers to the amount of revenue produced per dollar of assets available to the business depreciation: the apportionment of the cost of a capital item over an agreed period dividend: a payment made per share to the company’s shareholders. It is based on the profits of the year, but not necessarily all of the profits. Business failures rarely happen overnight: the warning signs of insolvency can be identified and, if the underlying problems are addressed early, the business may remain viable. A business is considered viable when it is either returning a profit that is enough to give a financial return to the business owner while also meeting its commitment to creditors, or it has sufficient cash resources to sustain itself through a period where it is not returning a profit. Franchisees who have a strong understanding of basic financial terms and what they mean for their business are more likely to be successful. However, this does not replace the need for an experienced, professional business adviser, who can support the company in reaching its full potential.
FR0315_000_CAS
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Buying a new or existing franchise? Refurbishing your store? Need new equipment? Cashflow It are the franchise finance experts. Rental or traditional leasing solutions tailored just for you. With terms from just 12 months to 5 years, you have the option to: Purchase the equipment at any time. Return your equipment at the end of the term. Own your equipment over your preferred term. Additional benefits for Accredited Franchise Systems. Call us today!
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Apply online now at or call our customer service team on 1300 659 676.
Advertisement_275x205_20120913 1
18/09/12 10:23 AM
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Taking a leap
MAY/JUN 2015 | 30 | WWW.FRANCHISEBUSINESS.COM.AU
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TIM KILHAM Head of the franchising division and a director of Lanyon Partners Chartered Accountants
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eady to invest in a brand new franchise location? Check out these tips for easing anxiety when you purchase a greenfield business.
Buying a business is a nerve-wracking process. I know - I have done it myself (or, rather, I have bought a share in a business) and I have assisted many people with the purchase of a business, be it a franchise or a non-franchise business. The one common factor is that there is never any certainty as to how a business will perform. And for most people, if the purchase of a business goes wrong it is disastrous, because of the amount of money involved. If you buy a pair of shoes or some clothes that don’t fit, you can always replace them. If you buy a business that doesn’t fit or doesn’t work there is probably going to be a significant impact on you, your family and your finances. It follows therefore that it is of the utmost importance that proper due diligence is carried out before deciding to purchase a business. The time, effort and money spent on performing proper due diligence is always worth it. So, having established that buying a business is a nerve-wracking process, the degree of anxiety is far greater if you are going to buy a brand new or greenfield franchise. The purchase of a greenfield franchise is fraught with more difficulty than the purchase of an existing franchise.
LACK OF FINANCIAL DATA A greenfield site is a new site or territory rather than an existing franchise. Once there was not a franchise on the site or in the territory (it was a ‘green field’) and now there is. The most obvious difficulty in purchasing such a franchise is the lack of financial data. When you purchase a business that is already MAY/JUN 2015 | 31 | WWW.FRANCHISEBUSINESS.COM.AU
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A green field site is a new site. So how do you determine sales for a greenfield franchise? If sales are known the rest of the budget is easier to prepare
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trading from a franchisee, or when you purchase an existing site or territory from a franchisor, you have historical financial data for that location. It is of course true that when you purchase the site or territory the future performance of the franchise might be very different to the past performance. This could be because of changes in economic conditions, product mix, operator and many other reasons. But at least you have a starting point when you buy an existing business. The biggest unknown when purchasing a franchise business – greenfield or not – is usually the sales. If you know what your sales are going to be, then it can be relatively easy to put together an expense budget. Items such as cost of sales, franchise royalties, marketing levies and often even wages, can be fairly readily determined if sales are known. They all vary to some extent with sales and some can be calculated as a percentage of sales. Some costs such as rent are likely to be fixed irrespective of what the sales are. So if sales are known, the rest of the budget is easier (but not necessarily easy) to prepare. This
article focuses only on sales and not on expenses.
TIPS FOR SALES PREDICTIONS So how do you determine sales for a greenfield franchise? The starting point is the franchisor may provide some estimates as to likely sales. The franchisor does not have to do this, but if it does, it is likely that you will be provided with a range of possible sales. You should make enquiries of the franchisor as to how its sales figures were determined. Increasingly today franchisors use sophisticated techniques to help them make decisions about site selection and territory planning. Often this includes financial modelling and detailed demographic analysis. Make enquiries and find out what work your potential franchisor has done in determining your site or territory. It may provide useful guidance to you to in predicting your sales. If the franchise system you are buying into has many existing franchisees but your proposed business is a greenfield, then you should find out
MAY/JUN 2015 | 32 | WWW.FRANCHISEBUSINESS.COM.AU
FR0215_000_CHEESE
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/thecheesecakeshop
TCS3576_Cirrus_Franchise AU_275x205_FA.indd 1
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The reliability and accuracy of the data should be taken into account when deciding whether to purchase the franchise and how much to pay SALES PREDICTION ACTION PLAN 1. Check any franchisor estimates of sales for the greenfield site - fi nd out what fi nancial modelling tools were used 2. Source sales information on any comparable outlets within the franchise system 3. Compare external outlets from other businesses within the same sector 4. Analyse third party industry benchmarks 5. Review all the sales data and pitch the greenfield site against the evidence
which other franchises in the system are most similar to yours. When you have identified similar franchises, try to obtain financial information – and particularly sales information – for those businesses. The source of your information could be the existing franchisees or could be the franchisor. Whatever your source, great care needs to be taken in identifying similar franchises within the franchise system; factors such as demographics, population density or location can mean that two franchises that on the surface appear very similar are in fact very different. If the franchise system you are investing in is relatively new and does not have many franchises, or many franchises similar to yours, you can still draw comparisons. Look at other franchise systems that operate in the same industry.
For instance, if you are the early purchaser in a new bakery franchise, there are existing bakery franchisors to turn to. If you are the early purchaser of a new franchise in the printing sector, there are comparable existing businesses. Do some homework. Try to establish which franchise outlets in those other systems are similar and then endeavour to obtain financial information, and in particularl sales information, for those franchises.
BENCHMARK DATA Finally, if there is there is no data available for franchises in the particular industry, there will be data available for non-franchised business in that industry. Various bodies produce business benchmarks for a wide range of industries – from A for accountants to V for video libraries – and almost certainly for the industry in which the franchise system you wish to buy is operating. Clearly the reliability of the information you obtain will vary in inverse proportion to how closely it relates to the franchise you are buying. As a buyer of an existing franchise, you will find the historical data for that franchise is a great starting point. If you are buying the first franchise in a new system in an industry in which no franchises operate, the data you get may bear little relation to how your franchise will perform. The reliability and accuracy of the data you obtain affects the risk, and accordingly the reliability and accuracy of the data should be taken into account when deciding whether to purchase the green field franchise, and if so, how much to pay.
MAY/JUN 2015 | 34 | WWW.FRANCHISEBUSINESS.COM.AU
FR0115_000_WAT2
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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.
Tired of working on the tools or in an office for someone else? If you love the outdoors and have a passion for customer service, you could be running your own successful franchise business with Swimart.
1 Own
2 Own a Swimart
YOUR OWN Swimart Store
Mobile Pool Services business
With over 30 years experience in the industry and a huge network of independently owned stores, we’re Australia’s leading pool and spa specialist. A Swimart franchise offers: - Strong gross profits and low operational costs - Low fixed fees - Comprehensive training - Professional support including marketing, TV advertising and business training.
A brand new business opportunity from Swimart. - In specially selected regional and rural areas - At last, the chance to open a business in the area you love to live in! Get with the strength When you become a Swimart franchisee, you’ll benefit from: - Strong brand awareness and a powerful marketing program including TV advertising hosted by Susie O’Neill - Comprehensive initial and ongoing training through the Swimart Training Academy - Exclusive Territory - The backing of a franchisor with 30 years in the business. - Customer database of pools in your area.
ng “Nothing beats achievi success in the pool” Susie O’Neill
To find out more, call Chris Fitzmaurice on 02 9898 8608
swimartfranchise.com.au SWI2243-R
ISL 207 ADW i dd 1
14/04/14 7 56 AM
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W
hen someone invests as a franchisee the franchisor will want to know how committed that individual is to the task of operating and building the business. So how far does commitment extend, and is there room for another project in the franchisee’s life?
Of course not every franchise systems demands an attention span in excess of 60 hours, and some networks are constructed on part time or investor-level involvement. But as a general rule, franchisors are expecting the franchisee to devote their time and energy to sustaining and developing the brand they represent, to uphold standards, and to extend themselves to reach their personal, and sometimes group-based, goals. If early on, even before the franchise agreement is signed, there is misunderstanding about the depth of practical and strategic work required by the franchisee there will be inevitable disappointments, possibly even disputes as the reality of the task hits home.
STAY FOCUSED So if there is a plan to continue with an existing family-run business, it’s important that issue is raised with the franchisor at early discussions. Bert Cotte, senior field support consultant at McDonald’s Australia, says “This is a tricky subject to talk about, but if we all agree that the aim is to have a well aligned financial focus on the business, then hopefully a healthy level of transparency follows. “The franchisee’s financial diversity is something that they will have to consider as part of their wealth building plan. It is however important that the investments outside of the franchise business do not drain funds from the business, and more importantly do not distract the franchisee’s attention and energy.” Perhaps there is a property or investment portfolio that will demand attention, and funds, to maintain. The question the franchisor might ask is whether that will detract from the role of building the franchise business. “In my experience, passive investments can provide financial diversity to the franchisee without negatively impacting the franchise business. Running another business at the same time is challenging on a lot of fronts for both the franchisee and the franchisor,” says Cotte. The demands of a retail business, and food retail in particular, are easy to identify: seven day trading MAY/JUN 2015 | 36 | WWW.FRANCHISEBUSINESS.COM.AU
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CAN YOU MULTI TASK IN FRANCHISING?
MAY/JUN 2015 | 37 | WWW.FRANCHISEBUSINESS.COM.AU
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allows little room for a personal life, certainly in the first few months of a greenfield site when the business is being established. But even office-based and mobile franchise models will more than likely have extra demands beyond the customer interaction. It is important to understand the extent of the after-hours role of a franchisee: will there be day to day administration to manage once the business hours are over, will there be client follow-ups and appointment scheduling to complete in the evenings, will the franchisee need to work on the business strategy at weekends, what sort of business networking and community involvement will take place out of hours, is the franchisee expected to undertake training in their own time? Some franchise models do provide franchisees with administration services such as lead generation, appointment scheduling, invoicing and bookkeeping; others have well-integrated IT systems that both ease and speed up the admin process for franchisees responsible for managing their own back-office.
Running a second, alternative business is not the same as expanding the franchise business through multiple units These can lessen the load for franchisees, but the three key demands of time, energy and application remain. If a franchisee intends to run parallel businesses, or to invest the results of their labour in home renovations or the traditional trappings of success – cars, boats and holiday homes – being open and transparent with the franchisor about their personal goals and their long term commitment will only serve both parties well. Mark Fernandez, director of Business Development Alliance, says ‘The key is to have
MAY/JUN 2015 | 38 | WWW.FRANCHISEBUSINESS.COM.AU
sufficient working capital at all times, in the good times and the bad. I would challenge you to firstly know what the franchise system determines is a ‘healthy working capital’ amount and to have contingencies in place to cover the difference in a time of need. This may reduce your exposure to losing all those ‘toys’ that you have purchased. “ Running a second, alternative business is not the same as expanding the franchise business through multiple units: while the day to day demands of a multi-unit franchisee will become more strategic and less hands-on than it is for a single unit
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operator, the business has a single purpose, one philosophy, one set of challenges.
FRANCHISOR ROLE Of course the question about multi-tasking in franchising isn’t just relevant to franchisees; franchisors can be guilty of too splintered an approach to the franchise business as well. As part of the due diligence process it is worthwhile for a franchise buyer to uncover the full extent of a franchisor’s entrepreunership and satisfy themselves as to the franchisor’s role in and commitment to the franchise system if there are multiple business operations under their guidance. Honesty is essential for both parties. Franchise buyers need to be clear about why they are looking to operate more than one business, consider whether a particular franchise model is the right fit or if there is a better way to match their goals, and pinpoint what business skills they can employ to ensure smooth running of their businesses.
MAY/JUN 2015 | 39 | WWW.FRANCHISEBUSINESS.COM.AU
FR0515_040
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10 REASONS WHY FRANCHISING
MAY NOT BE FOR YOU
F
ranchising is on a roll. This is a $144bn industry, it’s well-established as a business model, and there are more than 79,000 franchised units operating across Australia. But it isn’t the right option for everyone. By Donna Bennett
Establishing and operating a franchise business is no different to any other business – there is no guarantee of success. Not limited to just 10 possibilities, there are many reasons why you may not be suited to owning a franchise. However, here is a basic checklist that will assist in evaluating your compatibility.
1. YOU’RE NOT A PEOPLE PERSON No matter what franchise industry you choose, all will involve some level of customer service. You need to be friendly, converse well with strangers, be reliable, and always think of your clients.
“In our business, we know franchisee customer service skills are paramount,” says Sarah Allen, general manager and co-founder of Appliance Tagging Services (ATS).
they will: “You’ve got to be able to discipline yourself, make an appointment and stick to it.”
“Our customers expect consistent service from friendly professional technicians who respect the varied environments in which they work,” Allen explains.
Perhaps an obvious one, insufficient finance to fund your franchise is a major obstacle. You need to take into account more than just the amount of money required to buy the franchise. Your particular franchisor will be able to guide you on what working capital is ideal.
Jim Penman, CEO of Jim’s Group says the two biggest problems with his franchisees are returning telephone calls and turning up when they say
MAY/JUN 2015 | 40 | WWW.FRANCHISEBUSINESS.COM.AU
2. YOU DON’T HAVE ENOUGH MONEY
ATS advises its franchisees to begin business operations
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with enough working capital to cover their personal expenses for three months. “Whilst it is unlikely all this capital will be drawn upon, the knowledge it is available will most certainly relieve the stress of poor cashflow during the establishment months,” Allen explains. “In the past we have rejected applications from otherwise suitable franchisees as we believed the establishment of their franchise business would put too much strain on their finances," she says.
3. YOU’RE BUYING YOURSELF A JOB A sure path to failure is to view a franchise as simply buying a job, particularly if you find it hard to get recruited or have a history of frequently changing jobs. A franchise is a business and, as such, requires commitment to growth and development. Penman is extremely wary of someone who has an inconsistent employment background. He asks himself, ‘Why is it they keep changing jobs? What’s wrong with that person?’
If you view a franchise as a job, what’s stopping you from walking away from it, just like any other job? “The biggest single statistic in franchising is attrition rates,” explains Penman, “the proportion of people at the beginning of the year that are still there at the end of the year.” Someone with a choppy employment record with the attitude that a franchise is simply a job will buy a business and then walk away from it, which is the worst scenario for a franchisor.
MAY/JUN 2015 | 41 | WWW.FRANCHISEBUSINESS.COM.AU
4. YOU DON’T LIKE BEING TOLD WHAT TO DO The essence of franchising is following systems that have already been established and proven, so you don't have to start from scratch. If you prefer to do things your own way, you could be better suited to purchasing an independent business. Franchisor alarm bells can begin ringing during initial meetings if certain traits are detected from the prospective franchisee.
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“At ATS, these include a prospective franchisee being ‘too independent’ and therefore less likely to accept and embrace the rules of the franchise,” Allen says.
5. YOU HAVE BLIND FAITH Owning a franchise includes challenging times and you will need to be flexible and composed to resolve certain situations as they arise. If you have unrealistic expectations or are dismissive of negative possibilities and dangers, owning a business is probably not for you. “Any tendency to be too dismissive of any risks that we believe should be considered can indicate an arrogance or over-confidence on the part of the franchisee prospect,” Allen suggests. Corina Vucic, director at FC Business Solutions explains that today’s ‘franchisee athlete’ requires endurance, resilience, mental strength and sust-
ainability in all spheres of their life. This includes being able to cope with business situations that cause disappointment. “A well informed franchisee with a natural ability to work the system, innovate at a local level, contribute at a franchise brand level and accept that business seasons come and go will always flourish in a successful franchise journey,” Corina says.
6. YOUR PERSONALITY IS CHANGEABLE “We know that a prospective franchisee’s responses to delays or perceived obstacles during the application process are a good indicator of how they will react to problems, and how co-operative and conciliatory they might be after joining the network,” Allen explains. “From experience, a prospective franchisee who is inconsistent during the evaluation and recruitment process, is unlikely to change their behaviour should they join the network,” she says.
An unpredictable personality or inconsistent attitude displayed by a prospective franchisee may be as a result of lack of family support, stretched finances, or not being totally committed to the franchise business venture they are investigating.
7. YOU’RE YOUNG AND INEXPERIENCED Vucic says the new breed of franchisee is younger, businesssavvy and willing to be more entrepreneurial. “The investment they have secured may not be their money, their access to funds is greater and from less traditional sources and following a system is not in their DNA.” She says this is not necessarily adverse and a franchisor must determine whether they can harness this enthusiasm without damaging the franchise brand. However, Penman tends to disagree. “Anybody who’s single and under the age of 25 is a very high risk in a franchise system.”
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He gives the scenario of a successful parent providing the funds and/or business expertise for an adult child that will run the franchise. “You can’t run a business second-hand”, he declares. “What matters is the person out in the field that has the expertise.” He believes not only does the young franchisee lack what it takes to amass the credit rating of the parent, they don’t possess the commitment. Penman insists owning a franchise requires a fair degree of business strength. “We’ve found that it’s virtually a guarantee of failure when you have that kind of situation.”
8. YOUR ONLY FOCUS IS MAKING MONEY When someone embarks in a business wholly centred on how much money they can make, Penman says it’s a fair indication they will fail. “It’s one of our danger signs.”
FR0515_000_YOUNG
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1
2015-04-22T10:16:06+10:00
Once in a lifetime opportunity
Franchises offered for the for firstthe timefirst • nearly Property Millionaires Club members and counting Franchises offered time5,000 4,000 property millionaires and counting
“Property Club Club is is wholly whollydedicated dedicatedtotoproviding providingAustralians Australianswith withthe the “Property opportunity of of aa better betterlife lifethrough throughproperty propertyinvestment. investment.ToTocelebrate celebrate opportunity 21 years in property, we are offering a limited number of Property Club 20 years in property, we are offering a limited number of Property Club franchises. This is a unique offer to be part of an organisation that has over franchises. This is a unique, first-time offer to be part of an organisation that 80,000 members and we’ve helped more people create million dollar property has over 80,000 members, plus we have made more property millionaires portfolios than any other property investment organisation with almost 5000 than all the rest combined, with 4,000 millionaires and counting! Take members now in our Property Millionaires Club. Take advantage of this exclusive advantage of this exclusive opportunity by contacting us today.” opportunity by contacting us today.” Kevin Young Founder and CEO of Property Club Kevin Young Founder and Director of Property Club
Visit propertyclub.com.au Call 1300
663 282
FR0515_044
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People driven by money tend to take shortcuts, they're not focused on the important thing, which is making the customer happy
He says successful franchisees actually enjoy their work and have personal pride in doing a job well. Someone who’s always focused on money will rush through a job to get to the next one.
support of their family as the inevitable challenges arise, and the way the franchisee and their family reacts to these challenges will undoubtedly have an impact on the success of the business,” she explains.
“People driven by money tend to take shortcuts,” says Jim. “They’re not focused on the important thing, which is making the customer happy.”
Alarm bells can go off if it appears external parties to the franchisee have more influence or say regarding their franchise business than might have been indicated during the recruitment process.
The irony is that in your hurriedness to get to the next customer, you’ve probably lost the opportunity of repeat work from your current customer. Allen agrees. “If the prospective franchisee’s focus is only on the money they will make each week, this can be an indicator they may not be prepared to build the business over time and may expect financial returns too soon in the development.”
9. YOU DON’T HAVE THE SUPPORT OF YOUR FAMILY The support base of a franchisee in their business venture is vital. Allen says ATS places particular importance on this. “We confirm the franchisee has the support of their family during the application process.” “The franchisee will need the
“If the franchisee puts the interests of their lifestyle or family commitments, over and above that of their franchise business, this may indicate their lack of commitment to the ongoing development of the franchise,” she said. “From an ATS perspective, should a franchisee not have the support of their family we would most likely not approve their franchise application.”
10. YOU WANT TO SIGN UP WITHOUT SCRUTINY It could be one of the most successful or largest franchisors in history but you should still conduct thorough research and investigations. One very simple way of gauging whether franchisees are happy or not, is to speak with them. Your franchisor must provide
MAY/JUN 2015 | 44 | WWW.FRANCHISEBUSINESS.COM.AU
current franchisee names and contact details, but it’s up to you to telephone them and ask questions. “People can spend $30,000 on a business but will not speak to one existing franchisee,” says Penman, a situation he finds utterly absurd. He insists that the more questions someone asks in a franchisee interview and the more thoroughly they investigate the franchisor, the more commonsense they have. “Some people walk in and have a list of questions, they look a little embarrassed and ask us if we mind – we love it!” says Penman. “We look at them and say ‘yes’! Here’s somebody who has some sense, this is the person we want.” Vucic says a person not properly investigating a franchisor sends her warning bells into overdrive. “A prospective franchisee not willing to do their due diligence, which includes the ‘advice’ pathway is a red flag before the relationship has commenced. “A franchisee is buying into a vision, a proven franchise model, a franchise community. "Surely you want to know what you are going to be a part of if you want to participate and succeed?” she suggests.
FR1113_000_SUB
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2013-09-19T14:58:54+10:00
FR1114_000_REFRESH1
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1
2014-10-24T14:29:18+11:00
ADVERTORIAL
Multi-Award Winning Franchise Launching in Australia Refresh’s awards to date include: • 2014 Deloitte Fast50 Award Winner (New Zealand)
• 2013 Interactive Media Award Winner: Best in Class (New York)
• 2012 NZ Franchise Association Business Service Provider of the Year Finalist 2012
• 2012 Summit International Marketing Effectiveness Platinum Award Winner • 2012 NZ Marketing Awards Emerging Business Award Finalist
• 2012 NZ Marketing Awards Judges Choice Award Finalist • 2011 Summit International Creative Silver Award Winner
Huge opportunity in a massive market Every year Australians spend around $30 billion on renovating their homes. Refresh Renovations is providing an opportunity for you to gain a foothold in this huge market.
A professional operation for business-oriented franchisees Refresh’s business model is sales, marketing and businessoriented. We’re looking for franchisees skilled in these areas. You don’t need to be a builder to join Refresh. Successful renovation projects require clear expectation management and excellent communication throughout the process; from initial consultation, through the design stages, through the build, and right through to the handover of the completed project.
‘ You don’t need to be a builder to join Refresh’ To be awarded a Refresh franchise, you will be: • Inspired by building a company that delivers a better renovation experience • Driven to build a multi-million dollar business • Sales and marketing oriented • A great people manager
• Professional and well presented • Customer service focused
• Enthusiastic and eager to learn
‘Refresh is the established market leader in New Zealand, and is now launching in Australia’
Some of the benefits of owning a Refresh franchise include:
We currently have 35 franchisees operating nationwide across New Zealand and are still growing fast.
• A unique position in the market
As a Refresh Renovations franchisee, you will gain access to best-practice IP and systems, which you can use and leverage to build a significant income and business asset. The revenue potential is huge, and being service based, the establishment costs for a Refresh franchise are far lower than most retail-oriented franchises. You will have a revenue target to build a $3-5 million business within 3-5 years of starting your franchise. Refresh’s core target market for renovation projects is 35-65 year old mid-upper income female homeowners. The offer revolves around a professional sales process. Refresh franchise ownership is equally suited to males and females. Refresh was established and is owned by Traffic (www. traffic.net.nz). Traffic is New Zealand’s leading business growth and strategy provider to the building industry. Traffic is a marketing specialist, and has over 20 staff involved in supporting the Refresh franchise system model. This is the kind of substance that you should look for in any franchise you’re considering. www.refreshrenovations.com.au
• An opportunity to build a significant business asset
• Differentiated by Refresh’s strong offer and customer service • Access to a huge market with enormous potential
• Low start-up costs (no up-front premises or fit-out costs)
• Full initial training and well-structured ongoing support
• Fully integrated, custom designed, cloud-based IT system • Very strong branding and marketing
• Be part of the innovative, market leading Refresh network
What are the building industry requirements? If you purchased a café or restaurant you would employ a chef. With Refresh, you will be required to employ at least one licenced builder. In Victoria, that licenced builder must also be a director of your company, so if you’re based in Victoria, you might like to consider partnering up with a builder.
Contact Refresh Renovations: Does this sound like a franchise that you’d like to be involved with? If you’d like to find out more email Jon Bridge; jon.bridge@refreshrenovations.com.au or visit Refresh’s website; www.refreshrenovations.com.au.
FR1114_000_REFRESH2
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1
2014-10-24T14:29:18+11:00
$30 billion renovation market WESTERN AUSTRALIA $4 billion
NORTHERN TERRITORY $0.3 billion
QUEENSLAND $7.2 billion
ACT $0.4 billion SOUTH AUSTRALIA $2 billion
NEW SOUTH WALES $8.9 billion
VICTORIA $6.7 billion TASMANIA $0.8 billion
Do you want a share of this?
FR0515_048
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40
2015-04-29T19:34:00+10:00
8 STEPS TO FUNDING YOUR
FRANCHISE
PURCHASE
G
et yourself in the best possible financial position before you approach a bank or other lender. Here are some tips from www.business.gov.au on first class preparation to give yourself the best chance of success.
MAY/JUN 2015 | 48 | WWW.FRANCHISEBUSINESS.COM.AU
FR0515_049
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2015-04-29T19:34:00+10:00
1. SET OUT A BUSINESS PLAN A well-thought out business plan and any attachments will set you in good stead. It will take time to properly conduct research and fully prepare a business plan so don't leave this until the last minute. You will need to work out what you want to achieve in the business so you can set some clear goals and outline how you will achieve these. Ensure you have done enough research on the market and that this is up-to-date and accurate but be careful not to dump all the information into your plan. Keeping it concise but with enough detail to motivate your lender will work in your favour. What are your essential financial figures? It’s really important to know these. Your lender will be interested in your projected income, profit and expenditure; if you are purchasing an existing business, the lender will want to match up current and past trading figures. Lenders will also want to know you are on top of your personal finances before they
Your lender will be interested in your projected income, profit and expenditure look to extend funding to you so you may need to address this first.
any borrowing. Consider the following questions:
Run your figures past a franchise-friendly accountant before you finalise the presentation. You want to make a good impression so take a professional approach to the content and the language. Look at your plan from the viewpoint of a prospective lender - what will they make of it? Would you lend to you?
✱ How much money do you require upfront and how much working capital? ✱ Do you know all the business start-up costs you will have to pay out? There may be business or trade licenses, a rent deposit, utility and IT connections, insurance, vehicle and equipment costs. ✱ What is the maximum repayment you can afford? ✱ Do you know your Loan to Value Ratio (LVR)? ✱ If you need collateral, what assets do you have to offer?
2. UNDERSTAND WHAT YOUR LIMITATIONS ARE You will need to work out your limitations for finance and your ability to repay
MAY/JUN 2015 | 49 | WWW.FRANCHISEBUSINESS.COM.AU
FR0515_050
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2015-04-29T19:34:00+10:00
It's worth shopping around to see what offers are available, and which lender will best suit your circumstances ✱ If you need a guarantor, who will be willing to guarantee your loan? ✱ How much equity do you have?
3. BE FLEXIBLE While a small percentage of franchised brands are accredited with one or more of the top four banks who can offer a higher percentage lend, many franchisors don’t have a shortcut to finance – unless they offer vendor financing. Financial institutions such as banks, building societies and credit unions offer selections of short and long-term finance solutions with products including business loans, lines of credit and overdraft facilities. It’s worth shopping around to see what offers are available, and which lender will best suit your circumstances. There are a variety of loans available that can vary in the amount, loan term, interest rate, interest rate type, fees and security; perhaps you don't need a full-blown business loan but can request an overdraft or personal loan for a small investment? Any financial institution will expect self-funding to be a part of the deal. It's common for franchisees to secure the loan against a registered mortgage; this will of course put your property at risk if you fail to make repayments. There are alternatives to the traditional lenders that you can consider. Family or friends might be an option, but there are some important issues to talk through if you choose to go down this path. Other options include venture capital and private investors such as business angels.
4. DRESS TO IMPRESS When it comes to presentation, don't just think of how your business plan is shaping up. First impressions count, so when you visit your proposed lender, make sure you adopt a professional dress code. It sets the tone and shows you mean business.
5. REHEARSE Are you a born public speaker or presenter? Most of us are not, so it’s best to practice your presentation before you attend your interview with a lender. This will help you appear more efficient, alert and confident. Try to be concise and specific in your answers and deliver them in a professional and persuasive manner. You can role play an interview with an accountant to build your confidence in answering the hard questions.
6. BE PREPARED Ensure you attend your consultation armed with all the information required. Keep all the documents together neatly in a briefcase or folder. Some of the information includes your business plan, key financial statements for the last three years (if available), financial forecasts, ratio calculations and personal financial information for each business owner. Check with the lender to see if there is anything specific to bring along.
7. READ THE SMALL PRINT While it pays to be flexible when searching for finance, if you find a much cheaper lending option that sounds too good to be true, find out why it’s cheaper. ✱ Are the fees higher? ✱ Does the interest rate change at any point? ✱ Is it from a reputable finance provider? ✱ What happens if your LVR gets too high? It’s also a good idea to run your options past a business advisor or accountant before signing anything.
8. HANDLING FINANCE REFUSAL Unfortunately not every financial application results in a successful outcome. There could be a number of reasons why an application is rejected. Check the www. business.gov.au website for ways of seeking feedback, making changes and aiming to overcome the challenges so you don't get a refusal next time.
MAY/JUN 2015 | 50 | WWW.FRANCHISEBUSINESS.COM.AU
FR0515_000_DRE
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1
2015-04-29T13:06:41+10:00
Dream Doors – Don’t let anyone Dream Doors – Don’t let anyone steal your dream… steal your dream…
Hi, my name is Derek Lilly and I am the worldwide co-founder of Dream Doors, an internationally proven franchise system with a 14 year history of success. I am now expanding into Australia via a network of Hi, my nameand is Derek andfor I am the worldwide co-founder of Dream Doors,and an Entrepreneurs internationally proven Franchisees I am Lilly looking Marketers, Business Innovators, Go-Getters to franchisethe system a 14 yearwith history success. I am now expanding intokitchen, Australiabathroom, via a network develop brandwith in Australia me. of Dream Doors is different from other and of Franchisees and I amcompanies. looking for Marketers, Businessthe Innovators, Go-Getters to save bedroom renovation By simply replacing doors, drawer fronts,and andEntrepreneurs bench tops, we develop the brand in Australia with me. Dream Doors is different other kitchen, bathroom, and the customers $1,000’s on their own renovation and therein is thefrom secret to our international success. bedroom renovation companies. By simply replacing the doors, drawer fronts, and bench tops, we save History of success: the customers $1,000’s on their own renovation and therein is the secret to our international success. t 50 Franchises in the UK where I co-founded the business What does it cost: t Territory Franchise areas available with t In 2007 I moved to New Zealand to start the Dream History of success: What initialdoes costs:it cost: Doors business tt 50 Franchises in thehappy UK where I co-founded the business tt Territory Franchise areas available capital with From $60,000 $65,000 + GST + operating I have an extremely network of Franchisees t In 2007 I moved to New Zealand to start the Dream initial costs: t I look forward to sharing more of my in NZ and Australia (Just ask them) Doors business t From $65,000 story with you...+ GST + operating capital t I am now sharing my success and winning formula t Ithroughout have an extremely t I look forward to sharing more of my Australiahappy network of Franchisees Contact details NZ and Master AustraliaFranchise (Just asksold them) story with you... t in Australian Australian Master Franchisor tt IQueensland am now sharing my success and winning formula Regional Master sold Cam Hadlow (General Manager) throughout Australia t 10 3 x xAustralian areas (South Adelaide, AustralianFranchise Franchises soldsold (Adelaide, Melbourne x 2, Contact details DreamLilly Doors AustraliaDirector) Pty Ltd t Perth Australian Master Franchise soldDandenong/ Derek (Managing Northern and x 2,Beaches Sydney xSydney 5, Newcastle x 1, Brisbane x 3) cam@dreamdoors.com.au tt Queensland Master soldwork or not” is no Dream Doors Australia Pty Ltd North Casey Regional Melbourne) The question “does this business tt 3 x Australian Franchise areas sold (South Adelaide, Address: Suite 3, The question “does this business work or not” is no longer open for debate Northern Beaches Sydney and Dandenong/ 203-205 Henley Beach Rd, longer open for debate North Casey Melbourne) Torrensville, SA 5031, Australia t The question “does this business work or not” is no Tel: 1-800-373-263 longer open for debate Email: del@dreamdoors.com.au
FR0714_000_SNO
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1
2014-06-26T14:11:50+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 call Alistair Browne, our Franchise Network Development Manager on 0427 401 169
It’s amazing what a little snooze can do. snooze.com.au
FR0515_053
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40
2015-04-29T19:34:00+10:00
Working with a
master
franchisee
M
aster franchising: what is it and should you invest in a business headed up by a master franchisee? Domini Stuart investigates what’s involved.
The simplest way for a franchise to expand overseas is by awarding master franchise rights to someone who is willing and able to run the business in the new territory. There are various types of master franchise agreements but they are generally based on one of two different models – the
MAY/JUN 2015 | 53 | WWW.FRANCHISEBUSINESS.COM.AU
traditional and a newer, ‘area developer’-style arrangement.
THE TRADITIONAL MASTER FRANCHISE MODEL In the more traditional model, the master franchisee literally steps into the role of fran-
FR0515_054
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2015-04-29T19:34:00+10:00
chisor in a particular territory or region. “The master franchisee pays an initial franchise fee, acquires the rights to operate the system in that territory and is required to run and grow the system autonomously,” says franchise lawyer Chris Verebes, Special Counsel at Madgwicks Lawyers in Melbourne. “The agreement includes the right to grant franchises, and the master franchisee enters into franchise agreements directly with the franchisees. Franchisees make their payments to the master franchisee and he or she pays a percentage of this income to the franchisor.” For a would-be franchisee, there should be little obvious difference between an agreement with a local franchisor and a master franchisee – though Verebes does point out that the profitability of
The profitability of the operating franchises must be high in order to support a multi-tiered structure the operating franchises must be high in order to support a multi-tiered structure, and that the structure could also result in higher franchise fees.
THE AREA DEVELOPER MODEL A newer area developer model has been used with great success by franchise systems such as Subway and is proving increasingly popular. “Here, the master franchisee once again has responsibility
for servicing, managing and growing the brand in a certain territory and is granted the rights to recruit franchisees,” says Verebes. “A major difference is that the actual franchise agreements are between the franchisee and the franchisor – the master franchisee simply receives a percentage of the franchise fees for recruiting franchisees. This has the advantage of avoiding some of the problems that can be associated with a two-tier model.” Another difference is that,
MAY/JUN 2015 | 54 | WWW.FRANCHISEBUSINESS.COM.AU
under the area developer arrangement, master franchisees are usually required to operate their own franchise in the territory they run. This can give them a deep insight into the challenges their franchisees face in running a businesses, but a good franchisee doesn’t necessarily make a good master franchisee. “Unless the role of the master franchisee is properly defined and there is proper training, there can be confusion about the respective responsibilities
FR0515_055
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2015-04-29T19:34:00+10:00
of the master franchisee and the franchisor,” says Verebes.
As part of the expansion program, a national master franchisee was appointed to run the Fastway business across the whole country.
Some franchise systems have used hybrids of these two models or even arrangements where franchisor, master franchisee and franchisee enter into a tripartite franchise agreement.
“Fastway Couriers Australia operates with a two-level business model,” says chief executive officer Richard Thame. “First, we enter into contracts for specific areas with regional franchisees. They then grant franchises and enter into agreements with courier franchisees by selling them the rights to sub-regions, known as courier runs, which are also independently owned and operated. Today, we have more than 700 courier franchisees servicing 25 regional franchises across Australia.”
“In my view such arrangements can become over complicated and lead to significant confusion and inefficiencies,” says Verebes.
MAKING THE CHOICE Fastway Couriers began providing a low-cost courier service in New Zealand in 1983 and quickly became the first ever transport company to franchise its business. Ten years later, when the company identified similar opportunities in Australia, Fastway crossed the Tasman.
Thame believes that choosing between an agreement with a direct franchisor or a master franchisee should be just one aspect of a would-be franchisee’s
MAY/JUN 2015 | 55 | WWW.FRANCHISEBUSINESS.COM.AU
FR0515_056
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A franchise with a proven model in a similar country can bring a lot more strength and stability to the business
40
2015-04-29T19:34:00+10:00
decision-making process. “As with any business decision, it’s important to investigate the company and its people,” he says. “If any franchise business, small or large, is to function successfully, the operator needs to start with extensive research and have clear goals for the future.”
RISK AND PROTECTION Fifteen years ago, the North American franchise Fastsigns International expanded into Australia. A master franchisee was appointed to run the operation, which is known here as Signwave. Last year, corporate management consultant Linda Sultmann joined Signwave’s two top franchisees, Leo Baker and Dean Rowland, to take over the master franchise rights in Australia. “This is part of the organisation’s continuing strategy for international growth,” says Sultmann. “Our aim is to increase business and profit margins for current franchisees and to grow the Australian franchise base.”
Sultmann understands that a master franchise arrangement could be seen as introducing a second level of risk. “Both the health of the master franchisee and the health of the franchisor could potentially have an impact on franchisees,” she says. “But you can also see a two-tier system as providing an extra layer of protection. If a problem should arise, the most likely scenario is that it would be associated with the master franchisee, so franchisees would still have the backup of the franchisor.” Before appointing a master franchisee in a different territory most franchisors have achieved a significant presence in their own country and, typically, they will be running a very well-established and successful system. “From my perspective, that can be reassuring for would-be franchisees,” says Sultmann. “I believe that a franchise with a proven model in a similar country can bring a lot more strength and stability to the business.”
MAY/JUN 2015 | 56 | WWW.FRANCHISEBUSINESS.COM.AU
“A successful master franchisee, combined with a successful business structure, will ensure that you have greater support from your region as well as a strong overall brand,” Thame adds. “That can result in faster growth for your business.” If the franchisor is strongly committed to growth, there could also be more opportunities to expand. “The master franchisee model has great potential for an individual entering the business,” Thame continues. “For example, a successful franchisee might be offered the opportunity to become a master franchisee. If you have strong sales experience and are interested in developing your career this could be a very exciting prospect for you.”
TWO LEVELS OF RESEARCH Some systems are bound to be less sound than others. There’s never any substitute for thorough due diligence and, when a master franchise is involved, this can involve
FR0115_000_ENV
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1
2014-12-02T09:33:08+11:00
Looking to own your own fitness business?
Welcome to the world of EnVie Women’s fitness is an underserved niche market and EnVie Fitness is the perfect solution. EnVie offers a modern, safe and fully equipped fitness center with extended hours and a variety of training options - exactly the environment ladies are looking for. EnVie offers franchsees: • An affordable initial investment with leasing and financing options available for a turn-key solution. • Advanced operating and security systems, reducing staffing needs and allowing you to manage your fitness centre remotely. • Complete training and ongoing support in marketing, operations, finance, people, technology retention and sales - from a fitness franchise team truly vested in your success.
To learn more or for information on ways we can work together, visit enviefranchise.com.au or call 02 9332 2824.
FR0315_000_NEW
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1
2015-02-17T13:47:28+11:00
In 2014–15, the top 4 pizza companies in Australia are only expected to account for
32.3% of industry revenue
*
• Authentic New York pizza by the slice • 12 year old multi unit franchise • Less than 80% labour cost of other franchises # • Two thirds of the market is waiting • National distribution network • Great profits # • No experience necessary
Appointing Master Franchisees & Store Franchisees across Australia – Apply now!
Copyright 2015 # Dependent on individual circumstances *Source – IBIS World
FR0515_059
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2015-04-29T19:34:00+10:00
A successful franchisee might be offered the opportunity to become a master franchisee extra time and effort. Even the best master franchisee can be scuppered by an ineffective business model and, conversely, the strongest business model can be undermined by a weak or ineffective master franchisee. That means a would-be franchisee must pay close attention to both. Any due diligence should include talking to a number of franchisees who are already operating in the territory you’re considering. When you’re thinking about signing with a master franchisee, the ideal would be to visit franchisees in the home country as well. If this isn’t feasible, at least do some internet research on the overseas operation, looking closely at social media for clues as to how overseas franchisees feel about the business. The Franchising Code of Conduct provides some protection for franchisees by requiring disclosure at both franchisor and master franchisee levels. However, wouldbe franchisees still need to find out everything they can about master franchisees and the level of power and control they have in the country they’re running. “One important consideration is whether the master franchisee has the flexibility to manage the system in a way that’s culturally appropriate,” says Sultmann. “As subtle as they may be, we know there are differences between doing business in America and
Australia and these are most likely to show up in marketing materials and other communications. You really need to know whether the master franchisee has the authority to make those cultural adjustments.” You should also know how ready they are to adapt and innovate in order to meet your customer’s needs. “Change is happening quickly,” says Thame. “Are they investing in the development of technology and other resources to support the longevity and future of the business?”
TRAVELLING OVERSEAS Choose a franchise with a master franchise arrangement and there’s a good chance that you’ll have to travel overseas for at least some of your training to make use of the franchisor’s facilities. “Some people might see this as a disadvantage because there’s an extra cost involved, though this is usually quite small in the terms of the overall agreement,” says Sultmann. “Others appreciate the opportunity to get a broader view and understanding of the business. In fact, we find that so many of our franchisees have a real interest in the parent operation that we’ve made a trip to the United States a prize in a competition we’re running. We’ll help winners to visit one of the really big conventions there, and a lot of people are very keen to go.”
MAY/JUN 2015 | 59 | WWW.FRANCHISEBUSINESS.COM.AU
FR0515_060
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60
2015-04-30T11:56:03+10:00
INVESTING IN THE FUTURE F
ranchisors with vision: what are the signs to look out for? Donna Bennett investigates.
Vision is nothing without an action plan to have it fulfilled, and this must include significant investment, together with the capability to evolve over time. The vision of a franchisor often
MAY/JUN 2015 | 60 | WWW.FRANCHISEBUSINESS.COM.AU
starts with the person at the top, but it needs to filter down to all levels in order to be effective. You should examine the business acumen not only of the person at the head of the franchise, but the senior
When printing in 3 color: PMS 430 Gray PMS 286 Blue PMS 6 (Black)
FR0315_000_BRI
-
1
2015-02-20T14:46:14+11:00
How Can You Benefit from Personal & Business Coaching?
G L O B A L
Professional Coaching | Corporate Training Achieving Personal and Business Goals Faster
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www.briantracyglobal.com Franchising Magazine Full Page Feb 2015.indd 1
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management and operations, especially the contact you will be regularly dealing with.
CLOVIS YOUNG
Some visionaries can be tough characters to deal with even though they achieve results, so keep this in mind if you are relatively sensitive. Enquire what investments the franchised group is making today and into the future, to ensure it’s here for the long haul.
CLOVIS YOUNG, CEO, MAD MEX Identifying a need for modern Mexican food in Australia, American expatriates Clovis and Angela Young established Mad Mex Fresh Mexican Grill in 2007. Clovis Young says to be successful, franchisors have to accept the pace of change, which is always increasing. “In
WANTED! NEW FRANCHISE PARTNERS AUSTRALIA WIDE
a highly competitive environment where change is the norm, I’d be looking to businesses that are continuing to evolve.”
ion progresses over time. If he were a franchisee, he would want to know the brand would be able to keep up with change.
He believes a franchisor’s vis-
“The vision might be to provide
the best experience for your customers for example but what that best experience is, is going to be changing quite dramatically over five years, so it’s important that brands are
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Visit noodlebox.com.au/franchise & fill out enquiry form to receive an Information Kit. Or contact our Network Development Manager - Michael Standley on (03) 8851 4200 or 0416 256 338.
MAY/JUN 2015 | 62 | WWW.FRANCHISEBUSINESS.COM.AU
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evolving to meet those needs.” Hospitality is about the aesthetics, the style, types of food and the presentation, and Young maintains all these need to develop to remain relevant. However he says the same applies for a serviced based franchise. Are customer calls taken by a central telephone call centre, or are they placed on an App or website? How is the system evolving to improve the quality of the offer to customers over time? Ultimat-ely it’s all about trying to make the customer experience better. In 2013, Mad Mex launched its ‘10 Moments of Truth’, which are 10 key operational aspects of its business (such as customer service and presentation). Franchisees are continually guided towards this check-
12 ways to spot a visionary franchisor 1. Is the franchisor evolving the business to cope with new challenges and changes to the market? 2. What is the franchisor's vision and are franchisees in the network now aligned to this vision? 3. Is the franchisor passionate about the business and the franchising model? 4. Does the franchisor have integrity? 5. Is the franchisor focused on good site selection and using the latest tools to source locations? 6. Has the franchisor installed good systems across the network? 7. Is there new blood regularly coming into the business? 8. Does the franchisor appoint the best people to senior management roles? 9. How innovative is the marketing for the franchise brand? Is it taking a fresh approach and employing the most relevant channels to spread the message? 10. What investments is the franchisor making into the business? Is there money being put into IT ? 11. How measured is the growth of the business and is expansion being well executed? 12. Is there a focus on franchisee profitability?
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If you are considering a retail franchise, the way in which franchisors select sites is crucial.
JANINE ALLIS
Young says the Mad Mex approach is for a measured growth, with a target of 10 to 15 new sites each year. “If you grow too quickly, the vision may still be the same, but you lose out on the execution. “On average, we’ve opened between eight and 15 stores a year, because we’ve got a team where we can execute that number of stores.” Growing too fast means the business would not have the resources. “A big part of our business in retail is our property strategy,” Young explains. Out of 10 to 15 new stores a year, two will be corporate. And Mad Mex makes no distinction between a company store and a franchised store. “It’s a good discipline to keep you from doing things half par. We only look at sites we’d own ourselves.”
Make sure you ring other franchisees to see their experience, not only with their business, but with the people who founded or started the business
KEY QUESTIONS Young says as a franchisee, his top two questions would be, “What kind of investments are you making in IT, and what kind of investments are you making in senior management teams? I’d be looking for a business that’s investing in getting the best people.”
list to ensure their business activities correspond with the company’s vision. Young believes it’s a good idea for prospective franchisees to ask a franchisor a basic question: ‘What is your vision for the next five to 10 years?’. ALIGNING THE VISION “For Mad Mex,” says Young, “the answer is we see ourselves growing in Australia, with significant opportunities
overseas. Here are the things we are doing in our business to be successful domestically, and here is what we are looking at doing in terms of hiring people in our business to support interest in overseas opportunities.” He recommends you speak to existing franchisees and find out if their experiences within the organisation are aligned with the franchisor’s vision. “You want to make sure there’s a connection between the two.”
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Now, more than ever, the IT aspect of any business is critical, he suggests. “We are spending six figures reinvesting in our server and basic in-office IT, and looking at spending $250,000 over the next 18 months on changing the way we do our cloud based data. “Those are two projects that will allow us to be successful for the next five years, because if you don’t have the IT, you can’t execute mobile apps the way they need to be executed. “You need the ability to get real time information and data to
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yourselves and to your franchisees and, if you don’t have it, you’re kind of stuck in 1990.”
JANINE ALLIS, CEO, RETAIL ZOO Founded by Janine and Jeff Allis in 2000, Boost Juice is a well-known and loved brand, now under the umbrella of Retail Zoo. The Boost Juice vision is simple: every customer that leaves a Boost Juice Bar will leave feeling just that little bit better. Discussing whether franchisors should regularly reconsider their vision, Retail Zoo CEO Allis says, “Maybe the business doesn’t need reassessing, maybe it’s the right vision. Maybe the strategy and vision done five years ago is still something relevant and something they need to continue to strive for.”
WHY IS THE FRANCHISOR FRANCHISING? She says it’s more a matter of being true to that vision and delivering on it. “I think our vision of not trying to change the world but making everyone just that little bit happier and loving life is the vision that we had 15 years ago and it’s still our mission. “It’s just a matter of how you drive it. How does that vision evolve? What do the customers want? It’s those things that you need to look at.” Allis suggests a mission statement is good if you keep the sentiment alive: “If your mission statement is to have integrity and then fundamentally your CEO hasn’t got integrity, well it won’t go very far. "It really needs to come from the top, all the way down, and
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MAY/JUN 2015 | 66 | WWW.FRANCHISEBUSINESS.COM.AU
www.lma.biz/license
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A franchisee should be aiming to partner with a franchisor who really does love what they do
people need to understand the business.” She believes a franchisor with vision will be franchising for the right reasons. “They’re genuinely and utterly passionate about what they do and are obsessive about getting it right.” Allis says communication strategy is very important. “Probably our number one driver of communicating our
business and where we are is our annual conferences. That’s where we literally get everyone together and then share our vision through there.” A franchisee should be aiming to partner with a franchisor who’s not just about creating a brand and franchising it, but who really does love what they do. “It’s got to come from the right place, and it’s also about the amount of time they’ve put in their business.”
LOOK AT THE CLUES Franchisors will always tell you what you want to hear she advises. “The key is to make sure you ring other franchisees to see their experience, not only with their business, but with the people who founded or started the business.” She says there are clues to identifying a complacent franchisor. “Is the business only tolerating good people, whether franchisees or staff?
Genuinely interested in your community? Since our humble beginnings back in 2008, Afea Care Services are now very proud to be one of Australia’s leading Care providers. We are currently expanding our business and engaging with exceptional people to join the Afea Franchise. If you are wanting to move into meaningful work based on authentic relationships, please connect with us for more information.
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MAY/JUN 2015 | 67 | WWW.FRANCHISEBUSINESS.COM.AU
Join our franchise network. www.afea.com.au/franchising
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We can become complacent, so it’s a matter of making sure that there are systems in place and that there’s always fresh blood coming in “Look at the marketing – is it innovative marketing, are they growing marketing?” she questions. “Has the brand stopped consulting with and listening to its customers? Does it still have customer programs in place? “I think we’re all human, we can become complacent, so it’s a matter of making sure that there are systems in place and that there’s always fresh blood coming in as well, including franchisees.” Allis agrees with Young that the temptation is great for a franchisor to expand too quickly or embark overseas before it’s ready, when approached by interested parties. “We went from zero to 100 stores, I certainly didn’t have the infrastructure at that time. I have it now, but in four years you couldn’t possibly have that structure.”
have the right vision of who they want in their business before they go for a number.” “At the end of the day it’s a numbers game,” Allis says. “Business is risky, whether you’re in a franchise or going it alone; it’s all about trying to minimise that risk. One way of minimising that risk is going into a franchise because the numbers say that you’ve got more chance in a franchise than going it alone.” And as a franchisee herself, she would look at the length of the time the franchise has been around. “What are the numbers doing and what’s the profitability of the business?” Next would be her research into the other franchisees. “If
Allis believes it’s pertinent to look at a mature franchise network, that’s been around for a long time, that has already set up its processes and isn’t still in the learning stage. NUMBERS COUNT “I’d rather a franchisor doing it slow and steady and only getting great franchisees than somebody who says ‘right, I need to open 20 sites this year and I don’t care who comes in, I’ve got to open these stores’. “Fundamentally they have to MAY/JUN 2015 | 68 | WWW.FRANCHISEBUSINESS.COM.AU
they all say good things, my numbers are still quite good.” Allis says then it’s about taking responsibility for the site. “Yes, the franchisor would put forward a site but you need to take accountability and do your own research on it too. The number one reason why people do fail is their own ability or their own focus or expectations. “People often think the key to a franchise is like buying an investment property, just sit and forget, but they’re the ones that do fail because there’s not a business on this planet that would succeed without people putting their love and attention and focus into making it grow.”
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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. There’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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CAR WASH SNAPSHOT
F
ranchised operations are increasingly common in the car wash and detailing sector which is highly fragmented; the top four players account for less than 20 percent of industry revenue.
The car wash and detailing services industry has undergone five years of growth. There was an uptake of new car sales which helped boost growth as new car owners invest in keeping their vehicles in good shape. But a more subdued level of sales is expected to drive down the detailing industry revenue growth from 2015 onwards. IbisWorld predicts a slower
growth rate over the next five years: an annual rate of 2.1 percent to reach $584.1m in 2019-29.
substantial. At the same time, there are no particular skill sets required, and regulation is minimal.
An advantage for the market is the increasing consumer awareness of environmental issues; a disadvantage the increased density of cities, with less imperative for car use.
Mobile car wash services account for just five percent of the market but are particularly suited to a franchising model, suggests IbisWorld.
Victoria remains the sector’s stronghold, with more car wash businesses per head than any other Australian state. But Western Australia is showing the greatest growth, fuelled by the resources boom, although this is now slowing.
According to the report Car Wash and Detailing Services in Australia, April 2015, the franchised Magic Hand Car Wash business is the largest provider of hand car-wash services with an estimated 7.8 percent market share. The model combines a car wash and cafĂŠ and has 40 locations in five states.
There are few barriers to entry: mobile businesses have the advantage of lower investment levels; however some automated location-based set-up costs can be
The Car Care Australia mobile detailer is cited as another significant franchised operation, with Australian franchises numbering more than 200.
MAY/JUN 2015 | 70 | WWW.FRANCHISEBUSINESS.COM.AU
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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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EARNING
A CRUST
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he Euromonitor report on baked goods delivers an overview of the bread market in Australia.
cakes and pastries, with Australians increasing their eating out habits at lunch time and adding café breakfasts to their routines. Before this, franchised chains Bakers Delight and Brumby’s had sold the greater proportion of gourmet items, with Asianinspired bakeries such as Breadtop and Bon Bons joining the mainstream market in the last couple of years.
The trend for artisan products and gourmet items is having an impact on the baked goods and bread market in Australia. It’s a growing proportion of the market, which grew four percent in value but only one percent in volume last year. The value of unpackaged and artisanal bread increased by seven percent and reached $2.3bn in 2014 and a value share of 58 percent. WHAT’S HELPED THIS? The booming popularity of the café culture has contributed to the increase in baked goods supplied wholesale, predominantly
Supermarkets invested in their own baked goods facilities to boost their artisan items in response to the independents dominance. Now in-store bakeries are the primary driver of baked goods consumption, reports Euromonitor. Consumers are paying higher prices for their bakery items which include organic and gluten-free bread, and breads featuring superfood ingredients such as quinoa and chia. In 2014 unit prices rose to $6.91 a kilo, up 19 cents on the previous year. However, Euromonitor in its Passport report,
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The younger generation no longer opts for a sandwich lunch as standard fare and bread doesn't feature as a focus of breakfast
Baked Goods in Australia (December 2014) predicts the higher prices are unsustainable long term. WHAT ARE PEOPLE EATING? The younger generation no longer opts for a sandwich lunch as standard fare, and bread doesn’t feature as a focus of breakfast, with commuters either skipping breakfast altogether, eating in transit or choosing liquid breakfasts. The changing tastes of Australian consumers are reflected in the growing appeal of Middle Eastern breads and pastries. Flat bread has increased its share of the packaged bread market, up from 11 percent in 2013 to 13 percent in 2014. WHO IS THE CUSTOMER? Mature aged Australians are typical bread consumers and with an ageing demographic, the future for bread sales looks positive. The youth market will continue with its non-bread lunch habits and so is unlikely to reach the same spending patterns as today’s older generation as it too ages.
THE BAKERY VIEW MEAGAN SANDERS, GROUP MANAGER, MARKETING, BAKERS DELIGHT WHAT DRIVES CONSUMER BREAD PURCHASING? We find that our customers are consistently driven by flavour, quality and experience. Nothing quite stacks up to the taste of fresh bread and baked goods, especially when they are still warm out of the oven. Our customer is also concerned with healthier options, and ingredient integrity. By using simple tried and true recipes, with fresh high quality ingredients, we find we don’t need to supplement with preservatives or additives. We also take genuine pleasure in what we do, in delighting our customers and being an active member of the community. An authentic interest in our customers is what keeps them coming back. HOW DO YOU CATER FOR GLUTEN FREE AND GOURMET TASTES?
WHERE WILL CUSTOMERS BUY?
Evolving tastes, emerging ingredients and growing health and diet concerns form part of our constant market monitoring.
There will be further growth in self-service, Asian-inspired bakery chains. Competition will come from supermarkets such as Woolworths, which is offering artisanal baked goods (predominantly sweet items) in cafes in its premium stores.
When we see a new trend that also fits our brand values, we will experiment and love to bring new and different products to our customers. For example, in the next couple of months we will be offering Herb & Garlic Pane di Casa for a limited time.
MAY/JUN 2015 | 76 | WWW.FRANCHISEBUSINESS.COM.AU
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Dodo Connect is on a nationwide search for franchise partners Help us grow the hundreds of thousands of existing Dodo customers already enjoying our great value products and services.
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Gluten-free brings very specific challenges with it. Because we bake fresh bread in our bakeries using raw ingredients, and because gluten travels in the air, to produce glutenfree bread we would need to make this outside our bakeries, meaning it wouldn’t be baked fresh every day. Unfortunately because of this, we will not be producing gluten-free bread in the foreseeable future. GIVEN THAT THE BAKERY MARKET IS MATURE, WHAT POTENTIAL IS THERE FOR GROWTH WITHIN YOUR BUSINESS? The bakery market is mature, but it’s also facing an exciting time of growth. Delicious fresh bread never goes out of fashion. This coupled with the foodie revolution, the passion we are seeing from consumers for fresh delicious product and new exciting flavours and formats, we are confident that this growth period is here for a while. WHAT DOES A NEW FRANCHISEE NEED IN A LOCATION TO ENSURE IT IS VIABLE? When considered as a function of the sales, the total cost of occupancy (rent, outgoings, promotional fees, etc.) needs to be low enough to make the business viable. Having a Bakers Delight bakery close to the registers of a major supermarket is also an advantage. Where this is not possible, being on the main customer path between the car park and the supermarket is a terrific alternative. The local demography is vitally important to Bakers Delight. The company has census data that provides such things as the income of the customers in the surrounding areas, the amount of money the customers spend on bread and bread-related products, as well as the ethnicity and the employment status. The strength and vibrancy of the High Street or the shopping centre where the bakery is/will be located and the quality of the surrounding retailers from both a brand and a fitout perspective is also important. Parking access to the bakery and parking access for the customer when they arrive at the centre has to be taken into consideration. If the car park is hard to approach or it too far away from where our shop is, it can strangle customer numbers and impact heavily on sales performance. The Bakers Delight property managers
take all sorts of factors into consideration when looking at both opening new sites, as well as when they negotiate a renewal for an existing bakery. WHAT IS THE BIGGEST CHALLENGE NOW AND HOW WILL THAT CHANGE? Externally, we are continuously aware of competitive activity, in particular anything that runs the risk of commoditising the category. As bakers of fresh bread daily we are truly passionate about what we do. We try to always walk the talk, to show our customers exceptional value and exceptional product. This brings me to our biggest internal challenge. With a large distributed network, with every bakery we try to find the right balance of autonomy at a local level to meet unique market needs, while still delivering a consistent offer to the highest standard to every customer every day. It’s a tough but important balancing act. RIKKI LEE MERRIN, MARKETING MANAGER, BRUMBY’S WHAT IS THE BIGGEST CHALLENGE NOW AND HOW WILL THAT CHANGE? Food retailing is a fast paced and highly competitive area which ultimately drives our biggest challenge and business opportunity. We dedicate a significant amount of our time and resources in identifying and keeping ahead of changing customer needs and competitors activity and in evolving our brand offer and business model to address these changes and promote franchisee profitability. MAY/JUN 2015 | 78 | WWW.FRANCHISEBUSINESS.COM.AU
WHAT DRIVES CONSUMER BREAD PURCHASING? Customers continue to seek quality, natural or real products over the mass-produced products that are full of artificial preservatives. Value and health are key drivers for bread customers which we see reflected in the increased consumption of the artisan or specialty loaves and the multi and wholemeal grain loaves. Brumby’s has tailored its product offering to meet these changes with the recent launch of the Get Active and Preservative Free Range and the extension of its artisan products in the bakeries. HOW LABOUR INTENSIVE IS RUNNING A BAKERY? Brumby’s bread is of course a handcrafted product made from scratch so labour is inevitably one of our key input costs. It is because of this that Brumby’s has invested heavily over the years in developing labour efficient operational practices, specialised equipment and training programs aimed at reducing our labour needs without compromising our reputation. These sorts of initiatives have been instrumental in broadening the appeal of owning a Brumby’s bakery to a greater audience as seen by the notable increase in men and women from a non-bakery background becoming a franchisee. HOW DOES A BAKERY FRANCHISEE ACHIEVE A PROFIT IN THEIR BUSINESS? Our bakery franchisees ultimately make their profit the same way every other small business owner does: keeping the customer and their needs always ‘front and centre’ of the business while maintaining a firm control of expenses.
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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 Australia’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
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YOUR FRANCHISE. YOUR MUSIC.
Experience the effect great music has on your customers with custom branded playlists from Zoo Music. Subscribe to Zoo Music’s 6 million song music catalogue and enjoy custom playlists created to suit your franchise style and customer base. Choose from Dance, Smooth Jazz, Top 40, Lounge and more. Add special branding and advertising options and you have your own music channel. Call the friendly team at Zoo Business Media and find out how you can get great music INCLUSIVE of public performance licensing from just $21 per week.
zbm.com.au
THE ZOO BUSINESS MEDIA GROUP
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here are some tricks to running a good coffee franchise. The market has seen strong growth over the past five years and is also expanding as a share of the overall economy, according to IbisWorld’s latest report. Highly competitive, the coffee sector is expected to grow still more over the next 10 years.
The market has become extremely competitive over the last few years, confirms Darren Schulz, who heads up Xpresso Mobile. “The general public has a far more discerning palate for good coffee. I see this as a positive as its weeds out the poor operators MAY/JUN 2015 | 81 | WWW.FRANCHISEBUSINESS.COM.AU
and makes way for well run businesses. It’s not as simple as putting a coffee machine and grinder on a bench and taking a barista course for a few hours.” Jamaica Blue head roaster Jeremy Regan identifies greater diversification in the
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types of coffees people are ordering. “Health has become a big consideration and people are looking at alternatives to regular milk such as soy and almond milk, eliminating sugar from their coffees and moving towards smaller beverages with less milk content such as piccolo lattes and espressos. That being said, the flat white still reigns supreme as the most popular coffee sold at Jamaica Blue.” Tatiana Radzim, marketing manager at Cafe2U, part of the Retail Food Group portfolio, echoes Regan’s observation about diversified coffee choices. “The Australian coffee drinker has evolved and there has been a phenomenal increase in popularity of mocha, caramel latte, vanilla latte, Frappuccino and last but not least the dirty chai orders. “In Australia, Europe and many parts of the world coffee is quickly consumed while standing at a café during the week. On the other hand there are countries where people carve out time to take their coffees every day, whether it is at home or sitting
down at a café. In the US coffee is often taken on the go,” she says. Cafe2U is tapping into the need for great coffee while at work with its mobile format. Price is not an issue when the quality is good, suggests Radzim. “We find that consumers are generally willing to spend up to $5 for a good quality coffee. “Cafe2U has won numerous awards in mainstream coffee competitions beating many industry heavyweights to medal at the Australian International Coffee Awards (AICA) awards on several occasions.” Jamaica Blue cafés serve three unique blends of coffee in-store every day, including the single origin Wallenford Estate® coffee from the Blue Mountains of Jamaica Blue. The business launched Signature by Jamaica Blue coffee capsules for customers to recreate the Jamaica Blue experience at home. “However, it can be difficult to differentiate yourself purely based on coffee and this where the overall customer experience is important – customer service is key. We
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MAY/JUN 2015 | 82 | WWW.FRANCHISEBUSINESS.COM.AU
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strive to create unique cafĂŠ environments and train friendly efficient staff as well as deliver awesome coffee,â€? says Regan. “If the flavour profile of their coffee isn’t up to scratch customers will vote with their feet and go elsewhere.â€? Differentiating the coffee business from competitors comes down to four elements, says Schulz: training, systems, ongoing support and the coffee itself. “Consistently great coffee in all of our stores is what we strive for everyday. Our branding is strong and each site has some individuality to it. We pride ourselves on not being totally ‘cookie cutter’ with our model.â€? Schulz cites key challenges for franchisees as monitoring and controlling costs. “Accepting constructive advice on how to better improve their business by following a proven system can be a challenge for some.â€? It is important for franchisees to be able to contain their outgoings in a traditionally labour intensive cafĂŠ environment. “Once again it comes down to following a system,â€? believes Schulz. “If the head office
If the franchisor has done their job, all costs should relatively easy to control (franchisor) has done their job, all costs should relatively easy to control. Through experience I’ve seen many step outside the system, for example, purchasing stock through non-approved suppliers because a couple of their items are cheaper and their cost of goods sold (COGS) blow out. “Long standing relationships with suppliers is the best way to manage costs relating to coffee,� suggests Regan. “Jamaica Blue’s coffee supplier, Jahnus Speciality Coffee, manages the green bean purchasing, roasting and distribution of coffee and the company has been able to keep cost increases well below market.�
Regan explains milk, sugar and takeaway cups are also sourced centrally and the strong supplier relationships and volume across the Jamaica Blue network helps reduce the costs of these items. Stephen Spritz is co-founder of Xpresso Delight, a barista-style coffee machine for offices and workplaces. “Managing costs in our business is not really an issue apart from the consumables. Franchisees don’t employ staff, they don’t have shop rent or other costs just their normal daily living expenses. “As far as making it easy for franchisees we have a very systemised approach to getting the franchisee “immersed and engaged�
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info@baybridge.com.au MAY/JUN 2015 | 83 | WWW.FRANCHISEBUSINESS.COM.AU
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into their business quickly,” he explains.
CAFES AND COFFEE SHOPS IN 2014-15
$4.3bn REVENUE 2010-15 3.2% ANNUAL 2015-20 2.8% GROWTH
$2.56.6m PROFIT
$1.1bn WAGES
6,701
BUSINESSES
WHAT MAKES A COFFEE BUSINESS SUCCESSFUL?
CUSTOMER SERVICE
PRICE QUALITY OF PRODUCT
CAFÉ EXPERIENCE WHAT DO CUSTOMERS BUY?
51% COFFEE
27.5% FOOD
21.5%
OTHER BEVERAGES COFFEE COSTS
WAGES COST OF GOODS
RENT
HOW TO CONTROL COSTS:
LOWER LABOUR LEVELS,
MINIMISE WASTAGE
KEY SUCCESS FACTORS:
CLEAR POSITION
IN THE MARKET
BUSINESS
EXPERTISE OF
OPERATORS
COST & QUALITY
CONTROL ACCESS TO
MULTISKILLED AND FLEXIBLE WORKFORCE SUCCESS DEPENDS NOT ON SIZE OR MARKET SHARE BUT UNDERSTANDING THE NATIONAL COFFEE CULTURE.
“
IT IS CRUCIAL FOR OPERATORS TO UNDERSTAND THE NATIONAL PREFERENCE FOR QUALITY, TASTE, PRESENTATION, AMBIENCE AND CUSTOMER SERVICE.
”
SOURCE: IBISWORLD, CAFES AND COFFEE SHOPS IN AUSTRALIA 2015
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“It is hands on with the master agent for three weeks and is a combination of in-house training and being out in the field learning the ropes and reporting on what they have done. “We have interruption cycles built in and assessments every week on their progress which leads them to a post training review at the end of the fourth week. “I also have a conference call midway and after the review with the franchisee and the master agent to get first-hand knowledge from the new franchisee.” Spritz investigates how their training has been going, what areas they may need more help in, how well they are adapting to their new business and ensures they are showing all the signs of “following the system” and coping with all the new information and processes they need to learn. At Jamaica Blue, Regan says franchisees complete an intensive two week training course at our state-of-the-art training facility, as well as live in-store training. “This initial training is backed up by ongoing online training and regular support in the field from our expert coffee trainers.” Transparency is the key at Xpresso Mobile, explains Schulz. “The incoming franchisee gets to see where their money is being spent. This ensures they get in for the best possible price. If we can save them money we will. Our franchisees are guided through the process to make it as pain free as possible. This can take several months from initial enquiry to opening their store." The spread of Cafe2U franchises across Australia and beyond can be attributed to the low cost and low risk investment opportunity, says Radzim. “More than 98 per cent of all of our franchisees have achieved or exceeded the level of success they aimed for prior to starting their business.” To assist franchisees in their early days Cafe2U has developed the Acceleration Package to help the franchisee make the most of their coffee franchise opportunities. This includes an income guarantee [see page 22] Radzim explains that one benefit of the acceleration package is removing the cost pressures of a start-up.
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Financial obligations Compliance
Records and audits
A franchisee has ongoing obligations to the business and the franchisor. Make sure you understand the details of each business and legal commitment in the franchise system you sign up to for the sake of good communications with the franchisor, to benefit the network, and to promote your own chance of business success.
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Confidential information
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Local marketing
Defaults and termination
Minimum performance
Non-compete clause
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Operations manual
The end of the agreement
ILLUSTRATION: MATT NORRIS
Sale or transfer of your business
Purchasing goods and services
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Avoid the baby blues!
PIPPA HALLAS Pippa is CEO of beauty business Ella Bache. She has marketing experience and is passionate about branding.
Y
ou buy a franchise, get stuck into the business then find out you are pregnant. You couldn’t possibly take time off for maternity leave. Could you?
As a woman in business with a young family, the sentiment that women can’t have it all is something that Ella Bache CEO Pippa Hallas has never prescribed too, but she does strongly believe you can’t do it all, and that the need for the right support structures are critical. “As the CEO of, a business comprised of 90 percent women, most of whom run their own franchise salons, it is impossible for me to share this attitude, but it wasn’t until I had my son two years ago that MAY/JUN 2015 | 88 | WWW.FRANCHISEBUSINESS.COM.AU
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I came to realise how untrue this statement really was. The process I underwent in planning for maternity leave resulted in an outcome I didn’t expect. I became a better leader because of it,” she said. “Extended leave is a particularly viable option for women in franchising, as a franchise network provides features such as an in-built support network, advice channels that are always open and an extended franchise family who know the structure of the business as well as you do. Successful franchises value the importance of family and the need to create a business that provides the opportunity for a sustainable work-life balance.”
Wisewould
Wisewould Mahony Mahony Lawyers Lawyers Lawyers in love...... with Franchising
“When it is time to start a family the important thing to do is plan.”
PIPPA’S TOP TIPS TELL YOUR FRANCHISOR When it comes to planning for maternity leave, the longer you have to prepare the better, so inform your franchisor as soon as you are able to. They will be able to assist you in immediately beginning to prepare. ROLE ASSESSMENT Examine everything you and your employees (if you have them) do within the business. Create a full list of the different roles within the business and the jobs that each role entails. You will need to change your perspective on delegation but this won’t be achieved to its maximum requirement unless each and every operational process is revealed. You will need to know what each person does and what their capabilities and skills are in order to assess who can take on which jobs. You may be surprised by how much you are currently doing that could be delegated. It also allows people the opportunity to step up and empower themselves, removing any co-dependency. PEOPLE AND ROLES Before you leave, you must ensure you have the right people, structure and roles. This may mean you need to review structure, roles and fit the right people to them. Every franchise is different. For one or two person teams, it is worth discussing the possibility of a neighbouring franchisee taking on some or all of your clients with your franchisor. Another option for one or two person teams is outsourcing some of the more time consuming parts of the business, such as the administration and bookwork, and completing the more specialised work from home. Business owners with multiple employees should focus on having the right staff. Loyalty is wonderful, but only keep those who will be productive team members while you’re absent. For some, loyalty bonuses will assist with retaining key staff but make sure the benefits are tied to performance or else you may have people hanging in just for the money. If you know your team will need additional management without you, hire someone sooner rather than later to ensure they will be the right fit and can be trained accordingly. Make sure you involve the current staff in the employment process though, as you won’t
FRANCHISE FRANCHISE SPECIALISTS SPECIALISTS
Call for a complimentary Call for a complimentary guide to Franchising: guide to Franchising: Dispute Mediation/Solutions DisputeResolution, Resolution, Advice on Code Dispute Resolution, Mediation/Solutions & Strategies,Franchisee Franchisee reports Compliance, reportsand and & Strategies, Franchisee reports and assessments, Master Franchisee assessments, preparation of Master assessments, Master Franchisee agreements, International Franchising Franchise & Franchise Agreements, agreements, International Franchising Employment Law & Workplace Relations International Franchising, Employment Employment Law & Workplace Relations Law & Workplace Relations Fixed fee service to Franchisors and Franchisees based on scope of work Members of the
FCA, IFLA, FANZ
Accredited Business Law Specialists
Contact:Melissa RobertStrain Toth Contact: t:t: +61 3 9612 9612 7350 7297 e: e:melissa.strain@wisemah.com.au robert.toth@wisemah.com.au
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have time to deal with a poor culture fit.
opportunity to grow and step up, allowing for fresh perspectives.
CLIENTS Tell your clients. They will love to feel part of your personal journey, especially in an industry such as ours which is built on intimate relationships. It will also give them time to get to know your team more and therefore feel a lot more comfortable with you not being there for an extended period. We know that one of the biggest reason for clients leaving a business, is when a therapist or owner moves on. If your leave is well managed client retention won’t be an issue. PLANNING It is worthwhile talking to your business development manager or field support manager and develop a list of your aims and goals for the time that you will be away. Once these have been identified you can decide how they will be managed and achieved. To keep on top of performance with minimal effort, implement a range of measurement tools prior to leaving. Many companies already have general key performance indicators (KPIs) the company is working towards but this doesn’t transfer to each role within the organisation. Every role should have KPIs relevant to the ways in which they contribute to the overall goals. The focus needs to be on outcome measurement. Numbers never lie and to be a good remote manager you need easy to assess performance indicators. COMMUNICATION Figure out the best communication options for you and your business, and ensure the infrastructure is in place before you leave. It might be telephone conferences, Skype video calls, daily e-mails; whichever works best for your team. Schedule regular check-ins with your manager and staff to determine how the team is going and whether goals are still being reached. This practice in itself will generally ensure that they are. TRUST Ultimately, maternity leave will give both you and your team an
In your absence your staff may operate a little differently, which is to be expected, but as long as your shared outcomes and goals are being achieved this is not a negative thing. By trusting your team you are empowering them, and showing them that you believe that they are capable, which will lead to a stronger, more adept team and better results. PRACTICE A month or two before any official leave date run the business as though you have already left, putting into place all new roles and processes. This is the best way to test how things will work and how the team will cope but allows time to make changes if necessary. As a franchisee you have a distinct advantage, as support is built in guaranteeing you will not go through the experience alone. The processes outlined are simple but I have experienced firsthand the results as most franchisees have never taken the time to examine their business so thoroughly, until pushed by something like parental leave. The result is a heightened level of leadership, better focus, and more confidant franchisees as they often feel more in control of their business than before.
THE FRANCHISEE’S TALE Katie Mills, an Ella Baché franchisee and recent first-time mum, can vouch for the success of these processes, which she recently used within her salon in the lead up to her maternity leave. “Having the franchise to rely on throughout my maternity leave simplified the experience. I was able to plan ahead with the help of my franchisors and my business development manager, who gave me guidance on how to set up my business to carry on without me in store every day, and helped me put those practices into action. “I have been able to keep up with the week to week activities of the staff thanks to regular check ins with my manager, and stay on top of the financial and administrative sides of the business through weekly reports. I am now five months into my maternity leave, and business has continued as usual in my absence, leaving me free to concentrate on being a new mum.”
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JOIN AUSTRALIA’S #1 CARDS, GIFT & WRAP FRANCHISE Benefits of stepping into the wild... By joining Wild Cards & Gifts you immediately gain the commercial advantages not offered elsewhere in our industry, plus an outstanding, award-winning image and brand… • Profitability is second to none • Low cost start up from $200,000 • High turnover, outstanding margins and low service fees • Backed by one of the world’s largest retail groups WHSmith • EXCLUSIVE product through WHSmith, meaning greater margins for franchisees • Outstanding franchise system, industry best knowledge and business support • Local and national low cost marketing campaigns and national loyalty program Existing and new opportunities available! Please download our Franchise Information Pack from wildcardsandgifts.com/franchising, call (02) 9098 2830 or email franchising@whsmith.com.au to find out more... Your Wild adventure awaits you!
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Will your
FRANCHISOR help with
INSURANCE?
A
ll businesses are exposed to risk, and franchise businesses are no exception. Insurance is necessary for financial protection in case a loss is incurred. Did you know that franchisors can endorse an insurance provider for their franchise system? National Franchise Insurance Brokers (NFIB) looks at what’s involved.
CHOOSING THE RIGHT COVER For a new franchisee, choosing the appropriate types of franchise business insurance and the right levels of cover can be complex, especially when it comes on top of understanding contracts, undergoing any required training, obtaining finance, and dealing with all the legalities that go with entering into a franchise. This may particularly apply if the franchisee is unfamiliar with business insurance and all the terminology it entails. One way to make the process easier is for the franchisee to buy insurance from a provider that has been endorsed by the franchisor, under a managed insurance program. Depending on the franchise, some of the
cover that may be required includes: ✱ Property insurance – cover for damage to or loss of all types of business property including cash. ✱ Liability insurance – includes public liability to cover third-party death, injury or material loss due to negligence; professional indemnity for advice or consultancy-based businesses for losses incurred by clients as a result of advice given; and product liability insurance for businesses that provide or sell products to cover death, injury or other harm that may occur as a result of those products. ✱ Interruption insurance – in case of loss that occurs following a disaster – including franchisor royalties. ✱ Machinery breakdown cover – for damage to plant and equipment and stock spoilage.
but doing so can provide a number of advantages: ✱ Franchisees are assured that they have the required types and levels of cover, meeting the compliance requirements of their franchisor. ✱ They are likely to save the time that would normally be spent sourcing cover. ✱ Cost savings may result, especially without the need to buy all different types of separate cover. ✱ Stress-levels are reduced when it comes to obtaining the right insurance. Of course there are benefits for the franchisor too:
A managed insurance program is one where an insurance program is developed by the provider to suit a particular franchise system, providing all the necessary types of cover for all parties involved. This means that when new franchisees come on board, they only need to ‘hook’ into the existing system.
1. The franchisor is able to save the time and resources required to track their franchisees’ insurance cover, constantly ensuring it is adequate and up-to-date. 2. They may save money on insurance through group purchasing power. Savings can also be passed onto their franchisees. 3. Having the same customised and unique insurance cover across the franchise system creates a consistency and uniformity that might be lacking if all franchisees arranged individual separate policies.
Franchisees are not obliged to obtain insurance from an endorsed provider,
Does your proposed franchisor endorse an insurance provider?
FRANCHISOR-ENDORSED INSURANCE COVER
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MARCH TO THE BEAT OF YOUR OWN DRUMSTICK.
FRANCHISE WITH LOVE POLLO.
Learn more at lovepollo.com.au/franchising LOP0107_Franchise Magazine Ad.indd 1
LovePolloAU 10/04/2015 4:16 pm
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The Experts in Leather & Plastic Restoration
Why Fibrenew? The ever-growing consumer-driven need for the repair and restoration of leather, plastics and vinyl represents a huge opportunity for all franchise owners.
Seeking franchise partners throughout Australia Single Operator or Fleet A Fibrenew franchise can operate as a single operator or as a fleet. Our flat-fee franchise model and low overhead make it a great fit for budding entrepreneurs.
First-Rate Support & Products Fibrenew scored a 99% satisfaction rate with existing franchisees regarding the ongoing support, products and service that are provided.
An Eco-Friendly Business Fibrenew offers a business solution to a serious environmental problem. Our products and services help preserve mother nature.
Fibrenew-Franchising.com.au Visit our website to learn more about the opportunity to start your franchise. Fibrenew is a proud member of the IFA.
www.fibrenew-franchising.com.au
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When do you get your
FRANCHISE DOCUMENTS?
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.
W
hen should you, a franchise buyer, get your franchise documents and what should you do with them? Here are some simple tips for dealing with the essentials.
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You have chosen a franchise brand. You have made contact with the franchisor. You have gone through the initial screening process, which is different for every franchise system. What’s next? Once you, as a potential franchisee, sign the confidentiality deed, which is usually required before franchise documents can be provided, you will be issued with the following four documents by the franchisor: 1. a disclosure document 2. a franchise agreement 3. a copy of the Franchising Code of Conduct 4. an information statement outlining the risks and rewards of franchising The franchisor may also provide you with other marketing and additional financial information about the franchise system, but is not required to do
Before signing the franchise agreement, it's imperative that you have done your due diligence so. Please note that the abovementioned four documents (with the franchise agreement in final form) must be given to you by the franchisor at least 14 days before you start, renew or extend a franchise agreement or pay a non-refundable deposit.
TIME TO GET A LAWYER AND AN ACCOUNTANT At that point, you should engage professional advisers, such as an accountant and a solicitor, who specialise in franchising. You should also speak with a
financial institution and apply for a loan, if required, to cover the total financial outlay required. An accountant would assist with reviewing the facts and figures contained in the franchise agreement and disclosure document, creating of forecasts of the business’ financial potential and its ability to grow and provide a good return on your investment within the period granted under the franchise agreement. In turn, a solicitor will review
the franchise agreement and disclosure document to: ✱ ensure that they comply with the Franchising Code of Conduct and the current law; ✱ verify the information contained in these documents; and ✱ recommend any amendments required to protect your interests. However, please be mindful that in most cases a solicitor’s role will be more of educational nature, limited to explaining
An opportunity to join the Bridgestone Family. Bridgestone is Australia’s most trusted tyre brand and market leader. Right now we’re looking for enthusiastic people to join our successful franchise network. With Bridgestone Select franchise opportunities available in every state, we offer a great lifestyle with; a 5-and-a-half day trading week low entry cost and low ongoing fees full training and ongoing support from Australia’s strongest tyre brand. For initial enquiries, please call 02 8756 4516 or visit bridgestonetyres.com.au/franchise-opportunity to submit an enquiry form.
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the contents of the documents to you, as most franchisors will not amend their franchise agreements and, if anything, will only agree to one or two minor amendments.
provided by the franchisor in its documents; ✱ search court records in relation to any litigation involving the franchisor; ✱ search the Internet to ensure there is no bad publicity in relation to the franchisor’s brand and to find any other relevant information regarding the franchisor; ✱ speak to current and past franchisees, as they will be your best source of information; and ✱ seek any other industry relevant advice that will assist in your decision of committing to the brand you have chosen.
Regardless, you must understand the obligations placed on you as a result of signing a franchise agreement, as it often involves very large financial commitment. Before signing the franchise agreement, it’s imperative that you have done your due diligence and obtained as much information about the franchise system as possible. In addition to the information contained in the legal documents, you (or your solicitor for some of these) should:
Once you have collected and evaluated all the information and obtained all the relevant advice from your professional advisers, you need to make an educated assessment of the opportunity presented and whether you wish to proceed with the purchase.
✱ search the government registers such as ASIC, ACCC, IP Australia and ABR to verify the information
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hen Daniel Fenech took on a job at his local Battery World store in Caringbah, little did he realise within two years he would not only own that store but another nearby.
As the youngest franchisee in the 82 store network, Fenech has big entrepreneurial am-bitions. Even though he only bought his second store in Bankstown in November last year, he has eyes on purchasing a third Battery World store in coming months. His goal is to own five stores within two years.
MAY/JUN 2015 | 98 | WWW.FRANCHISEBUSINESS.COM.AU
As the country’s leading specialist national battery retailer, Battery World is embarking on a new era of rapid expansion. New general manager Rowan Hodge has kicked off a cultural revolution in the 18-year-old market leader centred on driving franchisee profit and expanding the network. This ex-
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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 Capital’s next Franchise Partner.
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. 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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pansion will include opportunities for franchisees from both inside and outside the network.
DANIEL FENECH
The Battery World growth strategy includes targeting new territories across Australia by 2020 with emphasis on New South Wales and Victoria. Rowan Hodge joined the company in October with a mission to drive franchisee profit as a key means by which to fuel expansion. “Profitable stores attract the new human and financial capital critical to fuel growth, “he says. “We have a strong USP, and record low interest rates; we also have an unbelievable talent pool of existing and prospective franchisees. Add to all of this the affordability of a Battery World franchise, our relative resilience to macroeconomic and technology trends; and you can see why we believe this is our time for rapid growth.” Daniel Fenech was once the store manager in his first store, Caringbah, in Sydney’s south. The Battery World strategy is actively targeting long-term employees like Fenech, who know and understand the brand, to take the next step and buy a business. At 26, Fenech says buying a business made better sense than buying a house. “Someone once said to me buy a business and let that business buy you a house,” he says.
HARD WORK BUILDS A LIFESTYLE “When I was a manager I just loved the business. When it came up for sale I jumped at the chance. It made such good business sense to own it. Unlike other products batteries are a must-have item. We need them for our everyday lives more than ever before. And the process to buy was really smooth. Everything is pretty much organised for you.
“The Bankstown store was always on my radar, and because it is not too far from Caringbah managing both has been challenging but very achievable.
advice is the number one factor for a successful business. It’s how we’ve differentiated ourselves from our competitors.”
“I am not afraid of hard work because that is the way to improve your lifestyle.”
Battery World network development manager Alex Forbes, also newly recruited to the team, has a pipeline of new target locations.
expansion has brought about a big increase in franchise applications across Australia - from all walks of life. Our newest franchisee of Battery World Campbelltown is an ex-accountant and in June it will be an ex-tiler taking the reigns of a new site and store in Mentone, Melbourne. We love to see this diversity of applicants, but they have a lot in common.
“Market research tells us many customers would shop in a Battery World store but don’t as we are not close by,” Forbes reveals. “The answer: build more stores. This message aligns with our five-year growth strategy and we are on target to open more than 10 stores per year for the next five years.
“They research us and see that Battery World is a sound investment that gives them the chance to be their own boss but have the security of a national market leader with 18 years of stable growth behind it. Battery World ticks the boxes for savvy investors seeking a sea change.”
“A key ingredient to growth is total transparency with potential franchisees. Once approved, new franchisees are actively engaged, working in partnership with the franchisor to find the perfect site to open their store. This level of engagement is critical to make sure the candidate has a big say in their new business.
Battery World will also continue to grow the business from within with a range of newly introduced expansion incentives.
The Bankstown store was stagnating and needed a new owner to boost business and match the achievements of other stores in the network which had undergone makeovers. Fenech specifically targeted the store’s signage, layout and product knowledge. All of this was underpinned by an intense focus on service. He was so busy with painting and remodelling the store his plans for local store marketing were put on hold. But in just five months Fenech has doubled the monthly sales revenue. “There are seven other battery retailers within this complex, and there are another 16 in an 800 metre radius! “Anyone can sell a battery but delivering exceptional customer service and expert product
TARGET LOCATIONS
“Our new focus on network
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“Franchisees like Daniel Fenech are critical to our expansion plans,” Forbes says. “His entrepreneurial attitude is what enables growth - it’s this attitude that gives franchisees the ability to grow sales, coach employees and achieve their dreams.”
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STATES OF INDEPENDENCE
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ranchisees Darrell and Di Doust plan to make a splash in the US with Aussie poolcare brand PoolWerx.
Franchisee, master franchisee, franchisor – is there anything this pair can’t do? For almost two decades Darrell and Di Doust have been involved in the franchised pool market in Western Australia; now the couple are heading to Phoenix, Arizona to lead the expansion of PoolWerx in the US.
year spell back in the UK where Di had grown up.
The WA based couple had moved into franchising by default about 19 years ago, returning to the mining state after a three
The pair invested in a competitor's franchise and within three years had not only become master franchisees of the
“I was working part time, and we’d been living in Kalgoorlie because Darrell always had a fly-in, fly-out job, contract maintenance. Darrell was looking for something else.”
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FRANCHISE, LICENSING AND RETAIL GROUP Marianne Marchesi has joined Robert Toth in our Franchise, Licensing and Retail Group! Marianne is a Senior Associate and recognised Franchise Specialist and Presenter. The new Franchise Code 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 suite of Franchise documents to be 2015 Code Compliant for a fixed fee. We also advise: 1. International Franchisors and assist companies 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 We have a network of Franchise Consultants that can assist our clients to successfully establish their system. Member: IFLA (International Franchise Lawyers Association) and US Commercial Service 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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DARRELL AND DI DOUST
It's all about getting the balance right. You have to make sure you have brand compliance and that the systems are followed, you want the franchisees to succeed
small group but bought out the disinterested franchisor. “We knew we had to buy the business off him or sell our own,” explains Darrell. So within six years the pair had moved from running their own business to acting as a coach and mentor for other franchisees and ended up in charge of the whole operation.
COMPLIANCE AND SYSTEMS Di highlights faced them.
the
challenges
that
“It’s all about getting the balance right. You have to make sure you have brand compliance and that the systems are followed, you want the franchisees to succeed. But they are individual business owners as well. Some may have their houses on the line, they have quite significant pressures. “You have to work with people, understand their individual issues and ensure brand compliance.” However, it comes down to one simple truth, says Darrell. “If the franchisees are profitable, everything else follows.” It didn’t take them long to appreciate the value of an advanced franchise system that offered infrastructure; so when
PoolWerx approached the pair, selling the business to join the more established network of franchisees made sense. “We had to invest heavily in infrastructure ourselves, or find someone else who had it,” explains Darrell. The benefits of infrastructure are illustrated by one of the franchisees in the system, Di says. “One of our first franchisees was a Mr Mum, a part-time operator. Eventually his wife joined him in the business, and they are PoolWerx Franchisees of the Year this year. They went from a $150,000 turnover to $3m a year.” Once in the PoolWerx system, the Dousts returned to the role of master franchisees. “We were able to focus on our franchisees, we didn’t have to develop software, or marketing or new products, that is all done for us,” says Darrell. The couple added to their experience with extra training from PoolWerx to ensure they could best grow and utilise their skills. “A master franchisee is really a business coach,” explains Darrell. “They are the people who help franchisees solve the problems that stop them doing well.
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That includes financial mentoring and marketing support.” The couple built up the WA network to 16 franchisees running 36 businesses (14 of these are stores, the rest are mobile vans). And now they are poised to farewell all this for the hotter and drier state of Arizona, where PoolWerx is beginning its foray into the massive US pool market.
OFF TO THE US
These outlets all operate within Phoenix, a city of 1.5 million people and three times the number of pools in WA. The pair is approaching this as a new challenge. Di takes on the role of marketing and HR manager, while Darrell is the business development manager. “We’ve done similar roles,” says Di. It will be a different challenge facing them however, from the expansion of a wellknown brand on home-turf.
Since the brand’s arrival was announced recently in the US there has been plenty of positive feedback, the pair reports.
“For us it’s about not understanding the culture and the different requirements, the rules and regulations.”
“We’re already looking to grow,” says Darrell. Right now PoolWerx has bought out a poolcare chain comprising nine company owned outlets and seven franchised units owned by four franchisees.
Darrell says although there are a couple of big groups in the poolcare arena in the US, it is predominantly an industry of individual operators and they are looking for greater buying power, among other things.
“The plan is to franchise the existing businesses, to convert the company owned stores to franchises, and to convert the existing franchisees to the PoolWerx system.”
“A lot of our growth will come through rebranding businesses,” he says. “One of the attractions to PoolWerx is that we’ve done it before. We’ve been involved in most parts of franchising.”
The plan is to franchise the existing businesses, to convert the company owned stores and to convert the existing franchisees to the PoolWerx system
LOUNGES | PAVILIONS | BARS
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P: + 61 3 9480 1030 | F: + 61 3 9480 1035 | franchising@theobroma.com.au | www.Theobroma.com.au
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So what in their view makes a good franchise? Darrell suggests a strong system is a great start. “At PoolWerx we’ve not tried to branch out. As John [O’Brien, founder] says, we are a franchise company that just happens to be in pools. John’s strength is that he sticks to his decisions.” Di believes organisation, getting the right people on board and managing them, are key factors for a good franchise operation. “You have to identify the different support required by the many individual needs of franchises; you have to be able to identify and use the systems to help them.”
ENGAGING FRANCHISEES For Darrell, franchise advisory councils and regular structured meetings go a long way towards engaging franchisees. “Franchisors need to get out and talk to franchisees, find what their hot buttons are. They have to encourage them to input in the business.”
He points out, “If you look for good people, you have to use them. It’s no good for franchisors not to takeaking their advice.” When it comes to hot topics, none is hotter than the issue of finance. And this is not just for franchise buyers seeking to invest but existing franchisees planning to expand their business. “Finance has been a problem for five years. We have finance deals in place so there is a level of unsecured finance available. But it’s one of the hardest things, having funds readily available.” He admits funding will be more of a challenge in the US where the brand is relatively unknown. But he is confident the recovering US economy makes this a good time to enter the market. While the timing is right for the economic recovery, it’s also right for the Dousts. “Our son is 23 and he’s going travelling in Europe; we can try something different and see a bit of the world,” says Di.
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FAMILY
CULTURE UNDERPINS RESTAURANT
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hat does it take to sustain a retail food business for 30 years? In 2015 La Porchetta celebrates its 30th anniversary, joining a select few Australian franchises that measure their success in decades.
Now the largest, licensed, a-la-carte restaurant franchise in Australasia, La Porchetta began in 1985 when business partners, Rocky Pantaleo and Felice Nania purchased a humble Italian restaurant in Melbourne’s Italian hub. They infused the venue with vibrant Italian culture and passion for life and their great food and warm atmosphere were an instant hit. The second La Porchetta opened a few years later and initial growth was measured, as the two restaurateurs planned the rollout of their vision for a national presence. Today there are more than 70 restaurants aross Australia and New Zealand. What began as a dream was underpinned by a strategic approach to growth, with a focus on systems and processes to build a strong framework for the brand. There was also a commitment to innovation, so La Porchetta would remain relevant in a rapidly changing market.
CORE VALUES However sound business structures and alignment to consumer trends don’t guarantee success. La Porchetta is now an iconic and much-loved brand and CEO Sara Pantaleo believes that’s because the group has refused to compromise on its core values. “From the beginning, we have stayed true to the family culture that made our first restaurant a success,” says Pantaleo.
“We didn’t compromise as we grew and our core values continue to underpin every aspect of the way we manage our business today.” A selective franchisee recruitment process and ongoing training have been crucial to the group’s growth. La Porchetta looks first and foremost for passion and people skills in its new franchisees in the belief that these are the most important drivers of success and everything else can be learned. There is a comprehensive initial training program, followed by ongoing support, including workshops, online forums and an annual conference. “We focus on building strong relationships with franchisees and even though we have a full operations team, my door is always open for them to speak with me directly,” says Pantaleo. Franchisees are also encouraged to become actively involved with their communities and many support local sports groups and not-for-profit organisations. For the consumer, La Porchetta is now a recognised brand where they know they can get good food and friendly service. “Our motto is Eat, Live, Love Italian and every franchise, no matter where it is located is expected to maintain the warm, friendly atmosphere that our customers expect. “I feel we’re now like a large, extended family” says Pantaleo. “As we enter our fourth decade
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of business, we’re seeing the children and even grandchildren of our original customers eating at our restaurants and to me, that’s one of the greatest measures of our success.” “Growth doesn’t happen by accident. Moving forward, our vision is to be the leading local Italian restaurant in Australia and New Zealand and we’re now focusing on the next decades of our development.”
FRANCHISEE STORY JASON KRAINSKI AND STEPHEN MONTEBELLO Jason Krainski and Stephen Montebello have been firm friends since they were 11 years old when they met playing footy. Now both in their 30s and in business together for the last decade, they have defied all popular ideas about mixing friendship with business. Following the success of their first La Porchetta restaurant in Rosebud, Victoria, which they purchased in 2005, Jason and Stephen recently opened their second La Porchetta at nearby Hastings.
“When I was a kid, we often went to our local La Porchetta as a family,” says Stephen. “I grew up with La Porchetta and I knew and loved the brand. When the opportunity came up to buy the Rosebud restaurant, it was our chance to be part of a fantastic business we knew and trusted.”
Both Rosebud and Hastings La Porchetta restaurants are also very much a part of their local communities, supporting local sports clubs, the SES and other services. “Rural communities are close and people look after each other,” says Stephen. “Our restaurants are very much part of that.”
“We treat everyone like they are family,” says Jason. “We have many regular customers at both restaurants and looking after them involves more than just taking their orders. We try to make our restaurants feel like home.”
With La Porchetta’s 30th birthday festivities in full swing, both restaurateurs plan to celebrate by encouraging their customers to join in the group’s program of national promotions and competitions throughout the year.
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START YOUR
JOURNEY Thinking about buying a franchise? Leverage our countless years of knowledge and industry expertise to help find the right franchise for you!
Download our FREE 6 step “Buying a Franchise” education journey at Franchisebusiness.com.au/subscribe
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FRANCHISING PROVIDES LIGHTBULB MOMENT FOR SPARKIES
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est mates Chad Rankin and Todd Lightbody may not be typical Snooze franchisees but they have ended up as multi-site franchisees for the bed retailing chain.
Working as qualified electricians for 11 years, the duo had always spoken about pursuing a new business adventure together – but with no professional experience outside the mining industry, how did they do it? HOW DID YOU BECOME FRANCHISEES? “Having worked in various mine sites across Australia for over a decade, Todd and I really didn’t have much experience
when it came to running a business. We’d both reached a point in our lives where we were hungry for change and up for a challenge, but weren’t sure what the launch pad would be,” says Chad. “Todd and I had friends who owned a Snooze franchise in Western Australia and told us about the Mandurah store opportunity. We identified the gap in our business skill set, and agreed a Snooze franchise really suited us. With a proven
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We immediately had access to support, training and direction which was invaluable in getting us started part of the well-performing Snooze store portfolio operating there today. DID YOU ALWAYS INTEND TO BE MULTI-UNIT FRANCHISEES?
business model securely in place, we immediately had access to support, training and direction, which was invaluable in getting us started in the early stages,” he explains. Chad and Todd took over Snooze Mandurah in May 2013, an acquisition in Western Australia that would soon form
“Never did we see ourselves becoming multi-site owners, but when offered the great opportunity and realising the strength of the Snooze brand we knew we were ready to drive our business to the next level,” says Chad. In August 2014, the pair proved they were moving from strength to strength with the grand opening of their second store, Snooze Cockburn, adding again to the brand’s retail footprint in WA.
HAVE YOUR ROLES CHANGED? With more than a year’s experience of running their own Snooze store, Chad and Todd hit the ground running with their second outlet, applying the knowledge and expertise they had gained since becoming franchisees. “Fortunately, and I suppose naturally, we’ve managed to settle into the new store a lot quicker. It’s been exceptionally efficient being able to streamline our established operations at Mandurah with the Cockburn store to form a fully functioning multi-site business. “We have since found we are better suited to different roles. So Todd now fulfils the
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duties of an operations manager and bookkeeper, whereas I focus my energy in-store, training staff, implementing sales promotions and managing merchandise on the shop floor,” explains Chad. WHAT KIND OF SUPPORT DID YOU RECEIVE? “Snooze has been overwhelmingly supportive; offering strong levels of communication and guidance,” he says. The pair are confident the franchisor will continue to help them grow their business.
go at it; take a leap of faith! “We face daily challenges, but the most important thing to remember is it’s OK to make mistakes. We’ve learned a lot through our errors, and ultimately these have shaped the success of our Snooze journey,” says Chad. ACHIEVING GOALS Chad and Todd now have plans to progressively appoint others within the business to alleviate the workload as they continue to grow their retail footprint.
The support has included access to exclusive products and services, sales and product training, business management support. national pr and marketing programs, IT support, vendor finance assistance to approved applicants and NAB and ANZ bank accreditation.
As eager businessmen, Chad and Todd say they’d definitely consider further expansion in the future.
WHAT ADVICE DO YOU HAVE FOR OTHER FRANCHISEES?
"Being multi-site owners is a testament to the goals we set and achieved, and the support the Snooze business has provided us with. This is something we are both very proud of,” says Chad.
“The best piece of advice I can give is to have a clear plan in mind and just have a
“We have had a go at something that was foreign to both of us; we were two electricians diving into unknown waters.
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SKIN I N TH E
GAME G
eorge Zhou decided his future lay in an unusual sector; he is one of a few men who have seen a business opportunity in a beauty franchise. Here he responds to our six key questions about buying a business and what it’s like to be your own boss.
WHAT WAS THE BIGGEST CHALLENGE MOVING FROM EMPLOYEE TO FRANCHISEE? As a new franchisee at Australian Skin Clinics, the biggest challenge for me was learning how to introduce my ideas and principles to the clinic and ensuring that they filtered down consistently to all team members. WHAT SKILLS DID YOU NEED TO ACQUIRE TO BE PROFICIENT IN YOUR FRANCHISE ROLE? Definitely business development skills. As a new franchisee, I needed to be able to build and maintain good relationships with other franchisees, local businesses, shopping centre management, suppliers, and of course head office. WHAT EXISTING SKILLS HAVE YOU FOUND MOST USEFUL IN YOUR NEW ROLE? I have always prided myself on my communication skills. I’ve found this to be extremely useful since becoming a franchise owner. Effective communication can improve relationships with clients, employees, and business partners as well as improve teamwork, decision-making, and problem solving.
HOW DIFFICULT WAS IT TO MAKE THE LEAP TO BEING YOUR OWN BOSS – FINANCIALLY, AND EMOTIONALLY? Purchasing your first franchise is a big investment. I resigned from my previous permanent employment to focus on the business, so I felt some pressure financially and emotionally at the time, however I am now seeing the benefits of this focus and commitment. Having the backing of a brand such as Australian Skin Clinics has also helped to fast track the clinic’s growth. WHAT ABOUT THE PURCHASE OF THE BUSINESS? I purchased an existing clinic. As part of my research, I looked up the population of the surrounding region, the potential client range and the planned government development in the area. I also researched other available franchises to better understand the potential of the business and the industry as a whole. I found the franchise offered both proven return on investment and a sense of flexibility that’s not found in larger enterprises. They also provided me with a range of support, training and system information to assist in my transition into the business. HOW INVOLVED ARE YOU AS THE FACE OF THE BUSINESS WITH CLIENTS? I’m very hands on. Australian Skin Clinics’ mission is to help people look and feel fantastic about themselves. We live and breathe that every day and place a huge emphasis on providing our clients with affordable treatments, in high quality facilities, delivered by experienced, qualified staff. I chat with our clients regularly to receive their feedback on both the clinic and their client experience. It helps me to better understand and meet their ongoing needs.
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WHAT ARE
&
RED ROOSTER SUMO SALAD UP TO?
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wo franchise food retailers have found common ground in a new partnership to boost healthy eating.
SumoSalad, and Red Rooster (which is owned by Quick Service Restaurants) have announced a new partnership that will see SumoSalads served in Red Rooster restaurants across the country.
the initiative, says “It’s a first. This is not a one-off campaign, the company is going in with a long term vision. This is a one year commitment but Red Rooster will see how this campaign goes."
Two custom designed SumoSalads have been introduced to the Red Rooster menu at all stores nationally. Zesty Pumpkin Couscous Salad and Red Pesto Penne Salad have been specifically created to match Red Rooster’s roast chicken flavours.
SumoSalad was given the challenge to complement the chicken flavours and create bespoke salads for the chain.
Anna Jones, who as national marketing manager for Red Rooster helped launched
This is the latest leap in Red Rooster’s Real Food journey which started last year
The salad ingredients will be delivered from SumoSalad’s suppliers and mixed on site.
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when the chicken chain removed all artificial colours, flavours and added MSG from their kitchen made menu. Jones says “This partnership shows how serious Red Rooster is about real food credentials. The company is extremely excited about the partnership with SumoSalad.” SumoSalad CEO Luke Baylis says demand for its healthy fresh food currently oustrips the 120 outlets in the salad chain. “We’re thrilled to announce this partnership with Red Rooster which will see our
salads served in over 350 Red Rooster restaurants nationally. SumoSalad is always looking to expand its influence and help Australians eat healthier food with purpose. “We wanted to do something really tasty and unique so people could see the high quality of the salads, but if they want to try the whole range, they have to come to SumoSalad.” Both salads will be available as part of the a la carte menu as well as a part of a selection of value combos.
Baylis says the salad business is very focused on the Red Rooster initiative. “We believe they are putting a lot of investment into the brand and have made a huge change to their offer. A huge part is roast chicken, which is different from high fat options available in other takeaway chains. We hope this is the first of many healthier options to come.” So watch this space, because there will be other major partnerships to be announced in the next few weeks, he says. “This is exciting, a great space for us.”
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LEGALESE
EVELYN MARCOU Evelyn is a senior associate at MST Lawyers with experience in property, commercial work and franchising.
WARNING SIGNS IN A LEASE AGREEMENT M
any franchised businesses are conducted from premises that are leased, with either the franchisor or the franchisee holding the lease and obtaining the right to occupy the premises. So what do you need to look out for in a lease?
There is no such thing as a “standard lease� and the terms of a lease will vary depending on the landlord. Lease terms, especially the commercial terms, are negotiable and to a certain extent, the non-commercial terms can also be negotiated, especially in the case of premises that are not located in shopping centres. Signing a commercial lease is a huge financial commitment. It is critical that you only sign a lease containing terms you understand. It is also important that you understand your rights and obligations in relation to the lease in order to deal with any disputes that may arise. Here are a few warning signs to assist you in recognising some of the clauses in a lease that should be looked at carefully and negotiated.
A LEASE FOR MORE THAN TWO YEARS When starting a new business, getting stuck with a long term lease can be a terrible burden for a small business owner. If you need to get out of the lease for any reason you will have to keep paying the lease payments until the landlord finds a suitable alternative tenant. While it is important to try and marry up the franchise term with the lease term, it would be much better to obtain, for example, a two year lease term with four further terms of two years than a five year lease term with one further term of five years. The shorter the terms, the more flexibility you will
have should the premises not be appropriate for the business and should things not go to plan.
RELOCATION AND REDEVELOPMENT CLAUSES Tenants need to understand what these clauses mean. These clauses are included in most, if not all, shopping centre leases. Importantly, where these clauses do appear in a lease, a tenant needs to ensure that it negotiates the best possible outcome should it be required to relocate. While the retail leasing legislation in each jurisdiction sets out the minimum requirements for clauses regarding redevelopment and relocation, these requirements are not exhaustive. For example, a redevelopment or a relocation clause should provide that on relocation, the tenant is not required to make good its existing premises.
DEMOLITION CLAUSES If your lease includes a demolition clause, then you need to understand that this clause means that at any time, whether after one year or one month of entering into the lease and spending a large sum of money on a brand new fit out, that the landlord will have the right to serve you with a demolition notice requiring you to leave the premises. This will mean that you will lose your business.
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While retail legislation offers some protection in requiring landlords to pay compensation, you should still try to negotiate that the landlord cannot exercise the right under this clause for a period of time for example the first five years of the term. You should also make sure that you are suitably compensated if the landlord does serve you with a demolition notice.
MAKE GOOD CLAUSES Tenants need to carefully review their obligations to “make good� the premises at the end of the lease term. Most tenants are anxious to obtain possession of the premises and start running their businesses and pay little regard to the make good requirements at the end of the lease. It is critical for tenants to have a clear understanding of their end of term obligations under the lease and the possible costs which may be incurred in meeting those obligations.
FORFEITING LEGAL RIGHTS In some cases, a lease may seek to force a tenant to give up certain rights. For example, if the landlord is undertaking development works at a shopping centre the landlord may seek to include a clause preventing the tenant from making a claim against the landlord for any disruption caused by the development. These clauses should be avoided where possible.
VAGUE AND UNRESTRICTED FEES AND OUTGOINGS It is really important that you read and understand the outgoings clauses in your lease and also check the amount of outgoings and the description of outgoings in the disclosure statement. Some landlords may try to pass on the direct costs of large common area maintenance and repairs to the tenant, or the costs of managing the property, or the costs of maintaining essential safety measures. These are just some costs that a tenant should seek to remove from the description of outgoings.
CENTRE RULES All shopping centre leases will include (usually at the back of the lease attached to a schedule) the shopping centre rules. You should make sure you read these carefully and ensure they are suitable and appropriate for your business and permitted use.
SUMMARY In summary, there are a lot of factors to consider when entering into a lease. Whether you negotiate the commercial terms yourself or through your franchisor, remember always to have your lawyer and accountant check the documents that you are being asked to sign before it is too late and you are locked into a long term agreement.
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When starting a new business, getting stuck with a long term lease can be a terrible burden for a small business owner
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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
Large territories
Access to an established ATS Client base
Sales and Marketing support
High level of administration and operational support
Report preparation, invoicing, debt collection handled for you!
Genuine repeat business
Full training provided – no electrical experience required
Not weather dependant
Part of the $10 billion safety industry
FCA National Franchisee of the Year 2013
Top Franchisor 2010
BRW Fast Franchises 2009, 2010, 2011, 2012, 2013
For further information visit
appliancetaggingservices.com.au or contact Steve Wren 0401 655 655 steve@ats.com.au
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TRENDS
Why doesn’t everyone want to be a franchisee? ANDREW TERRY Professor of Business Regulation, The University of Sydney Business School
I
t’s a fair enough question. If franchising is as good as it’s meant to be why doesn’t everyone want to get a bit of it? There are over two million Australian small businesses of which about 60 percent are sole traders and 85 percent have less than five employees. Yet despite the acknowledged success of franchising there are only about 70,000 franchised units and a lesser number of franchisees given that many franchisees today operate multiple units. Every industry sector is represented in Australia’s 1000+ franchise systems so the argument that there is no franchise system servicing a particular niche is unlikely to be convincing. Why don’t the nearly two million independent small businesses operate as franchises and reap the real and well-documented benefits of this dynamic business strategy?
Some - in fact many - independent operators aren’t franchisees because they don’t need to be franchisees. The micro service business does not necessarily need the resources that franchising can bring. At this level of neighbourhood business operation the personal reputation of the proprietor may be more important than a national brand. Economies of scale in purchasing and advertising, and plugging into another’s training and systems and support structures, may not be compelling reasons. It would nevertheless be surprising if the move from independent business operator to franchised operator did not gather speed as independent business operators face increasing challenges in regulatory compliance, consumer expectations, technology change. Some independent business operators are not franchisees because they aspire to larger and more sophisticated business empires than they believe possible through franchising. The original franchising model - the franchising of a single unit to an owner who owned and managed the outlet – did constrain franchisee expansion. But today multi unit franchising is common and most established franchise systems seek to appoint franchisees who are capable of operating and managing a multi unit operation. The opportunities for entrepreneurial franchisees to grow within a franchise system are real and considerable. Some independent businesses are not franchisees because they want total control over their business. Franchising offers many real and distinct advantages for franchisees but it is an underlying reality that it involves a loss of independence. The franchisee has the right - and the obligation - to apply the franchisor’s system in its entirety. Your dumplings may be better than your franchisor’s dumplings in the unanimous
opinion of your friends and family - but they are the not the franchise system’s dumplings and can’t be served. If you don’t like or can’t accommodate or can’t live with this reality then franchising is not for you. Good franchise systems will exploit the local knowledge of franchisees and, where possible, roll out franchisee inspired initiatives throughout the network but unilateral franchisee action cannot be tolerated. Franchising is not an impossible dream for such entrepreneurs for whom control and power is important - but their franchising journey should be as franchisors and not as franchisees. Some don’t become franchisees for cost reasons – their reluctance to pay to do what they do anyway. Of course there is a cost in being a franchisee – the franchisor after all makes its money primarily from the continuing fees paid by franchisees. It is part of a franchisee’s due diligence to satisfy him/herself that the value add from being part of a franchise system more than compensates for the franchise costs. There are other costs of course beyond the continuing royalty– but most of these are common to franchised and independent business and can be delivered more economically in the franchise context. Life would be much less interesting without the prominent presence of independent small businesses which bring colour and diversity and innovation to our markets – and also provide the source of most of our new franchising opportunities. Franchising will nevertheless continue to expand its influence as small independent business proprietors better understand the advantages that franchising offers.
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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
in Australia.
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
SEVEN WAYS to stay cool in a crisis KARLI FURMAGE is a trainer, coach and writer. Contact karli@goglobal. consulting
S
mall business owners face lots of potential crises. It’s a long list. And it spans the scale, from the physical destruction of a business to losing a major client to the downfall of a franchisor or sickness of a key person in the business.
in the way of sourcing the help we need. We can feel shame or reluctance to ask for help, particularly in financial situations. Our ego can cause us to freeze and do nothing. Show the humility and courage to get the help you need. As the saying goes, the same level of thinking cannot fix the problem that created it. 5. TALK TO THE FRANCHISOR
We have a very effective in-built mechanism for dealing with a crisis: our flight or fight response which was useful when we were living in caves dealing with sabre-toothed tigers. But the same rush of chemicals that spark a fight or flight reaction and bypasses our rationale mind still happens today. That’s why our thinking gets clouded; it’s hard to be rational when we are focused on short-term survival. We need better ways of dealing with the new sabre-toothed tigers.
HOW TO STAY CALM AS A FRANCHISEE 1. BREATHE The fight or flight reaction channels our blood to our limbs. Breathing moves the blood back to where you need it – your brain. Emotions can hijack you when you are faced with a crisis. Deep breaths counter that rush of emotion, and give you time to think. It is important to ‘feel the feelings’ and not suppress them. But being able to process the emotion and then move into a calm space is critical. A franchisee friend of mine was facing a [potentially business ending] court case. It was emotionally charged and an extremely difficult period. Her way to stay cool was to set an alarm on her phone to go off
every hour. This was a reminder to breathe; a circuit breaker. She credits the simple technique as the main thing that helped her keep a level head. 2. GET PERSPECTIVE Heightened emotion can be a good thing when it drives us to act, but bad when it clouds thinking. If you can, remove yourself from the immediate situation and look at it afresh. Take a walk, do some exercise. If you can’t get perspective for yourself, go find it. Read a newspaper or talk to someone in a worse situation. This is useful to reframe your thinking. When we are positive we are more likely to find solutions and keep going. 3. GET THE FACTS Before you react [unless of course it’s life threatening] get as much information as you can before you make any decisions. Work out the priorities and deal with them in order of urgency. Don’t delay but make sure you have the information you need to act in an informed way. 4. PARK YOUR EGO Our ego can be very useful in a crisis nudging us to keep going and not give up. But it can also get
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Immediately and regularly! As soon as there is the whiff of an issue, start talking. They are there to help you through this. Chances are they have previously navigated a similar situation to yours. We regularly hear of franchisors providing assistance in a crisis. In most cases it’s in their interest to help you get back on your feet. Ask for help. 6. TAKE CARE OF YOURSELF A crisis can be all consuming. You might stop sleeping well, stop exercising and eating properly. This just makes things worse. Stick to routines as best you can. 7. GET READY The best way to survive a crisis is to prepare for it. Being cautious [not paranoid] means having a disaster recovery plan and a business continuity plan in place. Simple things like having all the appropriate insurances in place, making sure all key documents are current and that your team knows what to do. The best time to plan for a crisis is when you have a clear head. Things go wrong in business. Spending time now to plan and think through some of the ways you would deal with a crisis will stand you in good stead when the next sabre-toothed tiger pounces.
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Visit the home of Franchising magazine online at FranchiseBusiness.com.au
nload Plus dow guide: E E R F r u yo the Choosing chise right fran • Access information and resources in our Knowledge Centre • Research franchise opportunities • Filter opportunities by location, category and investment level • Get mobile! Our mobile compatible site makes it easy to enquire wherever you are
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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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AUSTRALIA’S MOST TRUSTED TITLE IN FRANCHISING Ensure you get every copy! The leading publication for those looking to buy into the $144 billion franchising sector. Each issue you’ll receive: • Independent and essential financial, legal and business advice • Market sector and industry reviews • Inspirational success stories
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Call us on 1300 360 126 or visit www.franchisebusiness.com.au
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CHECKLIST
20
THINGS TO CHECK BEFORE YOU INVEST BEFORE YOU PURCHASE YOUR FRANCHISE YOU NEED TO TICK OFF ALL THE MUST-DO ITEMS. CHECK THE FOLLOWING:
Are you confident in the franchisor?
What are the franchisee 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 and 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
24
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 82 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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A-Z LISTINGS
G L O B A L
Professional Coaching | Corporate Training
Phone: 1300 99 55 12 Contact: Gavin Trewin gavin@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: $49,950 + GST
Start up costs from: $25,000 plus 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 simple yet very effective 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 • 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.
• comprehensive initial and ongoing training
• unlimited growth and earnings potential • vendor finance available for a limited number of foundation members • No Real Estate Licence required
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: 07 3839 4733 Contact: Adam Brazda opportunity@combined.com.au www.combined.com.au/ partnerwithus
PROFILE: Combined Insurance, a division of ACE Insurance Limited (ACE), has been providing Australians with peace of mind with our Accident and Sickness Insurance products. Now is your opportunity to become part of our future. Please note this is not a franchise opportunity, but rather a chance to become a Corporate Authorised Representative (Principal Agent) of ACE. If you want to run your own business and build equity with strong support and minimal start-up up costs, then look no further.
Phone: 1300 477 925 Contact: Susana Hands susana@createdbyhands.com.au www.createdbyhands.com.au Start up costs: $48,500
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.
Become a Principal Agent of ACE. As a Principal Agent, you will be able to build your own operation and engage Sub-Authorised Representatives while being authorised under the ACE Australian Financial Services Licence to advise on, distribute and sell the Combined Insurance Accident and Sickness products underwritten by ACE.
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A-Z LISTINGS
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: 0408 444 734 Fax: 02 4321 0286 Contact: Jack Zervos jack@execucon.com.au www.drboom.com.au
Phone: 1800 373263 Contact: Cam Hadlow cam@dreamdoors.com.au www.dreamdoorskitchens.com Start up costs from: $65,000 + GST + operating capital
Start up costs on application
PROFILE: Dr Boom Communications pride themselves on being one of the longest established and most innovative mobile phone and tablet accessories and repairs specialists in Australia having commenced trading from a single kiosk site in 1987. With eight well established stores in premium locations across Sydney, a modern central distribution, training and service centre and a secure exclusive supply chain including premium global brands we invite entrepreneurial, hardworking and committed people to leverage our experience, share in our success and build our future.
PROFILE: Dream Doors is different from other kitchen, bathroom and bedroom renovation companies. By simply replacing the doors, drawer fronts and benchtops we save the customers $1000’s on their renovation and there in lies the secret to our universal success. We will give you 14 years worth of International experience and knowledge and help you run your local Dream Doors Franchise. Working together is crucial to any new undertaking in the business arena and working with the company co-founder and the Australian Master Franchisee to set up and develop your own Franchise Territory will be a major advantage to the growth of your business. Long term this relationship will flourish because it is absolutely in the interest of both parties to make this business work together. Our joint incomes depend on it.
Phone: 1300 FASTWAY Fax: 02 9264 4966 fastway.com.au
Phone: 02 9332 2824 Contact: David Hundt dave@enviefitness.com.au enviefitness.com.au
Start up costs from: $25,000 Start up costs from: $100,000 + monthly leases PROFILE: Don’t buy a fitness franchise without exploring this exciting opportunity. EnVie is the innovative new approach to inspirational Women’s Health and Fitness. With sites ready for opening across the eastern seaboard we are seeking enthusiastic and passionate business owners NOW; with a determination to succeed and a passion for health and fitness. Incorporating the best elements from a range of franchise models an EnVie business is completely systemised. An innovative new franchise model means franchisee and franchisor have the mutual goal of your SUCCESS. The business is further supported by extensive training and ongoing coaching from a team of fitness, business, franchise operations, marketing and sales experts with a combined 127 years of experience in the franchise and fitness industries.
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
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Phone: 1300 362 994 Contact: Glen Jenkins info@fibrenew.com.au www.fibrenew-franchising.com.au
Phone: 1800 PT for U (783 678) Contact: Scott Hunt franchise@fitnessenhancement.com www.fitnessenhancement.com
Start up costs from: $75,000 + GST
Start up costs: From $29,000 including all equipment, training and advertising
PROFILE: Fibrenew is the industry leader in the restoration of leather, plastic and vinyl. We are a mobile service that caters to the aviation, automobile, commercial, insurance, marine, medical and residential markets. With the diversity of all these opportunities across so many markets, our company and franchisees have grown and thrived through every rise and fall of the economy. That really speaks to the fact that there is always a need for our services. Right now, there are franchise territories available throughout Australia. This is your chance at an exceptional business opportunity with potential for great income. To find out more about joining our franchise team, visit: www.fibrenew-franchising.com.au
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.
Phone: 07 5515 0119 Fax: 07 5500 3716 Contact: Geoff Biddle mail@groutpro.com.au www.groutpro.com.au
Phone: 0451 370 060 Contact: Peter Fiasco franchising@hairhousewarehouse.com.au www.hairhousewarehouse.com.au/franchanising
Start up costs from: $39,950 + GST & vehicle Start up costs from: $200,000 - $400,000 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.
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
Phone: 02 9224 0460 Fax: 02 9224 0469 Contact: Mark Buckland office@healthyhabits.com.au www.healthyhabits.com.au
Phone: 0427 208 462 Contact: Steve Potter franchising@indianbrothers.com.au www.indianbrothers.com.au
Start up costs from: $200,000 - $300,000
Start up costs from: $160,000
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.
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 from: $19,990 - $49,990 (ex GST) depending on territory size, location and equipment
Start up costs: $85,000 - $120,000 (Kiosk) $160,000 - $240,000 (Salon) 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. 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. 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! Just Cuts™ Franchisees have exclusive access to our professional retail range made in Europe; JUSTICE Professional™!
PROFILE: Kubarz is Australia’s premier and original beverage catering and mobile bar company established in 2003 and we have now limited territories available in this boutique franchise network across Australia. With everything included from training, operations manuals, equipment, marketing and more – all you have to bring is the right attitude! We have successfully been servicing clients with our professional and stylish beverage and mobile bar catering services for functions, parties and events for over 10 years and are looking for the right people to take advantage of our clients demand to take our service nationally. With minimal royalty fees, extensive ongoing head office support and already a handful of territories secured now is the chance to get into this exciting and rewarding industry whilst enjoying a flexible lifestyle. Contact us today for an obligation chat about our limited opportunities!
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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.
Contact us today to find out more info and begin the next chapter of your life.
Phone: 02 9638 8000 Contact: Mark Futeran mark.futeran@hunterdouglas.com.au www.luxaflex.com.au
Phone: 03 9604 9400 Fax: 03 9600 3313 Contact: Robert Toth rxt@marshmaher.com.au www.marshmaher.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.
PROFILE: Robert Toth has moved and Marianne Marchesi has joined the Franchise Group!
Luxaflex Window Fashions are sold primarily through quality window furnishings stores nationwide.
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
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: 1800 776 747 Fax: 1800 194 525 Contact Name: Brad Dixon info@mynfib.com.au Mynfib.com.au
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.
Well recognised and published franchise specialist with over 30 years industry knowledge now head of franchise group at Marsh & Maher. Providing advice to:
Fixed fee to upgrade Franchise documents to be 2015 Code Compliant.
Phone: 1300 NEW YORK Contact: Todd McGregor www.newyorkslice.com.au/ franchise Start up costs from: $150k PROFILE: New York Slice is the home of authentic New York style pizza by the slice. Over the last 12 years we have served literally millions of slices of hot, tasty pizza across our 5 inner city Brisbane stores alone. We have long been asked from people right across Australia “Can I open a New York Slice Franchise?”. The answer is now a resounding YES! Fact: The Pizza industry in Australia is valued at $3.6Bn annually and growing at a rate of 3% yet the top 4 Pizza companies in Australia have only 32.3% of industry revenue! – source: IBIS World New York Slice is now appointing Master Franchisees and Store Franchisees across the country. • Less than 80% labour cost of other Pizza stores • Great Profits • No experience necessary If you are hungry for success and want a Slice of a well established successful business then apply now!
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Phone: 03 8851 4200 Fax: 03 8851 4277 Contact: Michael Standley franchise@noodlebox.com.au noodlebox.com.au/franchise
Phone: 02 9822 5622 / 0423 052 456 Contact: Kate Bird franchise@packsend.com.au www.packsend.com.au
Start up costs from: $250,000 - $280,000
Start up costs from: $160,000 - $170,000 + working capital (ex GST)
PROFILE: Noodle Box is an Australian owned franchised QSR, delivering fresh, Asian-style street food specially crafted for the Australian palate. Locally owned and operated, Noodle Box has a strong network of franchise partners throughout Australia and internationally. Noodle Box provides an integrated offering for franchise partners, including a sophisticated training centre, award-winning online training platforms, highly experienced QSR management team, marketing support and strength of a recognised brand. Noodle Box is expanding. We are seeking enthusiastic, passionate franchise partners to join our network. We provide competitive entry-level investment and true partnership thinking, because we know that your success is also ours.
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: $300,000 - $350,000
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.
Phone: 1300 4 REDCAT (1300 4 733 228) Fax: 03 9696 1553 info@redcat.com.au www.redcat.com.au
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, staff, stock, payroll, through to accounts, GST, customer loyalty, and web based multi-site reporting to provide a complete business management system. Franchised groups can benefit from their flexible centralised management capability 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.
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 139 557 Contact: Jon Bridge jonb@traffic.net.nz www.refreshrenovations.com.au/ get-in-touch/franchise-opportunity
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.
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Phone: 02 8417 2668 Contact: Josh Franklin apsales@revelsystems.com
Phone: 07 5591 3242 Fax: 07 5591 9021 Contact: Michelle Connor michelle.connor@rfg.com.au www.rfg.com.au
http://revelsystems.com.au Start up costs from: $1000
Upgrade Your Business With Revel iPad POS.
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.
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.
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 features are designed to protect & increase your profit margins, automatically reduce mistakes, increase sales and improve efficiency.
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.
PROFILE: Get Amazing Control, Stop Money Leakage, Save Time and Increase Your Turnover.
Phone: 1800 762 766 Fax: 02 9837 9199 Contact: Les Coppin les.coppin@snapon.com www.snapontools.com.au
Phone: 0427 401 169 Fax: 03 9888 6327 Contact: Alistair Browne alistairb@snooze.com.au www.snooze.com.au
Start up costs from: $40,000
Start up costs from: $450,000
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. 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.
PROFILE: As one of Australia’s longest-running, most successful and innovative franchised business, Snooze’s experience in the bedding industry is second to none. With over 70 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: t Vendor finance assistance t NAB & ANZ accreditation t Sales and product training
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: 08 8376 3016 Contact: George Karamalis info@st-louis.com.au www.st-louis.com.au Start up costs from: $350,000
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.
t Business management support t A national marketing program t IT services
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. 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. Join the winning team with the #1 Franchise! Register your interest today.
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Phone: +61 439 222 422 (AUS) +64 21 917 148 (NZ) Contact: Glenn Dobson glenn.dobson@tdda.com www.tdda.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 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. 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 youâ&#x20AC;&#x2122;re looking for either a retail or service business that delivers solid revenues with high margins and low fees, just ask Swimart!
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: 02 9723 1011 Fax: 02 9727 6771 Contact: Nick Avgerinos franchise@cheesecake.com.au www.cheesecake.com.au
Phone: 0499 440 111 Fax: 07 3803 2320 Contact: Delena Farmer dfarmer@totalspan.com.au www.totalspan.com.au Start up costs from: $20,000 + GST
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 donâ&#x20AC;&#x2122;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.
PROFILE: Totalspan is part of the Spanbild Group, with over 40 yearsâ&#x20AC;&#x2122; experience in the building industry in Australia and New Zealand. Our franchising structure and systems are tried, tested and proven â&#x20AC;&#x201C; just ask any of our 100 franchisees, or 1,000 employees! Take control of your own future by establishing a business model with the oppportuity to generate profit from multiple sources without a significant capital outlay. Having access to a high level of support from the Totalspan team, means you can work for yourself but not by yourself. Whatâ&#x20AC;&#x2122;s more, our quality, affordable steel buildings are designed and built for life â&#x20AC;&#x201C; we stand behind every one with a 25 year structural guarantee. Successful people are changing their life with Totalspan - you can too! Be part of our success story!
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
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.
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Wisewould Mahony Lawyers Lawyers in love...... with Franchising
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 jonathan@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: • Drafting & review of Franchise documents • Legal and consulting advice to Franchisors & Franchisees • Dispute resolution – mediation – strategies and solutions
• Code compliance requirements • Sale/Purchase of Franchise Systems & Business • Master Franchising • International Franchising
Call or email for a complimentary brochure for Franchisors and Franchisees.
PROFILE: Xpresso Mobile Cafés operate in areas nationally where there are little to no fixed location café options for the workforce in commercial and light industrial precincts. We supply premium Di Bella Coffee products – both hot and cold. Frappés, 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 Café 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 ‘Nespresso’ 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 café to pay as much as $4.00 for their morning and afternoon coffees. This is the premise of Xpresso Delight - transplanting the cafe into the heart of the workplace at a fraction of the price that people pay normally.
PROFILE: 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!
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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