Franchising May_June 2014 by Cirrus Media

FR0514_001

2014-05-07T16:25:54+10:00

INVESTMENT OPPORTUNITIES

BUSINESS

WHICH SECTOR?

ADVICE

Franchising www.franchise.net.au

FRANCHISING

Your essential guide to

MAY/JUN 2014 VOL.27/No.3

buying a franchise

CODE OF CONDUCT MAY/JUN 2014 WWW.FRANCHISE.NET.AU

suits

on the go SPOTLIGHT ON: • Pizza industry • Beauty and hair • Safety services • Children’s sport

Brand new business measures up the mobile market

Print Post Approved 100008121

AUS $6.95 NZ $7.95

10 THINGS You should have in your lease

Franchising code

Your guide to the new look regulations

Supply system What to look for in a franchise

PLUS: HIRE A HUBBY, MCDONALD’S, NIGHTOWL, PACK & SEND

FR0514_002_PAC_R

2014-05-08T09:51:06+10:00

FR0514_003

2014-05-07T15:43:10+10:00

Contents MAY/JUN 2014 | YOUR ESSENTIAL GUIDE TO BUYING A FRANCHISE 50

Salon solutions Market report: hair and beauty

Kids and sport Five franchise opportunities

A safe investment Spotlight on the safety sector

Issues

Inspire

Cover story

Achieving the dream Hire A Hubby’s Paul Woolfe

104

McDonald’s: a great business partner

Editorial

News

116 Legal

Paving the way to success

Fried chicken… not as you know it

124 Viewpoint

A passion for property Pack & Send heads online Michael Paul talks tech tactics

NightOwl’s newest multi-unit franchisees They’ve acquired a second site

The USA style sporting bar Introducing The Sporting Globe

126 Resources 128 Glossary 129 Checklist 130 A-Z listings 138 Advertisers index

The gratitude equation Franchisee satisfaction: survey

How to...

A real estate tale, seven years on

120 Sketch 122 People

Gary Sandler’s career change

New Taiwanese food brand

Ringing in the changes A look at the amendments to the Franchising Code of Conduct

A look at due diligence

Training: who pays? Industry comment, case study

New mobile suit tailoring business

REGULARS

Investing in the future Australia’s top growth sectors

Franchisor supply system Who is set to benefit?

Plan for your success Six elements of a business plan

I want to buy a franchise Franchisees ongoing obligations

104 Termination without cause Clause 22: a time bomb?

108 Ending an agreement What do you have to give back when you leave the franchise?

110 Tips for business success Practical advice to help you reach your goal

Opportunities

112 Franchisors going bust?

114 Buying a franchise?

Invest in a slice of the pizza market What is driving the pizza sector? WWW.FRANCHISE.NET.AU

Handling a change of ownership

Check out the legal advice you need MAY/JUN 2014 FRANCHISING | 3

FR0114_000_CAL

2013-12-05T17:05:59+11:00

OVER 500 FRANCHISE CONVENIENCE STORES AND GROWING! You may not be aware that Caltex Australia operates one of the largest convenience retail networks across the country, with both company and franchised stores operating predominantly under the ‘Caltex Star Mart’ brand. Caltex is a well-recognised and reputable brand with outstanding systems and tools to enable operational success. New franchisees entering the business will be provided structured training and support on all key operational elements to set them up for success in their venture. The franchise community is strong and supportive with organised franchise councils and regular communication meetings, to ensure franchisees contribute to the brand success. Caltex has also held international conferences every 2 years with significant franchisee attendance, in locations such as China, Mauritius, Vegas and the most recent event was held in Dubai. This conference rewards high performers and is a highly anticipated event on any franchisees calendar. To find out more about our Franchise Opportunities, visit www.caltex.com.au and click on ‘Franchising at Caltex’.

FR0514_005

2014-05-07T15:09:29+10:00

Welcome

Franchising Publisher Raffael Fernandes P: 02 8484 0754 raffael.fernandes@cirrusmedia.com.au Editor Sarah Stowe P: 02 8484 0900 sarah.stowe@cirrusmedia.com.au Journalist Brea Carter P: 02 8484 0661 brea.carter@cirrusmedia.com.au

Faith in the franchising model

Graphic Designer Rizwan Nawaz P: 02 8484 0622 rizwan.nawaz@cirrusmedia.com.au

National Sales and Marketing Manager David Strong P: 02 8484 0905 david.strong@cirrusmedia.com.au Account Manager Ben Smith P: 02 8484 0740 ben.smith@cirrusmedia.com.au Account Manager Mitchell Greenway P: 02 8484 0696 mitchell.greenway@cirrusmedia.com.au Client Success Manager My Do P: 02 8484 0927 my.do@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

franchise.net.au facebook.com/franchisingau twitter.com/franchisingau

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 © Copyright Cirrus Media, 2014

Average Net Distribution Period ending Sep ‘13 - 7,534

SARAH STOWE Editor

ontinual reform has defined the Franchising Code of Conduct for the last few years. Now there is an end in sight to the additions, the deletions and, the elephant in the room, the question of good faith that have brought a sense of ennui to franchisors, and frustration to some franchisees. A revised Code that cuts through some of the clutter and embraces the good faith concept is set to become law in January 2015. For those who are coming to the franchising sector for the first time, the mandatory Code governs the industry under the Trade Practices Act and is regulated by the Australian Competition and Consumer Commission (ACCC). The Code guides the relationship between franchisee and franchisor and as we look at in this issue, franchisees are those most likely to welcome the changes. Turn to page 84 to read the Government’s revisions, and some legal commentary. Our regular columnist, Professor Andrew Terry, also casts his expert opinion over the changes, with particular reference to the much-vaunted inclusion of good faith. Is this a salve for franchisees? Find out on page 122. The Minister for Small Business, the Hon Bruce Billson, writes in his introduction to the planned reforms: “Franchising is a substantial and growing part of our small business community and has displayed a great capacity for nurturing innovation and entrepreneurship in Australia.” Briggins mobile suit business founders Daniel Breese and Matthew Higgins (our front cover pair) are two entrepeneurs who have spotted the benefits of the franchising model. Read their story, and their tips, on page 10. In this edition we take a long term look at which industries will be worth investing in, and hear from Back in Motion franchisor Jason Smith about how he has made inroads already into a high-potential field. There is market information from IbisWorld which highlights the growth in the beauty and hair sector, and some interesting statistics that are guiding the development of the pizza franchise players. You can find out more about opportunities in these markets, and those in safety services and children’s sport too. Our advice section has been boosted this issue with mustread information on the supply chain, franchisee obligations, terminating a franchise, ending an agreement, business success and the all-important topic of buying a franchise. F

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. © 2014. Opinions expressed in Franchising are not necessarily those of Franchising or Cirrus Media.

WWW.FRANCHISE.NET.AU

MAY/JUN 2014 FRANCHISING | 5

FR0514_006

2014-05-07T15:43:10+10:00

News ONLINE NEWS | WWW.FRANCHISE.NET.AU

SME owners optimistic about the future business conditions to improve, meanwhile one in 10 predict that business conditions in Australia will worsen. A total of 49 percent of business owners attribute growth over the next six months to better domestic economic conditions, meanwhile 40 percent saw an increase in business confidence as the driving force and 36 percent believe increased consumer confidence will play a part in business success.

SMALL to medium business owners expect business growth to increase over the next six months, the Commonwealth Bank’s latest SME Confidence Report has found. The report, which saw ACA Research survey 405 Australian businesses with an annual turnover of between $500,000 and

$25 million, found 50 percent of respondents expect their business’s revenue to increase over the next six months, and 46 percent predict they will see an increase in profit over the same period. Released in mid-April, the report also found 39 percent of SMEs expect overall

Franchisees suing Bank of Queensland TWO of the Bank of Queensland’s (BOQ) Victorian franchisees are suing the company on the grounds that senior management forced them out of business. In April, Heath McFadyen of BOQ’s Geelong West franchise, as well as Hawthorn franchisee Shaun Huntington lodged two claims in the Supreme Court of Victoria accusing BOQ of: • Failing to approve loans • Refusing certain customers • Reducing trailing commissions • Harassment including verbal abuse and ‘’inappropriate’’ touching • Promising them they would write $4 million each month, which both claim was not the case According to the Sydney Morning Herald, a number of other Victorian based 6| FRANCHISING MAY/JUN 2014

franchisees are considering legal action against BOQ. They’re concerned the bank may scrap its owner-manager system and transform their branches into company owned sites in a bid to increase profit. This is not the first time unhappy former franchisees have attempted to sue BOQ – in February several people lodged claims in the NSW Supreme Court accusing the bank of providing them with misleading information about profitability. They were later rejected by the court. Last year BOQ management called police out to the Geelong West site to have McFadyen and his partner, Mark Ellis removed from the branch. BOQ has since taken over both the Geelong West and Hawthorn branches, however BOQ has not yet filed a response to the claims. WWW.FRANCHISE.NET.AU

Key challenges that may prevent growth: • Meeting client/customer needs – 61% • Cash flow management – 58% • Staff management – 56% • Marketing and sales activities – 55% • Financial management – 50%

Images: Thinkstock - alphaspirit (top); JanPietruszka (bottom left) & mrkob (bottom right)

Growth factors include: • Cost reduction – 48% • Staff performance – 41% • Improved customer experience – 31% • Improved financial controls and management – 29%

FR0514_007

2014-05-07T15:09:29+10:00

News WWW.FRANCHISE.NET.AU | ONLINE NEWS

IN BRIEF The Auckland based master franchisee of the Nando’s fast food chain in New Zealand has gone into liquidation. Hungry Jack’s is suing former franchisee Toni Collins for more than $720,000, to which Collins has lodged a counter-claim of over $350,000. Fifty-five percent of the Australian population visited a fast food outlet at least once in an average four week period last year.

Carl’s Jr ads talk of the town as burger chain enters Oz CARL’S JR plans to bring its menu of American-style burgers and fries, as well as a series of controversial advertisements to Australia in the near future. It’s believed the burger chain will open its first Australian franchise on the NSW Central Coast before the end of the year, and according to its website there are territories available across the country. While it’s likely Carl’s Jr will attempt to bring its ads, which have been termed, the “slutburger” and include provocatively dressed women such as Kim Kardashian, Paris Hilton and Heidi Klum, don’t be surprised if they’re banned. A television commercial that features Paris Hilton washing a Bentley in a swimsuit and stilettos was banned in the US, meanwhile another that spruiked the company’s Memphis BBQ burger was prohibited in New Zealand, reports the Herald Sun. Carl’s Jr’s Australian website states potential franchisees will need between $1,038,374 and $2,217,366 USD to invest in their piece of the brand’s pie, and they’ll be required to commit the next 20 years of their lives to the business. Franchisees will undergo a 12 week training program, and the company will provide support in the areas of site selection, restaurant design, equipment ordering and construction.

WWW.FRANCHISE.NET.AU

The Federal Court has ordered Flight Centre to pay penalties totalling $11 million following its attempts to enter into anticompetitive relationships with three international airlines. Flight Centre has since appealed the decision. Petrol and convenience store chain 7-Eleven plans to open 11 WA stores within the next year, and 75 over the next five years. Twenty-three percent of men aged between 30 and 45 would like to run their own business, a survey conducted by market research company Pure Profile on behalf of Bakers Delight has found. In a Federal Court hearing on 8 April Justice Yates found weight loss franchise SensaSlim engaged in misleading or deceptive conduct on multiple counts. The opening of a new development in April kicked off a strong growth phase for Quest Serviced Apartments in 2014.

MAY/JUN 2014 FRANCHISING | 7

FR0514_008

2014-05-07T15:09:29+10:00

News ONLINE NEWS | WWW.FRANCHISE.NET.AU

DO franchisees really perform better than their counterparts in managed company owned stores? The latest research from Franchise Relationships Institute has put the common belief to the test. The research looked at what happens when businesses are converted from company to franchisee operated, or franchisee to company operated, and included more than 3,000 franchised and company owned stores. Greg Nathan, research director of FRI, said “Most franchisors enthusiastically talk of stores achieving an immediate lift in sales of over 20 percent when they change from theB company F Rbeing 0 5 1managed 4 _ 0 0 by 0 _ A Y - to1 2 being operated by a franchisee.”

Image: Ashley Roach - fullframe

Franchisees vs company owned stores ...which perform the best? THE STUDY FINDINGS The outcome of the research showed that when businesses convert from a company managed unit to franchisee operated, performance improves, particularly in the areas of sales growth and cost control. On the other hand performance generally dropped when stores went from franchisee operated to company managed, especially when the business had been performing well as a franchise. However as another part of the study found from comparing clusters of franchised and well-resourced company stores within the same franchise system 0no1 significant 4 - 0 4 - differences 2 2 T 1 0 : were 0 9 :found 2 1 + 1 0 in performance.

“Where a franchisor is willing to invest in solid management support and incentive systems for company stores, and the locations of these stores are strong enough to generate the sales to support this type they can perform as well or : of0 investment, 0 better than franchised stores,” Nathan said.

A new generation of franchise expert. For franchisors driven to grow their business. At Baybridge we are passionate about developing businesses. Our team of dedicated franchise professionals have the experience to support and grow your business. Leading the way as the new generation of franchise experts we are redefining the game. Talk to us today and experience the

LAWYERS ADVISORY CAPITAL Contact Baybridge now.

8| FRANCHISING MAY/JUN 2014

Baybridge difference.

info@baybridge.com.au

+61 2 9232 3511

baybridge.com.au

+61 2 9223 4625

WWW.FRANCHISE.NET.AU

Level 1, 109 Pitt St. Sydney, NSW, 2000

FR0314_000_Snap-On

SharpestTool_2014.indd 1

2014-02-20T11:24:49+11:00

19/02/2014 13:09:14

FR0514_010

2014-05-07T10:57:35+10:00

Inspire | Cover story

SU T

first suits back in 2006,” says Higgins. They quickly realised they’d captured a niche in the market, and identified that there were two particular types of people the business catered to. “Daniel and I saw the need for a mobile menswear business because we were in the corporate world at the time and a) didn’t like shopping and/or b) didn’t have time to go shopping, so we came up with the idea of taking the clothes to the guys and saving them time and money,” Higgins explains. “We were both working in professional industries, were both very time poor and at the time we felt there was a need for a business like Briggins – we knew we had to look good yet »

Cover image: Rizwan Nawaz - Anarchy concepts

he friends and business partners established mobile suit supply and tailoring business Briggins in 2006 after they experienced the perils associated with finding the right suit firsthand, and found they weren’t alone. Just as Breese and Higgins struggled to find the time to update their suits, a necessity when one is worn on a daily basis, so too did their fellow white collar workers. “I was working as a bank manager at ANZ at the time and had this quirky idea one day when I needed a new suit yet didn’t have the time to shop for one. I used my contacts to organise a suit party at the branch after hours, got all the guys together and we sold our

Matthew Higgins and Daniel Breese are transforming the way men shop for and purchase suits.

10| FRANCHISING MAY/JUN 2014

WWW.FRANCHISE.NET.AU

FR0314_000_BRO

CMY

2014-02-25T14:50:58+11:00

FR0514_012

2014-05-07T10:57:35+10:00

Image: Daniel Clark

Inspire | Cover story

Briggins franchisees will provide off the rack and tailored suit solutions

didn’t have the time do it,” Breese adds. The pair initially kept their full time jobs, operating the business in their spare time, however quite early on they left the corporate world to focus solely on growing the Briggins brand. “After a very short period of time we realised there was definitely a demand in the market for Briggins’ services and within a few short weeks and months we quit our regular day jobs and pushed the business full time, and it’s gone from strength to strength ever since,” says Breese. While initially Briggins’ key market was professional working males, the wedding market is also proving particularly lucrative. “During the week our main customers are typically business guys – such as accountants, lawyers and real estate agents, and we’ve tapped into the wedding market, which has been very successful for us too because it can be quite a pain to get all the groomsmen together to go shopping. “We make it easy – the client can simply book a time for us to come to their house, get their mates over and we’ll bring everything to them,” Higgins explains.

AN AFFORDABLE MOBILE BUSINESS The pair says Briggins franchisees can expect low overheads, flexible working hours and the freedom to work from home, and there’s a good chance they’ll earn a significant amount of money in the process. “The beauty of the business is the low overheads – the weekly running cost including all outgoings is approximately $500,” says Higgins. Instead of waiting for customers to walk in off the street, 12| FRANCHISING MAY/JUN 2014

franchisees are able to drive to their clients’ home or office irrespective of their territory. “Franchisees store all of their stock including suits, shirts, ties, shoes and cufflinks in a black Volkswagen Caddy so they basically just run the business from their car and home,” he says. “They get a territory which is non-exclusive so if they’re referred elsewhere they can go and see those clients,” adds Breese. Higgins is confident franchisees will benefit financially as well as enjoy a healthy work/life balance. “I think bang for buck and time wise, if you follow our system a) you’ll earn a lot of money and b) you’ll have flexible working hours as well,” he says. Breese says the initial cost of a Briggins franchise is also rather appealing. “It’s a very attractive start-up business. The initial cost is around the $60,000 mark plus additional fees such as legals.”

WHAT’S THE ROLE OF THE FRANCHISEE? Working from the home office and liaising with clients will make up a large portion of a franchisee’s day, Breese says. “We promote Briggins heavily in the weddings market so a franchisee’s typical day could involve seeing the bride and groom and discussing their upcoming wedding plans – how they want to style their day, the types of suits they want to have the guys in, measuring the guys and building rapport with them.” “Other aspects of the day include going out and visiting professional clients, which would involve going to their office, measuring them up, providing any adjustments that may be required and courtesy calling those customers,” he adds. Using Briggins’ intranet franchisees enter each client’s »

WWW.FRANCHISE.NET.AU

FR0514_000_YUM

2014-04-22T14:23:14+10:00

FR0514_014

2014-05-07T10:57:35+10:00

Inspire | Cover story

unique measurements, and they are sent directly to head office where the tailoring takes place. Franchisees will be responsible for familiarising the community with the brand and growing their customer base. “Franchisees will network with other retailers in different markets such as wedding photographers, wedding bands and reception venues to grow their business within those industries,” adds Breese.

THE IDEAL FRANCHISEE Breese and Higgins regard prior sales experience particularly highly, and personality traits are also at the top of their list. “Ideally we’d like someone with sales ability. In regards to the suits and the tailoring, we can train anyone up on that quite quickly – we really need ambitious people, male or female that aren’t afraid to sell our product,” explains Higgins. Breese says they don’t have a specific demographic in mind; however it’s desirable that franchisees can relate to the business’s customer base. “Our core client demographic is probably anywhere between 25 to 55 – obviously we want people to be able to relate with that age demographic, but not necessarily. “For us the key people we’re looking for are ambitious, and there’s a great reward for effort in this business,” he adds.

“It’s pretty involved initially, particularly for those that are new to retail and the tailoring process,” says Breese. “Our training covers everything from fitting to customer relationship management (CRM), P&Ls and fi nancials – we want to ensure that every franchisee has the opportunity to succeed and we don’t want to let any of our franchisees out into the market until they’re 100 percent ready.” The training is hands-on, and Breese and Higgins will assist franchisees well after they enter their own business. “We will help franchisees through all their initial deals to show them how it’s done, with real training and real experience rather than hypothetical scenarios,” Breese adds.

The weekly running cost including all outgoings is approximately $500

TRAINING New franchisees undergo an initial one month training program in Melbourne, which covers everything they need to know, and then there’s ongoing training after that.

EXPANSION

The pair is yet to recruit their first franchisee, yet they’ve got firm franchising goals for the business. “It’s been a dream of ours since day one to franchise the business, and we really believe that the results you get out of people who buy a business when compared to a sales representative are far greater,” says Higgins. “We’d rather have people invest in Briggins and own their own business so we can help them grow as well.” Breese says they’d like to achieve a national presence within five years. “We think its very achievable, but in saying that we don’t want to compromise the service we provide our franchisees and end consumers to get there. “We don’t want to over saturate the market – we want happy franchisees turning over good income.” F

Image: Daniel Clark

Franchisees will operate out of their own Briggins van

14| FRANCHISING MAY/JUN 2014

WWW.FRANCHISE.NET.AU

FR0514_000_PALM2

2014-04-30T11:58:13+10:00

GLOBAL

TREAT

YOURSELF

TO SUCCESS!

BRAND L O c A L O P P O r T u nI T I E s FOR OVER 69 YEARS BASKIN-ROBBINS ROBBINS™ HAS BEEN CREATING IRRESISTIBLE LE TREATS TO MAKE YOU SMILE AND FEEL EEL GOOD INSIDE AND OUT. WE’VE INATION OF DELICIOUS TREATS PERFECTED THE COMBINATION AND A FUN ATMOSPHERE.

We are looking for people with drive and passion to become Franchise Partners. We believe that people are the most important ingredient in making a business a success. Desirable key qualities for prospective Franchise Partners include: • A passion towards helping to make to make people successful • An Entrepreneur • Financial Literacy • The ability to drive and thrive thrive with change • Integrity, responsibility, trust and courage • Objective of being a multi-site Franchise Partner

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

FR0514_016

2014-05-07T10:57:35+10:00

Inspire | Franchisee

achieving the

FRANCHISE

DREAM

Paul Woolfe’s long-term dream of operating his own business became a reality in September last year when he joined handyman franchise Hire a Hubby.

s the franchise owner of Hire a Hubby Concord, Paul attends to the needs of clients across the Sydney suburbs of not only Concord but Breakfast Point, Cabarita and Mortlake too. Tell us a little about your work life before becoming a franchisee. I spent 26 years with Kmart managing 13 stores from Taree to Newcastle and across the Sydney metro area, and most recently I managed two Bunnings Warehouse stores in Sydney. What brought you to invest in a franchise? I have had the desire to be my own boss for a long time. When the opportunity to buy the Hire A Hubby Concord business arose, it was that desire combined with my love for hardware and home improvements that made my decision an easy one. Why did you choose the Hire a Hubby brand in particular? I’ve always had a huge interest in home maintenance, home improvements and DIY, so Hire A Hubby was a natural fit. The services Hire A Hubby offers are professional and give me the opportunity to be ‘on the tools’, fix problems and manage a team – which are all things that I fi nd fulfilling. When I looked into franchising two 16| FRANCHISING MAY/JUN 2014

years ago, I saw a lot of models with high investment and minimal franchisor support. Hire A Hubby is the complete opposite – they have an awesome support network and are far more affordable. They were also transparent with information right from the start. What skills did you bring to the business? My handyman skills were developed from a young age around the home. I gained most of my experience as I got older and completed more complex projects for family and friends. I get enormous personal satisfaction out of seeing a job done to a professional standard. My retail management experience – which included learning about the latest tools and techniques at Bunnings Warehouse – compliments my handyman skills perfectly. Having prompt, helpful and friendly service and the ability to understand and solve problems for customers is core to the Hire A Hubby business. What has been the biggest challenge as a franchisee in a new field? I am sure I ask more questions about the work than someone who has come from a trade background, but the support from the network accommodates that well. What’s more important is understanding how to run the business, and I am extremely comfortable with that aspect. WWW.FRANCHISE.NET.AU

Another challenge is quoting, but again that comes with experience. You have to think about the timing, resourcing and materials involved and it takes experience to fine-tune this. How has the franchisor helped you gain confidence in your business? Apart from the initial training every new franchisee undertakes with the business, I have two field managers in my area who have been awesome in helping me fi nd my feet. They assist with everything from quoting on jobs to generating new business. The other ‘Hubbies’ in the field also chip in to help one another. What are your plans for the business? What will do with your new-found skills? My short term goals are for the business to become a recognised and trusted brand in the local community, and to develop repeat residential business and profitable relationships with key commercial clients. By the end of year one I’d like to have a steady work flow sufficient enough to sustain two regular handyman staff working on the tools, a base of regular key tradies for work requiring specific licenses and skills, and I’d like to see myself working part time on the tools but primarily focused on developing the business further. F

FR0314_000_STL

2014-02-18T14:50:38+11:00

FR0514_018

2014-05-07T10:57:35+10:00

Inspire | Franchisee

INCREDIBLE BUSINESS PARTNER Gary Sandler tracks his career from pre-McDonald’s franchisee to multi-unit owner.

18| FRANCHISING MAY/JUN 2014

WWW.FRANCHISE.NET.AU

FR0514_019

2014-05-07T10:57:35+10:00

ary is a qualified chemical engineer, holds a marketing degree and heads up three Victorian-based McDonald’s franchises. He and his wife Liesl initially took on a McDonald’s business in Caldermeade, and eventually expanded their empire to include a site at South Oakleigh, as well as Oakleigh in Melbourne.

GARY’S PRE-FRANCHISEE LIFE “My career began in 1988 when I took a job with a company that designed and manufactured pumps for the oil and gas industry,” he says. In 1999 Gary started up his own business along with two partners, and it was sold to a South African private equity company in 2007. “Australian Fluid Handling provided equipment and services mainly to the oil and gas industry, but also mining, chemical, petrochemical and other heavy duty industries.” After two years working for the new owners and with a solid financial foundation (thanks to the sale) behind him, Gary began to explore alternate options. “I decided that I’d like to make a change into something new, work for myself and hopefully in a business where both my wife and I could work together,” he explains.

your first fries to understanding all of the systems that underpin the business and then opening a new restaurant was an interesting process to say the least,” Gary adds. The investmenr also saw him adjust to a new industry far removed from the engineering sector. “One of the biggest changes is that I now work with many young people in a fast paced environment, with the general public as customers,” he says. “The fact that the business operates 24/7 also presents both opportunities and challenges. I maintain that the first four months of opening our first store were the hardest of my life.”

RECRUITING THE RIGHT STAFF Gary and Liesl are passionate about not only recruiting the right people, but helping them to grow and develop during their time at McDonald’s. “We work hard to achieve this goal. Testament to the calibre of our staff over time has been the continually growing business at Caldermeade, strong business results and achieving well in all McDonald’s metrics,” he explains. “We are now able to focus on building the business, rather than continually working on the floor which has enabled us to expand to three restaurants.”

THE RIGHT PLACE AT THE RIGHT TIME

THE PERFECT PARTNERSHIP

Gary’s timing was perfect. Just as he began to consider a new career path, McDonald’s had advertised that it was seeking new Registered Applicants (RA’s), or potential licensees. “I applied and the rest, so they say, is history. I never had a plan B, so am delighted that plan A worked out,” he says. Timing aside, Gary explains a number of other aspects drew him to the brand. “McDonald’s is such an iconic brand - we all know it, my mother-in-law had been a licensee for around 20 years, I’d studied it significantly during marketing studies and believe it to be the best.”

“McDonald’s has been an incredible business partner,” says Gary “The pulling power of the Golden Arches cannot be underestimated, but we realise our joint responsibility to follow the systems and processes to protect the brand. The corporation employs a wealth of talent that is utilised to create the framework in which we operate as well as draw people into the store. This is a great distinction from non franchised businesses, where you may lack the ability to employ people like these directly.”

THE EARLY STAGES He says the initial training program was testing as there was simply so much to learn. “While the training process is outstanding, there is a lot to wrap your head around in a relatively short space of time. “To go from making your first burger or bagging

WWW.FRANCHISE.NET.AU

BUSINESS GOALS “We will spend the foreseeable future growing our business, both organically and through expansion into other stores, should the opportunity present itself,” says Gary. “Through financial prudence, people development and a clear focus on our business goals, operations, marketing and community engagement, we expect a bright future.” F

MAY/JUN 2014 FRANCHISING | 19

FR0514_020

2014-05-07T10:57:35+10:00

Inspire | Franchisee

PAV ING

the way to

SUC

CESS

David Shearing joined Amber at the beginning of 2012 and believes it’s a great brand to work with.

avid didn’t invest without first conducting the right research, not only into the Amber brand, but its competitors. Here, David tells Franchising how he went about the due diligence process.

Why did you decide to buy an Amber franchise? Amber is a friendly brand with a good name and it’s regarded as a leader in the wall and flooring retail sector, offering a wide range of tiles, pavers, stone and related products. The brand name was important along with the personalities of the Amber people and what they stand for – they’re all about positive attitudes,

20| FRANCHISING MAY/JUN 2014

confidence and results and they’re team players who are committed and genuinely interested in the success of their franchisees. How did you go about researching the brand? We secret shopped for almost two years. We bought tiles from Amber’s Seaforth store and had a really good experience, which reinforced our decision to become a part of the Amber group. What would you do differently in terms of the due diligence process, if anything? In hindsight there are always things you look back on that you think you could have done differently. »

WWW.FRANCHISE.NET.AU

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

ificial flavour s art

FR0514_000_GEL

a rtif

l icia l c o

taste the

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

gelatissimo.com.au

FR0514_022

2014-05-07T10:57:35+10:00

Inspire | Franchisee

Although I’m happy with my decision, I probably could have taken more time to review and familiarise myself with Amber’s tailored systems. I would have also hired an accountant with previous experience in the franchise industry to assist me with the sale documentation. What was your major reason for choosing the Amber brand? We wanted a market leader. We were approached by other competitors and after some due diligence soon realised that Amber was best suited to us and that we didn’t want to be associated with some of the others in the industry. We found Amber appealing in many ways – it has the best range of products, the best prices, a world-class retail offering and the best advice and inspirations – product managers travel the world seeking the best products from their original sources.

What has been the biggest challenge for you as a franchisee? I think these days, regardless of whether you’re a franchisee or a small business owner, the biggest challenge is being extra diligent with your expenses and making sure you get the most return out of your investment. It’s a tough market so you have to work harder to ensure your business is successful. What goals have you achieved since joing Amber? The Amber team certainly know their stuff and are happy to roll their sleeves up and get their hands dirty to achieve a common goal. We worked closely with senior staff and thanks to their guidance we now have a retail shop that offers not only tiles but outdoor products, pavers and stone – it’s meant our business can embrace other markets such as landscaping. With the help of Amber staff we’ve put yearly business plans and KPIs together to keep us focused and to set goals every 12 months, and they’re closely monitored.

I highly recommend Amber to any new starters. It’s still a young brand and it has a great future

How did you fund your franchise investment? We approached our local bank who were very diligent prior to any commitment. Once the formalities were completed and they gave us the go ahead, they remained a close supporter of the business. We have frequent meetings with them where we discuss the progression of the business and go through our business plan. What is the biggest lesson you’ve learned as a franchisee? Although supported by a bigger group, I still have control over most aspects of my business, including local supplier negotiations, product selection and local area marketing.

22| FRANCHISING MAY/JUN 2014

What advice would you offer someone thinking of investing in a franchise business? You could not find a company that has a higher standard of training, customer focus and support of the franchisee. In addition, the people who make up Amber are some of the nicest people in the universe and everybody is very helpful when required. I highly recommend Amber to any new starters. It’s still a young brand and it has a great future. Would you invest in the Amber brand again? Absolutely. F

WWW.FRANCHISE.NET.AU

FR0514_000_DOM

2014-04-30T14:32:21+10:00

FR0514_024

2014-05-07T10:57:35+10:00

Inspire | Franchise story

FRIED CHICKEN... not as you know it

Taiwanese fried chicken brand Hot Star is taking on the local market one outlet at a time.

ustralian master franchisees Lili Shi and siblings Kyle and Wing Lam opened the first Hot Star store in November 2013, and they have big plans for their new venture. They have opened two Hot Star outlets in Melbourne and another is scheduled to open this year, meanwhile Sydney received its first store in March, and the trio is currently negotiating a second site in the harbour city.

THE PRODUCT The Hot Star brand has its roots in Taiwan’s famous Shilin night market, and its chicken product is popular among locals, Kyle Lam says. Lam told Franchising he and his partners, who are also the master franchisees for Taiwanese bubble tea brand Gong Cha, wanted to bring something unique to the Australian market. “We consciously made a choice to pick stuff that other people don’t really have, because what’s the point of doing french fries when you can get them at McDonald’s?” He explains Hot Star’s signature chicken product is free from artificial ingredients and cooked fresh to order. “It’s basically one whole piece of chicken breast that is cut to a 30cm size chicken steak. We use a tapioca batter which coats the chicken so that when its deep fried the juices don’t escape – it’s not dry at all.” Hot Star’s chicken breast can be topped with either salt and pepper, spicy powder or plum salt, and Lam says the latter is a little sour and incredibly popular in Asia. The brand’s other offerings include deep fried mushrooms and sweet potato chips. “They sound a little odd [the mushrooms] but once you try them you get it straight away – it’s about the crunch on the outside » 24| FRANCHISING MAY/JUN 2014

WWW.FRANCHISE.NET.AU

AD_FRGROSEP_12.pdf

Page

14/08/12,

9:39

FR0514_026

2014-05-07T10:57:35+10:00

Inspire | Franchise story

and the texture of the mushroom on the inside,” he explains. “We also do sweet potato chips, which are hand cut on site and cooked to order and we use our own proprietary batter for them. Again you can top them with spicy powder, salt and pepper or the plum salt.”

THE FRANCHISING TIMELINE

We consciously made a choice to pick stuff that other people don’t really have, because what’s the point of doing french fries when you can get them at McDonald’s?

While franchising is definitely on the cards, Lam and his partners are keen to establish the Hot Star brand in Australia before they begin to recruit franchisees. “At this stage my partners and I will oversee all company stores; however after we open five stores we will reassess the situation. “Hot Star is relatively unknown in Australia so we really need to break the market open first and show people that there is a business model to be had here,” he says. There is no set franchising timeline – all will generally depend on how the brand is performing. “Franchising will definitely come, whether its six or 12 months or a little further down the track depends on a number of factors. “It’s really hard to recruit franchisees to something they don’t know, they just wouldn’t pay attention to that at all,” adds Lam.

TRAINING AND SUPPORT Hot Star’s global franchisor has developed an international franchisee training program (the brand currently operates in Taiwan, Hong Kong and China and has its sights set on North America) that can be customised to suit the local market, Lam explains. “If you read it then you’ll gain an understanding of the business and franchisees will pick up the skills required of them pretty quickly.” Of course, Hot Star will deliver the training franchisees require to operate a successful business. “We’ll train them up, it’s a pretty basic process,” says Lam. “No previous experience is needed in the kitchen as such but they definitely need to have a bit of business experience.” “It’s not rocket science but there’s a bit of nuance there to how to fry the chicken perfectly and get it crispy brown and golden for every customer,” he adds. Lam says Hot Star’s head office will operate out of the same location as Gong Cha, which is already franchising. “We already have a support office and network, as well as marketing for our franchisees so it wouldn’t be too hard for us to take that next step [to franchise Hot Star], but the most important thing for us is to get the Hot Star brand out there so everyone knows the product and believes it is a viable business.” F

26| FRANCHISING MAY/JUN 2014

WWW.FRANCHISE.NET.AU

FR0514_000_WAT

2014-03-19T16:50:13+11:00

Love Photography. Love Real Estate. It’s time to own a Top Snap Franchise! You don’t have to be a professional photographer or have owned a previous business to become a Top Snap franchisee. Our franchisees come from all walks of life with different sets of skills and experiences. If you love photography, we provide all the training you need to become a Top Snap franchisee. With all retouching done in-house, all you need to focus on is the photoshoot and building relationships with your clients.

Simon Draper, franchise owner in Geelong, says, “I was looking for a business that satisfied my interest in real estate and enabled me to work locally. The fact that the Top Snap business model is primarily B2B and in my opinion almost ‘recession-proof’ made the opportunity even more attractive. Whilst having my own company, I do feel a great deal of support from the Sydney office and indeed other franchise owners. Being part of a team allows me to focus on growing my business and learning from those who have experienced the same process in the past. Whilst new to the industry, I do feel that I have an advantage over much of my competition with the diverse product range Top Snap can offer its customers.”

S PE C I A L Purchase a Top Snap franchise now and receive camera equipment worth $10,000 for FREE.

OFF ER

Offer up for grabs for the first 3 franchise sales, so hurry! Also ask about special financing options

1300 TOP SNAP sales@topsnap.com www.topsnap.com 2014_Full page ad.indd 1

Find us on:

11/03/2014 12:07:04 PM

FR0514_028

2014-05-07T10:57:35+10:00

aniel and business partner Bianca Keleher invested in a Hockingstuart franchise in the Melbourne suburb of Chelsea seven years ago, and they couldn’t be happier.

DECIDING ON THE BRAND When a franchise became available in their area, Daniel and Bianca jumped at the opportunity. “For Bianca and I, the decision was simple – there were no other Hockingstuart agencies between Frankston and Mentone and we were always scared that if a Hockingstuart office opened up in Chelsea we’d be toast. As the saying goes, if you can’t beat them, join them!” While familiarity with the model influenced Daniel’s decision to invest in a franchise rather than an independent real estate business, the notion of franchisor support also played a part. “Becoming part of the Hockingstuart brand meant functions like marketing and training could be largely managed by head office, allowing Bianca and myself to focus on what we do best – property sales and leasing,” he explains. “I always viewed Hockingstuart as a sophisticated brand with strong recognition and expertise in the Melbourne metro market, but what really appealed to us was its extensive marketing capabilities with the likes of Red Magazine, on top of extensive listing spaces in online, local and metro news outlets.”

A PASSION FOR

PROPERTY 28| FRANCHISING MAY/JUN 2014

WWW.FRANCHISE.NET.AU

Daniel Wright has an extensive real estate and franchising background, so it made sense that he head up his own business.

FR0514_029

2014-05-07T10:57:35+10:00

Franchisee | Inspire

THE DAY TO DAY While he is director of the business, Daniel is still very much involved in the selling of properties. “An average day could include anything from listing properties and meeting with vendors to appraising houses, pre-auction meetings and managing staff. On weekends, it’s all about the auctions,” he says. Bianca, on the other hand, is responsible for the administration, accounting and property management side of the business. “Her role is to manage office procedures and improve efficiency, whereas I am more focused on securing listings, optimising sales results, motivating the sales team and nurturing vendor relationships. We complement each other and the result is a well run business.”

TRAINING UNLIKE ITS COMPETITORS

In addition, Daniel values the company’s directors’ conference, citing it as “invaluable”. “It’s the perfect opportunity to mingle, throw ideas around and share experiences with successful colleagues. The value of peer-to-peer learning is a big benefit of being a part of the Hockingstuart franchise,” he explains.

LOCAL AREA MARKETING Daniel has lived in Chelsea all his life, and is subsequently passionate about the local community. “We’re a major sponsor of the Bonbeach Football and Netball Club and the Chelsea Football and Netball,” he says. “We also sponsor the Carrum Cricket Club, as well as local primary schools, Carrum Primary and Kingston Primary. At the end of the day, the local Chelsea community is the foundation of our business.”

Daniel was surprised by the quality of both initial and ongoGOALS ing training on offer at Hockingstuart. “There’s such depth to their training that it doesn’t matter what level you are at or what Daniel and Bianca’s business goals are very much intertwined with the needs of their customers and employees. areas you want to develop, they’ve got you covered,” he says. “Improving customer service is an ongoing priority because its He uses the company’s auctioneer training program as an what really defines our business against competitors,” Daniel says. example: “It’s an extensive 10 week course that is compulsory “Maintaining a positive work environment is another key for every agent who wants to auction for the group. priority. We’re proud that our average period of tenure is five “Having not done anything similar under previous franchises, the difference have F R 0we 3 have 1 4 _really 0 0 0noticed _ I NX 1 2 and 0 1 4 - 0excelled 2 - 0 6 T 1 years, 4 : 5 which 9 : 3 2is +really 1 1 :high 0 0for the real estate industry. We place an emphasis on finding ways to keep staff motivated.” F in selling under the hammer ever since.”

WWW.FRANCHISE.NET.AU

MAY/JUN 2014 FRANCHISING | 29

FR0514_030

2014-05-07T10:57:35+10:00

Image: Gavin Jowitt

Inspire | Franchise story

PACK & SEND

HEADS ONLINE

Whether it be the virtual realm or a bricks-and-mortar retail store, Pack & Send has its franchisees and customers covered.

he booming online retail sector means big business for courier franchise Pack & Send, and the company is constantly introducing new initiatives that cash in on the trend. “I think our industry is an exciting one because there’s more freight and parcels being sent than ever before,” says Michael Paul, who founded the brand in 1993 and heads up the business as CEO. “Because of the advent of online shopping more and more people are buying things online, and a company like Pack & Send, which has been

30| FRANCHISING MAY/JUN 2014

around for over 20 years, has strong, robust systems, so we’re well poised to take advantage of that.” He explains Pack & Send customers can engage with the brand via three channels – by visiting one of their more than 100 their retail service centres, phoning the company’s call centre or by utilising its relatively new online channel. “[Customers] can get quotes and pay for parcels online, as well as book them online, so a courier just comes around and picks up the parcel and delivers it anywhere in the world,” he explains. “We’ve got three channels that really no WWW.FRANCHISE.NET.AU

other logistic company offers - it makes us the first choice in the marketplace.” The online channel was launched in December 2012 and has proved particularly lucrative for the brand, Paul explains. “In the first 12 months it brought 18,500 new customers to the brand. December is typically our peak period and in terms of shipment we sent 20 percent more parcels and freight in December 2013 than we did in December of the previous year. “It gives you some understanding of the increased volumes being sent.” »

F R0 5 1 4 _ 0 0 0 _ SI L FR0514_031_SIL_R

1 -

2 0 1 4 - 0 3 - 2 8 T0 9 : 4 7 : 3 1 + 1 1 : 0 0 2 2014-05-08T09:56:08+10:00

Get that equipment for your business without affecting your cash flow Join more than 25,000 other Australian businesses who have secured their equipment through us.

PRE-APPROVED FINANCE

Our Rent-Try-Buy® Solution is perfect for franchisees who want to keep their options open. You won’t be locked into a long term contract. Instead, Silver Chef offers a simple 12 month term, so you have the flexibility to: • Buy equipment at any time during the first 12 months and receive a 75% rental rebate. • Return equipment at the end of the 12 month agreement if you don’t need it anymore. • Keep renting and we’ll continue to reduce the purchase price. • Upgrade if you decide your franchise has outgrown the original equipment.

Contact Silver Chef today on 1800 337 153 for fast, easy approval or visit www.silverchef.com.au/franchising

J002058

If you belong to a Silver Chef Accredited Franchise, you are already pre-approved for finance and you can access other great benefits. Speak to your franchisor today or call the Silver Chef Approval Centre on 1800 337 153 for further information.

FR0514_032

2014-05-07T10:57:35+10:00

Inspire | Franchise story

CONTINUED TECH DEVELOPMENT

We’re the Flight Centre of the logistics industry - just as they... deal with a whole range of different suppliers at the back end, we offer a huge array of choice, which makes us the first choice option for a lot of customers

32| FRANCHISING MAY/JUN 2014

While Paul is no doubt pleased by the success of the online channel, innovation in the online realm remains a key focus for Pack & Send. “In the next month or so we’ll launch a new website which will have some further improvement functionalities, one of which is for regular eBay senders,” he says. “It will enable eBay power centres, which are people that send up to 50 or more parcels a week, to have a very convenient system where it integrates with the eBay website and pulls data from there so they can arrange the consignment to be sent with just a couple of clicks. “It’s a significant innovation that will continue to enable our franchisees to leverage off this new and growing market within the online space.” Paul is aware of the need to continuously change to adapt to the marketplace, an approach that is actively passed onto to brand’s franchisees. “It’s a big thing that we bring to our franchisees – making sure our model is always adapting to what the customers and the market is demanding, and we’ve placed a lot of emphasis on working with

WWW.FRANCHISE.NET.AU

our franchisees so they understand the importance of these sorts of innovations and changes,” he says.

CONVENIENCE UNDERLIES CHANGE These technology innovations no doubt make life a little easier for the modern day consumer, and Pack & Send strives to constinously provide more convenient solutions that apply to both the real and virtual worlds. “Very much one of the problems in the sector is most people aren’t home to collect their deliveries and so often the courier company can’t leave the parcel at the home. The household is inconvenienced as they attemtp to either go and pick it up at the depot or wait for another re-delivery,” says Paul. “In response, and this is a growing part of our business, we provide an option where customers can actually have the parcel delivered directly to their nearest Pack & Send outlet and then they just pick it up at a time that is convenient.” He explains services such as these are just one of the reasons why retail chains and logistics companies have become an important element in the supply chain.

FR0514_033

2014-05-07T10:57:35+10:00

Franchise story | Inspire

Image: Jeff Hawlins - Big River Creative

“It’s traditionally been the domain of Australia Post, who have a very comprehensive retail network, but people are increasingly looking at alternatives with respect to the retail network, such as Pack & Send.” Paul credits the brand’s success to its all encompassing service offering, and likens it to a travel agency. “Part of our real growth has been that we are just this complete one-stop shop solution so we deal with a large number of freight carriers and suppliers, which means we’re able to find the best solution for customers. “We’re the Flight Centre of the logistics industry - just as they have the retail centre that enables people to book airlines, rental cars and holidays and deal with a whole range of different suppliers at the back end, we offer a huge array of choice, which makes us the first choice option for a lot of customers.”

the market place,” says Paul. Despite the rise of business to consumer deliveries, which Pack & Send no doubt sees as a lucrative WHAT DOES THE FUTURE market, Paul insists business to busiHOLD FOR PACK & SEND? ness deliveries will continue to form a Pack & Send is currently exploring what key part of the business. could be seen as a fourth channel – a “The industry itself will continue to new take on its current retail service see increased volumes being sent because centre model. of the ongoing growth of people wanting “We’re looking at smaller centres that to purchase things online, and as a result are more kiosk type operations – they of that the industry is looking more at would be positioned within existing these business to consumer deliveries. retail businesses such as newsagents. “We still do a lot of work with busiF“They’re R 0 1 1the 4 _sort 0 0of0 things _ L I we’re S - look1 2 0nesses 1 3 - and 1 1 corporations; - 2 7 T 1 6 :I think 4 1 : that’s 3 1 +a1 1 ing at to give us increased penetration in common misunderstanding with people

that look at Pack and Send – they think we do a lot of work with consumers and households but 75 percent of our work is with businesses – that’s an area we’re just continuing to grow with,” he explains. F Michael Paul founded the Pack & Send business as a single standalone store in the Sydney suburb of Parramatta. Today more than 100 retail stores are in operation across Australia, New Zealand and the United Kingdom, and the brand continues to expand on a global scale. In 2007, Pack & Send was named Coopers’ Australian : Pricewaterhouse 0 0 Franchisor of the Year.

Thinking of becoming a Franchisor or Franchisee? Franchising is an exciting business opportunity but requires specialist legal advice. MST Lawyers is widely recognised as one of Australia’s leading franchising law firms. We advise franchisors, franchisees and suppliers to the franchising sector throughout Australia and internationally on all aspects of franchising. Our dedicated team practices exclusively in franchise law. We offer fixed fees for a variety of franchise work.

MST Lawyers 315 Ferntree Gully Road, Mount Waverley Victoria 3149 Australia Tel: 1300 MST LAW or +61 3 8540 0200 Email: mst@mst.com.au www.mst.com.au

Contact our franchising specialist team: John Sier, Philip Colman & Raynia Theodore

WWW.FRANCHISE.NET.AU

MAY/JUN 2014 FRANCHISING | 33

FR0514_034

2014-05-07T15:09:08+10:00

Inspire | Franchisee

MEET NIGHTOWL’S NEWEST

MULTI-UNIT FRANCHISEES Quentin & Lara Tumata recently acquired their second NightOwl site.

he husband and wife team invested in their first franchise at Charles Street, Townsville in April last year, and their second business is located at nearby Deeragun Street. In the 21 years prior to investing, Quentin was involved in the sale of fast moving consumer goods, and worked for the likes of Coca Cola, Cadbury, Parmalat and Lion Dairy & Drinks. “I moved my way through various roles beginning my sales journey as a sales rep, and then eventually progressing to regional sales management roles,” he said. Lara most recently spent her days raising the couple’s three young children, yet is now fully involved in the business. “When our youngest started grade one last year, I was able to return to work and join Quentin in our NightOwl adventure. Prior to having children, I worked as a legal secretary,” she said.

The pair believes a successful NightOwl franchisee: • Is enthusiastic and driven to achieve results. • Is genuinely interested in engaging with people, because after this is a people business. • Knows their strengths. • Enjoys a fast paced business. • Enjoys planning. Quentin and Lara would like to achieve four goals this year: • To continue to drive sales results in their business. • To build a skilled team who clearly understand their expectations and standards. • To engage sponsorship opportunities in the community and build awareness of the NightOwl brand. • To continue to have fun with their team and customers. They believe they will reap the following rewards: • A return on time invested in and on the business. • A successful business that will give them more time to spend with their young family. • A business for their kids should they choose to continue it. • Satisfied, happy customers. They pair wouldn’t do anything different if they had their time again, in fact they wish they’d invested in the brand earlier. Importantly, they advise prospective franchisees take the due diligence process seriously. “Do your research then follow this up by contacting the NightOwl head office to ask more insightful questions, then go out and have a look at some stores,” they advise. F

34| FRANCHISING MAY/JUN 2014

WWW.FRANCHISE.NET.AU

FR0514_000_WAT2

2014-04-28T13:34:41+10:00

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.indd 1

14/04/14 7:56 AM

FR0514_036

2014-05-07T10:57:35+10:00

Inspire | Franchisor

the

U.S.A style

SPORTING BAR

Image: Cormac Hanrahan

...coming to a suburb near you

36| FRANCHISING MAY/JUN 2014

WWW.FRANCHISE.NET.AU

FR0514_037

2014-05-07T10:57:35+10:00

Franchisor | Inspire

Brad Harris and James Sinclair founded The Sporting Globe brand in 2009, and they’re about to open their first franchise – which comes as no surprise considering their backgrounds.

Image: Cormac Hanrahan

F R0 5 1 4 _ 0 0 0 _ BRI

inclair’s father is the CEO of San Churro, while Harris’s father Geoff was one of the founders of Flight Centre and a major investor in Boost Juice. “The Sporting Globe model was always created with the idea of franchising in mind – in the US many of the successful sports bar models have been franchised and some of them have several hundred locations over there, so the business was designed with distinct branding, product specialisation and operating systems to eventually 2 0allow 1 4 it - to 0 4 - 1 7 T 1become 0 : 5 a 4 successful : 0 7 + 1 0 franchise,” Sinclair explains.

THE BRAND He describes The Sporting Globe as “a hospitality and sports entertainment brand inspired by America’s popular sports bar concept,” and the pair currently has three company owned venues in operation across Victoria – at Geelong, Fountain Gate and Moonee Ponds. Each offers a pub-style food and drink menu as well as extensive sports coverage. “We provide a high quality casual food environment, a large range of beers on tap and a welcoming atmosphere. of our venues are fit out with : 0 “All 0 state-of-the-art audio visual equipment, »

Free Call: 1800 634 227

The only card you need to realise your goals. We have helped millions of individuals and business organisations world-wide to solve personal, professional, and organisational challenges. Become a Brian Tracy Global Franchisee and enjoy the personal and financial rewards.

briantracyglobal.com WWW.FRANCHISE.NET.AU

MAY/JUN 2014 FRANCHISING | 37

FR0514_038

2014-05-07T10:57:35+10:00

Inspire | Franchisor

so they’ve usually got a huge hero screen as well as multiple LED panels and displays so that if there’s a game on you can catch it from every angle – it just creates a really good, exciting environment for not only major sports but everything in between.” Sinclair explains the concept is unlike the stereotypical Australian pub where males sit together and bet on the horse races, for example. “It’s a family friendly dining environment and women attend our venues – The Sporting Globe is far more a social

hangout than necessarily a dedicated sports bar. “Sport is something that I think crosses all demographics – everyone’s got an interest in some sort of sport so it’s a really good talking point,” he explains.

THE FIRST FRANCHISE Sinclair and Harris will open their first franchise in the Melbourne suburb of Richmond by mid-May and it’ll be headed up by retired Richmond fullback Kelvin Moore and his business partner Sean Kagan. “Kelvin retired two years ago yet

It’s really important that they [The Sporting Globe franchisees] have the skills to be able to motivate, coach, manage and develop a large number of people F R0 9 1 3 _ 0 3 9 _ CAF

38| FRANCHISING MAY/JUN 2014

he’s still got a passion for sport and he’s a really good people person. He was in the club’s leadership group too, so is really confident in leading and working with a young team of people, which works well considering he and Sean will have around 55 staff aged around 18 to 20-something – it’s a similar age bracket to a football club in that respect. “Sean has worked in cafes and pubs so he has more of a hospitality background,” adds Sinclair. The Richmond site is set to be the company’s largest yet, and it’s licensed to hold 625 people. “It’s got a rooftop deck, large function room, a restaurant that caters for about 140 people plus another large sports bar that’s complete with about 65 screens,” he says.

THE IDEAL FRANCHISEE

While it’s considered a bonus, Sinclair and Harris value personality traits above prior experience. looking for people that are 2 0 1 3 - 0 8 - 1 5 T 1 5 : 0 5 : 2 0 + 1 0 : 0 “We’re 0 honest, good with people and able to

WWW.FRANCHISE.NET.AU

FR0514_039

2014-05-07T10:57:35+10:00

Franchisor | Inspire

manage and lead a team. It’s really important that they have the skills to be able to motivate, coach, manage and develop a large number of people – that’s probably the most important thing we are looking for,” he explains. “We can teach people how to make different bar items or elements of the kitchen and how to run the business – it’s the people management skills that are a huge benefit.” Sinclair acknowledges the sheer size of the brand’s franchises may influence who invests. “It’s a more expensive set-up, fitout and business overall than franchises such as Boost Juice and San Churro, so I think we could foresee our future franchisees in some circumstances being a partnership of two people rather than just one individual.”

TRAINING When franchisees enter the system they’ll first take part in staff induction training and then they will undergo the management training process.

“It involves training across what are the key management KPIs including cost and revenue centres, marketing, managing people, operational support on the night – which covers what the managers should be doing to support their staff, and learning how to train staff in different systems.” Ongoing support is extensive, and includes: • Ongoing venue audits to make sure franchisees are following systems and procedures. • Marketing support, which includes the management of social media, upcoming promotions, EDMs and the company’s club loyalty program. • Menu design and development. • Management accounting and reporting. • Payroll execution. • Supplier procurement. • Fit-out design and development assistance. “I guess the goal was to offer people who aspire to own their own business a competitive advantage over independent

WWW.FRANCHISE.NET.AU

operators because they are able to focus on the one thing that matters the most, which is looking after the customer and of course their staff,” Sinclair explains.

EXPANSION Sinclair and Harris hope to eventually open sites across the country; however Victoria is currently the key focus. “We’d like to open another two sites in Victoria within the next 12 months and our goal for 2015 is to find a site and hopefully a good franchisee interstate. “Certainly we would love to be in all of the states around Australia and we’re keen to embark on that journey next year,” he adds.

COST The cost of a franchise will vary according to the size of the site – the brand’s Fountain Gate store is around 400m2 meanwhile its Geelong venue is over 1000m2. “Typically initial investment can start at around $750,000 and can go up to $1.5 to $2 million plus,” Sinclair says. F

MAY/JUN 2014 FRANCHISING | 39

FR0514_tfsLLL

2014-04-29T11:38:07+10:00

FR0514_adsRRR

2014-04-29T11:47:47+10:00

FR0514_042

2014-05-07T11:45:04+10:00

IN EST in a slice of the

pizza market

42| FRANCHISING MAY/JUN 2014

WWW.FRANCHISE.NET.AU

FR0514_043

2014-05-07T11:45:04+10:00

Food - Pizza | Opportunities

Australians’ love for pizza is going strong as chains refresh their offering in line with changing consumer preferences, writes Brea Carter.

GROWTH

MARKET

ustomers are becoming more health conscious and their tastes more sophisticated, a move that has seen pizza chains add healthier and more gourmet options to their menus – yet they’ve also kept a number of their originals. IBISWorld’s Pizza Restaurants and Takeaway in Australia industry report attributes much of the pizza industry’s growth over recent years to product innovation. “Over the five years through 2013-14, industry revenue is projected to grow at a compound annual rate of 3.2 percent to total $3.5 billion, including growth of 2.1 percent in 2013-14,” the report states. Businesses are also increasingly embracing technology as a means of providing convenient ordering options and communicating more tailored promotions to customers, and IBISWorld predicts such developments will contribute to the industry’s continued growth. The report reads: “Over the next five years, industry participants will continue to bank on their technology and systems to improve not only the customer experience, but also operational efficiency. “As Australian cities expand, system requirements will increase, and franchise owners will be best positioned to tap into these new markets.” Overall industry revenue is expected to increase at a compound annual rate of 2.3 percent through 2018-19 to post a profit of $3.9 billion. So whether they serve up traditional or gourmet offerings, pizza chains remain profitable by virtue of their ability to cater to their diverse clientele.

$3.9 billion

$3.5 billion 3.2%

2.3%

YEARS THROUGH 2013 -14 2.1% IN 2014 ALONE

YEARS THROUGH 2018 -19

DOMINO’S

13.4%

EAGLE BOYS

7.2%

PIZZA HUT

5.8% STATE BY STATE

DISRIBUTION NT 2.8%

QLD: 18.4%

NSW: 29.3%

SA 8.4%

ACT 3.1%

VIC: 24%

TAS 4.5%

Image: Michael Bevan

DOMINO’S While 2013 may have been Domino’s year for product innovation, this year it’s all about technological development. The Queensland-based pizza chain plans to introduce a number of new initiatives this year, the first being it’s Offers App, which was released at the end of March and seeks to help customers keep track of the special offers available at their local store. “[It] condenses all of our daily deals – on both local and national levels. Previously, customers had to wait for us to provide great deals. Now anytime, anywhere they can access all of the best deals,” explains CEO Don Meij. “Essentially, it’s empowering to the customer as it allows them to engage with Domino’s anytime. It really does put the customer in control of their ordering experience.” The brand’s focus on technology is very

WWW.FRANCHISE.NET.AU

much reflective of its commitment to the customer, explains Meij. “Our customers are our number one priority. Without them we don’t have a business so we are continually thinking of new ways that we can match their varied preferences. “Our online ordering system has been specifically designed to be useful to each individual consumer. We know all of our customers are different people and that’s why we look to cater to all of their needs.” He also recognises just how lucrative an effective digital strategy can be, particularly as customers continue to head online to place and track their orders. “Today approximately 60 percent of sales are online and that figure is forecasted to grow to 80 percent within the next two to three years. The rewards of digital strategy can be huge, both in boosting consumer loyalty and cutting infrastructure and labour costs,” Meij explains. Technological development will remain a key focus for Domino’s in 2014, and in an interview earlier this year Meij told Franchising the second instalment in the brand’s technology blitz would be released by the middle of the year. “We will continue to aim to be a global trendsetter of the industry’s use of digital technology and social media through exciting new initiatives – watch this space,” he says. Domino’s has 600 stores across Australia and New Zealand, and there are plans to roll out additional sites. “We have a very strong pipeline of new stores planned for this year. We will be looking to achieve record organic new store growth for the financial year. “Within the next four years we are confident that we will have approximately 800 stores across Australia and New Zealand,” Meij explains. Despite its large footprint, Meij stresses Domino’s does not compromise on quality. “We have achieved this significant growth while keeping quality high by remaining true to our core values and never accepting second best,” he says. »

MAY/JUN 2014 FRANCHISING | 43

FR0514_044

2014-05-07T11:45:04+10:00

Opportunities | Food - Pizza

CRUST GOURMET PIZZA The Crust brand was established in 2001 in response to customers’ increased desire for healthier and more gourmet pizza varieties, and the Retail Food Group (RFG) brand is constantly revising its menu to ensure its offering appeals to the increasingly savvy customer. “We firmly believe that our product quality is unparalleled in the gourmet pizza sector. We use the finest ingredients to create unique flavour combinations, and we are always ahead of our competitors when it comes to food trends,” says managing director, Michael Rose. “Crust recently launched our annual new menu, featuring a delicious new range of pizzas, sides and desserts,” he adds. The new menu stays true to the brand’s foundations – the pizzas are characterised by their gourmet toppings such as Vietnamese Chilli Chicken, Sangria Duck Ragu and Chilli Crab, meanwhile the herb bread, which is served with harissa infused hummus and Kalamata olives, offers a new take on the traditional side. “Health has always been a consideration for Crust, and as such we were the first pizza brand to market with a Healthier Choice range and wholemeal bases,” adds Rose. The Healthier Choice Pizzas range is representative of Crust’s desire to provide a less indulgent dining option that doesn’t compromise on taste, and it includes four varieties – Chicken Tikka, Spiced Pumpkin, Bruschetta and Chicken

44| FRANCHISING MAY/JUN 2014

Avocado, and its menu also includes a number of healthy sides, including two new salads – Radicchio and Roast Beetroot. Through its multi-levelled Crust Mobile Pizza Bar the brand has embraced a whole new space this year – events – and it operates as a pop-up version of a bricks-and-mortar store. Four pizza ovens churn out fresh pizza on the bottom level, and a communal area complete with dining tables and a wrap around bar exists upstairs. The concept was unveiled at the Formula One in Melbourne in March, and also appeared at the BMW Sydney Carnival races in Randwick. “The Crust Mobile Pizza Bar has a full schedule of events throughout the year and forms a big part of our campaign to raise brand awareness by sharing our delicious pizza with the people,” Rose explains. “We will continue our strong experiential campaigns through the Crust Mobile Pizza Bar to generate word of mouth about our brand.” Crust has developed a number of online ordering functions of late, and digital innovation will remain a key focus for the brand both this year and well into the future. “Digital ordering platforms are a key focus for convenience, and we continue to drive online ordering with our full suite of digital platforms, including our website and iOS and Android applications. “We will [continue to] enhance our digital platforms to stay up to date with consumer preferences,” Rose adds. »

WWW.FRANCHISE.NET.AU

FR0514_045

2014-05-07T11:45:04+10:00

Food - Pizza | Opportunities

EAGLE BOYS Eagle Boys’ marketing manager, Kate Pettiford agrees with the IBISWorld report in that the pizza industry has evolved significantly over the past five, and even 10 years. “There’s just such a vast range of what people are looking for in a pizza company now. It used to be very different in that customers simply came in and got their meal deal and left,” she says. The customer is at the forefront of all that the Australian born and bred business does, and it’s devoted much of its time and effort around customer insights of late. “We’ve been pulling all of our customer data from the last five years in an effort to really understand who our loyal customers are, where they come from and what they buy from us. We’ve brought together a number of different data sets that sit within the business and created a single customer view,” she explains.

Pettiford says the process has proven incredibly effective in terms of customer engagement as it enables Eagle Boys to communicate with its customers on a more personal level. “We’re able to really segment down our messaging and it doesn’t waste people’s time – they know that when they get a message or marketing material from us it’s going to be highly relevant to what they’re interested in. “It’s all about personalisation – you should know who your customers are and you should be able to speak to them directly,” she adds. Convenience of ordering is also a focus for the brand, and Eagle Boys has recently employed a smartphone developer to fine tune its ordering app, which was introduced in 2012. “His role is to constantly optimise the app and make it easier and simpler for people to use,” says Pettiford. WWW.FRANCHISE.NET.AU

“Ideally we’d like to get to the point where it’s only a couple of clicks and the order is through, which really speaks to the busy customers.” New product development is also on Eagle Boys’ agenda, and Pettiford stresses it’s not just about introducing brand new offerings. “We also want to be innovating how we are making our existing products – for example introducing new bases and looking at how we can make our pizzas healthier without sacrificing taste,” she explains. Pettiford says rolling out Eagle Boys brand refresh, which was unveiled last November and focuses on the local community, is also in the spotlight. “We won’t be doing any major national campaigns, it’s all about being part of our local community, which is the heritage of Eagle Boys – it’s where we started. Getting back to being part of the Aussie community is a big focus for us.” » MAY/JUN 2014 FRANCHISING | 45

FR0514_046

2014-05-07T11:45:04+10:00

Opportunities | Food - Pizza

PIZZA CAPERS Expansion is a key priority for Pizza Capers as it enters Western Australia and the Northern Territory in 2014; and managing director Peter Jones says there’ll also be a focus on the menu and technological innovation. “Over the coming months we will be focusing strongly on our product innovation and menu development with new pizzas and products rolling through the system to entice consumers into our stores. We are also continuing our commitment to enhancing our digital platforms and online ordering capabilities,” he says. As with other key players, the customer is at the forefront of all that Pizza Capers does and much of its current and future efforts are reflective of this. “We’ve developed, in our eyes, the best tasting gluten free pizza base in Australia – all because it’s what our customers wanted from us. “We are continuing to find out what our customers want in terms of health benefits and dietary requirements and create the best tasting products to meet their needs. We have a variety of 97 percent fat free pizzas and gourmet vegetarian options,” Jones explains. Healthier options include The Prawn and Vegetarian pizzas, as well as Caesar, Traditional Garden and Classic Cobb

Image: Nadine Shaw Photography

46| FRANCHISING MAY/JUN 2014

WWW.FRANCHISE.NET.AU

salads, and Pizza Capers has recently introduced its Artisan Handcrafted range, which includes five pizzas varieties that are designed for one person. Jones says the quality of ingredients and variety of toppings Pizza Capers offers it customers differentiates the brand from its competitors in the market. “Our pizzas are loaded with restaurant quality toppings and we use only fresh, quality ingredients, when they’re in season and at their best. There are no additives or nasties just healthy wholesome toppings on our pizzas.” He believes the brand’s personality is similarly unique, as is its franchise offering. “We have built a quirky and fun brand personality that our customers love. For franchisees, we operate in a fun team environment and we make quality products that they can genuinely be proud of.” There are plans to fine tune the brand’s online facilities, with the end goal being added convenience for the time poor customer. “We realise that our customers want convenient ways to place their orders so we are investing in enhancing our online ordering platforms,” he says. “In March we launched our mobile application and the coming year will see us developing iOS and Android applications too.” »

FR0514_000_HAI

2014-03-28T09:44:17+11:00

YOUR KEY TO FUTURE SUCCESS

JOIN A COMMUNITY THAT WILL GET YOU THERE IN STYLE.

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 has been built on passion and creativity. • Extensive and ongoing training programs • A proven turnkey operation • A focus on world class service • Multiple revenue streams, including retail, salon, piercing and beauty services • Exclusive stockists of world leading brands with the most lucrative merchandise trading terms worldwide Come and join our community of leaders and start your new future today. We’d love to hear from you.

With opportunities currently available in: WA: Perth and metropolitan QLD: Brisbane metropolitan and regional NSW: Sydney metropolitan and region SA: Adelaide metropolitan VIC: Melbourne metropolitan Contact Peter Fiasco for a confidential discussion on 0451 370 060

hairhousewarehouse.com.au/franchising

HHWH_BusinessFranchise_FullPageAd_V2.indd 7

25/03/14 2:39 PM

FR0514_048

2014-05-07T11:45:04+10:00

PIZZA HUT Product innovation is high on Pizza Hut’s agenda, and the chain in constantly testing and developing new offerings for customers. “Pizza Hut kicked off the year with the launch of the Cheeseburger Crust Pizza, which combines two of Australia’s favourite foods into one,” says the brand’s head of development, Andy Masood. “Made with eight Australian beef patties with tasty cheddar cheese on top, nestled into the golden crust of Pizza Hut’s large pizzas, the cheeseburger crust pizza is available with everyone’s favourite toppings. Pizza Hut is known for being the home of the Stuffed Crust, and this production innovation was an extension to this.” Pizza Hut has introduced a number

Image: Paul Harris - Seesaw Photography

48| FRANCHISING MAY/JUN 2014

We are continuing to find out what our customers want in terms of health benefits and dietary requirements and create the best tasting products to meet their needs

WWW.FRANCHISE.NET.AU

FR0514_049

2014-05-07T15:16:49+10:00

Food - Pizza | Opportunities

of other left-of-centre products, including the Hot Dog Stuffed Crust Pizza and Triple Dippers offering, and the brand’s recently added lighter options to its range. “Innovation is a leading force in Pizza Hut’s DNA,” says Masood. “We’ve reduced sodium by 21 percent over the past two years and due to customer feedback, have introduced gluten-free pizza bases.” Pizza Hut’s digital platforms and stores are similarly in a constant state of change as the brand seeks to remain relevant. “We have seen a strong movement to the digital operating platform, and with more and more customers ordering online we continue to update our internet, mobile and device ordering.” FThe R 0pizza 9 1 3industry _ 0 4 5is_aAcompetitive US 1 2

one, and Pizza Hut has focused its attention towards expansion as a means of staying ahead of the pack. “As competition intensified our priority became being accessible and convenient to our customers. In fact, we celebrated our 300th store opening in December last year and we’re aiming to celebrate the 400th Australian and New Zealand store in the second half of this year,” Masood explains. The company is looking for suitable franchisees to invest in the many new stores it plans to open over the coming months. “We actively look for people who show strong entrepreneurial values and want to build a business they can own and 0operate,” 1 3 - 0 he 8 -says. 1 9 T1 1 : 3 8 : 1 9 + 1 0

“We also look for people with business acumen, family support, leadership and personal organisation skills. Pizza Hut franchisees come from all walks of life and various working backgrounds, however most importantly all have a passion for pizza and customer service. “Pizza Hut will continue to seek opportunities to expand and recruit talented owner operators to ensure the system of the world’s largest pizza chain continues well into the future,” adds Masood. All in all he says it’s an exciting time for the brand. “We have a number of marketing initiatives in the works and we will continue to push the boundaries with product innovation. As a brand, we’re really investing and focusing on : our 0 0digital presence.” F

We’ve Got You Covered Enjoy the benefits of being apart of Australia’s No 1 outdoor blind franchise • No Experience Necessary • Full Training & Ongoing Support

• Exclusive Products & Territory • Group Advertising & Purchase

• Excellent Return on Investment • $220,000 to $240,000 to Turn-Key

Aussie Outdoor has become the most trusted and respect outdoor blind franchise. Aussie Outdoor franchisee’s and team members pride themselves on providing quality products and services with honesty and integrity at all times. Becoming an Aussie Outdoor franchisee is enjoyable and financially rewarding offering a great lifestyle. For further information Contact: Lloyd Gaunt on 0415 112 122 or email: lloyd@aussieoutdoor.com.au | www.aussieoutdoor.com.au

WWW.FRANCHISE.NET.AU

MAY/JUN 2014 FRANCHISING | 49

FR0514_050

2014-05-07T11:45:04+10:00

Salon solutions The challenges facing hair and beauty businesses and how they can embrace the market trends. By Sarah Stowe.

POSITIVES

DEMOGRAPHICS

Low barriers to entry but high turnover of operators

● 39.7% aged 35-54 ● 30.8% aged 55+ ● 29.5% aged 15-34

Low level of regulation

TRENDS CHALLENGES

Anti-ageing treatments ● Male grooming ● Kiosk outlets ●

Highly competitive

Medical referrals ●

Labour intense – wages represent 63.4% revenue

Organic products ●

TREATMENTS & SERVICES

Skills gap in hairdressing Lack of marketing and management skills

65.7% 10.8% 6.4% 6.3% 4.1% 3.5% 3.2%

Failure rate of 6-8% annually Industry profitability declined – lower prices Increasing globalisation – overseas brands here

hairdressing services nail care tanning services barber shops skincare hair removal other services

Source: A cut above: Stable growth in hairdressing services offsets poor growth in other segments, IBISWorld Industry Report S9511, Hairdressing and Beauty Services in Australia, February 2014. Author: Lauren Magner

50| FRANCHISING MAY/JUN 2014

WWW.FRANCHISE.NET.AU

FR0514_051

2014-05-07T11:45:04+10:00

Beauty | Opportunities

BRAND SHARE Estimated market share 4.4% Hairhouse Warehouse 2.2% Price Attack 2.1% Just Cuts 1% Toni and Guy

INDUSTRY STATS

1.6% ANNUAL GROWTH 2014-19 TO $4.1BN 21,267 BUSINESSES 15-25% OF SALONS CHANGE OWNERSHIP PA 1.6% EMPLOYMENT GROWTH 5 YEARS

SUCCESS FACTORS

● Specialist equipment ● High income area, easy access and parking, high traffic ● Highly skilled workforce ● Loyal customers ● Links with health professionals ● Differentiated services

Image: Michael Bevan WWW.FRANCHISE.NET.AU

ustralians are getting older. And that’s good news for the beauty sector. An ageing population keen to defer the obvious signs of maturity and a life well lived are turning to professionals for treatments to stop the clock. These age-defying citizens might be happy to indulge in an occasional massage to improve their wellbeing but the big trend is for a salon treatment that provides results. We want not just to feel good, but to be seen to look good – and to know that whatever mechanical application or injectable we commit to is going to show measurable improvements. The rise of cosmeceuticals and medical referrals is taking the beauty salon into the clinical sphere where highly skilled therapists are critical to the business. And the evidence is that men are embracing the ‘no worries’ look, seeking high-performance treatments too. In complete contrast to the high tech approach, the interest in organic products is increasing, albeit slowly, according to IbisWorld. This is a niche market and the players in beauty and hair have been slow to embrace the trend for more environmentally–friendly products: the report puts the revenue share at less than one percent. However, the number of salons is growing rapidly. Real household discretionary income is a key driver in the hair and beauty marketplace. IbisWorld reports that “price competition is expected to constrain overall revenue growth”. » MAY/JUN 2014 FRANCHISING | 51

FR0514_052

2014-05-07T11:45:04+10:00

Opportunities | Beauty

: Just Cuts

Hairdressing is the dominant service in the hair and beauty sector: the IbisWorld report says the haircare service accounts for 65.7 percent of industry revenue. But it’s also a highly fragmented sector with the four top hair service brands combined accounting for less than 10 percent of the market. The Just Cuts brand has a 2.1 percent market share. 1. What are the challenges today for a hairdressing business? “The challenge for today’s business is a busier lifestyle; there are fewer consumers visiting shopping centres and there is less job stability. However, even in times of economic uncertainty, people still need a haircut.” 2. Will there be further diversiﬁcation into different outlet models? “We have recently developed and launched our very own exclusive world class hair care product range, Justice Professional, which includes some sulphate-free products. We are expanding this range into electrical equipment and are confident we are moving into a very strong services and retail space. “We have also developed the Just Cuts kiosk concept which is a great tool to continue and expand our strength as a multi-unit franchise system,” says Denis McFadden, founder and CEO of the Just Cuts chain. More than 43 percent of the franchisees own more than one salon. The chain’s digital platforms – which include an app, mobile website and social media channels – add to consumer convenience and are seen as strong tools for the brand. 3. How important is good training for hairdressing staff, and what role does the franchisor play in this? “It’s extremely important! The challenge is getting out there to reach each and every one of our 1,600

52| FRANCHISING MAY/JUN 2014

stylists. We have developed more than six online training modules that can be accessed online 24/7.” Training modules include end-to-end customer service audio-visual training, induction and franchise business systems, OH&S, YouTube and video product knowledge and styling training. An operations and training team is on the road delivering face-to-face training in salons and at the head office Just Cuts Academy. “We have also developed diverse training toolkits franchisees and team leaders can utilise to train their teams and individuals. We measure our compliments and complaints and have significantly improved our client experience with incentive and reward programs for our stylists and clients.” 4. How can franchisees increase their proﬁt levels with such a high labour cost to their business? “Things have changed at Just Cuts and the chain is no longer just about a haircut,” says McFadden. “We are about empowering our client to create the professional salon look at home. This requires the stylists to make the correct recommendations and educate their client about which product would suit their hair, how to apply and get the desired look at home. “The launch of the new range allows franchisees to increase their bottom line and improve the clients experience. One of our primary KPIs as a business is a superior client return rate and this ethos allows us to focus on increasing profit levels whilst delighting our clients, which is paramount to ongoing growth.” 5. What are the expansion plans for the business in Australia and overseas? The company is ready to expand overseas with the right partner in a master franchise arrangement. “In Australia, an extension to the traditional salon is the kiosk concept which was launched in Westfield Doncaster. The $100,000 cost of this is approximately half the price of a regular salon.”

WWW.FRANCHISE.NET.AU

FR0514_053r

2014-05-08T11:00:40+10:00

Beauty | Opportunities

High cost treatments and salon merchandise are “particularly vulnerable to a decline in consumer sentiment”, the report indicates. But there is expectation of a rise in consumer sentiment this year. It’s the hair service sector that has seen relatively stable growth, according to the report. To cater to the more prevalent time-poor consumers, some hairdressing chains have broadened their business TALKING ABOUT THE TRENDS models and added kiosk-style outlets to Salons offering treatments that combat the mix. the signs of ageing are on the increase, Overall IbisWorld reports this is a and here we find out how three franhighly competitive market with no major chised chains in the arena are building players, significant labour costs (wages their businesses. typically take up 63.4 percent of revenue), and over the past five years, falling LUMINIERE SKIN CLINICS profitability. Cameron Fancourt, franchisor of A franchise chain offers training and Luminiere Skin Clinics sees the prediction support, branding, and economies of of consolidation as a huge opportunity. scale that should benefit franchisees. As “I think it’s a way small operators can smaller, inefficient businesses find the grow their business but still be part of it, if challenge of trading too difficult, the they can’t afford the operating costs.” ability of larger networks to bring these salons into the fold will result in more F R0 5 1 4 _ 0 0 0 _ I ND 1 2 0 1Fancourt 4 - 0 4 says - 2 8the T current 0 9 : 3legislation 6 : 1 3 + 1 0 allows for nurses to perform injectable consolidation across the sector.

Two of the main drivers for industry growth are expected to be higher grooming standards for men and baby boomers seeking to slow the ageing process

s ! t h i g l F Fre e

treatments in clinics without a doctor present. However, he adds, any change to tighten up regulations and require a doctor on the premises would have an impact on the beauty business with increased operational costs for many salons. Fancourt prefers to refer clients to doctors to conduct the treatment off-site. But he is looking at a particular business opportunity that will add flexibility without cost, or liability. “It will be like a sub business, they cover all the professional indemnities and the liabilities are on them,” he explains. certainly getting more enquiries : 0 “We’re 0 for results-based treatments and there »

Are you Interested in an Indian Brothers Franchise? Let us fly you up to show you what all the excitement is about!

Come and see how to run your own Indian Brothers Instant Takeaway Restaurant. Learn from the best in the business with free flights for two to Queensland! * Available to approved applicants only. Can’t be converted to cash. Best price economy airfaire on the day. Offer ends 24 June 2014.

Head office: 37 Dalton Street, Kippa-Ring www.indianbrothers.com.au

Call Mike 0488 777 277

franchising@indianbrothers.com.au

Previous_Dimensions.indd 1

24/4/14 2:20:39 PM

WWW.FRANCHISE.NET.AU

MAY/JUN 2014 FRANCHISING | 53

FR0514_054

2014-05-07T11:45:04+10:00

Opportunities | Beauty

is a greater rate of return than on smaller ticket items; $1000 versus $3000 to $1200 for anti-ageing in the same time scale.” Of course there is a greater investment required to enable salons to offer machinebased treatments and gain the ongoing returns. However Fancourt has a solution to help franchisees with upfront costs. “We’ve worked out a model with suppliers to get finance for equipment purchase. Franchisees pay back over a two to three year period so payments come out of operating capital. We understand the pressures.” The clinic chain typically has a high street presence, with the original outlet in Noosa situated on the street side of a local shopping centre. “I’m keen to explore shopping centres more but there is more for landlords to do, their costs have to be more realistic,” explains Fancourt. “Our model works better on a smaller rent base.” The business has Melbourne in its sights right now. “Our space has greater equipment costs but greater average sale, and needs fewer staff. Typically it takes a day spa six or seven rooms to generate $40,000 a month; we can do the same in three rooms with fewer staff.” Expansion plans for this brand may include India – in a joint venture with the Indian-born Randwick franchisee who sees great potential for the clinic. 54| FRANCHISING MAY/JUN 2014

AUSTRALIAN SKIN CLINICS Anti-ageing treatments are on the rise following the growth of the sector in the US, says Deb Farnworth-Wood, CEO of Australian Skin Clinics. “Definitely the public is incredibly educated about treatment and products, and they expect results,” she says. Anti-ageing salons are no longer hidden away. “We want to look good and feel great, we’re healthier and we want to look good as long as we can.” Male customers are a growing part of the clientele. “Guys are into the laser hair removal and it’s a big market,” she says. “Even in anti-ageing, particularly in the finance world, men don’t want that heavy look, they don’t want to look worried, so they are getting treatment for frown lines. Especially the younger men.” The target market is the everyday person. And the clinic business aims to offer treatments with integrity at an everyday price – from $3.95 for an individual anti-ageing product unit. When it comes to concerns about regulation over medical supervision for certain treatments, she explains that the business has adopted telemedicine techniques for all new clients. A consultation with a doctor is conducted using Skype, and at this point a full medical history is given.

Our space has greater equipment costs but greater average sale, and needs fewer staff

A critical component of the business model is offering robust, ongoing training says Farnworth-Wood. “We are looking for therapists with a business background. We have a very rigorous application process, and the staff are highly trained.” In fact, a new stream of potential WWW.FRANCHISE.NET.AU

franchisees is the associated healthcare professional such as doctors and dentists, looking for a business opportunity. The latest development is the so-called Express model, still offering the same menu of treatments but in a highly visible location and on a walk-in basis that means customers can have a lunchtime procedure. The clinic opened an outlet in the brand new centre in the iconic Emporium building in Melbourne in mid-April. LASER CLINICS AUSTRALIA Ian Houlton, general manager for Laser Clinics Australia explains the market growth observed by the business. “Across each category in our business; skin, laser hair removal and cosmetic injections we are seeing strong growth curves year on year. In the cosmetic injectables category we have seen 83 percent growth year to date, our skin category recently has grown from seven to 10 percent in one month, and laser hair removal remains our core service offering and has started to see growth this year in the male market.” And substantial growth in the skin category is expected with the introduction of a new treatment to focus on key concerns such as stretch marks. In 2014 Laser Clinics Australia aims to double its footprint, expanding interstate to Victoria, South Australia, Queensland and Western Australia. “We are also expanding existing sites in New South Wales to meet customer demand and recently opened our largest clinic in Westfield Eastgardens with nine treatment rooms.” The expansion into major retail locations sits neatly with Westfield’s strategy to capture the service oriented market. Competitive pricing, easy to access locations, and high standards of customer service are points of difference that work to the chain’s favour. “We always ensure we are partnering with the right people that will be working actively within the business, with high standards of customer service “If we have the active franchisee working on the business we see a higher standard of customer service and an uplift in performance which is why it is so important for us to find the right people to partner with to represent our brand.” F

FR0514_000_CAS

2014-03-28T11:42:11+11:00

FR0514_056

2014-05-07T15:16:49+10:00

Opportunities | Kids sports

KIDS SPORT

a winning formula

he kids sports industry is booming as parents seek to educate their children about the importance of leading healthy and active lifestyles, and the franchising industry has embraced the sector with open arms. Overall the sports industry in Australia is a profitable one, and according to IBISWorld’s Sports in Australia industry report the sector grew at an annualised rate of 2.3 percent over the five years to 2012-13. Overall, it expected the industry’s worth would grow by 5.4 percent in 2012-13 to reach $14.7 billion. The report states Australians engage in sport for both entertainment and leisure, and kid’s sports franchises fit this bill – they prove entertaining and leisurely for both the children involved and their proud parents watching from the sidelines. If the report is anything to go by, the industry also generally remains intact during times of economic uncertainty. “Sports in Australia is one of the most widely observed sectors, due to its popularity as a form of both entertainment and leisure. This has been no different over the past five years, with revenue within the sector only negatively affected briefly

56| FRANCHISING MAY/JUN 2014

There has never been a better time to equip children with important life skills, discovers Brea Carter.

during the global financial crisis,” it reads. Most importantly, it is believed the sector will perform particularly well through to 2017-18. The report states: “IBISWorld expects revenue to grow at an annualised rate of 2.7 percent… to reach $16.9 billion.” If you’re looking to invest in a kids sporting franchise, it seems now is the time – and there’s a number of options to choose from.

LITTLE KICKERS Little Kickers was founded by Christine Stanschus in 2002 as a means of achieving the elusive work/life balance, and she began to franchise the concept soon after. “She really struggled with returning to work after the birth of her first child and was passionate about creating a thriving, rewarding business model which offered a fantastic work/life balance for those involved,” explains Dan Kelland, Little Kickers master franchisee for New South Wales and the ACT, and Karen Tannoch-Bland, the company’s Queensland and South Australian master franchisee.

WWW.FRANCHISE.NET.AU

FR0514_057

2014-05-07T11:46:03+10:00

Today the business operates across five continents and approximately 30,000 children aged between 18 months and seven years attend its classes each week. “Our program is very much age specific to allow for maximum enjoyment and learning for each child - we have four distinct age groups,” the pair says. Little Kickers classes operate in line with the company’s motto ‘Play NotPush,’ which means competition is not the focus. “We realise that every child is an individual and through their own Little Kickers experience are able to learn at their own pace in a safe, fun and vibrant group environment. “Rather than running skills and drills, our sessions focus very much on imagination-based play. We find that this is the best way children of this age learn,” adds Kelland and Tannoch-Bland. Little Kickers recruits franchisees based on personality, and they subsequently come from a range of different backgrounds. “A passion for our business is paramount! We look for team players who have excellent customer service skills coupled with the ability to manage a team of coaches day-to-day to ensure

that each and every class is of the best quality,” they explain. “Multi-tasking is another important quality for our franchisees to have along with energy and the ability to deal with whatever challenges come along each day.” The company’s initial training program addresses all the things a new franchisee needs to know to run a Little Kickers franchise. “[It] covers all aspects of running a small business from the accounts side right through to the practical coaching side of the role. We can take as long as required to train up new franchisees as everyone works at a different pace, but it usually takes around one week,” explains the pair. Franchisees can also expect to receive ongoing support from their state master franchisees seven days a week, and the company has recently appointed an international director of coaching. “[The coach] provides support to our network of franchisees and their coaches. This is a role that will change every six to 12 months, allowing a chance for our star coaches to have input into how we can better train our coaching team,” Kelland and Tannoch bland say. »

WWW.FRANCHISE.NET.AU

MAY/JUN 2014 FRANCHISING | 57

FR0514_058

2014-05-07T11:45:04+10:00

Opportunities | Kids sports

KINDY DANCE TIME As its name suggests, Kindy Dance Time specialises in the facilitation of dance-based classes for toddlers and pre-school aged children. “Having been a professional classical ballet dancer and then later a ballet teacher for 10 years, I saw a real need for a preparatory dance program that gives the little ones an enjoyable and strong foundation for dance,” says founder Lara Gandini. The program operates as an alternative to traditional dance schools, which Gandini believes often deliver classes that are too advanced for young children. “The instruction [at traditional dance schools] is usually very demanding and requires children to be fully focused on the technical information given to them and to try and remember sequences. These ‘tiny tot’ type ballet classes typically have no real program or syllabus and are often taught by teenage dance students. In some cases technique that is way too advanced for their little bodies is enforced,” Gandini explains. In contrast, Kindy Dance Time offers a program that is tailored to the needs of young children. “Through its agespecific 30 lesson plan syllabus Kindy Dance Time provides two to five year olds with a fun and solid introduction into the world of dance.” Franchisees take part in an initial four week training program, and ongoing training is in fact compulsory. “The initial traning program covers the Kindy Dance Time syllabus, program and operations depending on the franchisee’s experience and background,” says Gandini. “Ongoing program training is provided once every three months and ongoing training in operations is provided as needed. Full ongoing support is provided by the director, franchise development manager and operations manager.” Kindy Dance Time operates 120 classes across Victoria and Western Australia each week, and it’s currently seeking franchisees as well as master franchisees for specific states. “We are planning to recruit more franchisees in Melbourne and regional areas of Western Australia and Victoria. We have also received interest from people in New South Wales and Queensland, where we are open to looking at master franchisee relationships.” Gandini says the qualities she looks for in a franchisee will vary according to the model they adopt. “If it’s the owner operator model then obviously we are looking for someone with experience in dance, music, performance and/or drama, however franchisees need not have a professional dance background. “This model would suit a parent with children at school as the teaching hours are in the mornings. An aptitude for business is also required; however previous business experience is not necessary. Some customer service experience is desirable,” she explains. Gandini adds people that are interested in a master franchise agreement would definitely need prior business and/or management experience. »

58| FRANCHISING MAY/JUN 2014

WWW.FRANCHISE.NET.AU

FR0314_000_SnapPrinting

2014-02-24T11:41:27+11:00

FR0514_060

2014-05-07T11:45:04+10:00

SOCCER TIME KIDS Soccer Time Kids focuses specifically on developing childrens soccer skills, making it a great fit for people with a passion for the sport. “Soccer Time Kids was established in 2007 and purchased by Football Star Academy earlier this year,” says the brand’s founder and director, Peter Nikolakopoulos. “[The business caters to children] between the ages of one to five years old, and once they turn five they move over to Football Star Academy which caters for children aged between five and 16.” The program operates in line with the government’s Early Years Learning Framework, which according to the Department of Education website: “describes the principles, practices and outcomes that support and enhance young children’s learning from birth to five years of age, as well as their transition to school.” Nikolakopoulos says the program is delivered in a positive learning environment, and children who take part in Soccer Time Kids classes can expect to develop their gross motor, social and cognitive learning skills. “We are all about encouragement and support, which is what underpins our business. It’s not only critical for the children within our programs, it’s also vital for our franchises and

60| FRANCHISING MAY/JUN 2014

potential business owners,” he adds. Training-wise, franchisees undergo a two week induction course in Melbourne prior to entering their new business. “It covers topics such as customer service, health and safety, financial management, record keeping, internal systems, venue selection, local-area marketing and more. “We also have regular scheduled meetings with individual franchisees as well as group franchisee meetings. The director of the business is always willing to take the time out to address and iron out any issues that may arise. Our brand strategy and marketing calendar is communicated to franchisees and assists in brand awareness and ongoing brand development,” explains Nikolakopoulos. Soccer Time Kids is currently seeking ambitious; results orientated people who love teaching children and are passionate about sport to head up their franchises. “We are hoping to launch another five locations by the end of the year and are looking at a couple of national opportunities. “We would tell a potential franchisee that if they were to join Soccer Time Kids they would become part of an ambitious, dynamic and rewarding business that encourages and supports them at every stage of their journey,” says Nikolakopoulos. »

WWW.FRANCHISE.NET.AU

FR0514_061

2014-05-07T11:45:04+10:00

Kids sports | Opportunities

READY STEADY GO KIDS Stuart and Toni Derbyshire purchased the Ready Steady Go Kids (RSGK) business from its creator, a qualified physiotherapist, in 2010 and adopted the franchising model in 2011. “She [the program’s creator] established the business in 2004 and had grown it to about 30 company owned locations nationally,” says Stuart Derbyshire. “Her experience was on the program side. The business had got to a point where she wasn’t able to devote the time or the energy to it, so my wife and I bought the business.” RSGK is designed for children between the ages of two-and-ahalf and seven, and Derbyshire attributes much of the company’s success to the fact that the program delivers on its promise. “It’s science based, it offers variety, it’s non-competitive, it’s an attractive proposition for parents looking to put very young kids into their first sporting experience and it’s about school readiness – the program teaches a lot of concepts that are useful for kids going into school.” Derbyshire says he and his wife run the RSGK business in a very professional manner, and have subsequently developed an extensive support network for franchisees. “We’ve got a solid marketing program and a contact centre that deals with all inbound calls and payments nationally – it can handle probably three times the volume than what we currently have. “Franchisees get the backing of a complete support system that removes the ugly side of the business in terms of the

bookings and merchant facilities and all that sort of stuff – we provide all of those services so our franchisees can focus on local area marketing and delivering great classes,” he adds. Initial training is conducted in Adelaide, and it takes between four and seven days to complete. “It’s program and business based – our team will run franchisees through the entire program and assess them at the end to ensure they’re confident in delivering it.” Franchisees are also familiarised with the company’s cloudbased information portal, which Derbyshire says: “allows franchisees to manage their enrolments, see what’s happening in their classes, access all of their marketing and human resource materials, share ideas with the RSGK network and track their financial performance, in particular their cash flow.” RSGK franchisees have the freedom to incorporate the program into their lives in myriad different ways – they may choose to devote as much as 50 hours a week to the business or treat it as a part-time income. “Because of that flexibility we attract a really broad range of people, so in terms of a typical franchisee there isn’t one – probably the only thing that is constant among all of them is a passion for teaching young children.” Forty-six RSGK franchisees currently head up 84 territories within Australia, and the company has master franchisees in Singapore, the UK and India. “We still want to fill the holes in Australia and I see us expanding to at least another 10 to 15 countries over the course of the next 18 months,” Derbyshire says. »

WWW.FRANCHISE.NET.AU

MAY/JUN 2014 FRANCHISING | 61

FR0514_062

2014-05-07T11:45:04+10:00

Opportunities | Kids sports

BM SPORTS If you’re after a sporting franchise that specialises in a number of different class formats including those that are tailored to children, BM Sports could be for you. “We do kids programs including after-school sports, school holiday programs and birthday parties and we also do personal training, sports club pre-season training camps and curriculum programs in secondary schools,” says founder Bobbie Evans. “This gives the franchisee a lot more flexibility and more ability to generate income for their franchise.” Two key factors prompted Evans, a former classroom teacher, to establish the Melbourne-based franchise in 2008. “The first was the fact that primary schools were not hiring extra physical education teachers to run classes – they would create the lessons and then the classroom teacher took the class. The second was the shortage of reliable sports companies in the area,” he explains. BM Sports caters to both highly skilled children and children that are just starting out, an approach that is reflective of its motto: ‘An innovative sporting company aimed at developing children’s physical education at both remedial and excelled sporting levels.’ “It demonstrates that we are trying to improve each child in an active environment – we want them to become more involved in active lifestyles,” says Evans. When new franchisees join the brand, they attend an initial planning meeting. “It’s held to build the franchisee’s individual marketing and business plan so they get a better understanding of the administration aspect of the franchise.” Once the marketing and business plan is created, training will commence – it covers BM Sports’ programs and equips franchisees with the appropriate qualifications. In terms of ongoing support, Evans facilitates up skilling opportunities for franchisees and a two-day general franchisee meeting is held each year. “BM Sports supports franchisees throughout the entire life of the franchise agreement. We provide professional learning opportunities to help franchisees improve their skills – this may include first aid, business management and other certificates that assist franchisees in becoming better professionals,” says Evans.

Image: Jared Revell

62| FRANCHISING MAY/JUN 2014

BM Sports looks for franchisees that possess the following: • A sporting background • Accountability • Leadership skills • A hard working nature • Good communication skills • Financial management skills • An ability to work in a team Evans also stresses that franchisees are actively involved in the classes their business operates. “One of the first things I say to potential franchisees is that they are expected to be involved in the running of our programs. Involvement by leaders encourages participant involvement, especially when it’s young children.” BM Sports currently operates in south Melbourne and south Sydney, and Evans hopes to bring the brand to at least another four states by the end of 2015. F WWW.FRANCHISE.NET.AU

AF_FRXPRMAY13_RHP

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

Connect with us on

3/04/13 11:37 AM

FR0514_064

2014-05-07T11:45:04+10:00

Opportunities | Safety sector

SAFE

investment

Safety service franchises perform important tasks including the testing of electrical appliances and implementation of floor safety solutions.

$1.2 BILLION

2.8% over the 5 years through 2018-19

5.5% in 2013-14

IBISWorld Occupational Health & Safety Services in Australia industry report forecast

$1.4 BILLION

Looking to the future, the harmonisation of OH&S laws is expected to have a particularly positive impact on the safety services sector. Image: Michael Bevan

heir services are in demand from almost every industry, from construction to healthcare, and this has proved particularly beneficial for the safety services industry during times of economic uncertainty. In its Occupational Health and Safety Services in Australia industry report, market research company IBISWorld forecasts industry revenue will grow at a rate of 5.5 percent in 2013-14 to reach $1.2 billion. Looking to the future, the harmonisation of OH&S laws is expected to have a particularly positive impact on the safety services sector.

64| FRANCHISING MAY/JUN 2014

IBISWorld expects industry revenue will increase at a compound annual rate of 2.8 percent over the five years through 2018-19, to total $1.4 billion. “The growth in revenue will be due to the harmonisation of OH&S regulations across Australia, which will mean that businesses may have to meet new regulations,” the report reads. “Businesses will hire industry service providers to ensure their employees work in safe environments that meet safety laws. This activity will boost industry revenue in the short term. The increase in demand will enable industry firms to widen operating profit margins.” » WWW.FRANCHISE.NET.AU

FR0514_065

2014-05-07T11:45:04+10:00

WWW.FRANCHISE.NET.AU

MAY/JUN 2014 FRANCHISING | 65

FR0514_066

2014-05-07T11:45:04+10:00

Opportunities | Safety sector

APPLIANCE TAGGING SERVICES (ATS) Sarah Allen, ATS’s general manager and co-founder says the business’s fire extinguisher testing arm is a particular growth area, and she outlines what’s expected of franchisees in terms of OH&S laws, as well as the cost of an ATS franchise. What types of safety services does ATS specialise in? ATS franchisees provide electrical safety services including testing and tagging, exit and emergency lighting inspection and testing, safety switch testing and microwave leakage testing. Some franchisees also provide fire extinguisher inspection and testing, which is a rapidly growing area of our business. Who do you primarily lend your services to? ATS’s clients include large national corporations, government agencies, the manufacturing sector, large retail chains and smaller single site operations. Our reporting and management tools are world class and have been designed and developed around the requirements of these clients, giving them unprecedented access to their testing data and reports along with a detailed analysis of their testing history. What are your thoughts surrounding the harmonisation of OH&S laws? The intention of the harmonised OH&S laws was to reduce confusion and compliance costs for businesses operating across state and territory borders. Unfortunately, this has not been the case as the area of electrical safety remains terribly confusing for most organisations. Victoria and Western Australia are yet to take on the harmonised laws, and while Queensland has adopted them, it has stated its Electrical Safety Act and Regulations will take precedence. ATS provides guidance on the legislation applicable to our clients and our franchisees. How do other government regulations affect the state of the business? As ATS operates nationally, franchisees are required to comply with the regulations in the states in which they conduct business. 66| FRANCHISING MAY/JUN 2014

WWW.FRANCHISE.NET.AU

FR0514_067

2014-05-07T11:45:04+10:00

Safety sector | Opportunities

What sets ATS apart from others in the safety sector? Why should someone invest? As the leaders in the electrical safety compliance sector, ATS’s proprietary systems and testing technology enable franchisees to provide the most comprehensive and efficient testing service in Australia. The level of administrative and operational support ATS franchisees receive is also unmatched in the industry.

ATS franchise territories are over 10 times larger than many other test and tag franchise systems

• • •

•

that can be used by both ATS franchisees and their clients; Numerous business development tools for franchisee use; Scheduling, invoicing and data management support; ATS franchise territories are over 10 times larger than many other test and tag franchise systems, which provides ATS franchisees with a huge scope for development; Franchisees receive one-on-one field sales support in their local area.

How do you see the sector in the future? How will you change the business up to remain relevant? ATS’s service offerings and systems change as the requirements of our clients evolve and develop. For example, ATS has recently expanded its service offering to include fire extinguisher inspection and testing in response to repeated client requests for this service. The business’s client base is expanding every day and ATS is subsequently seeking additional franchisees in all states of Australia to service this growing demand.

technical training, ongoing technical support, local area sales support and training as well as access to the company’s latest technology developments. In addition, the ATS support office provides franchisees with a complete administration solution – from scheduling and invoicing work through to debt collection and lead allocation, it eliminates the need for franchisees to complete hours of administration each day. What qualities do you look for in a franchisee? ATS seeks franchisees that have a passion for safety, a friendly and flexible nature, a commitment to exceptional customer service and a desire to grow a profitable and successful business.

How much does an ATS franchise cost? • Application fee - $2,500 + GST • Franchise fee - $26,500 + GST • Training fee - $6,000 + GST • Equipment - $10,000 + GST • Start up stock - $2,000 + GST • Total - $47,000 + GST Franchisees will also need to purchase For potential franchisees we believe a suitable vehicle for business use, which the ATS model offers significant advantypically costs between $18,000 and What kind of training and support do tages over our competitors in that the $35,000 + GST. you provide franchisees? business provides: The franchisee’s vehicle choice Franchisees initially undergo a two • A significant level of national contract needs to be approved by ATS prior to week induction training program in work servicing major networks; commencement and the vehicle should be • FARhighly online 0 9 1 user 3 _ friendly 0 0 0 _ M O N portal 1 2 0Melbourne, 1 3 - 0 8 and - 1 they 6 T 1receive 0 : 4 ongoing 4 : 2 6 + 1 0 : black 0 0 or white in colour. »

Connecting People, Creating Careers

FRANCHISORS Are you looking for top talent for your management team? Please connect with Steve Bianchini at Mondo Direct – The Number 1 Specialists in Franchise Executive Search and Recruitment Tel: 0403 840 996 | Email: steve@mondodirect.com.au WWW.FRANCHISE.NET.AU

MAY/JUN 2014 FRANCHISING | 67

FR0514_068

2014-05-07T15:16:49+10:00

Opportunities | Safety sector

MOBILE TEST ‘N’ CAL Andre Borell, the CEO of Mobile Test ‘n’ Cal discusses the business’s offering, as well as the impact of the changing OH&S laws on the busines and broader industry.

We pride ourselves on our offering, fast turnaround, technical integrity, onsite service and convenience, economical pricing and our friendly customer focused team who deliver desired results

68| FRANCHISING MAY/JUN 2014

What types of safety services does Mobile Test ‘n’ Cal specialise in? Mobile Test ‘n’ Cal Australia Pty Ltd is Australia’s leading provider of onsite services for the testing of electrical safety equipment and the calibration of electrical test and measurement instruments or meters. Who do you primarily lend your services to? Anyone from owner operator, man-in-avan style electricians all the way through to power stations, mines, hospitals, utilities and anyone in between. What are your thoughts surrounding the harmonisation of OH&S laws? HV testing of safety equipment, tools, and working equipment; along with the calibration of electrical test equipment and instruments is not currently governed by a national standard or code of practice. It is instead governed by local state regulations, Acts or guidelines that vary greatly from state to state and often provide little in terms of consistency or methodology

WWW.FRANCHISE.NET.AU

behind what their guidance is based on. Harmonisation therefore has little impact on the business. We are however on a mission to create a national guideline (showing logic behind its recommendations) for our services and are making steady progress. How do other government regulations affect the state of your business? Government regulations require regular high voltage testing of electrical safety equipment, inspection of height safety equipment and calibration of meters and instruments. General OH&S guidelines tell employers they must provide a safe workplace for employees, which also necessitates the use of our service. What sets your business apart from others in the safety sector? Why should someone invest? Prior to us entering the market, testing and calibration was a part of the industry that often frustrated customers due to long lead times, the inability to get bookings for mobile services and exorbitant pricing. We pride ourselves on our offering, fast turnaround, technical integrity, onsite service and convenience, economical pricing and our friendly customer focused team who deliver desired results.

FR0514_069

2014-05-07T11:45:04+10:00

| Opportunities Safety sector 1 2 0 1 3 - 1 2 - 1 0 T1 6 :

F R 0 1 1 4 _ 0 0 0 _ WI S

Wisewould Mahony Lawyers Lawyers in love with Franchising

How do you see the sector in the future? How will your business remain relevant? We have a strategic three-year plan to have a van in every state or territory and have every franchise territory sold and being serviced. This will enable us to offer our service nationally with total geographical reach within Australia. In these three years we will also expand and refine our service offering to handle even more of our clients testing and calibration needs in a more timely manner, while maintaining the highest technical standards we already offer. What kind of training and support do you provide franchisees? Full ongoing technical support is provided and includes training in new procedures as required. Initial training is an intensive two-week course with 10 units of competency. What qualities do you look for in a franchisee? Business acumen, technical competence and a customer service focused mindset are the keys to success with our franchise. How much does a franchise cost ? Its $220,000 + GST and includes all training, assets and equipment. Âť

FRANCHISE SPECIALISTS Call for a complimentary guide to Franchising:

Dispute Resolution, Mediation/Solutions & Strategies, Franchisee reports and assessments, Master Franchisee agreements, International Franchising Employment 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: Robert Toth t: +61 3 9612 7297 e: robert.toth@wisemah.com.au

WWW.FRANCHISE.NET.AU

MAY/JUN 2014 FRANCHISING | 69

2 5 : 3 6 + 1

FR0514_070

2014-05-07T11:45:04+10:00

Opportunities | Safety sector

JIM’S TEST & TAG The Jim’s group encompasses service franchises that specialise in everything from mowing and pool cleaning to conveyancing and safety services - and the latter is bursting with opportunity. James Jacka, the divisonal manager of Jim’s Test & Tag talks about the business, the influence of external factors such as government regulations on its performance and the training and support it offers franchisees. What types of safety services does Jim’s Test & Tag specialise in? • Testing and tagging of electrical appliances • Scheduled emergency and exit light testing (bi-yearly inspection) • Scheduled portable fire equipment – fire extinguishers, hose reels and fire blankets • First aid kit supply and top ups. Who do you primarily lend your services to? With almost 200 franchisees across Australia and New Zealand, our customers range from businesses with one to 40,000 employees. What are your thoughts surrounding the harmonisation of OH&S laws? Harmonisation has provided clearer guidelines and penalties across more states than ever before. How do other government regulations affect the state of Jim’s Test & Tag? With representation across all states and territories of Australia and New Zealand; the variation in safety based legislation can confuse the end user and blur the intent behind safety.

70| FRANCHISING MAY/JUN 2014

WWW.FRANCHISE.NET.AU

FR0514_071

2014-05-07T15:47:57+10:00

Safety sector | Opportunities

What sets Jim’s Test & Tag apart from others in the safety sector? Why should someone invest? • It’s a nationally recognised brand; • We offer a robust franchise agreement; • We have quality and safety certification; • Franchisees receive local support through their franchisor; • We offer robust training and manuals for all areas of the business; • There’s a variation in our service offering; • We use the latest software and equipment to assist clients in running their small business. How do you see the sector in the future? How will you change the business up to remain relevant? Safety is an evolving sector that continues to see growth. Jim’s Test & Tag will continously improve its technology to assist franchisees at a local level. F R0 9 1 3 _ 0 8 5 _ RED

What kind of training and support do you provide franchisees? • A four-week induction training program; • Locally based franchisor training to assist in the development of the business; • Ongoing professional development through online learning; • Regional face-to-face meetings with ongoing learning opportunities; • Annual conferences with fantastic content and the ability to share experiences with other franchisees and franchisors. What do you look for in a franchisee? People with the ability to develop relationships, who are motivated and have clear objectives to achieve the wealth and lifestyle balance they are striving for. »

Safety is an evolving sector that continues to see growth. Jim’s Test & Tag will continously improve its technology to assist franchisees at a local level

2 0 1 3 - 0 8 - 1 3 T1 0 : 2 7 : 0 7 + 1 0 : 0 0

WWW.FRANCHISE.NET.AU

MAY/JUN 2014 FRANCHISING | 71

FR0913_079_MES

Job15565 FPC Ad 9(c) final.indd 1

2013-08-13T09:48:42+10:00

7/08/2013 10:31:34 AM

FR0514_073

2014-05-07T11:45:04+10:00

Safety sector | Opportunities

GRIP GUARD It’s vital that floor surfaces are safe and slip-free, particularly in workplaces and other areas where OH&S compliance is paramount, which is why safety business Grip Guard is faring particularly well. Patricia Simmons, the marketing director at Grip Guard non-slip took the Franchising Q&A. What types of safety services does Grip Guard specialise in? A range of floor safety solutions including: • Non-slip floor treatments • Anti-slip floor coatings • Stair nosings • Non-slip tapes Who do you primarily lend your services to? Facility managers, aged care facilities, healthcare facilities, schools, office buildings and residential facilities. What are your thoughts surrounding the harmonisation of OH&S laws? We would be pleased to see a harmonisation of OH&S laws as Grip Guard is continually asked to help businesses meet Australian Standards. What sets your business apart from others in the safety sector? Why should someone invest? Grip Guard is in the fortunate position to provide products and services that help businesses to meet their duty of care and avoid litigation. Grip Guard’s safety initiatives are not an optional extra but a necessity for businesses in their bid to protect their most valuable assets – their staff and clients. How do you see the sector in the future? How will you change the business up to remain relevant? Grip Guard continues their research and development so that they can continue to offer the most up-to-date floor and stair safety initiatives. We strive to expand further into regional areas so that all Australians have access to the most technologically advanced safety services.

What kind of training and support do you provide licensees? Grip Guard provides a three-day training program followed by 24 hour support to its licensees. Grip Guard also undertakes a national marketing program with all enquiries passed to our licensees in the field. What qualities do you look for in a licensee? Our ideal licensee is organised, thorough, personable, prompt, courteous and has a great attention to detail. How much will someone need to invest? $25,000 + GST. F

WWW.FRANCHISE.NET.AU

MAY/JUN 2014 FRANCHISING | 73

F FR0514_074R R F0 R5 01 54 1_ 40 _0 00 0_ 0R _F -RGFA 2G 2 A2014-05-08T13:38:11+10:00 2- -2 22 0 21 04 1- 40 -4 0- 42 -2 2T 21 T0 1: 02 :0 2: 02 :9 2+ 91 +0 1: 00 :0 0 0

FR0514_075R

2014-05-08T13:41:47+10:00

FR0514_076

2014-05-07T16:07:18+10:00

Opportunities | Market trends

Investing in

THE future What are the top growth sectors in Australia for the next two decades? Sarah Stowe reports

76| FRANCHISING MAY/JUN 2014

WWW.FRANCHISE.NET.AU

FR0514_077

2014-05-07T16:07:18+10:00

Market trends | Opportunities

Image: Samantha-Leigh Photography (top right)

he latest report in the series Building the Lucky Country from Deloitte highlights upcoming sectors that have potential to grow significantly in Australia and give the country an edge in the global arena. It puts its Fantastic Five in the spotlight: gas, agribusiness, tourism, international education and wealth management. Positioning for prosperity? Catching the next wave suggests that Australia will be the fastest-growing developed Western nation in the next few years. The report points out though that this is not the same as saying Australian growth rates will accelerate. “Deloitte (along with the Federal Treasury), believes that the longer term growth of the economy will be more modest than the rates recorded over the past two recession-free decades.” What will have an effect on growth is the retirement of the baby boomers. But for anyone looking for what will boom across the country in the future, the so-called Local Heroes include the services around, and demands of, an ageing population. Think the obvious: residential aged care, preventative health and wellness, retirement living and leisure, community and personal care. Then think of the other services which sit in the ‘megatrend’ of an ageing demographic: financing the future, the digital delivery of health, reskilling an ageing workforce, and parcel delivery. »

AMC Commercial Cleaning was founded in 1988 and has more than 600 franchises across Australia; last year 60 franchisees joined the network. It has an estimated 11 percent market share. The five year plan is for a doubling of the turnover, currently $47 million - last year the business saw growth of $10 million. The managing director, Joanna Pycinska, is confident in the potential for the $4.3 billion industry and AMC in particular, as it looks to expand its footprint through organic growth and acquisition. She also agrees with the findings of a recent report* on the cleaning sector which indicated increasing competition. “The main challenge is a highly competitive market, a low entry level and low level of skills,” she says. “The reason for our target market [commercial cleaning] is that we know this is a differentiator for us and it enables us to be more competitive. Some customers offer bundles but we believe in focusing on our original target.” Growing the partnerships with customers and franchisees is paramount and will come about through improving the performance levels within the system, she says. “Our objective is to help franchisees do a better job, then they will retain customers and we will retain the franchisees who are happy with the outcomes.” A greater awareness of environmental issues, and the use of technology and equipment to deal with the challenges, is increasingly part of the cleaning business arena, says Pycinska. * Commercial Cleaning Services in Australia December 2013, IbisWorld

WWW.FRANCHISE.NET.AU

MAY/JUN 2014 FRANCHISING | 77

FR0514_078

2014-05-07T11:45:04+10:00

Opportunities | Market trends

BUSINESS OPPORTUNITIES Busy Australians are looking for time-saving services. So community and personal care - the domestic services, dog walkers, personal shopping services - are set to grow by 4.79 percent, says Deloitte. Enabling these older Australians to stay in work and deal with the challenges of rapid technological change will require reskilling and education - another opportunity. Australians will be at risk of outliving their savings, while at the same time banks, super funds and new financial services providers will look to maximise the assets of the wealthier retirees. There is a host of opportunities around products that will service both elements of the ageing population. Retirement living and leisure is another attractive proposition. According to the report, the baby boomers have invested in property and shares, and are now financially set-up. “Those who retire in the next two decades will, on average, have funds available on a scale never before seen in Australia. At the same time, the coming wave of retirements among baby boomers will be large, and will come with more ambitious expectations of their retirement years than previous generations,” the report suggests. Seventy-five will be the new 55, the report suggests, and retirement facilities will become increasingly luxurious. While there has been a boom in at-home care, residential aged care will prove to be a boom business, but it’s the slow burner, with the peak years of the baby boomers entering nursing homes more than a decade away. But the preventative health and wellness sector is set to see the greatest growth over the next 20 years, according to the report. The potential reaches across the industry, from those organisations helping to address risk factors such as smoking and weight issues, anything helping people lead more active lives (vitamins, remedial massage, Pilates for instance) through to diagnostic centres and allied health professionals (optometry, dentistry, pharmacy, physiotherapy).

CASE STUDY: HEALTH AND WELLNESS Jason Smith, founder of physiotherapy business Back in Motion, can identify with the massive growth in the preventative health and wellness sector. “We totally concur with the report, in fact

DELIVERING OPPORTUNITY Parcel delivery has potential too: convenience and cost the key consumer drivers for this business arena. The report indicates Australia Post has delivered 9.3 percent more parcels domestically in the 2012-13 financial year, while growth has been seen at Fastway Couriers too; the company’s comparative growth figure for 2012-2013 is 13 percent. What else? Honourable mentions go to: waste management, building homes and infrastructure suited to an ageing population.

78| FRANCHISING MAY/JUN 2014

WWW.FRANCHISE.NET.AU

FR0514_079

2014-05-07T11:45:04+10:00

Market trends | Opportunities

these trends have been alive for us for about five years,” he says. health services in particular: osteopaths, dietitians, podiatrists, There is an aggressive growth plan for the wellness-focused exercise physiologists and sports and clinical psychologists. business: it needs 57 more outlets over three years to reach its “All these services are a complementary, adjunctive fit to target of 100 clinics across seven states. preventive health care,” Smith says. Smith believes Back in Motion has a huge competitive, and His first thought is that bringing these services into a franthe first mover, advantage because of the size and scale of the chise network will mean adding the businesses on a one-by-one network but he is predicting consolidation and more corporate basis, incorporating them into the existing brand. entities in the sector. In addition to the advantage of capturing new business While the business model has traditionally provided a route arenas before any other network has the capabilities and scale to for physiotherapists to tag on to the brand and become part of do so, extending the services suits the clients too and provides the franchise model with all its benefits, it is now opening up to economies of scale. non-health practitioners. “The health consumer will get benefits. We know the clients The major effort in attracting practitioners to the business need our services, and they will get more value for money, and has been focused in metro Sydney areas, and Smith is confident they are more likely to give their loyalty.” this will pay off and provide the dominant growth for the brand In addition to clinic-based services, Back in Motion is taking in the next 12 months. There is also a launch scheduled in Perth. its wellness philosophy out into the community. But as the business expands around the country there is a One program particularly designed for the ageing populadanger: patient care and quality control are the major challenges tion is gaining a lot of traction, Smith says, although it is only as the brand develops. Victoria-based right now. Revita, an aged care service, will “As we pursue explosive growth, the challenge is how we can be rolled out nationally over the next 30 months following an keep the alignment in the services industry. Our point of differagreement with aged care service operators. ence is preventative, integrative physiotherapy and our philosoThen there is the Actif initiative, run as a separate business, phy is counter to most others. The danger is that we dilute as we which provides support for workplace occupational health and grow,” he explains. safety. Currently operating in Victoria and South Australia, Other areas of preventive health remain untapped as franthere will be activity interstate, Smith says, which will put the F R0 1 1 4 _ 0 0 0 _ AUT 1 2 0 1 3 - 1 1 - 1 9 T1 7 : 0 8 : 4 6 + 1 1 : 0 0 chised businesses, Smith says and he is eyeing up five allied brand in the number one position in the private market. F

Motor into your next adventure

We kn w how to get you there.

Franchises Available Now!

• Automotive retail market continually growing • Established in 1985 and the largest independently owned automotive parts and accessory retailer in Australia • 100 Plus stores providing strong brand recognition • Great buying power, exclusive products & centralised distribution centre • Extensive franchise system training and support • SEVERAL NEW STORE FRANCHISE

OPPORTUNITIES AVAILABLE NOW!

For further information call now

1300 550 155

or go to autobarn.com.au

WWW.FRANCHISE.NET.AU

MAY/JUN 2014 FRANCHISING | 79

FR0514_080

2014-05-07T11:47:16+10:00

Issues | Training

Should franchisees pay for their

TRAINING? When you invest in a franchise will you be paying extra for the training you need?

80| FRANCHISING MAY/JUN 2014

WWW.FRANCHISE.NET.AU

FR0514_081

2014-05-07T11:47:16+10:00

ne of the attractions of a franchise system for a new recruit is the promise of training that not only helps franchisees set up and understand the operating structure of their business, but guides them in building a strong, wealth creating enterprise. But should franchisees have to pay for their training separately from the franchise fee, or can training be considered an essential part of the ‘all-inclusive’ business package? Vivienne Beech, the Gold Coast franchisor of Resort Room Coffee, says “Personally I feel franchisees take more responsibility for learning systems and implementing them and the role they play in getting results when they pay for the training and a value has been placed on this training.” But could a franchisee justifiably feel they are paying extra for something that

should be integral in the franchise fee? “It may depend on the cost of the franchise, the higher the cost the more they may want it all included,” says Beech. Ray Margiano, CEO and founder of Balance Walking and the international franchise chain Foot Solutions, suggests there should be no hidden cost in a franchise fee. “I believe that the cost of training on an ongoing support basis should be a cost covered by the franchisor. That is why they get a continuing royalty and upfront fee. There is not a concept out there that cannot be copied or closely duplicated, so there has to be real value in why a person chooses a franchisor. Training is a key factor in the success of any business and certainly is critical for people entering a field they know nothing about.” Full House Group licensee Tracy Richardson says “I believe start-up training should definitely be included in the cost of the franchise. This is what WWW.FRANCHISE.NET.AU

a franchisee purchases: a proven business model that they need to learn and understand. This, to me, is definitely part of the purchase.” Richardson, who operates her license in the Sydney area, believes that ongoing training should also be included but the inclusive packages shouldn’t extend to specialist skills training. Kate Groom, co-founder of SmartFranchise, says that to offer the training needed these days, franchisors must pass on some of the costs directly to franchisees rather than hoping they will recover them through increased revenue. “My experience is it’s entirely possible and reasonable for franchisees to pay directly for training that benefits their business. I believe it’s also vital for franchisors to encourage franchisees to participate in external training if they are to get the type of development and fresh perspectives that’s needed to stay ahead.” » MAY/JUN 2014 FRANCHISING | 81

FR0514_082

ails – 03 9413 1400 unitedpetroleum.com.au

2014-05-07T11:47:16+10:00

Issues | Training

CASE STUDY: POOLWERX Training is included in the total entry fee to join the Poolwerx system and it’s costed so franchisees can account for it appropriately in their first year of business says Ian Jenkins, PoolWerx learning and development manager.

Q: What about the costs of ongoing education? Franchise-specific training is provided throughout the year as part of the overall offering at no extra cost. This includes access to Pool School, Winter Workshops, online training modules, one-on-one field training with field staff and technical advisors. Product-specific training is also offered during monthly business meetings and via online modules as and when products are brought to market. “We also have an annual three day convention in August which is arguably the biggest information sharing and learning opportunity for our entire network. The fee for attending these events is subsidised by half through utilising our partners and suppliers.” Federal Government funding has been sourced to help franchisees undertaking the industry’s new qualifications, Certificate III and Certificate IV in Swimming Pool and Spa Care Service.

Q. Has the amount of training provided increased in recent years? “Yes, particularly around our specialist CRM software – Evosus,” says Jenkins. “This entails one-on-one training sessions, live group webinars, recorded training videos, onsite training and involvement at business meetings – all at no additional cost. Training manuals are shared with franchise partners and staff for further instructions on how to use the system.” The Datamate water testing software was recently introduced to the network with training delivered through the retail executive and supplier. “We also have a variety of digital online marketing platforms that help make LAM easier. To support this, we have a free online learning management platform to aid in the management of this important part of our franchise partners’ businesses.” F

Q: How much time is spent on training in the beginning? New franchisees undertake a three week training program at the recently opened world class Global Support Centre. Known as Pool School, this program offers everything from practical and technical training in pool maintenance through to retail training in sales techniques, merchandising and POS management, and formal business skills training. Following this, the company offers 16 hours of online self-paced pre-learning as part of its Forming Good Habits program in the first few months of trading: this also includes field visits from the business development FR 0 1 1 4 _ 0manager. 0 0 _ UNI 1 2 0 1 3 - 1 1 - 1 5 T1 2 : 0 9 : 5 6 + 1 1 : 0 0

Fuel your future with a

Franchise

When you decide to become a United Franchisee you are choosing one of Australia’s largest independent petrol and convenience retails. CANSTAR WINNER “MOST SATISFIED CUSTOMERS” FOR 3 YEARS IN A ROW! Be your own boss Tenure: 12 years (2 x 6 years) ROI: Generous Fuel Commissions Support: National promotional program Training: 4 week induction Contact details – 03 9413 1400 franchiseinfo@unitedpetroleum.com.au | www.unitedpetroleum.com.au

2011

2012

2013

82| FRANCHISING MAY/JUN 2014

WWW.FRANCHISE.NET.AU

FR0114_000_JIM

2013-11-27T16:44:29+11:00

“Take Control Of Your Life & Build a Future for Yourself”

8 weeks paid training ($1000 per week) Ongoing Training and support Plentiful Work Leads As a former furniture/cabinet maker, Danny was confident ‘on the tools’ and found the transition to fencing quite easy. However as he had never owned his own business before, he knew he would find the administration and sales side a challenge, so the 8 Week Paid training program was definitely an influencing factor in his decision to buy. “The time was right and I wanted to work for myself,” Danny said. “During the training period as well as learning the practical, hands on side of it, I learned I needed to know to set up the business and develop my sales skills before I went out in the field.” “From a hands-on point of view, learning the different techniques used when building different types and styles of fences was very important. The trainer I had was extremely supportive, knowledgeable and very helpful.” Danny Frood – Jim’s Fencing (Blackburn)

Find out about becoming a Jim’s Fencing business owner today

131 546

www.jimsfencing.net

FR0514_084

2014-05-07T11:47:16+10:00

Issues | Code of conduct

WHAT ARE THE HIGHLIGHTS? • Ensuring franchisees and franchisors act in good faith in their dealings with each other • Introducing penalties for a breach of certain provisions of the Franchising Code • Improving the transparency of marketing funds • Improving disclosure including short form, easy to understand information for prospective franchisees. The 2013 Review The result of the review was a list of 18 recommendations that deal with disclosure, franchisor failure, transparency of financial information in a franchise, good faith, transfer, renewal or end of a franchise agreement, dispute resolution and enforcement. The Minister says “The wide spectrum of views which informed the review and consultation process has meant that the impacts of the reforms have been thoroughly explored. The draft regulations and draft bill contain the entirety of the Government’s changes to the Code following the review. Broadly, the Government’s changes address the issues identified in the review report.” The Government has made “a concerted

84| FRANCHISING MAY/JUN 2014

effort to reduce the compliance burden on franchisors and franchisees”, Billson says. The Government outlined the changes in The Future of Franchising document. LEGAL COMMENT Lawyers Jane Garber and Ilya Furman of Franchise Legal write… “This is the first time since the introduction of the Code in 1998 that the Government has made a real attempt at addressing many debated areas in franchising previously not clearly (or not at all) dealt with by the Code. “The proposed changes cover a broad range of issues, from introduction of an obligation of parties to act in good faith to the introduction of civil penalties for serious breaches of the Code by franchisors of up to $51,000. “The obligation to act in good faith, which has been lobbied for by many players in the franchise industry, will require parties to act honestly and to cooperate to achieve the purpose of the franchise agreement. This obligation cannot be excluded by agreement of the parties and it does not in any way limit the application of good faith obligations under common law. “Under the new-look Code franchisors will be required to provide to all franchisees a short information sheet that contains an overview of the risks and rewards of franchising, the importance of education and conducting due diligence, information on unforeseen capital expenditure and the prospect of franchisor failure. This will be provided before disclosure. “The changes attempt to streamline the information provided to prospective and current franchisees and require an even greater detail of disclosure from franchisors than before. “The amendments to the Code remove unnecessary information, such as the duplication of information provided to a sub franchisee by the master franchisee and the franchisor which means that franchisees in multi-tier franchise systems will receive one combined disclosure document rather than separate documents which are largely repetitive in content. “The Code will allow the ACCC to use its audit powers to obtain documents that the franchisor has relied upon to support statements and claims made in their disclosure document. This means that the franchisors will have a much more stringent requirement to keep records and information in the future.” »

WWW.FRANCHISE.NET.AU

All images: Thinkstock - Peerayot

he franchise industry is currently regulated by the Franchising Code of Conduct under the Competition and Consumer Act 2010. The Code was reviewed last year by Alan Wein, an experienced mediator for the Office for the Franchising Mediation Adviser, and as part of this review received input from franchisees, franchisors, lawyers, academics and industry associations. He made several recommendations to remove the red tape and improve the overall performance of the Code. Following these recommendations, the Federal Government has proposed franchising policy reforms. Small business is a vital part of Australia’s economy, the Hon Bruce Billson MP Minister for Small Business, writes in his introduction to the Franchising Code of Conduct reforms: The Future of Franchising. “We want to promote growth in the sector, reduce red tape and make sure that all participants in the industry follow best practice principles. The Government is also committed to guard against separate and additional state regulation to maintain a consistent national framework,” he says.

FR0514_085

2014-05-07T11:47:16+10:00

Code of conduct | Issues

RINGING IN

WWW.FRANCHISE.NET.AU

the changes

The major legislation that governs the franchising sector is facing some amendments. Find out whatâ&#x20AC;&#x2122;s new here.

MAY/JUN 2014 FRANCHISING | 85

FR0514_086

2014-05-07T16:03:08+10:00

Issues | Code of conduct

15 KEY POINTS There are some significant reforms proposed for the franchise industry, writes lawyer Felix McKnight, Legal Vision. Proposal #1 – Reduce franchise red tape The Government proposes to: 1. Reduce the length and complexity of the franchise disclosure document. How? By removing the disclosure obligations in relation to the summarising provisions 2. Remove the compliance burden currently imposed on master franchisers. How? Master franchisors will no longer need to comply with disclosure requirements for sub-franchisees, as disclosure would have already been made to franchisees 3. Accept electronic documentation signatures 4. Amend the Code to increase consistency of practice in the franchise industry. Proposal #2 – Improve availability of information for franchisees The Government intends to increase availability of information to franchisees by: 5. Introducing an information sheet. Franchisors will be required to provide franchisees with an information sheet detailing the risks and rewards of owning a franchise business. The goal is to encourage franchisees to conduct a more thorough due diligence process before becoming contractually bound and financially committed. 6. Requiring disclosure about online activity. Franchisors will be required to disclose online trading activities, the territory to which online sales may be supplied, and how this could impact on franchisees and increasing disclosure and protection about marketing expenses. Franchisors will be required to disclose the types of expenses that marketing funds are being used for, and maintain a separate bank account for the franchisees’ marketing contributions. Proposal #3 – Address the imbalance between the franchisor and franchisee The Government seeks to address the imbalance between the franchisor and franchisee in the following areas: 7. Dispute resolution: preventing franchisors from attributing costs of dispute resolution

86| FRANCHISING MAY/JUN 2014

WWW.FRANCHISE.NET.AU

to franchisees. This can act as a disincentive for franchisees to raise concerns 8. Capital expenditure: enhancing protections for franchisees in preventing franchisors from imposing significant capital expenditure unless it is disclosed in the franchisee agreement, a majority of franchisees agree, or is necessary expenditure justified by a statement by the franchisor 9. Restraints of trade: preventing franchisors from unreasonably imposing restraints of trade. Restraints may be rendered invalid in some circumstances 10. Contributions: ensuring that franchises owned by the franchisor also contribute to the system’s marketing and other funds. Proposal #4 – Improve franchisor and franchisee conduct The Government intends to address questionable conduct of both franchisors and franchisees by: 11. Introducing a duty for each party to act in good faith, i.e. to act honestly and cooperatively, in the event of any further discussions, negotiations or disputes in relation to the agreement or throughout the term 12. Introducing civil pecuniary penalties of up to $51,000 for serious breaches of the Code 13. Allowing the ACCC to utilise audit powers to obtain documents that the franchisor relies upon in their disclosure document 14. Giving the ACCC power to issue infringement notices of up to $8,500 without court action 15. Preventing franchisors from interfering in communications between ex and prospective franchisees. Franchising is a significant part of the Australian economy. Franchises employ hundreds of thousands of Australians and provide accessibility to popular brands and chain stores. The Federal Government is demonstrating its commitment to assisting the growth of the franchising industry with these proposed reforms. These policy reforms are expected to take place from 1 January 2015. F Read what our regular columnist Professor Andrew Terry of the University of Sydney makes of these proposals – turn to page 118.

FR0514_000_NFIB

2014-04-15T15:49:33+10:00

WE CAN SEE THE FUTURE OF YOUR BUSINESS. YOU ARE ABOUT TO SAVE MONEY ON INSURANCE. anks to NFIB, the futureâ&#x20AC;&#x2122;s looking extremely good as far as your franchised business insurance costs are concerned. anks to our highly simplified online system together with our reduced premiums, we are fast becoming the preferred insurance provider for Australian franchised businesses.

To find out how you can insure your franchised business in just four clicks of a mouse, speak to Brad Dixon today on 1800 776 747 or email info@mynfib.com.au

MYNFIB.COM.AU National Franchise Insurance Brokers Pty Ltd is an authorised representative (ARLN 277977) of LTM Group Pty Ltd (AFSLN 245374)

NFI085FRANCHISINGMAGAZINE

FR0514_088

2014-05-07T11:47:16+10:00

Issues | Franchisee satisfaction

GRATITUDE

the

Image: Thinkstock - alphaspirit

you need to know equation/ What about franchisee satisfaction.

88| FRANCHISING MAY/JUN 2014

WWW.FRANCHISE.NET.AU

Franchisee satisfaction | Issues

ratitude in the franchise relationship can lead to greater satisfaction rates among franchisees. That’s according to research from the Asia-Pacific Centre of Franchising Excellence at Griffith University. Franchisors who show a co-operative approach to building the franchise business will encourage a sense of gratitude among franchisees, the report indicates. Studies on gratitude have previously looked at how businesses inspire gratitude in consumers; this is the first survey which looks at a contractual setting. Centre deputy director and Griffith University Associate Professor, Scott Weaven, says “The research reveals franchisees rate gratitude up there with trust and commitment as being important factors in franchising relationships. “Franchisees become grateful for behaviours they believe to be motivated by the franchisor’s desire to promote franchise system success, regardless of whether these behaviours are contractually mandated. F R 3 9 3 1 _ T u r n e r F r e e ma For instance, additional meetings,

if they are seen to be worthwhile, can engender a positive response from franchisees while franchisors who empower franchisees to give feedback on new initiatives reap the results. However, says Weaven, “Elements of the franchise relationship, such as paying royalties or local area marketing spend, work against gratitude and may produce feelings of obligation rather than gratitude.”

THE KEY IS GRATITUDE NOT INDEBTEDNESS “The key to gratitude is the effort must not be perceived as the result of a role-based relationship or contract, which exists in franchising,” Weaven adds. “There is a difference between gratitude and a feeling of indebtedness, so if franchisors do their best to foster gratitude in franchisees it will produce more satisfied franchisees.”

• They work well with their franchisor and the relationship is fair and respectful • They are working with their franchisor rather than working for them • Flexibility in the franchise relationship and the franchisee’s belief in a flexible franchise relationship • Their franchisor is willing to set aside contractual terms in an effort to adapt within dynamic business environments, where appropriate • Their franchisor is not taking advantage of their power at the franchisee’s expense • Their franchisor promotes equity and fairness in the franchising relationship, despite having the ability to take advantage of their less powerful franchisees.

Associate Professor Weaven co-authored the report with Researcher Professor Rajiv Dant – in partnership with Brent Baker from the University of North RESEARCH RESULTS Dakota. Weaven says “We think franchisThe Centre’s research found franchisees ing is all about sticking to the rules but 1 2 0 1 4 - 0 4 - 1 7 T1 1 : 5 7 : 3 6 + 1 0 : 0 0 feel grateful when: it’s also about going above and beyond.” F

Moving

forward

in franchising

For over 15 years our Franchise Law Partner, Bill Morgan, has successfully represented clients in franchise disputes and advised on franchise agreements and issues in respect of franchises located throughout Australia. He delivers an exceptional service that is cost effective. Turner Freeman Lawyers is a proud member of the FCA.

1800 683 928 | www.tfqlawyers.com.au WWW.FRANCHISE.NET.AU

MAY/JUN 2014 FRANCHISING | 89

FR0514_ads

2014-04-29T10:15:07+10:00

FR0514_ads

2014-04-29T10:18:57+10:00

FR0514_092

2014-05-07T12:05:40+10:00

What to look for in a

SYSTEM

FRANCHISORâ&#x20AC;&#x2122;S

SUPPLY

Image: Thinkstock - tetmc

Franchisors often require franchisees to purchase goods or services from nominated suppliers, which is usually perfectly justifiable on the basis of product uniformity and consistency.

92| FRANCHISING MAY/JUN 2014

WWW.FRANCHISE.NET.AU

FR0514_093

2014-05-07T12:05:40+10:00

Supply chain | How to...

here are, however, a number of challenges in creating supply arrangements that benefit all involved.

1. HOW MUCH CONTROL WILL THE FRANCHISOR HAVE? First, you should understand the level of control a franchisor purports to exercise over your supply arrangements. Third Line Forcing and the Competition and Consumer Act (“the Act”) A franchisor that requires franchisees to purchase goods or services exclusively from a particular supplier or a list of nominated suppliers may be engaging in what is commonly referred to as “third line forcing”. Third line forcing is prohibited outright by the Act irrespective of its effect on competition. However, a franchisor may lodge a notification with the Australian Competition and Consumer Commission (ACCC) which provides it with protection from legal action under the Act. In the notification, the franchisor must demonstrate the public benefits and detriments of the proposed exclusive dealing arrangement and show that, overall, the arrangement has benefits to franchisees and customers of the franchise substantially F R 0 3system 1 4 _ 0without 0 0 _ N OO 1 lessening competition.

When advising prospective franchisees, we usually search the ACCC’s public register of notifications to see whether the franchisor has put in place exclusive supply arrangements.

2. CAN REBATES BE ETHICAL?

will deliver the best value for franchisees. Often, rebates increase the cost of goods or services that the franchisees are required to buy, which is actually the opposite effect sought to be achieved. Evaluating whether or not a particular supply arrangement is beneficial to a franchisee can be difficult. We advise our clients to: 1. Speak to existing franchisees to work out whether they are happy with the price, quality and service provided by nominated suppliers. 2. Obtain the suppliers price lists and compare such price lists with those of competitors and the competitors prices. 3. Check the relevant sections of the disclosure document, franchise agreement and operations manual to determine, if possible, the extent of the particular supply arrangement. Exclusive supply arrangements should deliver benefits to the whole franchise system. So, despite franchisors reaping the financial rewards from receiving rebates, the benefits to franchisees should outweigh the terms otherwise available to a franchisee independently of the group. If done right, both franchisor and franchisee can make more money from well-negotiated supply systems. F

Some franchisors may enter into arrangements where a nominated supplier will provide the franchisor with a rebate payment when franchisees purchase goods or services from that supplier. There is generally no legal prohibition on franchisors to enter into rebate arrangements with suppliers, provided the rebates are disclosed to franchisees. The Franchising Code of Conduct requires franchisors to disclose whether they will receive a rebate, the name of the supplier providing the rebate, and whether such rebate is shared with franchisees. There is no requirement for franchisors to share the rebate(s) received with their franchisees, although many franchisors choose to do so by adding the rebates received to the marketing fund. There is no requirement for franchisors to disclose the amount of rebate received or how it is calculated. Many franchisees genuinely feel hard done by franchisors who select a supplier due to the expected value it will 2 0receive 1 4 - through 0 2 - 2 the 0 T rebates, 1 4 : 1rather 3 : 0 than 1 + 1 1 : Ilya 0 0Furman and Jane Garber are franchise by having regard to whether the supplier law professionals at Franchise Legal.

Do you fit the box?

WANTED! NEW FRANCHISE PARTNERS AUSTRALIA WIDE

WHAT CAN WE OFFER YOU? Australia’s largest noodle based franchise chain Dedicated Franchise Support Centre team with focus on profitable development National & local area marketing campaign support Full training in-restaurant & in our purpose built training centre Innovative & exciting new restaurant design Australian owned Competitive capital entry level Successful business model for sustainable growth International expansion

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.

WWW.FRANCHISE.NET.AU

MAY/JUN 2014 FRANCHISING | 93

FR0514_094

2014-05-07T12:05:40+10:00

Image: Thinkstock - duron123

How to... | Business plan

PLAN

FOR YOUR

SUCCESS

The six key elements of a business plan. By Andrew Graham

ne of the biggest causes of failure for any venture is a lack of planning and preparation. A good business plan can help you strategise, manage and navigate your new endeavour by detailing how you will achieve your business goals. A business plan is essential for any company; no matter what the size, industry or location. A good plan serves as a blueprint for the business: it identifies where the company wants to be in the future and outlines the steps required to get there. A business plan is also a good indicator of the company’s potential for success as it helps potential investors and partners understand the organisation’s strategy and direction. Some industries also face increased scrutiny from government and financial institutions. Banks require a high quality of management reporting and strategic planning to support funding applications and reviews. A solid business plan is considered critical in both obtaining and meeting financing requirements, which is essential for franchisees looking to start their business. All business owners should consider completing regular business plans that are updated as market and economic conditions change to ensure they have the right strategies in place for success. Writing a business plan is a crucial first step when starting a business. However, it is just as important to keep

94| FRANCHISING MAY/JUN 2014

the plan up to date. It will need to be revised often to continually adapt to rapidly changing business conditions.

WHY A BUSINESS PLAN HELPS Writing a business plan is beneficial in helping you: • Learn about the industry you are in, including the market and competitors • Identify challenges that the business may come across and pre-plan strategies to overcome them • Understand the company’s finances, including managing cash-flow and determining the break-even point.

THE SIX ELEMENTS The following are recommended components of a business plan. 1. Executive summary This is the abstract section of the business plan and summarises the plan. The executive summary can include a company background, marketing opportunity, mission statement, competitive advantage and a summary of financial projections. It is a good idea to write the executive summary last despite it being the first section of your business plan. 2. Company overview This is designed to provide more information about the company, including when and how it was formed, its business model and its strategy and direction. WWW.FRANCHISE.NET.AU

3. Business offering This section outlines why the company is in business, its competitive advantage and also what it sells, whether that is a product or a service. The business offering should also provide information on manufacturers, distributors and inventory. You should also include any new product or service lines you are planning to introduce in the future. 4. Marketing plan and analysis This section details the businesses marketing analysis, sales, customer service, advertising and public relations. Many companies use this section to outline why the company will be successful. 5. Strategy and implementation These two elements are particularly important to potential investors. This section needs to include all the in-depth details involving dates and deadlines and it can also include the company’s sales forecasts. 6. Financial projection This section will include the projected profits for the business. It should comprise projected profit and loss statements, balance sheet and cash flow statements. Financial projections are about showing the quantities involved in the entire business plan. F Andrew Graham is the national head of business solutions for RSM Bird Cameron.

FSNO656[CUMM2K].pdf

Page

12/04/2013,

11:08

Sap ntNit Sapie ntNitro ro FSNO FSNO 640 640

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

FR0514_096

2014-05-07T12:05:40+10:00

I WANT TO BUY A FRANCHISE what are my ongoing obligations?

Image: Thinkstock - Naypong

For most franchisees, the decision to join a franchise network is one of the biggest decisions they will make in their lives, writes Bianca Sevastos.

96| FRANCHISING MAY/JUN 2014

WWW.FRANCHISE.NET.AU

FR0514_097

2014-05-07T12:05:40+10:00

Franchisee obligations | How to...

ust like a marriage, once you sign on the dotted line you are committed, there is no easy way out and there is no guarantee the relationship is going to work. A good franchising relationship, just as a good marriage, requires mutual trust, respect and a commitment to perform ongoing obligations.

IS THIS FRANCHISE RIGHT FOR ME?

the business will provide you with the financial security you require and a reasonable return on your investment. You will also have sought specialist independent legal advice in respect to the franchise documentation to ensure that you are fully aware of all of your rights and obligations in respect to the franchise. A franchising specialist lawyer will determine if the documentation provided to you is compliant with the Franchising Code of Conduct (the Code) and will guide you through the process while advising you on the pitfalls to look out for.

Many factors need to be considered when deciding which franchise network is right for you. No doubt you will have considered the strength of the brand, the depth of the franchisor’s experience, whether the franchise business will complement your lifestyle, and what you are getting for your investment. You will have met with the franchisor and its key people to ask many questions in respect to the general operation of the business and to determine whether you can envisage being tethered to that relationship for the next five to 10 years, knowing that the average life cycle of a franchise relationship is seven years. In turn, the franchisor will have assessed your financial standing, business acumen, general suitability and whether you will be a good ambassador for its brand. You will have met with and spoken to other franchisees in the network to garner their impressions of the franchisor and the network at large. You will have asked many probing quesYou have been through the franchisor’s recruitment process and tions as to what the franchisor is like to deal with, the efficiency you have been approved by the franchisor for the grant of a franof the systems, and whether individual franchisees are meeting chise. You feel as though you are making an informed decision and their minimum performance criteria and financial hurdles. you are excited about the prospect of your new venture and being You will have undertaken due diligence on the franchise and your own boss, but with the comfort of the franchisor’s support and the franchisor just as they have vetted you. Such due diligence within the framework of the franchise system. will include seeking independent business and accounting Once the 14 day mandatory disclosure period has expired advice as to the viability of the business, to ensure that the and you can sign the final documents the courtship is over and numbers to1know F R 0 5stack 1 4 up _ 0and 0 0to_ provide D I S reasonable 1 2 0assurances 1 4 - 0 4that - 1 7 T 1 it6 is: time 0 6 :to4get 4 + 0 : 0each 0 other better. »

A good franchising relationship requires mutual trust, respect and a commitment to perform ongoing obligations

w w w.displaydesign.com.au

sales@d isplaydesign.com.au

1 7 9 G e r t r u d e S t r e e t , F i t z r o y, V I C 3 0 6 5 Te l 0 3 9 4 1 7 5 0 0 0 F a x 0 3 9 4 1 9 0 9 WWW.FRANCHISE.NET.AU 37 sales@d isplaydesign.com.au

MAY/JUN 2014 FRANCHISING | 97

FR0514_098

2014-05-07T12:05:40+10:00

How to... | Franchisee obligations

WHAT FRANCHISEES NEED TO COMMIT TO: 1. Compliance with the system If you have an entrepreneurial spirit, a desire to be creative in your business, or if you have owned and operated your own business before, the franchising model as a business may not be right for you. As a franchisee you are bound to comply with the systems implemented, and as directed, by the franchisor. It is likely that the franchisor will have spent considerable time, effort and money developing the systems to create the greatest efficiencies within and throughout the franchise network having drawn upon their experience in running the business. While good franchisors are open to their franchisee’s suggestions as to any accommodations or efficiencies that can be made, it should be remembered that even if you think your way of doing things is better, you must still conform to the systems, policies and training provided by the franchisor.

3. Marketing fund Many franchisors operate a marketing fund whereby they collect a prescribed percentage of the franchisee’s sales, or a flat fee amount, to market and promote the franchise network at large. You should be aware that most franchisors are not obliged to spend the marketing fund monies to benefit your particular franchise. The use of the marketing fund monies can be a much contested issue among franchisees and is one of the major »

98| FRANCHISING MAY/JUN 2014

WWW.FRANCHISE.NET.AU

Image: Thinkstock - pcruciatti

2. Financial obligations The franchise agreement and disclosure document should set out all payments required to enter and exit the franchise, as well as any recurring payments required over the life of the franchise. Such payments will likely include a royalty fee and a marketing fee, either expressed as a percentage of the franchisee’s sales or as a flat fee, payable on a weekly or monthly basis. Additionally, there may be a requirement to upgrade the premises at your cost, pay a renewal fee at the beginning of any renewal term of the franchise, and attend any ongoing training and annual conferences. All of these costs add up to your cost of doing business and need to be factored into your business modelling at inception. Many franchisors do not provide any financial information or data as to the expected turnover of a particular franchise. The exclusion of any such information will mean that you will need to prepare your own cash flow projections and budget based on your own information and research. While, for franchisees, there is a certain element of comfort provided within the framework of the franchise model, it is important to remember that franchising does not provide a silver bullet to success. Just as in any business, there is a risk that the business may not succeed and you will need to ensure you can financially survive in the event the business fails.

FR0114_000_GAM

2013-11-19T17:30:11+11:00

TAKE CONTROL!

Special Cosplay guests Sarah & Dylan pictured above.

Gametraders Live is totally unique in Australia - stores opening nationally!

IS THIS YOU? • You grew up with gaming and can tell a Super Nintendo from a Playstation 4. • You know what a Cosplayer is and how this sector is booming. • You love interacting with like-minded people and have a passion for video games, Warhammer, Yu-Gi-Oh, Pokemon and Magic tournaments, Cosplay activities plus anything else that’s hot. Find out about owning your own Gametraders Live franchise and changing your today into an exciting tomorrow. Setup costs including stock approximately $225,000 plus GST and working capital. Contact Mark Langford marklangford@gametraders.com.au or call (08) 8338 2557.

www.gametraders.com.au

FR0514_100

100

2014-05-07T12:09:16+10:00

How to... | Franchisee obligations

reasons for disputes between franchisors and franchisees. Franchisees often feel as though the monies generated through the marketing fund are better spent elsewhere and that it only serves to benefit the franchisor in their efforts to sell franchises. However, under the Code there are strict regulations in respect to the governance of the marketing fund to keep the franchisor accountable. Within four months after the end of each financial year, the franchisor must prepare an annual financial statement detailing all of the fund’s receipts and expenses for the past financial year. The financial statement must then be audited by a registered company auditor, unless 75 percent of the franchisees in Australia who contribute to the fund vote otherwise. 4 Local marketing In addition to your contribution to the marketing fund, the franchisor may also require its franchisees to conduct their own local marketing to promote the sale of the products and services sold by the franchise business. Some franchise agreements will stipulate

that a certain percentage of the franchisee’s sales must be spent on local marketing and while the franchisor does not collect the monies and spend it on behalf of the franchisee, you may need to prove to the franchisor that you have spent the allocated amount on local advertising and complied with the obligation. 5 Minimum performance criteria Many franchise agreements stipulate that the franchisee must achieve a certain set of minimum performance requirements which will either be articulated in the franchise agreement itself or in the operations manual. Such requirements may be as basic as “the franchisee must complete the store opening training program during the first year of operation” or be financial in nature such as “the franchisee must achieve gross sales of at least 95 percent of the previous year”. It is important that you carefully consider whether the minimum performance criteria are reasonable and achievable. Failure to meet the minimum performance criteria can result in further training costs and in worst case scenarios termination of the franchise agreement. If the minimum performance criteria are contained in the operations manual and not the franchise agreement, you should request to see the operations manual before you enter into the franchise agreement to ensure you are comfortable with its provisions.

7 Operations manual Many of the franchisor’s systems and policies for the day to day running of the franchise will be set out in the operations manual. The manual is developed by the franchisor to set a minimum standard for franchisees and to provide a consistency of operations throughout the network. It is important that you understand that the operations manual is a living document which can be updated at any time by the franchisor and that a breach of the operations manual may also be considered a breach of the franchise agreement.

100| FRANCHISING MAY/JUN 2014

WWW.FRANCHISE.NET.AU

Image: Thinkstock - robertiez

6 Supply of goods and services Most franchisors require their franchisees to purchase the goods and services sold in the business from the franchisor or a nominated supplier to ensure consistency of supply and quality throughout the network. Such arrangement will also provide the franchisor, and the network at large, with greater economies of scale or “buying power” which will result in a lower cost of goods and services to the franchisees and a higher profit margin. In turn, this arrangement may allow the franchisor to clip the ticket on the supply of goods and services down to the franchisee or to receive rebates from nominated suppliers. Under the Code, any rebates received by the franchisor must be disclosed in the disclosure document.

FR0514_101

100

2014-05-07T12:09:16+10:00

Franchisee obligations | How to...

8 Records and audits Most franchisors will require franchisees to provide them with the records of the business including profit and loss statements and balance sheets on a monthly basis. Such records may also include any reports, sales information, invoices or bank statements as required by the franchisor. The franchisee’s obligation to provide these records is often a source of tension between the franchisor and franchisee. The franchisee may view the requirement to provide such information as a breach of their privacy while the franchisor will want to assess the performance of the business and identify any areas for improvement. If the franchisor suspects that the records are not a true reflection of the sales of the business the franchisor will most likely have the right to inspect the records and have them audited by an independent auditor. You should be aware that if there is a reasonable discrepancy in the records the costs of such an audit will be passed on to you as the franchisee.

and will require its franchisees and any key personnel of the business to hold any such information in strict confidence which obligation survives the termination of the franchise agreement.

10 Default and termination In certain circumstances, the franchisor may terminate the franchise agreement automatically and without notice to you. Such circumstances are prescribed by the Code and apply only where the franchisee: • No longer holds a licence that the franchisee must hold to carry on the franchised business • Becomes bankrupt, insolvent under administration or an externally-administered body corporate • Voluntarily abandons the franchised business or the franchise relationship • Is convicted of a serious offence • Operates the franchised business in a way that endangers public health or safety • Is fraudulent in connection with operation of the franchised business 9 Confidential information • Agrees to termination of the franchise agreement. In essence, a franchise agreement grants the franchisee a licence In all other circumstances, if you are in default or breach of to use the brand, trade marks, systems and any other intellecyour obligations under the franchise agreement the franchisor tual property of the franchisor for the operation of the business must provide you with written notice that you are in default, set forFthe term of the franchise. R1 1 1 3 _ 0 0 0 _ T CC 1 2 0 1 3 - 1 0 - 1 4 T 1 out 4 : the 2 9nature : 2 2 of + the 1 1 default : 0 0 and what you must do to rectify the Franchisors are very protective of their intellectual property default within a reasonable period of time. »

“Dollar for dollar The Concrete Cutter offers great value among the ‘man & van’ franchises”

It’s Simple

No costly fitouts, no staffing problems, no real-estate leases.

It’s Fair

Franchise royalties are $150 p.w + gst. You keep the profits from extra effort.

It’s Effective

Advertising royalties are $60 p.w + gst. They are pooled for maximum buying power.

It’s Affordable

$45,000 + gst includes equipment, sign writing, uniforms, stationery & training. You supply a vehicle, it need not be new.

It’s Proven

Eight of our nine franchisees have been operating for between six and eleven years.

It’s Profitable

Most of these established franchisees frequently take above $2,500 p.w (conservative).

It’s Your Move

If you’d like to learn more please telephone Bruce Miskin.

“Only leaves one box to tick” WWW.FRANCHISE.NET.AU

www.theconcretecutter.com.au Bruce Miskin 0499 399 355 Email: bruce@theconcretecutter.com.au

MAY/JUN 2014 FRANCHISING | 101

FR0514_102

100

2014-05-07T12:09:16+10:00

If the franchisor provides you with such written notice and you fail to rectify the default within the allotted time, the franchisor may have the right to terminate your franchise agreement.

Many disputes between franchisors and franchisees occur due to the lack of communication between the parties or differing expectations

102| FRANCHISING MAY/JUN 2014

12 Non-compete Most franchise agreements contain provisions that will preclude franchisees from setting up, operating or holding any interest in any competing business during the term of the franchise and for a period of time following the end of the franchise relationship. As the franchisee, you will have the benefit of the franchisor’s intellectual property, systems and know-how and the franchisor will want to be sure that you or any of its franchisees do not use such information to set up a business in competition with the franchise network. The “non compete” or restraint of trade provisions within a franchise agreement are often confusing to franchisees. Several options may be provided in respect to the period of time (24months – 12 months – six months) and in respect to the geographical area (5km radius – 3 km radius – 1 km radius) in which you may not operate, or hold an interest in, a competing business following termination of the franchise agreement. Clauses drafted in this manner are called cascading provisions or ladder clauses. The purpose of such drafting is so that if a court determines that the period of time or geographical area stipulated in the restraint of trade provisions are unreasonable, the provisions can be read down so that the lesser period of time and smaller geographical area can be enforced. The enforceability of non-compete clauses is a bit of a grey area in the law. On the face of it, they are considered anticompetitive and therefore unenforceable. However, a court will enforce the provisions where it considers protection of a franchisor’s goodwill is necessary. Unfortunately, the only way to determine whether the restraint provisions provided in your franchise agreement are enforceable is to test it in a court of law.

WWW.FRANCHISE.NET.AU

Image: Thinkstock - Michael Blann

11 Sale or transfer of your business If you wish to sell your franchise during the term, the franchise agreement will set out the procedure that must be followed which will include seeking the franchisor’s consent. It is likely that the franchisor will have the right of first refusal to purchase the business which means that you must first offer to sell the business to the franchisor. Under the Code, the franchisor is taken to have given consent to the transfer if the franchisor does not, within 42 days after the request was made, give to the franchisee written notice that consent is withheld and set out why consent is withheld. In accordance with the Code, the franchisor may not unreasonably withhold consent to you transferring or selling your business. Notwithstanding, there are certain circumstances where the franchisor may withhold its consent which includes where the purchaser is unlikely to meet the financial obligations of the franchise agreement, or such transfer will have a significantly adverse effect on the franchise system, or the franchisee is in breach of the franchise agreement among others.

FR0514_103

100

2014-05-07T12:09:16+10:00

Franchisee obligations | How to...

13 Disputes Just as in a marriage, many disputes between franchisors and franchisees occur due to the lack of communication between the parties or differing expectations. Where franchise problems or conflict occurs, it is advisable that the parties first seek to resolve the dispute among themselves and if possible have a lawyer or trusted advisor available to guide you through the process. Where disputes cannot be resolved informally between the parties, the Code provides that parties to a franchise agreement are required to first trigger mediation before going to court over the dispute. The dispute resolution provisions of the Code clearly sets out the procedure which must be followed including formal written notice outlining the nature of the dispute, the desired outcome of the dispute, and a timeframe within which it should occur. Should the dispute progress to a point where mediation is required, it is advisable to then engage a specialist franchising solicitor to assist in your preparations for mediation or to enter into direct negotiations with the franchisor to settle the dispute. Figures from the Office of Mediation Adviser indicate that up to 75 percent of mediations result in a settlement, which means that both parties are satisfied with the result and in many cases are prepared to continue the franchise relationship. If the dispute is not resolved through the mediation process, the parties may then need to consider taking further action through the court system.

14 The end of the relationship Unlike a marriage, when you enter into a franchise agreement you know that the relationship with the franchisor has a set expiry date. It is important to have in your mind from the outset what your exit strategy for the business will be. It may be that you intend to build the business up and on-sell it mid-way through the franchise term or during the renewal term. You should remember that when the franchise term comes to an end, in most cases, you will not have the right to sell the business and you will not be entitled to an exit payment from the franchisor.

THE MORAL OF THE STORY A good relationship between a franchisor and franchisee can result in a profitable, fruitful and rewarding outcome for both parties. Many franchisees have built significant wealth through franchising and as any good franchisor recognises, happy and successful franchisees are imperative to the overall success of the franchise network. As with any marriage, open lines of communication are key to an harmonious franchise relationship together with a strong commitment from both parties to uphold their end of the bargain. F Bianca Sevastos is senior associate in the Sydney office of Baybridge Lawyers, and she specialises in franchising and licensing.

Franchises offered for the first time.

4000 MEMBERS HAVE JOINED OUR PROPERTY MILLIONAIRES CLUB AND COUNTING The Property Club is dedicated to providing Australians with the opportunity of a better life through property investment. To celebrate 20 years in property, we are offering a limited number of Property Club franchises. This is a unique, ﬁrst-time offer to be part of an organisation that has over 80,000 members, plus we have made more property millionaires than all the rest

“

combined, with over 4,000 members in our Property Millionaires Club and counting! Take advantage of this exclusive opportunity by contacting us today.

Kevin Young Founder and CEO of Property Club

WWW.FRANCHISE.NET.AU

MAY/JUN 2014 FRANCHISING | 103

FR0514_104

100

2014-05-07T12:09:16+10:00

All images: Thinkstock - fergregory 104| FRANCHISING MAY/JUN 2014

WWW.FRANCHISE.NET.AU

FR0514_105

100

2014-05-07T12:09:16+10:00

Termination | How to...

TERMINATION WITHOUT CAUSE a timebomb for franchisees?

Robert Toth delves into Clause 22 of the Code, which broadly covers the termination of franchise agreements.

aul Kelly was right when he wrote: “From little things big things grow.” It’s the little things in a contract that can matter the most and this applies to franchise agreements. The main terms are apparent for example, the franchisees’ obligations to pay a franchise fee, ongoing royalties and market levies, the restraints, compliance with the operating manual and system supplied by the franchisor. An experienced franchise lawyer reviewing a franchise agreement will look at other issues such as the right of the franchisor to terminate an agreement and what occurs on expiry of the franchise term.

WWW.FRANCHISE.NET.AU

Clause 22 of the Code – Termination without cause Clause 22 of the Code is a provision that has had little attention from the Australian Competition and Consumer Commission (ACCC) or the courts. A clause may be tucked away in the franchise agreement which could be a time bomb for franchisees giving a franchisor the right to terminate the franchise where there is no breach by the franchisee. A franchisee may invest a substantial sum – anywhere between $250,000 and $500,000 to establish their franchise, and they may need the first term or even their second term of the franchise to get a return on their investment. »

MAY/JUN 2014 FRANCHISING | 105

FR0514_106

100

2014-05-07T12:09:16+10:00

TERMINATION - NO BREACH Let’s look in more detail at Clause 22 “Termination - no breach by franchisee” to understand what is at stake. This clause applies if: 1. A franchisor terminates a franchise agreement: • in accordance with the agreement • before it expires • without the consent of the franchisee; 2. The franchisee has not breached the agreement; and 3. Clause 23 does not apply (termination for special circumstances such as bankruptcy, fraud and abandonment). It is worth noting that a condition of a franchise agreement that a franchisor can terminate the franchise agreement without the consent of the franchisee is not taken to be consent. Before terminating the franchise agreement, the franchisor must give reasonable written notice of the proposed termination, and reasons for it, to the franchisee. The section on resolving disputes “applies in relation to a dispute arising from termination under this clause”. But note that: 4. “reasonable written notice” is not 106| FRANCHISING MAY/JUN 2014

defined. So what may be considered reasonable by a franchisor may not be considered reasonable to a franchisee. 5. “reasons for it” is not defined. There is no guidance as to whether the reason should be reasonable or legitimate. It does not say the decision must be made in the franchisor’s legitimate commercial interests or that there has to be a genuine business case for the decision. Franchisor and franchisee interests are generally aligned when they enter into a franchise, however as time goes by for a variety of reasons, their interests may diverge and in some cases the relationship sours. This could arise from a breakdown of their working relationship, a lack of trust or an inability to communicate. It may also arise if the franchisor considers the franchisee is not performing well or feels the franchisee is no longer a part of the team sharing the common vision. The franchisee on their part may simply be asking legitimate questions of the franchisor and asking the franchisor to deliver on what it promised. The franchisor may see an opportunity to offer the franchise to a better operator or even take over the franchise. WWW.FRANCHISE.NET.AU

DANGER ZONE The provision in the franchise agreement may be as simple as the “The franchisor may exercise its rights under Clause 22 of the Code”. Pretty innocuous really, unless you or your lawyer understand what this means. It means that even if the franchisee is performing extremely well, meeting all its obligations, following the system and doing all that is required of them, the franchisor can serve a notice on the franchisee to terminate the franchise without cause. This is a devastating notice for a franchisee to receive and may crystallise a huge financial loss to them. The franchisee will have no opportunity to obtain a return on its investment and effort in building the business and any goodwill or ability to sell or transfer the franchise as a going concern will be lost.

THE FRANCHISOR PERSPECTIVE Should a franchisor rely on this right to terminate on reasonable notice if such a clause exists in their franchise agreement? Even if such a clause is in the agreement should a franchisor exercise that right? As much as franchisors may like

FR0514_107

100

2014-05-07T12:09:16+10:00

Termination | How to...

to reserve this right they need to consider the impact of having this type of provision in their agreement. It will no doubt be a disincentive to potential franchisees. Why would a franchisee pay a franchise fee on an expectation of a five year term when in reality the franchisor can rely on this right to terminate the franchise on reasonable notice for no cause at any time within that term?

THE FRANCHISEE PERSPECTIVE You need to know whether the franchise agreement gives the franchisor this contractual right to terminate on reasonable notice for no cause. If the franchise agreement does not expressly grant this right, the franchisor cannot give notice without cause. If the agreement does have the right, consider whether to proceed and discuss this issue with the franchisor and your lawyer. It may be that they will agree to delete the clause or at least restrict the right.

CODE REVIEW This issue was touched on in Alan Wein’s recent review of the Franchising Code of Conduct. In reference to the “termination without cause” provision relevant to the automotive industry, Wein indicated there were few complaints by franchisees of franchisors relying on clause 22 and if such action was taken by a franchisor issues of “reasonableness”, “conscionability” and “good faith” would be tested by a court and depend on the facts in each case. His view was that termination without cause where no reason or no reasonable reason was given would be unlikely to be upheld by a court in favour of a franchisor. It’s the little things from which big things may grow! F

Before terminating the franchise agreement, the franchisor must give reasonable written notice of the proposed termination, and reasons for it, to the franchisee

Robert Toth is a partner, corporate and commercial, at Wisewould Mahony lawyers. He is an accredited business law specialist with more than 30 years experience.

Kitchens, bathrooms & bedrooms

Dream Doors – Don’t let anyone 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 motivated Franchisees and I am looking for Marketers’, Business Innovators and Entrepreneurs to develop the brand in Australia with me. History of success: 50 Franchises in the UK where I founded the business. 10 Franchise areas sold in NZ 2013 record Franchisee sales returns I have an extremely happy network of Franchisees in NZ (Just ask them!). • 1 x New Australian Franchisee

Now I want to share my success and winning formula in Australia, with like minded people. The question “does this business work or not” is no longer open for debate! Individual Franchise opportunities available throughout Australia

For more information e: del@dreamdoors.com.au w: www.dreamdoorskitchens.com t: +64 34435133

WWW.FRANCHISE.NET.AU

MAY/JUN 2014 FRANCHISING | 107

FR0514_108

108

2014-05-07T12:08:10+10:00

How to... | Ending an agreement

Cancel or trans fer: Business name

Sell: ent /equipm s ts c u g Prod in tt and fi Fixtures

108| FRANCHISING MAY/JUN 2014

you need to know about ending a franchise agreement

YOU WILL NEED TO CANCEL OR TRANSFER:

or: anchis y fr o t n Retur tual propert n tellec rmatio

In Info ential Confid

Restriction s: Time and place of future trad ing

WWW.FRANCHISE.NET.AU

The business name You will be required to register a business name and to do so at your own cost. However, at the end of the franchise relationship you will need to cancel the business name (also at your own cost) or, in the event of a transfer, ensure the business name is transferred over to the incoming franchisee. This is typically because the business name incorporates part of the franchisor’s name and in some way is a unique identification of your franchise business. For example, you may have the franchise name followed by the area of which you service as part of the name. You will be required to discontinue any trade with this business name indefinitely.

YOU WILL NEED TO SELL: Products, equipment, fixtures and fittings You are typically required to purchase only approved products and/or approved equipment from the franchisor or an approved supplier. You may also be required to have a minimum inventory of these products. At the end of the franchise relationship any products remaining are legally yours, however, your franchise agreement may require you to first offer these products to the franchisor for purchase before you can sell them to anyone else. However, the franchisor doesn’t have to buy any of the products or equipment and they may even have the right to

Image: Micahel Bevan

things

hen you purchase a franchise you are essentially purchasing a right to market and distribute the franchisor’s goods and/or services for a set period of time. Given this and the initial and ongoing costs you will be paying for this right, you may be asking what you will be left with when the franchise relationship ends. Because there will come a time when the relationship ends – and depending on your plans, it may be that you want to keep trading in the same business. Below are four essential elements to a franchise that you will need to consider when the relationship ends.

FR0514_109

109

2014-05-08T09:49:43+10:00

Ending an agreement | How to...

purchase the products and equipment from you at a price determined by them (this often means you would be selling them below market value). If your franchise business has required a premises and therefore a lease/license there will be fittings within the premises that you have paid for and installed. Your lease/license will determine your obligations at the end of the franchise relationship in detail, however, typically you would be required to ensure the premises is returned to its original state and as with products and equipment you may be required to offer the fittings to the franchisor prior to selling them to others.

that you trade with as a franchisee belong to you; intellectual property belongs to the franchisor. At the end of the franchise relationship you will have to immediately stop using this IP and hand over any signage and advertising material containing any of the above. Similar to the IP above all confidential information (manual, price lists, customers – lists and info, financial information, trade secrets, the system business procedures etc) must be passed back to the franchisor, including the manual, price lists, financial information, business procedures – any documents you have relating to any of this information needs to be returned.

YOU WILL NEED TO RETURN TO THE FRANCHISOR:

THERE MAY BE RESTRICTIONS:

particular clauses relating to restraint periods and non-competition that are in the individual franchise agreement. Typically however, there will be a period of time in which you are restricted in running a similar business; there are also likely to be restrictions placed on where you trade – perhaps an exclusion zone. It’s important to be aware of what you will need to hand back when you finish your franchise agreement. A franchising lawyer can be very useful in helping you understand the clauses of the franchise agreement before you sign and also by acting on your behalf to ensure these clauses are favourable to you when the franchise relationship does end. F

Restraint clause and competition Intellectual property and A common question by franchisees is Lachlan McKnight is an experienced corpoconfidential information whether they can continue to have access rate lawyer with particular expertise in None of the logos, trademarks, images or to a client database or client informageneral corporate matters and franchise law. slogans (often detailed in the franchise tion that has formed part of their franprovides businesses and franF R0 5 1 4 _ 0 0 0 _ J US 2 2 0 1 4 - 0 4 - 2 4 T 1 0 : 2 9 : 5 5 + 1 0 : LegalVision 0 0 agreement and the disclosure document) chise business. This will depend on the chisees with access to high quality legal advice.

No appointments . Just come in . TM

No hairdressing experience required • Opportunities Australia wide • Fixed flat fee • Franchise opportunities from $100,000 • In good times and bad – hair grows!

Luke Manning Business Development Manager T (02) 8522 1408 M 0439 130 499 luke@justcuts.com justcuts.com

WWW.FRANCHISE.NET.AU

MAY/JUN 2014 FRANCHISING | 109

109

2014-05-07T12:14:12+10:00

Employ practical strategies to help you achieve your business goals.

10 TOP TIPS

110| FRANCHISING MAY/JUN 2014

WWW.FRANCHISE.NET.AU

for achieving business success

FR0514_110

FR0514_111

109

2014-05-07T12:14:12+10:00

Business success | How to...

hether you’re a budding entrepreneur or looking to add to your income with a franchise investment, growing or improving the way you do business is sure to be on your to-do list. 1. Create a business plan It’s easy to lose sight of what you want to achieve once workloads become heavy, but having a business plan helps keep focus on the big picture allowing you to manage goals and opportunities throughout the year. 2. Stay connected on the go The faster your technology, the faster you work, so it pays to invest in gadgets like a wireless modem router. You might even like to consider a wireless printer, scanner and photocopier, which means you can print, scan and copy anytime anywhere. 3. Back up your data The only thing worse than a computer crashing is losing all of your important work and personal files in the process. Consider regular data backup and an insurance policy for your business, protecting IP and preventing headaches when things may go awry. 4. Clear the clutter Start your business with a sense of order and regularly reorganise your office; throw out any paperwork that’s outdated, no longer relevant or a duplicate. Keep your filing up to date - whether that’s in desk binders or online folders for email communications. 5. Design your workspace Workspaces don’t have to be plush nor does it need to cost a fortune to set up an office. Strike the balance between practical and inspirational: this will be a home away from home, particularly in the early months when you will be working long hours.

6. Make your business look the part The way you dress is a reflection of you professionalism, but so is presentation of your business material. Don’t let poorly created documents disappoint and ensure your business cards, promotional banners, and printed documents keep to the standards set out by your franchise. This will ensure your business looks as great as you want people to believe it is. 7. Professional accessories Does your franchisor provide you with technology tools? Are there branded accessories available? Consider a laptop or tablet sleeve for your technology and a messenger bag for your personal belongings and any important documents. 8. Don’t get caught without the essentials It’s easy to forget about supplies such as ink cartridges, print and copy paper and kitchen and cleaning items when it’s busy at work, but they’re essential to an office performing productively. Write a list of ‘must-haves’ to stock and keep track of levels. 9. Keep everything in the one place Whether you are a pen and paper person, or a tablet devotee, having your note-taking tools to hand means you can scribble down that brilliant idea as soon as it comes to mind - decide which is the most effective way for you to record and find information and use the tools! 10. Time management Whether you need to put in a system for sending mail, stocking up on stationery products or reporting your finances, time management is critical. Follow any guidelines set out by the franchisor and take advice from your fellow franchisees about ways to be highly effective on a daily basis. F John Kwan is Officeworks’ spokesman for business.

WWW.FRANCHISE.NET.AU

MAY/JUN 2014 FRANCHISING | 111

FR0514_112

109

2014-05-07T12:14:12+10:00

What happens if your franchisor

GOES BUST OR SELLS ITS RIGHTS?

You buy a franchise and then not long into your first term, the franchisor goes bust. Or decides to sell the business on. What happens now?

ccording to Robert Toth, its important franchisees accept changes in franchisor ownership as franchise agreements don’t necessarily end when a franchisor goes into liqudiation.

CHANGES TO THE BUSINESS The new franchisor or equity owners can introduce ideas and systems that franchisees may see as positive or negative. A new franchisor may be more diligent in enforcing an existing franchisee’s obligations to the business in an effort to improve the system as a whole. But other times this could lead to dispute and franchisees can choose to stay or use the situation as a means to get out. It is also an opportunity for the franchisor to identify franchisees that aren’t performing well and to use that to negotiate their exit and invest to build on those franchisees willing to stay. Most franchise agreements will have a provision that allows the franchise to transfer its rights to a third party without the consent of the franchisee.

• The franchise rights may be sold to a third party that operate their own franchise system • The franchisor goes into liquidation and the liquidator sells the franchise rights to a third party

A FRANCHISOR IN LIQUIDATION Franchisees often believe that they have the right to end their franchise agreement when the franchisor goes into liquidation. This is not the case unless the agreement includes an express right for the franchisee to do so, which is unlikely. The liquidator takes control of the franchisor company and can enforce the rights against franchisees. Franchisees must continue to pay royalties and follow the franchise system. The liquidator will quickly find a purchaser and in some cases offer the rights to existing franchisees or a group of franchisees or a master franchisee. Franchisees are still contractually bound to meet their obligations under the agreement and the liquidator can enforce the franchisors rights against franchisees. This also applies in the reverse where the new franchisor is also required to meets its obligations as a franchisor. In cases of well established franchise systems going bust, a change in ownership may have little or no impact to its franchisees and you should keep in mind that a new franchisor is most likely looking to improve the system that will ultimately benefit everyone in the group. F

Most franchise agreements will have a provision that allows the franchise to transfer its rights to a third party

There are a number of ways a franchisor can sell or transfer its rights: • By selling its licensed rights to operate the system • By a transfer of shares in the franchisor company or a majority of the shares to a third party

112| FRANCHISING MAY/JUN 2014

WWW.FRANCHISE.NET.AU

FR0514_113

109

2014-05-07T12:14:12+10:00

Change of franchisor | How to...

WWW.FRANCHISE.NET.AU

MAY/JUN 2014 FRANCHISING | 113

FR0514_114

109

2014-05-07T12:14:12+10:00

BUYING A FRANCHISE? Check out the legal advice you’ll need

114| FRANCHISING MAY/JUN 2014

WWW.FRANCHISE.NET.AU

FR0514_115

109

2014-05-07T12:14:12+10:00

Buying a franchise | How to...

When searching for a franchise lawyer, look for someone with relevant franchising experience and ensure they understand the nature of the franchise you are looking to buy.

ood legal advice will ensure you understand the commercial terms of a franchise offer compared to general industry practices. You should feel comfortable that you understand the rights and obligations of both franchisor and franchisee. Depending on the business you are purchasing, the advice required will vary. Common variables include the type of business and whether a premises is required to operate the business. The period prior to entering the Agreement is when you have the best opportunity to secure the rights and understanding required for you to protect yourself adequately during the term of the franchise. F R 0 5Having 1 4 _ 0a letter 0 0 _ofTadvice O W amongst 1 2 your files can be a useful resource when

managing a dispute or recalling your rights during the term of the franchise agreement. In providing you with advice your solicitor should: 1. Review the disclosure document (identify any alarming or disturbing disclosures) 2. Review the franchise agreement including: • Costs associated with entry into the system • Ongoing costs during the duration of the agreement • Franchisee’s rights and obligations • Franchisor’s rights and obligations, paying special attention to what changes the franchisor can impose on a during 0 1system 4 - 0 4 - 2 2the T 1franchise 4 : 1 8 term, : 4 5and + 1 0 fully grasp how these changes might

WWW.FRANCHISE.NET.AU

affect the profitability of your business. • Termination provisions • Transfer rights • Onerous obligations on the franchisee; and • Exit provisions. 3. Explain the relevance of ancillary agreements and review them; and • Assist in negotiations with the franchisor. Good legal advice before you enter into a franchise will assist you in planning well for the full life-cycle of the franchise business. F Tsungai Mukushi is principal at Franchise Ease, a law firm that specialises in : the 0 0franchising industry and services both franchisees and franchisors.

MAY/JUN 2014 FRANCHISING | 115

FR0514_116

116

2014-05-07T12:08:28+10:00

Promises, Promises... DEALING WITH THE FRANCHISOR

hen people are looking at buying a franchise they are often confronted with masses of information. Typically the first thing people read is the promotional material. This is likely to contain statements relating to the performance of the franchise system. These representations are almost always intended to extol the virtues of the franchise in order to “sell” the system to prospective franchisees. What are legally called representations

are often made by franchisors not just in promotional material but also by the franchisor’s representatives in discussion with potential franchisees. Representations are made regarding matters such as: • Expected profits, turnover or trading figures • Ongoing support and training available to franchisees • Expected number of prospective customers or clients • Availability of products

Know that any forecasts or predictions made by the franchisor are not guarantees of your success and don’t rely on them as such

116| FRANCHISING MAY/JUN 2014

WWW.FRANCHISE.NET.AU

• Quality and profitability of products • Suitability of certain premises, sites or the territory for conducting the franchised business. Disputes often arise if the franchisee’s experience does not meet expectations created by the franchisor or reflect the promises made by the franchisor. When the franchise relationship sours, franchisees often allege that they were misled or deceived by the franchisor and claim this conduct is the reason for them not performing in their franchise as well as they had originally anticipated. However, if franchisees are diligent in their approach at the preliminary stages, potential problems may be avoided. Franchisees should follow the simple steps set out below before entering into a franchise agreement in order to minimise the potential for any future disputes as to promises made by the franchisor.

116

2014-05-07T12:08:28+10:00

Image: Thinkstock - AndreyPopov

FR0514_117

Advice LEGALISE MADE EASY | LEGIT

STEP 5

RAYNIA THEODORE

Principal, Mason Sier Turnbull

Talk to other franchisees in the system about their experiences in dealing with the franchisor and in running their franchise. Ask them about how the franchise system operates in practice and about their turnovers and profit margins. Other franchisees are your best source of information, but remember that such information is a guide only. Each franchisee’s experience is particular to its own business.

STEP 6

STEP 1 Make sure you receive the franchisor’s current disclosure document, a copy of the franchise agreement you will be asked to sign and a copy of the Franchising Code of Conduct at least 14 days before signing your franchise agreement. This is a mandatory requirement of the Code and must be adhered to by all franchisors. Read these documents thoroughly and familiarise yourself with their contents.

STEP 2 Obtain independent legal advice on all legal documents prior to signing documents.

STEP 3 If the franchisor provides you with fi nancial information and in particular, forecasts do not rely on these solely. Prepare your own budgets and forecasts;

take advice from your accountant - accountants often have information about industry sectors and can assist in the preparation of meaningful budgets and forecasts. An accountant who is familiar with the franchising industry should be able to help you work out whether the franchise has the potential to be successful and profitable.

STEP 4 If you will be operating from a particular site, seek professional advice about the location and the surrounding area. There are consultants who can provide you with information about the relevant demographics but you should also do your own research. Speak to other tenants in the area; visit the shopping centre or the shopping strip and observe traffic flows, peak and non-peak trading times and the competitors in the area. WWW.FRANCHISE.NET.AU

Communicate any issues uncovered during the due diligence phase to the franchisor. All concerns should be presented in writing to the franchisor and any resolutions reached with the franchisor should also be documented in writing. Good communication between the franchisee and the franchisor should serve to eliminate any misunderstandings. Keep notes of all discussions and meetings with the franchisor.

STEP 7 If you have been provided with information by the franchisor or any promises are made by the franchisor prior to you signing the franchise agreement you should put these in writing and ensure the franchisor signs and acknowledges the information provided and promises made.

STEP 8 Let common sense prevail. When reading any documents published or provided by the franchisor, be sensible and try to distinguish between marketing “fluff” and actual representations of fact. The same applies to any verbal statements made by the franchisor. Know that any forecasts or predictions made by the franchisor are not guarantees of your success and don’t rely on them as such. » MAY/JUN 2014 FRANCHISING | 117

FR0514_118

116

2014-05-07T12:08:28+10:00

Advice Image: Thinkstock - triloks

LEGIT | LEGALISE MADE EASY

STEP 9 Should a dispute arise, you must be familiar with the Codeâ&#x20AC;&#x2122;s dispute resolution procedure. Read it and know it in advance so that you can take the appropriate action. If, after doing all the proper due diligence and taking all the above precautions, you find yourself in a situation where the franchisor has made statements or representations that have misled you, there are a number of options available to you. The starting point should always be to try and resolve the dispute amicably with the franchisor. Raise the issues at an early stage with the franchisor and with the aim of preserving the franchise relationship. Mediation may be an effective tool in achieving a mutually beneficial outcome and is usually much less costly and time-consuming than litigation or other combative methods of dispute resolution. An independent mediator may be appointed by you and the franchisor or by the Office of the Franchising Mediation Adviser. Usually each party bears its own costs associated with the mediation. If you are unable to resolve the dispute, you may have recourse to bring a claim against the franchisor

for misrepresentation or misleading or deceptive conduct under the Competition and Consumer Act 2010 (Cth). To be successful in such proceedings, you will need to be able to show that certain representations were made by the franchisor, that you relied on such representations and that those representations have turned out to be false causing you to suffer loss or damage as a result. You may also report your complaint to the Australian Competition and Consumer Commission (ACCC) who may investigate the franchisorâ&#x20AC;&#x2122;s actions or even bring an action on your behalf against the franchisor. The ACCC has been increasingly instrumental in holding franchisors accountable for their assertions and ensuring that franchisors deal honestly with franchisees and prospective franchisees.

Disputes often arise if the franchiseeâ&#x20AC;&#x2122;s experience does not meet expectations created by the franchisor or reflect the promises made by the franchisor

118| FRANCHISING MAY/JUN 2014

WWW.FRANCHISE.NET.AU

IN CONCLUSION Prevention is better than cure. Do your homework and always seek specialised advice before entering into any franchise agreement. Ensure any promises made or representations upon which you have relied are recorded, in writing, and are incorporated into or annexed to the franchise agreement. Communicate clearly and effectively with the franchisor at all times. If you believe the franchisor has made certain promises to you, make them aware of your belief and of your intention to hold them to such promises. Discuss issues openly as soon as they arise. Obtain specialised legal advice at the first sign of a dispute or when it first becomes clear that a franchisor has made misleading statements. A good franchising lawyer will review your franchise agreement, the associated franchise documents and any communications between you and the franchisor and will be able to advise you of the best course of action available to you and the likely outcomes of pursuing that action. F

FR0114_000_ATS

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

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

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

Low entry costs



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

FR0514_120

120

2014-05-08T08:24:59+10:00

Opinion VIEWPOINT | IN MY SECTOR

DENA BLACKMAN

What I have

learned about franchising

he first thing I learned about franchising was that it is the ideal way to establish a national and international presence for a well-known local business with an exemplary reputation. It is a way for like-minded entrepreneurial colleagues to have skin in the game and to have their own enterprises profit from experience and mentorship. My company Angels & Associates Pty Ltd is the franchising arm of Dial-anAngel and although we are not in “the business” of franchising but in the business of home and family care and support services, we like to share our 47 years of experience in the industry with our carefully selected franchisees. I have always wanted each of our franchisees to be millionaires in their own successful businesses. If they do poorly, we receive no income from them and they are discontented colleagues. It is important to have close and frequent communication both ways. Nurturing a new franchisee is very time-consuming but if it is done well, franchisees will gain confidence faster and not be so demanding of time and energy

120| FRANCHISING MAY/JUN 2014

in the long run. Our association with one of our original franchisees lasted for more than 25 years and the others have also been long-standing and outstanding successes. One of the most important aspects of franchising is the development of a proper “package” to present to a new franchisee. This includes a training program and the tools with which to start their venture. From the franchisor’s point of view, the incoming franchisee must be prepared to listen carefully and learn quickly and not assume that they understand every nuance of the new business venture. Nothing is geared to irritate a franchisor more than (after providing the franchisee with all the tools to access frequent Q&As) than to have them phone at all hours for the same information. I believe that the success of a franchise lies in the selection process. I have always chosen capable caring franchisees with people skills and sound business principles. Business acumen may be assessed by their previous exposure to the various skills required in running their own businesses. I can’t emphasise communication enough. Feedback as to how the WWW.FRANCHISE.NET.AU

Founder of family care and support service franchise Dial-An-Angel

franchisee is coping or the advice of any major changes being contemplated or initiated by the franchisor are integral to the relationship.

THE SECOND GENERATION Dena’s daughter, Danielle Robertson, writes: I began working in the family business in 1986. It was evident early on that the franchisees were quite entrepreneurial, which is great in one way but they would often make changes to policies and procedures without letting us know. It would only be when we visited the office to audit that these types of changes were noticed. We learned that we needed to communicate better with the franchisees and encourage them to collaborate with us as a franchisor. We had a network of offices developing which could have all benefited from the ideas or changes. It took a significant amount of time to alter the culture and advise them that it was ok to make tweaks and changes but consistency across the group was imperative. Over the years, everything has become consistent. It has to be! F

AD_FRKWIMAY_12.pdf

Page

3/04/12,

2:55

Plan your success. Design your lifestyle. A Kwik Kopy franchise lets you experience the best of both worlds, financial success and quality of life. Kwik Kopy offers graphic design, printing and marketing services to the business sector. Be part of a creative process that delivers: • Marketing brochure design and production • Branding and logo development • Direct mail campaigns • Email marketing and website development, to name but a few. Kwik Kopy franchisees handle a broad range of jobs every day, in fact that’s what makes a Kwik Kopy franchise so exciting. But you DON’T require any print or design experience to take on a Kwik Kopy franchise.

With Kwik Kopy you get a tried and tested system that removes the usual start up headaches and helps you establish your business sooner. As part of the Kwik Kopy network, you tap into a highly established and recognised brand, giving you plenty of leverage in the market. What’s more you’ll have an extensive support network all focused on your success.

For more information about our award winning franchise model call 1800 251 680 or visit kwikkopy.com.au/franchise to view Kwik Kopy franchise videos and download a franchise information kit.

Why choose Kwik Kopy: • Brand strength and ongoing marketing solutions • Area sales support • IT support • B2B model • Sales focus • Regular working hours Mon-Fri • Comprehensive training • Award winning franchise model

kwikkopy.com.au FranchisingAPril_1pg_KwikKopy_FA_Headley.indd 1

3/04/12 12:29 PM

FR0514_122

116

2014-05-07T12:08:28+10:00

Opinion Image: Thinkstock - Tashatuvango

THE SKETCH | TRENDS AND DEVELOPMENT

FRANCHISING CODE REFORMS the implications for franchisees

ranchising is a substantial and growing part of our small business community and has displayed a great capacity for nurturing innovation and entrepreneurship in Australia. The Government’s commitment to these important franchising reforms will ensure that our regulatory settings remain responsive to the needs of the sector to promote confidence, competitiveness and productivity.” These words of the Hon Bruce Bilson, Minister for Small Business, in introducing reforms to the Franchising Code of Conduct underpinned by, and in some cases going further than, the Wein Review recommendations will be welcomed by the franchising sector. It is a long time since franchising has been regarded as the “bad uncle” of Australian business but the strong endorsement of franchising as a business strategy, and the unambiguous recognition of its contribution to the small business community and indeed to the economy as a whole, is nevertheless welcome. But while it may be politically correct to opine that franchising is the winner, in the context of the inevitable tension between franchisors and franchisee in matters regulatory it is franchisees rather than franchisors who will take most comfort from the reform package. The most significant reforms will: • Introduce a general duty for franchisors and franchisees to act in good faith in their dealings with each other • Introduce civil pecuniary penalties for Code breaches • Enable the ACCC to issue infringement notices for Code breaches • Improve prior disclosure • Improve the transparency of marketing funds • Invalidate certain restrain clauses The proposal is to prescribe the reforms in a new 2014 Franchising Code of Conduct which, from 1 January 2015, will replace the current 1998 Code. This is a sensible development which reflects a cleaning up exercise. The 1998 Code has become increasingly cluttered and complicated by the addition of new provisions between original provisions requiring, in the case of the disclosure document for example, the introduction of Items 17A, 17B, 17C 122| FRANCHISING MAY/JUN 2014

and 17D between Items 17 and 18. By the time this piece is published the three week period allowed for consultation will have expired but it is not expected that there will be any significant changes of substance to the proposals announced. The Government invited comments on “technical aspects of the implementation of the law” and made it clear in its 2 April Exposure Draft that “there is no intention for the process to reconsider the policy underlying the reforms”. For the most part the reform package holds no great surprises to those who have followed the Wein Review.

GOOD FAITH The most high profile exception relates to good faith. The introduction of a general obligation of good faith imposed on franchisors and franchisees in relation to all aspects of the relationship was expected. Previous recommendations to introduce such an obligation have not been accepted but the Wein recommendation to this effect was. Wein concluded that despite there being “many compelling arguments both in favour of, and against, the introduction of a specific obligation of good faith the weight of opinion supports the inclusion of such an obligation”. The government has nevertheless rejected the Wein recommendation that good faith not be defined and instead be left to the judges to determine on a case-by-case basis. The Exposure Draft provides that good faith includes an obligation to “act honestly and not arbitrarily; and to cooperate to achieve the purposes of the franchise agreement”. Good faith is a very ephemeral concept – it has been described as a concept in search of a meaning – and a strong case can be made for leaving its meaning to be developed by the courts. The Franchise Council of Australia’s (FCA) argument that the new wording will create “unnecessary legal uncertainty, disputation and compliance cost” and may affect bank lending as “it will not be possible to determine with certainty whether a signed franchise agreement will in fact be enforceable” may be overstated. But franchisees must appreciate that good faith is not a universal solvent providing an antidote to anything that goes wrong in a franchising relationship. F WWW.FRANCHISE.NET.AU

ANDREW TERRY Professor of Business Regulation in the University of Sydney Business School

FR1876_100feetv2_20

2014-03-10T11:27:42+11:00

Australia’s most complete sources for buying a franchise

Our all-inclusive portfolio encompasses • Bi-Monthly Magazine • Franchisebusiness.com.au - Australia’s most comprehensive guide to franchise opportunities and service providers – the official franchise directoryof the Franchise Council of Australia (FCA) • Franchise.net.au – Daily breaking news, the communication hub for franchising Research – Reports – Advice • eNewsletters • Digital Magazine • Social Footprint

www.franchisebusiness.com.au

www.franchise.net.au

For any advertising enquiries, please call us on 1300 216 469.

FR0514_124

116

2014-05-07T12:08:28+10:00

Opinion PEOPLE | LEADERSHIP

Lesson in trust from a rescue dog

KARLI FURMAGE CEO of The Franchise Relationships Institute, a research and training organisation that has been helping franchisors and franchisees create profitable partnerships for 24 years

HOW TRUSTWORTHY ARE YOU? Trust is such a powerful thing. Once it’s broken, it’s extremely difficult to get back. In Bella’s case I had to prove repeatedly that I was trustworthy. I did this by being consistent in my behaviour and by being transparent in everything I did. I learnt a lot about trust from adopting Bella and the lessons apply to my human relationships. Trust is about wholeheartedly accepting uncertainty. It occurs when we rely and have confidence in someone’s character, their abilities, intent and integrity. Trust is the belief we have that someone has our best interest at heart. Trust can take years of hard work to build and can be destroyed in a few seconds by impatience, anger or opportunism. Betrayal is one of the most awful emotions. This is where trust has been breached, it’s the feeling we get that someone has taken advantage of us, exploited us in some way. Sadly, many breaches in trust are accidental, due to unrealistic or unexplained expectations.

124| FRANCHISING MAY/JUN 2014

WWW.FRANCHISE.NET.AU

If someone is perceived to have acted improperly it is the same as if they did act improperly. This highlights how careful franchisors need to be in being transparent and explaining themselves. Some franchisees also act opportunistically and in so doing they destroy the franchisor’s trust in them. We trust (or don’t trust) based on our experiences. Like Bella, when we have been betrayed we expect the worst. This is a relationship destroyer. Transparency and disclosure builds trust. Secrecy erodes it.

DO YOU KEEP YOUR PROMISES? Trustworthiness is evident in how we behave. How do you interact with and treat other people? Are you warm, welcoming and respectful? Or are you inconsiderate, rude, gossipy and judgemental? Trustworthiness means you are reliable. Do you keep your promises and do what you say? Trustworthy people are honest. There is a scale here, from telling little fibs through to downright fraud and deception. People may lie in order to make themselves look good or to get themselves out of a tricky situation. Regardless, if they choose to lie about one thing, what else do they choose to lie about? Finally, and I think most importantly, trustworthy people are compassionate. They seek to really understand a situation and genuinely have others best interests at heart. Are you more interested in what you can gain from the relationship?

WHEN DOES TRUST TURN TO DISTRUST? Easy. When you no longer have confidence in someone’s character, their abilities, intent and integrity. And as we all know, once you lose trust in someone it may take forever (or never) to earn it back. F

Image: Thinkstock - Carmelka

o you and your franchisor have each other’s best interests at heart? Trust is fundamental in a relationship. Let me tell you about my beloved rescue dog, Bella. For the first 18 months of her life she was mistreated. From her early experience of life, Bella learned that humans can’t be trusted, that interaction with humans led to pain. It has been a long, slow process to being a healthy, reasonably well adjusted dog… but sadly after two years scars remain. For instance, last month I took a belt off and cracked the leather. Bella peed herself in fear.

FR0514_000_SPE

2014-04-14T12:10:21+10:00

FR0514_126

126

2014-05-07T12:14:18+10:00

Directory HELP GUIDE | RESOURCES

ASIA-PACIFIC CENTRE FOR FRANCHISING EXCELLENCE A pre-entry franchise education program is available for free and online through this centre. Funded by the ACCC this course aims to help franchisees understand the process of due diligence and have realistic expectations of what it means to be a franchisee. The Centre was launched by Griffith University in 2008 and undertakes research on franchising best practice. The research helps inform policy and team members regularly engage with government bodies and franchise associations across the Asia-Pacific. Visit: www.franchise.edu.au

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION (ACCC) The ACCC is an independent Commonwealth statutory authority that is responsible for enforcing the Competition and Consumer Act 2010 as well as legislation, promoting competition, fair trading and regulating national infrastructure. Its role is to protect, strengthen and improve the way competition works in Australian markets and industries. The ACCC also regulates the Franchising Code of Conduct (Code) which is a mandatory industry code that applies to parties involved in a franchise agreement, namely the franchisor and franchisee. The purpose of the Code is to regulate the conduct of the parties involved and if allegedly breached prompts investigations by the ACCC. Visit: www.accc.gov.au

126| FRANCHISING MAY/JUN 2014

BUSINESS.GOV.AU This website is an online government resource for the Australian business community which gives the public access to government information, forms and services for all things business. It is aimed at assisting individuals or a group of people to plan, start and grow their business. New business owners can access the advice fi nder, events calendar, grants and assistance fi nder, a directory of government and business associations, planning templates, business videos, and business checklists. Business topics include emergency management and recovery, finance, recruitment, environmental management, fair trading, taxation, online business, franchising, importing and exporting, intellectual property and training. Visit: www.business.gov.au

FRANCHISE COUNCIL OF AUSTRALIA (FCA) The FCA is the main body for representing franchisees, franchisors and service providers in the $131 billion franchise sector in Australia. Becoming a member of the FCA is voluntary and is available for any organisation or anyone involved in the franchise industry includingÂ franchisees. Visit: www.franchise.org.au

FRANCHISE BUSINESS Franchise Business is a sister website to www.franchise.net.au. It is the official directory of the FCA and lists franchising opportunities available in Australia and New Zealand. Potential franchisees looking to

WWW.FRANCHISE.NET.AU

move into the franchising sphere can explore opportunities by location that currently exist in the market and enquire about the franchisor or brand. The site is also updated with whatâ&#x20AC;&#x2122;s happening in the franchising industry as well as announcements from franchisors in relation to their franchising advancements. Users also have access to franchise consultants and advisors who can assist prospective or existing franchisees or franchisors with any legal, fi nancial, education and training, IT and other services. Visit: www.franchisebusiness.com.au

FRANCHISE.NET.AU As the online arm of Franchising magazine, this website is focused on providing essential advice and information for anyone looking to invest in a franchise: short and snappy business tips and news, video interviews, industry commentary and market reports. Financial, legal and business guidance are key components of the independent, authorative editorial that helps potential franchisees make their purchasing decision. Visit: www.franchise.net.au

FR3956_Subs_FP_V1

2014-05-01T16:37:18+10:00

AUSTRALIA’S MOST TRUSTED TITLE IN FRANCHISING

ENSURE YOU GET EVERY COPY! OPPORTUNITIES

HOW TO WIN

Your essential guide to

Franchising www.franchise.net.au

Nov/Dec 2013 VOL.26/No.6

NOT TO LEASE

WHY CASUAL DINING is a tasty alternative

a franchise

STEP INTO THE $6.6 BILLION

TO LEASE OR

MAR/APR 2014 VOL.27/No.2

Your essential guide to buyi ng

buying a franchise

TAX TIPS FOR NEW BUSINESS

@ SYDNEY EXPO

ADVICE

Franchising www.franchise.net.au

FIND A FRANCHISE

MARKETING

IN TRAVEL

AT RETAIL

FITNESS BOOM

Franchising 4

www.franchise.net.au

How to spo spot ot a

Your essential

Jan/Feb 2014 VOL.27/No.1

TECH TRENDS FROM THE USA

money-mak money-making king franchise franch hise

HATE YOUR JOB? how quickly can you buy a franchise?

FAKE FRANCHIS FRANCHISES C S

Safeguard

how to spot the scammers

guide to buying a franchise

Getting value

your assets with insurance

SPOTLIGHT ON: r Automotive r Automotive services

from your franchise fees

r Bakeries r Bakeries r Cleaning

WHAT

RFG SCRIBE

SUB DID NEXT for just AUS $6.95 NZ $7.95

$45

r Mobile r Mobile businesses

MEET MEE ET AUS $6.95 NZ $7.95

Spot the

celebrating 25 years c

LONG TERM TREND

REPORT:

Weighing up the

The Aussie taste for chocolate PLUS: ANYTIME FITNESS, FITNESS S, TTHE HE COFFEE CO CLUB, MR RENTAL

frozen yoghurt craze

PLUS: HAIRHOUSE WAREHOUSE, GRILL’D, STEP INTO NTO LIFE, BIG4

t step e the firs g k ta d n a becomin towards n boss your ow

JIM PENMAN P ENM

r Signage

AUS $6.95 NZ $7.95

A PASSION FOR THE

25 YEAR

QUEST

Where next for the brand?

PLUS: BEDSHED, DOMINOS, THE CHEESECAKE SHOP, STEPZ

The leading publication for those looking to buy into the $131 billion franchising sector Each issue features: ◗ Inspirational success stories ◗ Pertinent issues in franchising

◗ Practical knowledge and advice ◗ Management tips and much more…

Call us on 1300 360 126 or visit www.franchise.net.au

FR0514_128

126

2014-05-07T12:14:18+10:00

Glossary HELP GUIDE | KEY TERMS

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 site: a brand new site.

128| FRANCHISING MAY/JUN 2014

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 franchisorâ&#x20AC;&#x2122;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 franchiseeâ&#x20AC;&#x2122;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.

WWW.FRANCHISE.NET.AU

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.

FR0514_129

126

2014-05-07T12:14:18+10:00

Checklist TO DO LIST | HELP GUIDE

20 things to check before you invest Before you purchase your franchise you need to tick off all the must-do items. Check the following: 1. Are you confident in the franchisor

11. What are the franchisee and franchisor obligations?

2. Have you seen a disclosure document?

12. What training is available and who pays for it?

3. Have you evaluated the financial returns?

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

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

14. What marketing will the franchisor implement?

5. Have you worked out your operating costs?

15. Who pays for the marketing?

6. Do you know the term of the agreement?

16. What is the dispute resolution process?

7. Is the business operating from fixed or mobile premises?

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

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

18. Can you assign the franchised business?

9. Are you restricted in your product purchase?

19. How can the franchisor or franchisee terminate the Franchise Agreement?

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

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

F BAU_ 1 . 3 H

2 0 1 4 - 0 3 - 0 5 T1 6 : 1 1 : 4 2 + 1 1 : 0 0

.com.au

• Choose from over 1200 franchises showcased in one place • Research, compare & contact franchisors directly, quickly and easily • Expert advice from legal, financial and business consultants

The Official Directory of the Franchise Council of Australia FRANCHISING GROUP

WWW.FRANCHISE.NET.AU

MAY/JUN 2014 FRANCHISING | 129

[with thanks to Mason Sier Turnbull]

FR0514_130

126

2014-05-07T12:14:18+10:00

A-Z listings

Searching for a particular franchise? Use this showcase of franchise systems to find out some key details about the business opportunities available, all in alphabetical order for easy referencing

ONLINE DIRECTORY

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

Phone: 08 9306 5588 Fax: 08 9306 5522 Contact: Lloyd Gaunt Email: lloyd@aussieoutdoor.com.au Website: www.aussieoutdoor.com.au

Start up costs from: $47,000 + GST

Start up costs from: $220,000 - $240,000

PROFILE: Looking for a franchise with on-going repeat business, large territories and access to an existing client base to get you started?

PROFILE: Established in 2004, Aussie Outdoor has become the biggest and the best outdoor blind franchise with 14 outlets and a goal of 20 by 2015.

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 39 franchisees grow profitable and successful businesses.

Offering exclusive patented products to the market Aussie Outdoor franchisee’s and team members pride themselves on providing quality products and services with honesty and integrity at all times.

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.

Becoming an Aussie Outdoor franchisee is enjoyable and financially rewarding. No experience is necessary as full training and ongoing support is provided. Your business will be fully systemised making it easy for you and others to operate. Aussie Outdoor is not just a franchise it is a lifestyle

Phone: 03 8878 1111 Fax: 03 8878 1145 Contact: Neville Bruns Email: neville.bruns@automotivebrands.com.au Website: www.autobarn.com.au

Phone: 0417 077 633 Contact: Michael Payne Email: michael@palmoasisventures.com Website: www.baskinrobbins.com.au Start up costs from: $190,000

Start up costs from: $350,000 - $450,000 + stock PROFILE: Established in 1985, Autobarn has a network of over 100 stores Nationwide which makes it the largest independently owned automotive parts and accessories retailer in Australia. The business has an enviable track record of success and growth with some stores in the group having traded for over 20 years. The longevity of the business, combined with consistent, high quality marketing activity, means that the brand has become iconic in the Australian market and enjoys enormous consumer goodwill and recognition. Autobarn represents the retail consumer brand within the Automotive Brands Group (ABG), which also includes the trade based Autopro and Carparts groups. Combined ABG represents over 250 outlets, giving ABG considerable buying power, the ability to have ABG exclusive products, substantial management resources and significant marketing and advertising strength.

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.

Phone: 1800 634 227 Contact: Andrew Email: info@briantracyglobal.com Website: www.briantracyglobal.com

Phone: +65 6222 9443 Fax: +65 6222 5773 Contact: Jason Tan Email: jasont@brotzeit.co Website: www.brotzeit.co

Start up costs from: $79,950 + GST Includes inventory for fast ROI.

Start up costs from: US$650,000

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 about more about the Brian Tracy International.

130| FRANCHISING MAY/JUN 2014

PROFILE: Brotzeit® is a typical Bavarian expression - “Brot” being German for bread and “Zeit” for time, referring to a cosy meal complemented by fresh beer. Brotzeit® is the world’s leading franchised German concept casual dining restaurant, serving authentic German cuisine and premium quality beer imported directly from Munich, in a chic and modern environment. With an expanding regional presence in Singapore, Malaysia, Vietnam, Philippines, Thailand, Hong Kong and China, and the first outlet in Perth to be opened by September 2014, the company is looking for interested area franchise partners for Australia.

WWW.FRANCHISE.NET.AU

FR0514_131

126

2014-05-07T12:14:18+10:00

A-Z listings

To be part of the A-Z listings: Contact David Strong: E: david.strong@cirrusmedia.com.au P: 02 8484 0905 M: 0411 366 656

Phone: 1300 659 676 Fax: 1300 659 675 Contact: James Scurr Email: customerservice@cashflowit.com.au Website: www.cashflowit.com.au

Phone: 02 9451 3260 OR 1300 CAFE2U Fax: 02 9451 2105 Contact: John Stanton Email: franchises@cafe2u.com.au Website: www.cafe2u.com Start up costs from: $129,990 + GST PROFILE: Australian owned Cafe2U is the world’s largest mobile coffee company with over 160 franchises in Australia and 240 worldwide. The business is rapidly expanding due to a simple and proven business model. Cafe2U now includes the unique “Acceleration Package”, designed to create success and profitability sooner. This includes a four week training programme, a personal franchisee coach, revenue guarantee and an initial marketing campaign. Offering a full time events coordinator and strong marketing support, Cafe2U offers a great opportunity for new business owners who are looking to make the most of the added lifestyle benefits. Contact Cafe2U now should you wish to make the change.

PROFILE: Cashflow It specialises in equipment financing solutions for the franchise sector. It’s the smart way to finance the equipment you need in your business. Cashflow It can get you pre-approved for finance so that you can find the best deal on the equipment you need from any supplier in Australia. You simply agree to a minimum 12 month term and we buy the equipment you need for your business. At the end of this term you have the option to Continue Renting, Purchase Equipment, Rent To Own or Return Equipment. Apply online today in less than 10 minutes.

Phone: +64 3443 5133 Contact: Derek Lilly Email: del@dreamdoors.com.au Website: www.dreamdoorskitchens.com

Phone: 1300 131 888 Fax: 07 3633 3399 Contact: Franchise recruitment Website: www.dominos.com.au/franchising

Start up costs from: $60,000-$350,000 + GST + operating capital

Start up costs from: $100,000

PROFILE: For over 25 years, Display Design has been helping businesses both large and small with their retail merchandising and display requirements. Specialising in the manufacture and supply of a vast range of products suitable for use in any retail, commercial or corporate environment. Display Design’s range includes: Wall display systems, freestanding merchandising units and racks, light boxes, showcases and counters, graphic display products, metal and acrylic accessories, suspended cable and rod display systems and sign connection components.

PROFILE: At Domino’s we see ourselves as the Pizza Experts, and focus all our energy and passion into making and delivering the hottest, freshest and tastiest pizzas. As a New Franchisee, you are about to embark on a journey to become a Pizza Professional. We are the market leaders in most neighbourhoods and we need to continue to rise to the occasion of exceeding our customers expectations. If you think you’ve got what it takes, contact us today for more details about becoming part our family.

In addition, the business also encompasses areas such as design, custom manufacture, project management, installation & fit out.

Phone: 1300 FASTWAY Fax: 02 9264 4966 Website: fastway.com.au

Phone: +64 3443 5133 Contact: Derek Lilly Email: del@dreamdoors.com.au Website: www.dreamdoorskitchens.com Start up costs from: $60,000-$350,000 + GST + operating capital 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 our 14 years worth of combined knowledge and run the Master Franchise/Franchise territory together with you. It really doesn’t get any better than this in our opinion. Working together is crucial to any new undertaking in the business arena. Working with the company co-founder to set up and develop your Master Franchise, 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.

Start up costs from: $25,000 PROFILE: Run your own rewarding business and take control of your future as a Fastway Courier Franchisee. As a market leader in nationwide courier services, our multi-award winning franchisees enjoy: • Guaranteed income package* • Low start up costs • No weekend work • Ongoing business support & training • Exclusive territories • 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

WWW.FRANCHISE.NET.AU

MAY/JUN 2014 FRANCHISING | 131

FR0514_132

126

2014-05-07T12:14:18+10:00

A-Z listings Phone: 1300 FRANCHISE Fax: 03 8640 0688 Contact: Kevin Bugeja Email: kevin@franchiseselection.com.au Website: www.franchiseselection.com.au PROFILE: Franchise Selection is the leading franchisee recruitment company in Australia that assists potential franchisees through the interview and selection process. We offer potential franchisees a wide selection of franchises covering all industries including retail, food, automotive, telecommunications, construction and even service franchises. We pride ourselves in being leaders in our industry and our approach is not to sell franchises but to educate and assist buyers in finding the right business opportunity for them and to assist franchisors in selecting the very best franchisees.

Phone: 08 8338 2557 Fax: 08 8338 4552 Contact: Mark Langford Email: marklangford@gametraders.com.au Website: www.gametraders.com.au Start up costs from: $225,000 + GST PROFILE: Gametraders Live is a retail and entertainment destination consisting of our unique retail business model combined with other activities such as Card tournaments, Warhammer and Cosplay. Gametraders Live caters for franchisees and customers who love buying selling and trading but also enjoy being involved in events and activities. We are extremely proud to announce our new concept franchise stores Gametraders Live. Gametraders Live is best described as a gamers and cosplayers paradise, They are big and there will be plenty of activities and things to do. There are Sofa’s for our guests to relax and interact, snacks, coffee, drinks, activities, events, film nights and much more.

Phone:02 028845 88450100 0100 Phone: Fax:02 028845 88450199 0199 Fax: Contact:Karen KarenPollard Pollard Contact: Email:franchise@gelatissimo.com.au franchise@gelatissimo.com.au Email: Website:www.gelatissimo.com.au www.gelatissimo.com.au Website:

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

Start Startup upcosts costsfrom: from:$350,000 $350,000

Start up costs from: $29,950 + GST & vehicle

PROFILE: PROFILE: Australia’s looking afor outstanding franchisees. Australia’sleading largest gelato franchise is presents unique concept; with over 20 years Gelatissimo, Australia’sisleading gelato franchise is expanding itspassion strong of product development, customer satisfaction and a brand that embodies style Prior food experience not necessary however system franchisees must have brand and is looking for outstanding and sophistication. Our retailing pointfranchise of difference is makingforfulldelivering flavouredquality gelato for the system and brand, leadership skills, andpartners. enthusiasm fresh in-store daily usinggelato a customer system that isfresh simple to run. has an enviable products through excellent service. Our multi award winning is made in store byGelatissimo dedicated Franchisee performance record, with an average store and turnover of $779,000* and recipes. comparative Gelato Artisans, using the finest ingredients authentic Italian family Multi award winning Gelatissimo provides full training and on-going support from store sales growth has averaged a positive 8.29%* over the last two years. dedicated operational, and development them to to Gelatissimo franchiseesmarketing have the benefit of a systemteams that isenabling simple and easy As part of its commitment Gelatissimo charges flat royalty fee produce artisan gelato freshtoinfranchisees, store using a simple proven asystem. run, supported by full training, ongoing support fromand professional operational and instead of teams, a percentage of sales, full training, ongoing support from its marketing extensive brandprovides building activities, product development and operationswith and local marketing team, brand building and local store marketing. assistance store marketing. *Sales figures based on the last 12 months turnover as at April 2012 inc GST. Increases based on comparative moving annual turnover for the last 48 months.

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

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

Phone: 0427 208462 Contact: Steve Potter Email: franchising@indianbrothers.com.au Website: www.indianbrothers.com.au

Start up costs from: $250,000 - $550,000

Start up costs from: $160,000

PROFILE: Hairhouse Warehouse is Australia’s leader in the hair and beauty industry, with over 140 stores across Australia. A belief in your ability to change your life and courage to do it is all you need. Our culture and business has developed from over 21 years of success and mastery. Hairhouse Warehouse is built on passion and creativity. • Extensive and ongoing training programs • A proven turnkey operation • A focus on world class service • Multiple revenue streams, including retail, salon, piercing and beauty services • Exclusive stockists of world leading brands with the most lucrative merchandise trading terms worldwide

132| FRANCHISING MAY/JUN 2014

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.

WWW.FRANCHISE.NET.AU

FR0514_133

126

2014-05-07T12:14:18+10:00

A-Z listings Phone: 0418 600 919 Contact: Meredith Ham Email: sales.au@inxpress.com Website: www.inxpress.com

Phone: 131 546 Email: franchise.sales@jimsfencing.net Website: www.jimsfencing.net

Start up costs from: $49,000 +GST

Start up costs from: approx $64,000 - $66,000 inc equipment

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 200 franchisees internationally, InXpress is now accepting applications to grow the Australian business. Benefits to franchisees include: • Low entry costs • Low risk • No inventory/warehousing

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

PROFILE: Jim’s Fencing operates Australia wide with currently 160 plus franchise owners and sub-contractors building fences everyday. Jim’s Fencing has such a huge demand for work in fact; Jim’s Fencing is at a point in which they are actually reluctant to advertise the services as they have to many leads to fill as it is and not enough franchise owners on the ground to do the work. Can you imagine? A business that has too much work available? If you yearn to work outdoors and are handy with the tools, then Jim’s Fencing could be for you. Franchises available Australia wide.

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

Phone: 02 8522 1408 Fax: 02 9527 5144 Contact: Luke Manning Email: luke@justcuts.com Website: www.justcuts.com

Phone: 1800 251 680 Fax: 02 9967 5511 Contact: John Post Email: franchise@kwikkopy.com.au Website: www.kwikkopy.com.au/franchise

Start up costs from: $100,000 to $240,000

Start up costs from: $210,000

PROFILE: Don’t just buy yourself a Job! Discover how you can easily run a “Genuine Business System”. Did You Know? Most of our Just Cuts™ Franchise Owners are not Hairdressers. Plus, the average Franchise Owner goes on to own multiple stores. Why? Because proven systems, support and training means your hairdressers become the technicians and easily run the business for you. At Just Cuts™ Franchise Owners have been free to grow to own multiple sites. Just Cuts™ do over 66,000 Style Cuts™ cuts a week! Just Cuts™ operate on a no appointment, no request system, quality Styles Cuts™ cut at an affordable price. Contact us today to find out how. Join the largest Hairdressing Franchise in the Southern Hemisphere.

PROFILE: A Kwik Kopy franchise is your path to a successful new business. And what’s more, you don’t require any print experience to take on a Centre. Kwik Kopy is a B2B print and design provider, focusing on the small to medium business market. A highly established and recognised brand, Kwik Kopy has been operating in Australia for over 25 years and has an extensive network of Centres in regional and metropolitan locations Australia wide. The benefits of becoming a Kwik Kopy franchisee include: • Award winning franchise model • Strong brand and ongoing marketing solutions • Regular working hours Mon-Fri • Extensive training and on-site assistance

Phone: 1300 737 917 / 0403 840 996 Contact: Steve Bianchini Email: steve@mondodirect.com.au Website: www.mondodirect.com.au

Phone: +61 3 8540 0200 Fax: +61 3 8540 0202 Contact: John Sier Email: john.sier@mst.com.au Website: www.mst.com.au

PROFILE: The Destination for the Best Hidden Franchise Talent. Mondo Direct is a specialist in providing executive search and headhunt services to franchise companies. We support franchise companies in achieving success through their people building robust talent teams. Our enduring relationships with the top passive talent in the APAC region, means you will gain a competitive advantage.

PROFILE: MST Lawyers is widely recognised as one of Australia’s leading franchising law firms, advising participants in the franchising sector, Australia wide, on all aspects of franchising. We assist franchisors with their franchise strategy and structures, including drafting franchise documentation and managing franchise transactions. We also advise franchisors on Franchising Code of Conduct compliance, consumer law compliance, leasing, employment law, intellectual property and dispute resolution. MST Lawyers also act for franchisees providing advice in respect of sales and purchases of franchise businesses and advising on franchise documents and leases. Our international affiliations allow us to stay in touch with global franchising trends and assist our clients with their international expansion strategies. Our dedicated Franchise Team prides itself on providing cost effective, practical and current advice to its franchise clients.

WWW.FRANCHISE.NET.AU

MAY/JUN 2014 FRANCHISING | 133

FR0514_134

126

2014-05-07T12:14:18+10:00

A-Z listings Phone: 03 8851 4200 Fax: 03 8851 427 Contact: Michael Standley Email: franchise@noodlebox.com.au Website: noodlebox.com.au/franchise

Phone: (08) 9201 3400 Fax: (08) 9201 3444 Contact: Brad Dixon Email: info@mynfib.com.au Website: http://mynfib.com.au

Start up costs from: $250,000 - $280,000 PROFILE: National Franchise Insurance Brokers has been created to meet the Australian demand for a dedicated online provider of insurance cover for franchisees, franchisors and franchised businesses.

PROFILE: An Australian success story.

Our service is fully automated, compliant and provides you with full documentation. Plus, we are underwritten by one of world’s longest established insurance organisations.

Franchise partner relationships are paramount and are built on integrity, respect and trust. The Noodle Box Franchise Support Centre is focused on ongoing Franchise Partner profitability and success.

Put simply, our service is the fastest, most affordable way to get the most appropriate level of cover you need to protect your business.

With a competitive entry level investment and new restaurant design concept, the Noodle Box brand represents excellent value for money.

Noodle Box’s goal is to be the first choice noodle-based restaurant concept in every market in which they operate.

Noodle Box is healthy, fresh and fast and made right in front of guests by friendly, welltrained team members. With a relaxed atmosphere – it doesn’t get tastier than that!

Phone: 02 9822 5622 / 0423 052 456 Fax: 02 9822 5677 Contact: Kate Bird Email: franchise@packsend.com.au Website: www.packsend.com.au

Phone: 02 9930 3185 Contact: Nathan Kelk Email: au-pizzahut.franchising@yum.com Website: www.pizzahut.com.au/franchise Start up costs from: $250,000-$300,000

Start up costs from: $154,450 - $166,900 + working capital (ex GST) PROFILE: PACK & SEND is an award winning Retail Service Centre operation providing convenient freight and packaging services to businesses and consumers wanting to send anything, anywhere - plus, we offer online freight solutions for pre-packed parcels! Utilising our proprietary freight management technology (GlobalMaster™) to perform the delivery solution, together with our expertise in packaging services, means you can offer a solution for any person or business. Established for 20 years with a network of over 100 Australian stores – along with international stores in New Zealand and the United Kingdom – there is no other franchise system like PACK & SEND in the world and, best of all, our franchisees receive assistance and support along the way.

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

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

Phone: 1300 4 RED ROCK (1300 473 376) Contact: Phil Colburn Email: admin@redrocknoodlebar.com.au Website: www.redrocknoodlebar.com.au Start up costs from: $180,000

Start up costs from: $98,000 PROFILE: The Property Club is a division of The Investors Club. Since its establishment in 1994, The Property Club has assisted in the sale of over 17,000 properties throughout Australia and New Zealand and are looking to expand further in these markets. Property Club prides itself on providing investment opportunities and deals and a one-stop-shop to access property related services for its members. The company currently has 18 Franchises and 300 Property Mentors, as well as a head office with 40 staff specialising in all areas of Property Investment.

134| FRANCHISING MAY/JUN 2014

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

WWW.FRANCHISE.NET.AU

FR0514_135

126

2014-05-07T12:14:18+10:00

A-Z listings Phone: 07 5591 3242 Fax: 07 5591 9021 Contact: Michelle Connor Email: michelle.connor@rfg.com.au Website: www.rfg.com.au

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

Start up costs from: $94,000 (The Coffee Guy) to $475,000 (Brumby’s Bakery) PROFILE: RFG is Australia’s largest multi-food franchise operator with more than 105 million customer visits each year across the Donut King, bb’s Café, Brumby’s, Michel’s Patisserie, Esquire’s Coffee, Pizza Capers, Crust Gourmet Pizza and The Coffee Guy Franchise Systems. Today, RFG has more than 1,400 outlets across Australia, New Zealand, Papa New Guinea, Singapore, China, Malaysia, the Middle East and the USA. Our premium product offering combined with our successful franchise systems and innovative brands are key strengths which have positioned RFG as a leader in the retail food franchise industry.

PROFILE: Silver Chef has been helping businesses to fund their equipment needs for almost 30 years. Silver Chef’s Rent.Try.Buy.® Solution offers a simple 12 month term so that you have the flexibility to: • Keep renting and we will continue to • Purchase the equipment during the reduce the purchase price 12 month period and enjoy a 75% • Upgrade if you decide your franchise net rental rebate has outgrown the original equipment • Return equipment at the end of the 12 months if you don’t need it anymore And if you are part of an accredited franchise, you will enjoy even greater benefits such as reduced rental bonds, rental discounts and pre-approval for all franchisees.

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

Phone: 1300 810 233 Contact: Franchising development team Email: snapfranchising@snap.com.au Website: www.snap.com.au Start up costs from: $150,000

Start up costs from: $50,000

PROFILE: Snap is the most successful print, design and website franchise network for medium-sized enterprises (SMEs) in the Southern Hemisphere. Founded in 1899 and still 100% Australian owned, we now have 145 Centres in Australia and a further 30 in New Zealand, Ireland and China. First to Australia in digital print, our ability to evolve is key to snap-proofing the future of our Franchise Owners. Today, clients can not only rely on Snap for top quality print, but the full range of design, websites and all other online marketing tools as well – all developed by a company with a 100 year long history of achievement. So, are you ready to Snap-Proof your future?

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 20 years in the Australian market, Snap-on continues to solidly perform, providing robust financial results for its network of over 160 franchisees. Extensive training and ongoing support is provided – no previous mechanical experience required. Snap-on offers an exclusive finance package to assist new franchisees.

Phone: 0427 401 169 Fax: 03 9888 6327 Contact: Alistair Browne Email: alistairb@snooze.com.au Website: www.snooze.com.au

Phone: 08 8353 5888 Contact: George Karamalis Email: info@st-louis.com.au Website: www.st-louis.com.au Start up costs from: $350,000

Start up costs from: $450,000 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: • Vendor finance assistance • NAB & ANZ accreditation • Sales and product training

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

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

WWW.FRANCHISE.NET.AU

MAY/JUN 2014 FRANCHISING | 135

FR0514_136

126

2014-05-07T12:14:18+10:00

A-Z listings sparky a3.pdf 1 7/04/2011 12:22:20 PM

Phone: 02 9898 8608 Contact: Chris Fitzmaurice Email: enquiries@swimart.com.au Website: www.swimartfranchise.com.au

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

CMY

Start up costs from: Retail - $175,000-$250,000 Mobile - $85,000-$90,000

PROFILE: • Caltex Star Mart is Australia’s number 1 convenience retailer with locations in every State and Territory across the country. • The Star Mart convenience network consists of over 630 stores nationally. • Franchisees operate approximately 85% of Caltex’s retail network. Our world class business model, merchandising and field support has set the benchmark for convenience retailing, making Caltex the number one convenience retailer throughout Australia. A select amount of Caltex Star Mart opportunities now exist for high calibre franchisees with a passion for retail and a burning desire to be successful. To discover more about Caltex’s exciting franchise opportunity, please visit www.caltex.com.au and click on ‘Franchising at Caltex’.

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 you’re looking for either a retail or service business that delivers solid revenues with high margins and low fees, just ask Swimart!

Phone: 0499 399 355 Contact: Bruce Miskin Email: bruce@theconcretecutter.com.au Website: www.theconcretecutter.com.au

Phone: +61 439 222 422 (AUS) +64 21 917 148 (NZ) Contact: Glenn Dobson Email: glenn.dobson@tadda.com.au Website: www.tadda.com.au

Start up costs from: $45,000 + GST + vehicle

PROFILE: The Australian Drug Detection Agency (ADDA) 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 State Office support and large-scale clients that need services in your area. ADDA wants highly motivated and business oriented individuals to join the team to share in the success of this proven business model.

PROFILE: Established in Melbourne in 2001, The Concrete Cutter has nine long running franchises. We now seek to expand in Melbourne and duplicate the Melbourne success interstate. We invite enquiry from smart ‘hands on people’ in good health who are easily understood on the telephone. Most established franchisees regularly take over $2,500 p.w. The price includes equipment, sign writting, uniforms, stationery, training, and on-going support. You will need to provide a white vehicle such as a one-tonner, van or small truck. A second-hand vehicle is O.K. Please ring for information pack.

If you are seeking a next generation business opportunity with huge potential then contact us now to find out more.

Phone: 0414 217 019 Contact: Rob Watkin Email: sales@topsnap.com Website: www.topsnap.com

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

PROFILE: The Franchise Shop is the leading franchise consultancy offering both franchise development & recruitment services to the franchising industry throughout Australia and New Zealand. With more than 30 years experience in developing businesses into franchises, conducting feasibility studies, recruiting franchise owners, territory planning and site finding. At The Franchise Shop our aim is to grow your business. Are you thinking of developing your business? A free initial consultation will provide you with an honest, comprehensive and accurate assessment. Looking to buy a franchise? We offer an advice service and range of documents which are designed to help you make an informed decision.

136| FRANCHISING MAY/JUN 2014

Start up costs from: $39,950 + GST PROFILE: Interested in real estate? Passionate or keen to learn about photography? Then a Top Snap property photography franchise could be for you! We are currently looking for positive, enthusiastic, customer-focused individuals to build their own professional photography business, with the support of an established franchise system behind them. As a leading and fast-growing property photography franchise, we have photographers located across the country servicing the real estate industry’s growing demands for professional property photography and marketing tools. In recognition of this outstanding growth, Top Snap was recognised as one of Australia’s top 50 fastest growing SMEs in both the 2012 and 2011 SmartCompany awards.

WWW.FRANCHISE.NET.AU

FR0514_137

126

2014-05-07T12:14:18+10:00

A-Z listings Phone: 03 9413 1400 / 0429 811 811 Fax: 03 9413 1401 Contact: Adrian Gallace Email: adrian.gallace@unitedpetroleum.com.au Website: www.unitedpetroleum.com.au/ franchising/welcome

Phone: 0400 655 489 Fax: 03 5243 1476 Contact: Wes Smith Email: franchise@townandcountrypizza.com.au Website: www.townandcountrypizza.com.au Start up costs from: $200,000-$350,000 PROFILE: Town & Country Pizza & Pasta want to share and help franchisees build a successful business with the development of their effective and profitable business model. They help you manage your team, cultivate your clientele and grow your business to ensure your full potential is reached and maintained. By using the right business systems, ingredients and recipes, Town & Country Pizza & Pasta’s proven franchise model can help franchisees take-off sooner without the usual headaches when starting up. Being a Town & Country Pizza & Pasta franchisee is a rewarding opportunity for people who want to thrive in a challenging environment and make a difference in their workplace and communities.

Start up costs from: $400,000 upwards PROFILE: Australian-owned company that has become one of the largest independent fuel retailers with over 320 convenience stores throughout Australia. United Petroleum continues to invest heavily in its stores and systems which has earned the trust of consumers and respect of major competitors. United franchisees enjoy ongoing support, generous Fuel Commissions, merchandising support, a national promotional program, five week induction program and on-going training. United is a proud member of the Franchise Council of Australia (FCA) and was awarded Canstar winner for 3 years in a row – Most Satisfied Customers (Service Stations).

Phone: 03 9612 7297 Fax: 03 9629 4035 Contact: Robert Toth Email: robert.toth@wisemah.com.au Website: www.wisewouldmahony.com.au PROFILE: Wisewould Mahony is a leading commercial law firm with a 150 year history in Victoria with clients in Australia and worldwide. 25 Years of Industry Knowledge Member Franchise Council of Australia (FCA) International Franchise Lawyers Association (IFLA) Franchise Association of New Zealand (FANZ) Accredited Business Law Employment Specialists Fixed Fee Services to Franchisors & Franchisees based on scope of services Services provided: • Legal and consulting advice to Franchisors & Franchisees • Code compliance requirements • Dispute resolution – mediation – Solutions & Strategies • Sale/Purchase of Franchise Systems • Master Franchising • Employment Law & Workplace Relations Specialist Call or email for a complimentary brochure for Franchisors & Franchisees

Phone: 0414 745 155 Contact: Paul Crabtree Email: paul@xpressodelight.com.au Website: www.xpressodelight.com.au Start up costs from: $64,900 + 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.

A-Z Listings Phone: x Fax: x Contact: x Email: x Website: x

Phone: 1800 664 653 Contact: Scott Leydon Email: sleydon@1800onhold.com.au Website: www.zbm.com.au

Start up costs from: $

PROFILE: Zoo Business Media is a full service provider of music, video and voice marketing solutions to the Hospitality, Retail and Fitness industries.

PROFILE: Listing Profile

We help you create the perfect ambience for your shops, gyms, restaurants and bars with internet delivered, license fee free music.

For A-Z listings enquiries contact:

We also enable you to make a great first impression with creative on hold messages for your telephone lines. A cost effective service absolutely essential to your marketing plan.

National Sales and Marketing Manager David Strong on 02 8484 0905 david.strong@cirrusmedia.com.au

WWW.FRANCHISE.NET.AU

MAY/JUN 2014 FRANCHISING | 137

FR0514_138

138

2014-05-08T09:52:20+10:00

Advertisers index INCORPORATING FCA NEWS

HELP GUIDE | COMPANY LIST

* indicates FCA member FRANCHISE COUNCIL OF AUSTRALIA

1800 OnHold

72*

Appliance Tagging Services

119*

Aussie Outdoor

Gametraders

99*

Retail Food Group

Gelatissimo

21*

Silver Chef

31*

Groutpro

25*

Snap Printing

59*

Autobarn

79*

Hairhouse Warehouse

47*

Snap-On Tools

Baskin-Robbins

15*

InXpress

29*

Snooze

Baybridge Lawyers

Indian Brothers

Brian Tracy

37*

Jim’s Fencing

Brotzeit

11*

Cafe2U

38, 39*

Caltex

Cashflow It

55*

Cirrus Media

123, 127, 129

74, 75*

9* 95*

Specialised Events

125*

83*

St Louis

Just Cuts

109*

Swimart

35*

Kwik Kopy

121*

The Australian Drug Detection Agency

140

Mason Sier Turnbull Mondo Direct

33* 67

The Concrete Cutter The Franchise Shop

National Franchise Insurance Brokers

87*

Top Snap Town & Country Pizza & Pasta

101* 40, 41* 27*

Display Design

Noodle Box

93*

Domino’s

Pack & Send

Turner Freeman Solicitors

United Petroleum

82*

115* 89

Dream Doors

107*

Pizza Hut

Fastway Couriers

139*

Property Club

103

Wisewould Mahony Lawyers

69*

Red Rock Noodle Bar

71*

Xpresso Delight

63*

Franchise Selection

Fr a nc hi s e _ 1 . 3 H

90, 91*

2 0 1 4 - 0 3 - 0 5 T1 6 : 1 2 : 1 8 + 1 1 : 0 0

Franchise.net.au is the communication hub for the franchising industry High quality editorial, advice and news. Updated daily. • Currently garnering over 50,000 page impressions, 27,000 visits and 22,500 unique visitors per month* • Twice weekly Franchising eNewsletter News – Opportunities – Advice • Social Footprint

FRANCHISING GROUP

*Google Analytics Nov 13 – Jan 14

138| FRANCHISING MAY/JUN 2014

WWW.FRANCHISE.NET.AU

FR0514_000_FASTAWAY

2014-04-15T16:24:11+10:00

FR0514_000_TADDA

2014-04-23T09:23:10+10:00

THEREâ&#x20AC;&#x2122; Sâ&#x20AC;&#x2122; S AA LOT LOT OF OF THERE

MONEY IN IN DRUGS DRUGS MONEY

makesure sureyou youcontrol controlaaterritory territory make The Australian Drug Detection Agency wants highly motivated and independent people to join Thethe Australian wants highly motivated and independent people to join team, asDrug eitherDetection Master orAgency Regional Franchisees. the team, as either Master or Regional Franchisees. The ADDA is a proven business model that will provide excellent financial rewards for those Thewho ADDA a proventobusiness model willcriteria. provide excellent financial rewards for those areisprepared work hard andthat fit the who are prepared to work hard and fit the criteria. This is a huge opportunity for business-orientated individuals who have served, or are currently Thisinislaw a huge opportunity business-orientated individuals who have or are currently enforcement, the for emergency services or the armed forces, to getserved, in at the ground level in law enforcement, the emergency services or the armed forces, to get in at the ground level and grow their own enterprise. and grow their own enterprise. Are you ready to join our experienced group and secure a lucrative future? Are you ready to join our experienced group and secure a lucrative future? Our guess is Yes, you are! Our guess is Yes, you are! s Franchises selling fast s Franchises selling fast s Masters sold in QLD/NSW/VIC s Masters sold in QLD/NSW/VIC

Email: kirk.hardy@tadda.com.au Email: kirk.hardy@tadda.com.au Website: www.tadda.com.au Website: www.tadda.com.au